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HomeMy WebLinkAboutApril 2, 2002 AgendaA02-011 4-2-02 AGENDA CITY OF DENTON CITY COUNCIL April 2, 2002 After determining that a quorum is present, the City Council will convene in a Special Called Meeting of the City of Denton City Council on Tuesday, April 2, 2002 at 3:00 p.m. in the City Council Chambers of City Hall, 215 E. McKinney, Denton, Texas at which the following item will be considered: Consider adoption of an ordinance authorizing the issuance, sale, and delivery of City of Denton General Obligation Bonds, Series 2002, levying the tax to pay same; approving and authorizing instruments and procedures relating thereto; and providing an effective date. Consider adoption of an ordinance authorizing the issuance, sale, and delivery of City of Denton Certificates of Obligation, Series 2002; approving and authorizing instruments and procedures relating thereto; and providing an effective date. Following the completion of the Special Called Meeting, the City Council will convene in a Work Session on Tuesday, April 2, 2002 in the Council Work Session Room at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be considered: 1. Receive a report and hold a discussion concerning cable television regulated rate adjustment filing by Charter Communications. Hold a discussion and give staff direction regarding the City of Denton 2001 Small Area Planning Program Annual Report. 3. Receive a report and hold a discussion regarding City of Denton transportation projects. Requests for clarification of consent agenda items tsted on the consent agenda for today's City Council regular meeting of April 2, 2002. Following the completion of the Work Session, the Council will convene in a Regular Meeting of the City of Denton City Council on Tuesday, April 2, 2002 at 5:00 p.m. in the Council Chambers at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be considered: Pledge of Allegiance A. U.S. Flag B. Texas Flag "Honor the Texas Flag -- I pledge allegiance to thee, Texas, one and indivisible." PROCLAMATIONS/PRESENTATIONS 2. Proclamations 3. Recognition of staff accomplishments. City of Denton City Council Agenda April 2, 2002 Page 2 CONSENT AGENDA Each of these items is recommended by the Staff and approval thereof will be strictly on the basis of the Staff recommendations. Approval of the Consent Agenda authorizes the City Manager or his designee to implement each item in accordance with the Staff recommendations. The City Council has received background information and has had an opportunity to raise questions regarding these items prior to consideration. Listed below are bids, purchase orders, contracts, and other items to be approved under the Consent Agenda (Agenda Items 4 - 19). This listing is provided on the Consent Agenda to allow Council Members to discuss or withdraw an item prior to approval of the Consent Agenda. If no items are pulled, Consent Agenda Items 4 - 19 below will be approved with one motion. If items are pulled for separate discussion, they will be considered as the First items following approval of the Consent Agenda. 4. Consider approval of the minutes of March 13 and March 25, 2002. 5. Consider approval of tax refunds for the following property taxes: Tax Name Reason Year Amount B. Mark Morris & Melissa Franklin Overpayment 2001 $ 618.10 D. American Title Company for David L. Wicker Duplicate Payment Jr. 2001 $ 688.94 F. Metroplex Title for Eric & Ruby Hjelte Duplicate Payment 2001 $ 815.97 H. Healthcare Administration Overpayment 2001 $ 974.14 J. James Renaud Duplicate Payment 2001 $1,666.25 L. Bromley Williams & Lori Moo Duplicate Payment 2001 $ 985.66 N. Commonwealth Title for Danny J. O'Brien Duplicate Payment 2001 $ 677.20 P. Robert Boso Duplicate Payment 2001 $ 542.86 R. Raymond Abbott Value Decrease per Denton 2001 $ 987.60 Central Appraisal District T. Transamerica Real Estate Tax Service for Duplicate Payment 2001 $ 520.82 Paul Jenkins V. Transamerica Real Estate Tax Service for Duplicate Payment 2001 $ 504.39 Wanda Woodward City of Denton City Council Agenda April 2, 2002 Page 3 Tax Name Reason Year Amount X. Transamerica Real Estate Tax Service for Duplicate Payment 2001 $ 643.79 Paul & Susan Willenbrock Z. Transamerica Real Estate Tax Service for Duplicate Payment 2001 $ 517.56 Erich Klein Consider adoption of an ordinance authorizing the mayor to execute an Interlocal Cooperation Agreement between the City of Denton and the City of Corinth for the impoundment and disposition of dogs and cats and the collection of fees pursuant to the provisions of said agreement; and providing for an effective date. Consider adoption of an ordinance authorizing the mayor to execute an Interlocal Cooperation Agreement between the City of Denton and the City of Aubrey for the impoundment and disposition of dogs and cats and the collection of fees pursuant to the provisions of said agreement; and providing for an effective date. Consider adoption of an ordinance accepting competitive bids and awarding a public works contract for the construction of a 54" finished transmission waterline; providing for the expenditure of funds therefore; and providing an effective date (Bid 2811 - Lake Ray Roberts 54" Waterline awarded to S.J. Louis Construction of Texas, LTD., in the amount of $6,129,855). Consider adoption of an ordinance accepting competitive bids by way of an Interlocal Agreement with Tarrant County and awarding a contract for the purchase of police sedans; providing for the expenditure of funds therefore; and providing an effective date (File 2733 - Inteflocal Agreement for Police Sedans with Tarrant County, contract awarded to Classic Chevrolet in the amount of $36,618). 10. Consider adoption of an ordinance approving the annual contract for the lease of library books, a service available from only one source in accordance with the provisions of State law exempting such purchases from requirements of competitive bidding; providing for the expenditure of funds therefore; and providing an effective date (File 2835 - McNaughton Book Service in the amount of $26,550). 11. Consider adoption of an ordinance accepting competitive bids and awarding a contract for the purchase of a 35' Aerial Device (Bucket Truck); providing for the expenditure of funds therefore; and providing an effective date (Bid 2783 - 35' Aerial Device awarded to lowest responsible bidder, Ford Country, in the amount of $62,916). 12. Consider adoption of an ordinance accepting competitive bids and awarding a contract for the purchase of (six) each 12 cubic yard dump trucks and (one) haul truck tractor; providing for the expenditure of funds therefore; and providing an effective date (Bid 2784 - 12 Yd Dump Trucks and Haul Truck Tractor awarded to lowest responsible bidder as listed in the amount of $447,662). City of Denton City Council Agenda April 2, 2002 Page 4 13. Consider adoption of an ordinance accepting competitive bids and awarding a contract for the purchase of a Hydraulic Detachable Gooseneck Trailer; providing for the expenditure of funds therefore; and providing an effective date (Bid 2785 - Hydraulic Detachable Gooseneck Trailer awarded to lowest responsible bidder, Dart Equipment, in the amount of $32,317). 14. Consider adoption of an ordinance accepting competitive bids and awarding a contract for the purchase of a Crawler Dozer, Motorgrader, Rubber Tired Loader and Tractor Loader Backhoe; providing for the expenditure of funds therefore; and providing an effective date (Bid 2786 - Earth Moving Equipment awarded to lowest responsible bidder in the amount of $436,386). 15. Consider adoption of an ordinance accepting competitive bids and awarding a contract for the purchase of a 6,000 lb. Capacity Electric Forklift; providing for the expenditure of funds therefore; and providing an effective date (Bid 2800 - 6,000 lb Capacity Electric Forklift awarded to lowest responsible bidder, Powr-Lift Corporation, in the amount of $28,696). 16. Consider adoption of an ordinance accepting competitive bids and awarding a contract for the purchase of a Self-Loading 3 Reel Trailer; providing for the expenditure of funds therefore; and providing an effective date (Bid 2804 - Self-Loading 3 Reel Trailer awarded to lowest responsible bidder, OK Champion in the amount of $106,845). 17. Consider adoption of an ordinance of the City of Denton, Texas, authorizing the Mayor to execute an Inteflocal Cooperation Agreement by and between the City of Denton, Texas and the City of Krum, Texas pertaining to the design and construction by Krum and the oversize cost participation by Denton for the Krum gravity flow wastewater main; authorizing the expenditure of funds therefor; and providing an effective date. 18. Consider adoption of an ordinance of the City of Denton, Texas approving a wholesale wastewater treatment services contract between the City of Denton, Texas and the City of Krum, Texas; wherein Denton agrees to provide wholesale wastewater treatment services to Krum; authorizing the City Manager to execute said contract; authorizing the expenditure of funds therefor; and providing an effective date. 19. Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager to submit an application under the National School Lunch Act to obtain funding for the 2002 Summer Food Service Program; if such funding is granted, the City Manager is authorized to execute the Summer Food Service Program agreement with the Texas Department of Human Services and execute a contract with the Denton Independent School District and all additional documents and agreements, as required; authorizing the expenditure of funds to administer the program; and providing an effective date. CITIZEN REPORTS 20. Chuck Johnston regarding the Development Code. 21. Edwin Fulton regarding fees added onto the utility bills. City of Denton City Council Agenda April 2, 2002 Page 5 22. Ross Melton regarding the budget, elections, Code Enforcement, the City Attorney's Office and the Planning and Development Department. 23. Gerard Hudspeth regarding citizen concerns with the City. 24. Willie Hudspeth regarding citizen concerns with the City. PUBLIC HEARINGS 25. Hold a public heating and consider adoption of an ordinance setting a gas utility services rate for electric generation transportation service customers within the City of Denton, Texas; making findings in accordance with the setting of this rate; providing for the recovery of rate case expenses and the payment of rate consultants; providing for reheating and reservation of rights; providing a severability clause; and providing an effective date. ITEMS FOR INDIVIDUAL CONSIDERATION 26. Consider approval of a resolution of the City of Denton, Texas establishing local government sponsor support for the "Land Use / Transportation Joint Venture" transportation grant funding awarded by the North Central Texas Council of Governments (NCTCOG) Regional Transportation Council (RTC); and providing an effective date. 27. New Business This item provides a section for Council Members to suggest items for future agendas or to request information from the City Manager. 28. Items from the City Manager A. Notification of upcoming meetings and/or conferences B. Clarification of items on the agenda 29. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the Texas Open Meetings Act. 30. Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the Texas Open Meetings Act. CERTIFICATE I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the City of Denton, Texas, on the day of ,2002 at __o'clock (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. THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 SC1 AGENDA DATE: DEPARTMENT: ACM: AGENDA INFORMATION SHEET April 2, 2002 Fiscal Operations Kathy DuBose, Fiscal and Municipal Services SUBJECT Consider adoption of an ordinance authorizing the issuance, sale, and delivery of City of Denton General Obligation Bonds, Series 2002; levying the tax to pay same; approving and authorizing instruments and procedures relating thereto; and providing an effective date. BACKGROUND On April 2, 2002, David Medanich of First Southwest Company and Ted Brizzolara III of McCall, Parkhurst and Horton, will deliver and open the bids regarding the City of DeNon General Obligation Bonds, Series 2002. The process of opening the bids and tabulating them before the City Council is required by City Charter. These Bonds will provide $12,075,000 for the following projects and improvemems: $5,725,000 $6,350,000 Transportation (streets, traffic control, ramp reversal, bikeways and sidewalks) Parks and Recreation/Beautification PRIOR ACTION/REVIEW (Council, Boards, Commissions) All of these projects were approved in the 2002-2006 Capital Improvemem Program and approved in the bond election on January 15, 2000. FISCAL INFORMATION The General Obligation Bonds have an estimated average annual debt service requiremem of approximately $1,000,000. This amoum has been included in the budget process. Re~nectfi~llv ~nhmitted: Diana G. Ortiz Director of Fiscal Operations ORDINANCE NO. 2002- AN ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON GENERAL OBLIGATION BONDS, SERIES 2002, LEVYING THE TAX TO PAY SAME; APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO; AND PROVIDING AN EFFECTIVE DATE. THE STATE OF TEXAS : COUNTY OF DENTON : CITY OF DENTON : WHEREAS, an election was held on January 15, 2000 at which the City Council was authorized to issue certain of the bonds hereinafter authorized; and WHEREAS, at said election the following bonds were authorized to be issued: Amount Prop. Amount Amount Being Previously Voted No. Authorized Issued Issued But Unissued 1 $17,045,000 $5,725,000 $9,420,000 $1,900,000 2 6,800,000 0 5,600,000 1,200,000 3 10,175,000 6,350,000 2,975,000 850,000 WHEREAS, the bonds hereinafter authorized and designated were voted and are to be issued, sold, and delivered pursuant to Chapter 1331, Texas Government Code, and Article IX of the City's Home Rule Charter, and other applicable laws; and WHEREAS, it is considered to be in the best interest of the City that said interest bearing bonds be issued, NOW, THEREFORE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: Section 1. AMOUNT AND PURPOSE OF THE BONDS. The bond or bonds of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and delivered in the aggregate principal amount of $12,075,000, FOR THE PURPOSE OF THE ACQUISITION OF PROPERTY AND MAKING IMPROVEMENTS FOR PUBLIC PURPOSES IN SAID CITY, TO-WIT: STREET AND TRAFFIC CONTROL IMPROVEMENTS AND PARK IMPROVEMENTS. Section 2. DESIGNATION OF THE BONDS. Each bond issued pursuant to this Ordinance shall be designated: "CITY OF DENTON GENERAL OBLIGATION BOND, SERIES 2002, and initially there shall be issued, sold, and delivered hereunder a single fully registered bond, without interest coupons, payable in installments of principal (the "Initial Bond"), but the Initial Bond may be assigned and transferred and/or converted into and exchanged for a like aggregate principal amount of fully registered bonds, without interest 0705.056\GO-Ordinance March 15, 2002 coupons, having serial maturities, and in the denomination or denominations of $5,000 or any integral multiple of $5,000, all in the manner hereinafter provided. The term "Bonds" as used in this Ordinance shall mean and include collectively the Initial Bond and all substitute bonds exchanged therefor, as well as all other substitute bonds and replacement bonds issued pursuant hereto, and the term "Bonds" shall mean any of the Bonds. Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL BOND. (a) The Initial Bond is hereby authorized to be issued, sold, and delivered hereunder as a single fully registered Bond, without interest coupons, dated April 1, 2002, in the denomination and aggregate principal amount of $12,075,000, numbered R-l, payable in annual installments of principal to the initial registered owner thereof, to-wit: or to the registered assignee or assignees of said Bond or any portion or portions thereof (in each case, the "registered owner"), with the annual installments of principal of the Initial Bond to be payable on the dates, respectively, and in the principal amounts, respectively, stated in the FORM OF INITIAL BOND set forth in this Ordinance. (b) The Initial Bond (i) may be prepaid or redeemed prior to the respective scheduled due dates of installments of principal thereof, (ii) may be assigned and transferred, (iii) may be converted and exchanged for other Bonds, (iv) shall have the characteristics, and (v) shall be signed and sealed, and the principal of and interest on the Initial Bond shall be payable, all as provided, and in the manner required or indicated, in the FORM OF INITIAL BOND set forth in this Ordinance. Section 4. INTEREST. The unpaid principal balance of the Initial Bond shall bear interest from the date of the Initial Bond to the respective scheduled due dates, or to the respective dates of prepayment or redemption, of the installments of principal of the Initial Bond, and said interest shall be payable, all in the manner provided and at the rates and on the dates stated in the FORM OF INITIAL BOND set forth in this Ordinance. Section 5. FORM OF INITIAL BOND. The form of the Initial Bond, including the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed on the Initial Bond, shall be substantially as follows: FORM OF INITIAL BOND NO. R- 1 $12,075,000 UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON GENERAL OBLIGATION BOND SERIES 2002 0705.056\GO-Ordinance March 15, 2002 2 THE CITY OF DENTON, in Denton County, Texas (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to or to the registered assignee or assignees of this Bond or any portion or portions hereof (in each case, the "registered owner") the aggregate principal amount of $12,075,000 (TWELVE MILLION SEVENTY FIVE THOUSAND DOLLARS) in annual installments of principal due and payable on February 15 in each of the years, and in the respective principal amounts, as set forth in the following schedule, and to pay interest, from the date of this Bond hereinafter stated, on the balance of each such installment of principal, respectively, from time to time remaining unpaid, at the rates per annum as follows: PRINCIPAL INTEREST PRINCIPAL INTEREST YEAR AMOUNT RATE(%) YEAR AMOUNT RATE(%) 2003 $125,000 2013 $605,000 2004 375,000 2014 635,000 2005 395,000 2015 670,000 2006 420,000 2016 705,000 2007 440,000 2017 745,000 2008 465,000 2018 785,000 2009 490,000 2019 825,000 2010 515,000 2020 870,000 2011 545,000 2021 920,000 2012 575,000 2022 970,000 Interest shall first be due and payable on February 15, 2003, and semiannually on each February 15 and August 15 thereafter while this Bond or any portion hereof is outstanding and unpaid. Said interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months. THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Bond are payable in lawful money of the United States of America, without exchange or collection charges. The installments of principal and the interest on this Bond are payable to the registered owner hereof through the services of BANK ONE, NATIONAL ASSOCIATION, AUSTIN, TEXAS, which is the "Paying Agent/Registrar" for this Bond. Payment of all principal of and interest on this Bond shall be made by the Paying Agent/Registrar to the registered owner hereof on each principal and/or interest payment date by check, dated as of such date, drawn by the Paying Agent/Registrar 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 purpose as hereinafter provided; and such check shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such principal and/or interest payment date, to the registered owner hereof, at the address of the registered owner, as it appeared at the 0705.056\GO-Ordinance March 15, 2002 3 close of business on the last day of the month next preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. The Issuer covenants with the registered owner of this Bond that on or before each principal and/or interest payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on this Bond, when due. 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 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 Special Record Date and of the scheduled payment date of the past due interest (" SpecialPayment Date", which shall be fifteen (15) days after the Special Record Date) 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 Holder of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of business on the 15th business day next preceding the date of mailing of such notice. IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, a legalholiday, or a day on which banking institutions in the City where 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 which 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 on the original date payment was due. THIS BOND has been authorized in accordance with the Constitution and laws of the State of Texas FOR THE PURPOSE OF THE ACQUISITION OF PROPERTY AND MAKING IMPROVEMENTS FOR PUBLIC PURPOSES IN SAID CITY, TO-WIT: STREET AND TRAFFIC CONTROL IMPROVEMENTS AND PARK IMPROVEMENTS. ON FEBRUARY 15, 2012, or on any date whatsoever thereafter, the unpaid installments of principal of this Bond may be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer, with funds derived from any available source, as a whole, or in part, and, if in part, the particular portion of this Bond to be prepaid or redeemed shall be selected and designated by the Issuer (provided that a portion of this Bond may be redeemed only in an integral multiple of $5,000), at the prepayment or redemption price of the par or principal amount thereof, plus accrued interest to the date fixed for prepayment or redemption. AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a written notice of such prepayment or redemption shall be mailed by the Paying Agent/Registrar to the registered owner hereof. By the date fixed for any such prepayment or redemption due provision shall be made by the Issuer with the Paying Agent/Registrar for the payment of the required prepayment or redemption price for this Bond or the portion hereof which is to be so prepaid or redeemed, plus accrued interest thereon to the date fixed for prepayment or redemption. If such writtennotice of prepayment or redemption is given, and if due provision for such payment is made, all as provided above, this Bond, or the portion thereof which is to be so prepaid or redeemed, thereby automatically shall be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear interest after the date fixed for its prepayment or redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the prepayment or 0705.056\GO-Ordinance March 15, 2002 4 redemption price plus accrued interest to the date fixed for prepayment or redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such prepayments or redemptions of principal of this Bond or any portion hereof. THIS BOND, to the extent of the unpaid or unredeemed principal balance hereof, or any unpaid and unredeemed portion hereof in any integral multiple of $5,000, may be assigned by the initial registered owner hereof and shall be transferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms and conditions set forth in the Bond Ordinance. Among other requirements for such transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar for cancellation, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment by the initial registered owner of this Bond, or any portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees in whose name or names this Bond or any such portion or portions hereof is or are to be transferred and registered. Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Bond or any such portion or portions hereof by the initial registered owner hereof. A new bond or bonds payable to such assignee or assignees (which then will be the new registered owner or owners of such new Bond or Bonds) or to the initial registered owner as to any portion of this Bond which is not being assigned and transferred by the initial registered owner, shall be delivered by the Paying Agent/Registrar in conversion of and exchange for this Bond or any portion or portions hereof, but solely in the form and manner as provided in the next paragraph hereof for the conversion and exchange of this Bond or any portion hereof. The registered owner of this Bond shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary. AS PROVIDED above and in the Bond Ordinance, this Bond, to the extent of the unpaid or unredeemed principal balance hereof, may be converted into and exchanged for a like aggregate principal amount of fully registered bonds, without interest coupons, payable to the assignee or assignees duly designated in writing by the initial registered owner hereof, or to the initial registered owner as to any portion of this Bond which is not being assigned and transferred by the initial registered owner, in any denomination or denominations in any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute bond issued in exchange for any portion of this Bond shall have a single stated principal maturity date), upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the Bond Ordinance. If this Bond or any portion hereof is assigned and transferred or converted each bond issued in exchange for any portion hereof shall have a single stated principal maturity date corresponding to the due date of the installment of principal of this Bond or portion hereof for which the substitute bond is being exchanged, and shall bear interest at the rate applicable to and borne by such installment of principal or portion thereof. Such bonds, respectively, shall be subject to redemption prior to maturity on the same dates and for the same prices as the corresponding installment of principal of this Bond or portion hereof for which they are being exchanged. No such bond shall be payable in installments, but shall have only one stated principal maturity date. AS PROVIDED IN THE BOND ORDINANCE, THIS BOND IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more assignees, but the bonds issued and delivered in exchange for this Bond or any portion hereof may be assigned and transferred, and converted, subsequently, as provided in the Bond Ordinance. The Issuer shall pay the Paying Agent/Registrar's standard or customary 0705.056\GO-Ordinance March 15, 2002 5 fees and charges for transferring, converting, and exchanging this Bond or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be required to make any such assignment, conversion, or exchange (i) during the period commencing with the close of business 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 Bond or portion thereof called for prepayment or redemption prior to maturity, within 45 days prior to its prepayment or redemption date. IN THE EVENT any Paying Agent/Registrar for this Bond is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Bond Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and promptly will cause written notice thereof to be mailed to the registered owner of this Bond. IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly voted, authorized, issued, sold, and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this Bond have been performed, existed, and been done in accordance with law; that this Bond is a general obligation of the Issuer, issued on the full faith and credit thereof; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged irrevocably for such payment, within the limit prescribed by law. 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 recorded and available for inspection in the official minutes and records of the governing body of the Issuer, and agrees that the terms and provisions of this Bond and the Bond Ordinance constitute a contract between the registered owner hereof and the Issuer. IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or facsimile signature of the Mayor of the Issuer and countersigned and attested with the manual or facsimile signature of the City Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Bond and has caused this Bond to be dated April 1, 2002. ATTEST: CITY OF DENTON, TEXAS By: By: Jennifer Walters City Secretary, City of Denton, Texas (CITY SEAL) Euline Brock Mayor, City of Denton, Texas (INSERT BOND INSURANCE LEGEND, IF ANY) 0705.056\GO-Ordinance March 15, 2002 6 FORM OF REGISTRATION CERTIFICATE OF THE COMPTROLLER OF PUBLIC ACCOUNTS: (To be attached to Initial Bond only) 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'S SEAL) Comptroller of Public Accounts of the State of Texas Section 6. ADDITIONAL CHARACTERISTICS OF THE BONDS. (a) Registration and Transfer. The Issuer shall keep or cause to be kept at the principal corporate trust office of BANK ONE, NATIONAL ASSOCIATION, AUSTIN, TEXAS (the "Paying Agent/Registrar") books or records of the registration and transfer of the Bonds (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 transfers and registrations under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such transfers and registrations as herein provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the registered owner of 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 writing of the address to which payments shall be mailed, and 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 entity. Registration of each Bond may be transferred in the Registration Books only upon presentation and surrender of such Bond to the Paying Agent/Registrar for transfer of registration and cancellation, together with proper written instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, (i) evidencing the assignment of the Bond, or any portion thereof in any integral multiple of $5,000, to the assignee or assignees thereof, and (ii) the right of such assignee or assignees to have the Bond or any such portion thereof registered in the name of such assignee or assignees. Upon the assignment and transfer of any Bond or any portion thereof, a new substitute Bond or Bonds shall be issued in conversion and exchange therefor in the manner herein provided. The Initial Bond, to the extent of the unpaid or unredeemed principal balance thereof, may be assigned and transferred by the initial registered owner thereof once only, and to one or more assignees designated in writing by the initial registered owner thereof. All Bonds issued and delivered in conversion of and exchange for the Initial Bond shall be in any denomination or denominations of any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Bond shall have a single stated principal maturity date), shall be in the form prescribed in the FORM OF SUBSTITUTE BOND set forth in this Ordinance, and shall have the characteristics, and may be assigned, transferred, and 0705.056\GO-Ordinance March 15, 2002 7 converted as hereinafter provided. If the Initial Bond or any portion thereof is assigned and transferred or convertedthe Initial Bond must be surrendered to the Paying Agent/Registrar for cancellation, and each Bond issued in exchange for any portion of the Initial Bond shall have a single stated principal maturity date, and shall not be payable in installments; and each such Bond shall have a principal maturity date corresponding to the due date of the installment of principal or portion thereof for which the substitute Bond is being ex- changed; and each such Bond shall bear interest at the single rate applicable to and borne by such installment of principal or portion thereof for which it is being exchanged. If only a portion of the Initial Bond is assigned and transferred, there shall be delivered to and registered in the name of the initial registered owner substitute Bonds in exchange for the unassigned balance of the Initial Bond in the same manner as if the initial registered owner were the assignee thereof. If any Bond or portion thereof other than the Initial Bond is assigned and transferred or converted each Bond issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Bond for which it is exchanged. A form of assignment shall be printed or endorsed on each Bond, excepting the Initial Bond, which shall be executed by the registered owner or its duly authorized attorney or representative to evidence an assignment thereof. Upon surrender of any Bonds or any portion or portions thereof for transfer of registration, an authorized representative of the Paying Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new fully registered substitute Bond or Bonds, having the characteristics herein described, payable to such assignee or assignees (which then will be the registered owner or owners of such new Bond or Bonds), or to the previous registered owner in case only a portion of a Bond is being assigned and transferred, all in conversion of and exchange for said assigned Bond or Bonds or any portion or portions thereof, in the same form and manner, and with the same effect, as provided in Section 6(d), below, for the conversion and exchange of Bonds by any registered owner of a Bond. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such transfer and delivery of a substitute Bond or Bonds, but the one requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be required to make transfers of registration of any Bond or any portion thereof (i) during the period commencing with the close of business 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 Bond or any portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date. (b) Ownership of Bonds. The entity in whose name any Bond shall be registered in the Registration Books at any time shall be deemed and treated as the absolute owner thereof for all purposes of this Ordinance, whether or not such Bond shall be overdue, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on account of, the principal of, premium, if any, and interest on any such Bond shall be made only to such registered owner. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid. (c) Payment of Bonds and Interest. 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, and to act as its agent to convert and exchange or replace 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 to 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 payment (a "Special Record Date") will be 0705.056\GO-Ordinance March 15, 2002 8 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 ("Special Payment Date", which shall be fifteen (15) days after the Special Record Date) 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 Holder of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of business on the 15th business day next preceding the date of mailing of such notice. (d) Conversion and Exchange or Replacement; Authentication. Each Bond issued and delivered pursuant to this Ordinance, to the extent of the unpaid or unredeemed principal balance or principal amount thereof, may, upon surrender of such Bond at the principal corporate trust office of the Paying Agent/Registrar, together with a written request therefor duly executed by the registered owner or the assignee or assignees thereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, may, at the option of the registered owner or such assignee or assignees, as appropriate, be converted into and exchanged for fully registered bonds, without interest coupons, in the form prescribed in the FORM OF SUBSTITUTE BOND set forth in this Ordinance, in the denomination of $5,000, or any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Bond shall have a single stated maturity date), as requested in writing by such registered owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid or unredeemed principal balance or principal amount of any Bond or Bonds so surrendered, and payable to the appropriate registered owner, assignee, or assignees, as the case maybe. If the Initial Bond is assigned and transferred or converted each substitute Bond issued in exchange for any portion of the Initial Bond shall have a single stated principal maturity date, and shall not be payable in installments; and each such Bond shall have a principal maturity date corresponding to the due date of the installment of principal or portion thereof for which the substitute Bond is being exchanged; and each such Bond shall bear interest at the single rate applicable to and borne by such installment of principal or portion thereof for which it is being exchanged. If a portion of any Bond (other than the Initial Bond) shall be redeemed prior to its scheduled maturity as provided herein, a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in the denomination or denominations of any integral multiple of $5,000 at the request of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon surrender thereof for cancellation. If any Bond or portion thereof (other than the Initial Bond) is assigned and transferred or converted, each Bond issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Bond for which it is being exchanged. Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond. The Paying Agent/Registrar shall convert and exchange or replace Bonds as provided herein, and each fully registered bond delivered in conversion of and exchange for or replacement of any Bond or portion thereof as permitted or required by any provision of this Ordinance shall constitute one of the Bonds for all purposes of this Ordinance, and may again be converted and exchanged or replaced. It is specifically provided that any Bond authenticated in conversion of and exchange for or replacement of another Bond on or prior to the first scheduled Record Date for the Initial Bond shall bear interest from the date of the Initial Bond, but each substitute Bond so authenticated after such first scheduled Record Date shall bear interest from the interest payment date next preceding the date on which such substitute Bond was so authenticated, unless such Bond is authenticated after any Record Date but on or before the next following interest payment date, in which case it shall bear interest from such next following interest payment date; provided, however, that if at the time of delivery of any substitute Bond the interest on the Bond for which it is being exchanged is due but has not been paid, then 0705.056\GO-Ordinance March 15, 2002 9 such Bond shall bear interest from the date to which such interest has been paid in full. THE INITIAL BOND issued and delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in conversion of and exchange for or replacement of any Bond or Bonds issued under this Ordinance there shall be printed a bond, in the form substantially as follows: "PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance described in this Bond; and that this Bond has been issued in conversion of and exchange for or replacement of a bond, bonds, or a portion of a bond or bonds of an issue which 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. BANK ONE, NATIONAL ASSOCIATION, AUSTIN, TEXAS, Paying Agent/Registrar Dated By Authorized Representative" An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date and manually sign the above Bond, and no such Bond shall be deemed to be issued or outstanding unless such Bond is so executed. The Paying Agent/Registrar promptly shall cancel all Bonds surrendered for conversion and exchange or replacement. 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 or replacement 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 of type composition printed on paper with lithographed or steel engraved borders of customary weight and strength. Pursuant to Chapter 1201, Texas Government Code, the duty of conversion and exchange or replacement of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the above Paying Agent/Registrar's Authentication Certificate, the converted and exchanged or replaced Bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Initial Bond which originally was issued pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging any Bond or any portion thereof, but the one requesting any such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the exercise of such privilege of conversion and exchange. The Paying Agent/Registrar shall not be requked to make any such conversion and exchange or replacement of Bonds or any portion thereof (i) during the period commencing with the close of business 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 Bond or portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date. 0705.056\GO-Ordinance March 15, 2002 10 (e) In General. All Bonds issued in conversion and exchange or replacement of any other Bond or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Bonds to be payable only to the registered owners thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be converted and exchanged for other Bonds, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the principal of and interest on the Bonds shall be payable, all as provided, and in the manner required or indicated, in the FORM OF SUBSTITUTE BOND set forth in this Ordinance. (f) Payment of Fees and Charges. The Issuer hereby covenants with the registered owners of the Bonds that it will (i) pay the standard or customary fees and charges of the Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on the Bonds, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect to the transfer of registration of Bonds, and with respect to the conversion and exchange of Bonds solely to the extent above provided in this Ordinance. (g) Substitute Paying Agent/Registrar. The Issuer covenants 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 agency to act as and perform the services of Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying Agent/Registrar will be one 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 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 other- wise cease to act as such, the Issuer covenants that it will promptly appoint a competent and legally qualified bank, trust company, financial institution, 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 shall promptly transfer and deliver the Registration Books (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 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 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. Section 7. FORM OF SUBSTITUTE BONDS. The form of all Bonds issued in conversion and exchange or replacement of any other Bond or portion thereof, including the form of Paying Agent/Registrar's Bond to be printed on each of such Bonds, and the Form of Assignment to be printed on each of the Bonds, shall be, respectively, substantially as follows, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance. FORM OF SUBSTITUTE BOND (Book-Entry Only Legend, if appropriate) 0705.056\GO-Ordinance March 15, 2002 11 NO. UNITED STATES OF AMERICA PRINCIPAL AMOUNT STATE OF TEXAS $. COUNTY OF DENTON CITY OF DENTON GENERAL OBLIGATION BOND SERIES 2002 INTEREST RATE MATURITY DATE DATED DATE CUSIP NO. (the ON THE MATURITY DATE specified above the CITY OF DENTON, in Denton County, Texas "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to , or to the registered assignee hereof (either being hereinafter called the "registered owner") the principal amount of and to pay interest thereon, calculated on the basis of a 360-day year composed of twelve 30-day months, from April 1, 2002, to the maturity date specified above, or the date of redemption prior to maturity, at the interest rate per annum specified above; with interest being first due and payable on February 15, 2003, and semiannually on each August 15 and February 15 thereafter, except that if the date of authentication of this Bond is later than the first Record Date (hereinafter defined), suchprincipal 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 (hereinafter defined) 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. 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 fixed for its redemption prior to maturity, at the principal corporate trust office of BANK ONE, NATIONAL ASSOCIATION, AUSTIN, TEXAS, which is the "Paying Agent/Registrar" for this 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, dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of the Bonds (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check 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 the address of the registered owner, as it appeared at the close of business on the last day of the month next preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. However, the payment of such interest may be made by any other method acceptable to the Paying Agent/Registrar and requested by, and at the risk and expense of, the registered owner hereof. Any accrued interest due upon the redemption of this Bond prior to maturity as provided herein shall be paid to the registered owner at the principal corporate trust office of the Paying Agent/Registrar upon presentation and surrender of this Bond for redemption and payment at the principal corporate trust office of the Paying 0705.056\GO-Ordinance March 15, 2002 12 Agent/Registrar. The Issuer covenants with the registered owner of this Bond that on or before each principalpayment date, interest payment date, and accrued interest payment date for this Bond it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Bonds, when due. 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 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 Special Record Date and of the scheduled payment date of the past due interest (" SpecialPayment Date", which shall be fifteen (15) days after the Special Record Date) 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 Holder of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of business on the 15th business day next preceding the date of mailing of such notice. 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 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 which 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 on the original date payment was due. THIS BOND is one of an issue of Bonds initially dated April 1, 2002, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $12,075,000, FOR THE PURPOSE OF THE ACQUISITION OF PROPERTY AND MAKING IMPROVEMENTS FOR PUBLIC PURPOSES IN SAID CITY, TO-WIT: STREET AND TRAFFIC CONTROL IMPROVEMENTS AND PARK IMPROVEMENTS. ON FEBRUARY 15, 2012, or on any date whatsoever thereafter, the Bonds of this Series may be redeemedprior to their scheduled maturities, at the option of the Issuer, 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 Issuer (provided that a portion of a Bond may be redeemed only in an integral multiple of $5,000), at the redemption price of the par or principal amount thereof, plus accrued interest to the date fixed for redemption. AT LEAST 30 days prior to the date fixed for any redemption of Bonds 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 Bond to be redeemed at its address as it appeared on the 45th day prior to such redemption date; provided, however, that the failure to send, mail, or 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 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 for the Bonds or portions thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such written notice of redemption is given and if due provision for such payment is made, all as provided above, the Bonds or portions thereof which are to be so redeemed thereby automatically shall 0705.056\GO-Ordinance March 15, 2002 13 be treated as redeemed 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 plus accrued interest from the Paying Agent/Registrar out of the funds provided for such payment. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same maturity date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, and in aggregate principal amount equal to 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 Bond Ordinance. THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds, upon the terms and conditions set forth in the Bond Ordinance. Among other requirements for such assignment and transfer, this Bond 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 Bond or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Bond or any such portion or portions hereof is or are to be transferred and registered. The form of Assignment printed or endorsed on this Bond shall be executed by the registered owner or its duly authorized attorney or representative, to evidence the assignment hereof. A new Bond or Bonds payable to such assignee or assignees (which then will be the new registered owner or owners of such new Bond or Bonds), or to the previous registered owner in the case of the assignment and transfer of only a portion of this Bond, may be delivered by the Paying Agent/Registrar in conversion of and exchange for this Bond, all in the form and manner as provided in the next paragraph hereof for the conversion and exchange of other Bonds. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such transfer, but the one requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be required to make transfers of registration of this Bond or any portion hereof (i) during the period commencing with the close of business 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 Bond or any portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date. The registered owner of this Bond shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Bond to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary. 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 Bond Ordinance, this Bond, or any unredeemed portion hereof, may, at the request of the registered owner or the assignee or assignees hereof, be converted into and exchanged for a like aggregate principal amount of fully registered bonds, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case may be, having the same maturity date, and bearing interest at the same rate, in any denomination or denominations in any 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 Bond to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the Bond Ordinance. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging any Bond or any portion thereof, but the one requesting such transfer, conversion, and 0705.056\GO-Ordinance March 15, 2002 14 exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the exercise of such privilege of conversion and exchange. The Paying Agent/Registrar shall not be required to make any such conversion and exchange (i) during the period commencing with the close of business 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 Bond or portion thereof called for redemption prior to matur- ity, within 45 days prior to ks redemption 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 promptly will appoint a competent and legally qualified substitute therefor, and will promptly cause written notice thereof to be mailed to the registered owners of the Bonds. IT IS HEREBY certified, recked, and covenanted that this Bond has been duly and validly voted, authorized, issued, sold, and delivered; that all acts, conditions, and things required or proper to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this Bond have been performed, existed, and been done in accordance with law; that this Bond is a general obligation of the Issuer, issued on the full faith and credit thereof; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond, as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged irrevocably for such payment, within the limit prescribed by law. 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 recorded and available for inspection in the official minutes and records of the governing body of the Issuer, and agrees that the terms and provisions of this Bond and the Bond Ordinance constitute a contract between each registered owner hereof and the Issuer. IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or facsimile signature of the Mayor of the Issuer and countersigned and attested with the manual or facsimile signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Bond. ATTEST: CITY OF DENTON, TEXAS By: By: Jennifer Walters City Secretary, City of Denton, Texas (CITY SEAL) Euline Brock Mayor, City of Denton, Texas 0705.056\GO-Ordinance March 15, 2002 15 FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE (To be executed if this Bond is not accompanied by an executed Registration Certificate of the Comptroller of Public Accounts of the State of Texas) It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance described in this Bond; and that this Bond has been issued in conversion of and exchange for or replacement of a bond, bonds, or a portion of a bond or bonds of an issue which 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 BANK ONE, NATIONAL ASSOCIATION, AUSTIN, TEXAS, Paying Agent/Registrar By. Authorized Representative (INSERT BOND INSURANCE LEGEND, IF ANY) FORM OF ASSIGNMENT: ASSIGNMENT FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly authorized representative or attorney thereof, hereby assigns this Bond to / / (Assignee's Social Security or Taxpayer Identification Number) (print or typewrite Assignee's name and address, including zip code) and hereby irrevocably constitutes and appoints attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating in a securities transfer association recognized signature guarantee program. Registered Owner NOTICE: This signature must correspond with the name of the Registered Owner appearing on the face of this Certificate in every particular without alteration or enlargement or any change whatsoever. 0705.056\GO-Ordinance March 15, 2002 16 Section 8. TAX LEVY. A special Interest and Sinking Fund (the "Interest and Sinking Fund") is hereby created solely for the benefit of the 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 valorem taxes levied and collected for and on account of the Bonds, together with any premium and accrued interest receivedupon sale of the Bonds, 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 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 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 (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 approved tax rolls of the Issuer, with full allowance 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 levied, against all taxable property in the Issuer for each year while any of the Bonds 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 Bonds, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. Section 9. 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 9, when payment of the principal of such Bond, plus interest thereon to the due date (whether such due date be by reason of maturity, upon redemption, or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof (inc- luding the giving of any required notice of redemption), 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 for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Government 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 Issuer with the Paying Agent/Registrar for the payment of its services until all Defeased Bonds shall have become due and payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond 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 this Ordinance, and such principal and interest shall be payable solely from such money or Government Obligations. (b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer 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 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. (c) The term "Government Obligations" as used in this Section shall mean direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally 0705.056\GO-Ordinance March 15, 2002 17 guaranteed by the United States of America, which may be United States Treasury obligations such as its State and Local Government Series, which may be in book-entry form. (d) Until all Defeased Bonds shall have become due and payable, the Paying Agent/Registrar shall 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. Section 10. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS. (a) Replacement Bonds. In the event any 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. (b) Application for Replacement Bonds. Application for replacement of damaged, mutilated, lost, 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 a replacement bond 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. Also, in every case of loss, theft, or destruction of a Bond, the registered owner shall furnish to the Issuer and 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 Bond, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated. (c) No Defauk Occurred. Notwithstanding the foregoing provisions of this Section, in the event of any such Bond shall have matured, and no defauk has occurred which 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 or indemnity is furnished as above provided in this Section. (d) Charge for Issuing Replacement 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 shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Bonds duly issued under this Ordinance. (e) Authority for Issuing Replacement Bonds. In accordance with Chapter 1201, Texas Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such replacement bond 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 bonds is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form and manner and with the effect, as provided in Section 6(d) of this Ordinance for Bonds issued in conversion and exchange for other Bonds. 0705.056\GO-Ordinance March 15, 2002 18 Section 11. COVENANTS REGARDING TAX-EXEMPTION. The Issuer covenants to refrain from taking any action which would adversely affect, or to take such action to assure, the treatment of the Bonds 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 income taxation. In furtherance thereof, the Issuer covenants as follows: (a) to take any action to assure that no more than 10 percent of the proceeds of the Bonds or the projects financed therewith (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 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 contravention of section 141(b)(2) of the Code; (b) to take any action to assure that in the event that the "private business use" described in subsection (a) hereof exceeds five percent of the proceeds of the Bonds or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of five percent is used for a "private business use" which is "related" and not "disproportionate", within the meaning of section 141(b)(3) of the Code, to the governmental use; (c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or five percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is, directly or indirectly, used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code; (d) to refrain from taking any action which would otherwise result in the Bonds being treated as "private activity bonds" within the meaning of section 141(b) of the Code; (e) 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; (f) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bonds, other than investment property acquired with -- (1) proceeds of the Bonds invested for a reasonable temporary period of 3 years or less, or in the case of a refunding bonds, for a period of 30 days or less until such proceeds are needed for the purpose for which the Bonds are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1.148-1 (b) of the Treasury Regulations, and 0705.056\GO-Ordinance March 15, 2002 19 (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the stated principal amount (or, in the case of a discount, the issue price) of the Bonds; (g) 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 Code (relating to arbitrage), section 149(g) of the Code (relating to hedge bonds), and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); and (h) to pay to the United States of America at least once during each five-year period (beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the "Excess Earnings", within the meaning of section 148(f) of the Code and to pay to the United States of America, not later that 60 days after the Bonds have been paid in full, 100 percent of the amount then requked to be paid as a resuk of Excess Earnings under section 148(f) of the Code. For purposes of the foregoing (a) and (b), 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 Bonds. 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 U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify, or expand provisions of the Code, as applicable to the Bonds, the Issuer will not be required to comply with any covenant contained herein to the extent that such failure 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 regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Bonds, the Issuer agrees to comply with the additional requirements to the extent necessary and reasonably possible, in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance of 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, which may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. The Issuer covenants to comply with the covenants in this section after defeasance of the Bonds. In order to facilitate compliance with the above covenant (h), a "Rebate Fund" is hereby established by the Issuer for the sole benefit of the United States of America, and such fund shall not be subject to the claim of any other person, including without limitation, the bondholders. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. Section 12. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE PROJECT. The Issuer covenants to account for the expenditure of sale proceeds and investment earnings to be used for the purposes described in Section 1 of this Ordinance (the "Project") on its books and records in accordance with the requirements of the Internal Revenue Code. The Issuer recognizes that in order for the proceeds to be considered used for the reimbursement of costs, the proceeds must be allocated to expenditures within 18 months of the later of the date that (1) the expenditure is made, or (2) the Project is 0705.056\GO-Ordinance March 15, 2002 20 completed; but in no event later than three years after the date on which the original expenditure is paid. The foregoing notwithstanding, the Issuer recognizes that in order for proceeds to be expended under the Internal Revenue Code, the sale proceeds or investment earnings must be expended no more than 60 days after the later of (1) the fifth anniversary of the delivery of the Bonds, or (2) the date the Bonds are retired. The Issuer agrees to obtain the advice of nationally-recognized bond counsel if such expenditure fails to comply with the foregoing to assure that such expenditure will not adversely affect the tax-exempt status of the Bonds. For purposes hereof, the Issuer shall not 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. Section 13. DISPOSITION OF PROJECT. The Issuer covenants that the property constituting the Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash 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 Bonds. 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 purposes from gross income of the interest. Section 14. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND COUNSEL'S OPINION, CUSIP NUMBERS, PREAMBLE AND INSURANCE. The Mayor of the Issuer is hereby authorized to have control of the Initial Bond issued hereunder and all necessary records and proceedings pertaining to the Initial Bond pending its delivery and its investigation, examination, and approval by the Attorney General of the State of Texas, and its registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Initial Bond said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate on the Initial Bond, and the seal of said Comptroller shall be impressed, or placed in facsimile, on the Initial Bond. The approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Initial Bond or on any Bonds issued and delivered in conversion of and exchange or replacement of any Bond, but neither shall have any legal effect, and shall be solely for the convenience and information of the registered owners of the Bonds. The preamble to this Ordinance is hereby adopted and made a part hereof for all purposes. If insurance is obtained on any of the Bonds, the Initial Bond and all other Bonds shall bear an appropriate legend concerning insurance as provided by the insurer. Section 15. SALE OF INITIAL BOND. The Initial Bond is hereby sold and shall be delivered to ., for cash for the par value thereof and accrued interest thereon to date of delivery, plus a cash premium of $ It is hereby officially found, determined, and declared that the Initial Bond has been sold at public sale to the bidder offering the lowest interest cost, after receiving sealed bids pursuant to an Official Notice of Sale and Bidding Instructions and Preliminary Official Statement dated ., 2002, prepared and distributed in connection with the sale of the Initial Bond. Said Official Notice of Sale and Bidding Instructions, Preliminary Official Statement and the Official Statement dated _, 2002, and any addenda, supplement, or amendment thereto have been and are hereby approved by the Issuer, and their use in the offer and sale of the Bonds is hereby approved. It is further officially found, determined, and declared that the statements and representations contained in said 0705.056\GO-Ordinance March 15, 2002 21 Official Notice of Sale, Preliminary Official Statement and Official Statement are true and correct in all material respects, to the best knowledge and belief of the City Council. Section 16. INTEREST EARNINGS ON BOND PROCEEDS. Interest earnings derived from the investment of proceeds from the sale of the Initial Bond shall be used along with other bond proceeds for the acquisition and construction of the improvements for which the Bonds are issued; provided that after completion of such improvements, 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 which are required to be rebated to the United States of America pursuant to Section 11 hereof in 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 17. DTC REGISTRATION. The Bonds initially shall be issued and delivered in such manner that no physical distribution of the Bonds will be made to the public, and The Depository Trust Company ("DTC"), New York, New York, initially will act as depository for the Bonds. DTC has represented that it is a limited purpose trust company incorporated under the laws of the State of New York, 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 under Section 17A of the federal Securities Exchange Act of 1934, as amended, and the Issuer accepts, but in no way verifies, such representations. The Initial Bond authorized by this Ordinance shall be delivered to and registered in the name of the Purchaser. However, it is a condition of delivery and sale that the Purchaser, immediately after such delivery, shall cause the Paying Agent/Registrar, as provided for in this Ordinance, to cancel said Initial Bond and deliver in exchange therefor a substitute Bond for each maturity of such Initial Bond, with each such substitute Bond to be registered in the name of CEDE & CO., the nominee of DTC, and it shall be the duty of the Paying Agent/Registrar to take such action. It is expected that DTC will hold the Bonds on behalf of the Purchaser and/or The DTC Participants, as defined and described in the Official Statement referred to and approved in Section 15 hereof (the "DTC Participants"). So long as each Bond is registered in the name of CEDE & CO., the Paying Agent/Registrar shall treat and deal with DTC in all respects the same as if it were the actual and beneficial owner thereof. It is expected that DTC will maintain a book entry system which will identify beneficial ownership of the Bonds by DTC Participants in integral amounts of $5,000, with transfers of ownership being effected on the records of DTC and the DTC Participants pursuant to rules and regulations established by them, and that the substitute Bonds initially deposited with DTC shall be immobilized and not be further exchanged for substitute Bonds except as hereinafter provided. The Issuer is not responsible or liable for any functions of DTC, will not be responsible for paying any fees or charges with respect to its services, will not be responsible or liable for maintaining, supervising, or reviewing the records of DTC or the DTC Participants, or protecting any interests or rights of the beneficial owners of the Bonds. It shall be the duty of the Purchaser and the DTC Participants to make all arrangements with DTC to establish this book- entry system, the beneficial ownership of the Bonds, and the method of paying the fees and charges of DTC. The Issuer does not represent, nor does it in any way covenant that the initial book-entry system established with DTC will be maintained in the future. The Issuer reserves the right and option at any time in the future, in its sole discretion, to terminate the DTC (CEDE & CO.) book-entry only registration requirement described above, and to permit the Bonds to be registered in the name of any owner. If the Issuer exercises its right and option to terminate such requirement, it shall give written notice of such termination to the Paying Agent/ Registrar and to DTC, and thereafter the Paying Agent/Registrar shall, upon presentation and proper request, register any Bond in any name as provided for in this Ordinance. Notwithstanding the initial establishment 0705.056\GO-Ordinance March 15, 2002 22 of the foregoing book-entry system with DTC, if for any reason any of the originally delivered substitute Bonds is duly filed with the Paying Agent/Registrar with proper request for transfer and substitution, as provided for in this Ordinance, substitute Bonds will be duly delivered as provided in this Ordinance, and there will be no assurance or representation that any book-entry system will be maintained for such Bonds. Section 18. CONTINUING DISCLOSURE. (a)AnnualReports. (i) The Issuer shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year ending in or after 2001, financial information and operating data with respect to the Issuer of the general type included in the final Official Statement authorized by Section 16 of this Ordinance, being the information described in Exhibit A hereto, which Exhibit is attached to and incorporated in this Ordinance as if written word for word herein. 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) audited, 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 financial statements is not complete within such period, then the Issuer shall provide unaudited financial statements by the required time and will provide audited financial statements for the applicable fiscal year to each NRMSIR and any SID, when and if the audit report on such statements become available. (ii) If the Issuer changes its fiscal year, it will notify each NRMSIR and any SID 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 each NRMSIR and any SID or filed with the SEC. (b) MaterialEvent Notices. The Issuer shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of holders of the Bonds; 0705.056\GO-Ordinance March 15, 2002 23 8. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; and 11. Rating changes. The Issuer shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the Issuer to provide financial information or operating data in accordance with subsection (a) of this Section by the time required by such subsection. (c) Limitations, 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 Bonds within the meaning of the Rule, except that the Issuer in any event will give the notice required by Subsection (b) hereof of any Bond calls and defeasance that cause the Issuer to no longer be such an "obligated person". (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 claim hereunder to any other person. The Issuer undertakes to provide only the financialinformation, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation 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 Bonds at any future date. (iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER, ITS OFFICERS, AGENTS AND EMPLOYEES, BE LIABLE TO THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. (iv) No default by the Issuer in observing or performing its obligations under this Section shall comprise a breach of or default under the Ordinance for purposes of any other provision of this 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 may 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 law, or a change in the identity, nature, status, or type of operations of the Issuer, but only if (1) the provisions of this Section, as so 0705.056\GO-Ordinance March 15, 2002 24 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 Rule 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 outstanding Bonds 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 of the registered owners and beneficial owners of the Bonds. 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 (a) 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 operating data so provided. The Issuer may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction 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 Bonds in the primary offering of the Bonds. (d) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. "SID" means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. Section 19. PROTECTION OF PLEDGE. Chapter 1208, Government Code, applies to the issuance of the Bonds and the pledge of the taxes granted by the Issuer under Section 8 of this Ordinance, and is therefore valid, effective, and perfected. If Texas law is amended at any time while the Bonds are outstanding and unpaid such that the pledge of the taxes granted by the Issuer under Section 8 of this Ordinance is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, then in order to preserve to the registered owners of the Bonds the perfection of the 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 to perfect the security interest in said pledge to occur. Section 20. FURTHER PROCEDURES. The Mayor of the Issuer, the City Secretary of the Issuer, 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 0705.056\GO-Ordinance March 15, 2002 25 acts and things and to execute, acknowledge, and deliver in the name and under the corporate seal and on behalf of the Issuer all such instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance, the Bonds, the sale of the Bonds, and the Notice of Sale and Official Statement; and the Assistant City Manager/Finance of the City shall cause the expenses of issuance of the Bonds to be paid from the proceeds of sale of the Initial Bond or from any other lawfully available funds of the Issuer. In case any officer whose 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 all purposes the same as if such officer had remained in office until such delivery. Section 21. OPEN MEETINGS. The City Council has found and determined that the meeting at which this Ordinance is considered is open to the public and that notice thereof was given in accordance with the provisions of the Texas Open Meetings, Law, Tex. Gov't. Code, Chapter 551, as amended. Section 22. EFFECTIVE DATE. This Ordinance shall become effective immediately upon its passage and approval. 0705.056\GO-Ordinance March 15, 2002 26 PASSED AND APPROVED this the 2nd day of April, 2002. Euline Brock, Mayor ATTEST: Jennifer Walters, City Secretary By: APPROVED AS TO LEGAL FORM: Herbert L. Prouty, City Attorney By: 0705.056\GO-Ordinance March 15, 2002 27 EXHIBIT A DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 18 of this Ordinance: Annual Financial Statements and Operating Data 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 tables of the Official Statement referred to) below: Tables numbered 1 through 15, inclusive, under the captions "Tax Information", "Debt Service Requirements" and "Financial Information" in the Official Statement. Appendix B in the Official Statement. Accounting Principles The accounting principles referred to in such Section are the accounting principles described in the notes to the financial statements referred to in the paragraph above. 0705.056\GO-Ordinance March 15, 2002 THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 SC2 AGENDA DATE: DEPARTMENT: ACM: AGENDA INFORMATION SHEET April 2, 2002 Fiscal Operations Kathy DuBose, Fiscal and Municipal Services SUBJECT Consider adoption of an ordinance authorizing the issuance, sale and delivery of City of DeNon Certificates of Obligation Bonds, Series 2002, and approving and authorizing instruments and procedures relating thereto; and providing an effective date. BACKGROUND On April 2, 2002, David Medanich of First Southwest Company and Ted Brizzolara III of McCall, Parkhurst and Horton, will deliver and open the bids regarding the City of DeMon's Certificates of Obligation Bonds, Series 2002. The process of opening the bids and tabulating them before the City Council is required by City Charter. The Bonds will provide funding of $12,405,000 (plus costs of issuance) or the following projects and improvements: $ 4,055,000 2,000,000 800,000 1,050,000 4,500,000 Streets and Transportation Technology Services Parks (Aquatic Cemer) Facilities (Renovations) Solid Waste PRIOR ACTION/REVIEW (Council, Boards, Commissions) All of these projects were approved in the 2002-2006 Capital Improvemem Program. FISCAL INFORMATION The Certificates of Obligation Bonds will have an estimated average annual debt services requiremem of approximately $823,000. This amoum has been included in the budget process. Respectfully submitted: Diana G. Ortiz Director of Fiscal Operations ORDINANCE NO. 2002- AN ORDINANCE AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 2002; APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING THERETO; AND PROVIDING AN EFFECTIVE DATE. THE STATE OF TEXAS : COUNTY OF DENTON : CITY OF DENTON : WHEREAS, the Certificate of Obligation Act of 1971, as amended and codified (the "Act") permits the City to issue and sell for cash the Certificates of Obligation hereinafter authorized; and WHEREAS, the City has duly caused notice of its intention to issue the Certificates of Obligation hereinafter authorized to be published at the times and in the manner required by the Act and no petition has been filed protesting the issuance thereof, NOW, THEREFORE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: Section 1. AMOUNT AND PURPOSE OF THE CERTIFICATES. The certificate or certificates of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and delivered in the aggregate principalamount of $12,590,000, for the purpose of paying all or a portion of the City's contractual obligations incurred pursuant to contracts for the purchase of certain real and personal property, to-wit: (a) improvements at the City's airport, (b) equipment for the City's public parks, (c) improvements to the City's solid waste disposal system, (d) computer and technology equipment and upgrades for the City's information technology systems, (e) road and street improvements and equipment and (f) miscellaneous renovations and improvements to City owned facilities; 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 connection with said Certificates of Obligation. Section 2. DESIGNATION OF THE CERTIFICATES. Each certificate issued pursuant to this Ordinance shall be designated: "CITY OF DENTON CERTIFICATE OF OBLIGATION, SERIES 2002", and initially there shall be issued, sold, and delivered hereunder a single fully registered certificate, without interest coupons, payable in installments of principal (the "Initial Certificate"), but the Initial Certificate may be assigned and transferred and/or converted into and exchanged for a like aggregate principal amount of fully registered certificates, without interest coupons, having serial maturities, and in the denomination or denominations of $5,000 or any integralmultiple of $5,000, all in the manner hereinafter provided. The term "Certificates" as used in this Ordinance shall mean and include collectively the Initial Certificate and all substitute certificates exchanged therefor, as well as all other substitute certificates and replacement certificates issued pursuant hereto, and the term "Certificates" shall mean any of the Certificates. 0705.055\CO-Ordinance March 15, 2002 Section 3. INITIAL DATE, DENOMINATION, NUMBER, MATURITIES, INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL CERTIFICATE. (a) The Initial Certificate is hereby authorized to be issued, sold, and delivered hereunder as a single fully registered Certificate, without interest coupons, dated April 1, 2002, in the denomination and aggregate principal amount of $12,590,000, numbered R-l, payable in annual installmems of principal to the initial registered owner thereof, to-wit: or to the registered assignee or assignees of said Certificate or any portion or portions thereof(in each case, the "registered owner"), with the annual installmems of principal of the Initial Certificate to be payable on the dates, respectively, and in the principal amounts, respectively, stated in the FORM OF INITIAL CERTIFICATE set forth in this Ordinance. (b) The Initial Certificate (i) may be assigned and transferred, (ii) may be converted and exchanged for other Certificates, (iii) shall have the characteristics, and (iv) shall be signed and sealed, and the principal of and interest on the Initial Certificate shall be payable, all as provided, and in the manner required or indi- cated, in the FORM OF INITIAL CERTIFICATE set forth in this Ordinance. Section 4. INTEREST. The unpaid principal balance of the Initial Certificate shall bear interest from the date of the Initial Certificate to the respective scheduled due dates of the installments of principal of the Initial Certificate, and said interest shall be payable, all in the manner provided and at the rates and on the dates stated in the FORM OF INITIAL CERTIFICATE set forth in this Ordinance. Section 5. FORM OF INITIAL CERTIFICATE. The form of the Initial Certificate, including the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be endorsed on the Initial Certificate, shall be substantially as follows: FORM OF INITIAL CERTIFICATE NO. R- 1 $12,590,000 UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON CERTIFICATE OF OBLIGATION SERIES 2002 THE CITY OF DENTON, in Demon County, Texas (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to or to the registered assignee or assignees of this Certificate or any portion or portions hereof (in each case, the "registered owner") the aggregate principal amount of $12,590,000 (TWELVE MILLION FIVE HUNDRED NINETY THOUSAND DOLLARS) 0705.055\CO-Ordinance March 15, 2002 2 in annual installments of principal due and payable on February 15 in each of the years, and in the respective principal amounts, as set forth in the following schedule, and to pay interest, from the date of this Certificate hereinafter stated, on the balance of each such installment of principal, respectively, from time to time remaining unpaid, at the rates per annum as follows: PRINCIPAL INTEREST PRINCIPAL INTEREST YEAR AMOUNT RATE(%) YEAR AMOUNT RATE(%) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 $520 000 800000 845 000 890000 940 000 625 000 660000 595 000 625 000 665 000 2013 $420,000 2014 445,000 2015 475,000 2016 495,000 2017 520,000 2018 555,000 2019 580,000 2020 610,000 2021 645,000 2022 680,000 Interest shall first be due and payable on February 15, 2003, and semiannually on each February 15 and August 15 thereafter while this Bond or any portion hereof is outstanding and unpaid. Said interest shall be calculated on the basis of a 360-day year composed of twelve 30-day months. THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this Certificate are payable in lawful money of the United States of America, without exchange or collection charges. The installments of principal and the interest on this Certificate are payable to the registered owner hereof through the services of BANK ONE, NATIONAL ASSOCIATION, AUSTIN, TEXAS, which is the "Paying Agent/Registrar" for this Certificate. Payment of all principal of and interest on this Certificate shall be made by the Paying Agent/Registrar to the registered owner hereof on each principal and/or interest payment date by check dated as of such date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the 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 shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such principaland/or interest payment date, to the registered owner hereof, at the address of the registered owner, as it appeared at the close of business on the last day of the month next preceding each such date (the "RecordDate") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. The Issuer covenants with the registered owner of this Certificate that on or before each principal and/or interest payment date for this Certificate it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on this Certificate, when due. 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 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 Special Record Date and of the scheduled payment date of the past due interest (" SpecialPayment Date", which shall be fifteen (15) days after the Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United States mail, first class postage prepaid, to 0705.055\CO-Ordinance March 15, 2002 3 the address of each Holder of a Certificate appearing on the registration books of the Paying Agent/Registrar at the close of business on the 15th business day next preceding the date of mailing of such notice. IF THE DATE for the payment of the principal of or interest on this Certificate shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where 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 which 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 on the original date payment was due. THIS CERTIFICATE has been authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $12,590,000 for the purpose of paying all or a portion of the City's contractual obligations incurred pursuant to contracts for the purchase of certain real and personal property, to-wit: (a) improvements at the City's airport, (b) equipment for the City's public parks, (c) improvements to the City's solid waste disposal system, (d) computer and technology equipment and upgrades for the City's information technology systems, (e) road and street improvements and equipment and (f) miscellaneous renovations and improvements to City owned facilities; 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 connection with said Certificates of Obligation. ON FEBRUARY 15, 2012, or on any date whatsoever thereafter, the unpaid installments of principal of this Certificate of Obligation may be prepaid or redeemed prior to their scheduled due dates, at the option of the Issuer, with funds derived from any available source, as a whole, or in part, and, if in part, the particular portion of this Certificate of Obligation to be prepaid or redeemed shall be selected and designated by the Issuer (provided that a portion of this Certificate of Obligation may be redeemed only in an integral multiple of $5,000), at the prepayment or redemption price of the par or principal amount thereof, plus accrued interest to the date fixed for prepayment or redemption. AT LEAST 30 days prior to the date fixed for any such prepayment or redemption a written notice of such prepayment or redemption shall be mailed by the Paying Agent/Registrar to the registered owner hereof. By the date fixed for any such prepayment or redemption due provision shall be made by the Issuer with the Paying Agent/Registrar for the payment of the requked prepayment or redemption price for this Certificate or the portion hereof which is to be so prepaid or redeemed, plus accrued interest thereon to the date fixed for prepayment or redemption. If such written notice of prepayment or redemption is given, and if due provision for such payment is made, all as provided above, this Certificate, or the portion thereof which is to be so prepaid or redeemed, thereby automatically shall be treated as prepaid or redeemed prior to its scheduled due date, and shall not bear interest after the date fixed for its prepayment or redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the prepayment or redemption price plus accrued interest to the date fixed for prepayment or redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such prepayments or redemptions of principal of this Certificate or any portion hereof. THIS CERTIFICATE, to the extent of the unpaid principal balance hereof, or any unpaid portion hereof in any integral multiple of $5,000, may be assigned by the initial registered owner hereof and shall be transferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Certificates, upon the terms and conditions set forth in the Certificate Ordinance. Among other requirements for such transfer, this Certificate must be presented and surrendered to the Paying 0705.055\CO-Ordinance March 15, 2002 4 Agent/Registrar for cancellation, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment by the initial registered owner of this Certificate, or any portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees in whose name or names this Certificate or any such portion or portions hereof is or are to be trans- ferred and registered. Any instrument or instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Certificate or any such portion or portions hereof by the initial registered owner hereof. A new certificate or certificates payable to such assignee or assignees (which then will be the new registered owner or owners of such new Certificate or Certificates) or to the initial registered owner as to any portion of this Certificate which is not being assigned and transferred by the initial registered owner, shall be delivered by the Paying Agent/Registrar in conversion of and exchange for this Certificate or any portion or portions hereof, but solely in the form and manner as provided in the next paragraph hereof for the conversion and exchange of this Certificate or any portion hereof. The registered owner of this Certificate shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Certificate to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary. AS PROVIDED above and in the Certificate Ordinance, this Certificate, to the extent of the unpaid principal balance hereof, may be converted into and exchanged for a like aggregate principal amount of fully registered certificates, without interest coupons, payable to the assignee or assignees duly designated in writing by the initial registered owner hereof, or to the initial registered owner as to any portion of this Certificate which is not being assigned and transferred by the initial registered owner, in any denomination or denominations in any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute certificate issued in exchange for any portion of this Certificate shall have a single stated principal maturity date), upon surrender of this Certificate to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the Certificate Ordinance. If this Certificate or any portion hereof is assigned and transferred or converted each certificate issued in exchange for any portion hereof shall have a single stated principal maturity date corresponding to the due date of the installment of principal of this Certificate or portion hereof for which the substitute certificate is being exchanged, and shall bear interest at the rate applicable to and borne by such installment of principal or portion thereof. No such certificate shall be payable in installments, but shall have only one stated principal maturity date. AS PROVIDED IN THE CERTIFICATE ORDINANCE, THIS CERTIFICATE IN ITS PRESENT FORM MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and to one or more assignees, but the certificates issued and delivered in exchange for this Certificate or any portion hereof may be assigned and transferred, and converted, subsequently, as provided in the Certificate Ordinance. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging this Certificate or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be required to make any such assignment, conversion, or exchange during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date. IN THE EVENT any Paying Agent/Registrar for this Certificate 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 promptly will cause written notice thereof to be mailed to the registered owner of this Certificate. 0705.055\CO-Ordinance March 15, 2002 5 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 to 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 law; that this Certificate is a general obligation of the Issuer, issued on the full faith and credit thereof; and that annual ad valorem taxes sufficient 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 the Issuer, and have been pledged irrevocably for such payment, within the limit prescribed by law; and that, together with other parity obligations, this Certificate additionally is payable from and secured by certain surplus revenues (not to exceed $10,000 in aggregate amount) derived by the Issuer from the ownership and operation of the City's Utility System (consisting of the City'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 right 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 of the City's Utility System, on a parity with, or with respect to said revenues, superior in lien to, this Certificate. 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 bound by such terms and provisions, acknowledges that the 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 terms and provisions of this Certificate and the Certificate Ordinance constitute a contract between the registered owner hereof and the Issuer. IN WITNESS WHEREOF, the Issuer has caused this Certificate to be signed with the manual or facsimile signature of the Mayor of the Issuer and countersigned and attested with the manual or facsimile signature of the City Secretary of the Issuer, has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Certificate, and has caused this Certificate to be dated April 1, 2002. ATTEST: CITY OF DENTON, TEXAS By: By: Jennifer Walters City Secretary, City of Denton, Texas (CITY SEAL) Euline Brock Mayor, City of Denton, Texas (INSERT BOND INSURANCE LEGEND, IF ANY) 0705.055\CO-Ordinance March 15, 2002 6 FORM OF REGISTRATION CERTIFICATE OF THE COMPTROLLER OF PUBLIC ACCOUNTS: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Certificate has been examined, certified as to validity, and approved by the Attorney General of the State of Texas, and that this Certificate 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) Section 6. ADDITIONAL CHARACTERISTICS OF THE CERTIFICATES. Registration and Transfer. (a) The Issuer shall keep or cause to be kept at the principal corporate trust office of BANK ONE, NATIONAL ASSOCIATION, AUSTIN, TEXAS (the "Paying Agent/Registrar") books or records of the registration and transfer 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 transfers and registrations under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such transfers and registrations as herein provided. The Paying Agent/Registrar shall 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 to notify the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and 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 Regis- tration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity. Registration of each Certificate may be transferred in the Registration Books only upon presentation and surrender of such Certificate to the Paying Agent/Registrar for transfer of registration and cancellation, together with proper written instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, (i) evidencing the assignment of the Certificate, or any portion thereof in any integralmultiple of $5,000, to the assignee or assignees thereof, and (ii) the right of such assignee or assignees to have the Certificate or any such portion thereof registered in the name of such assignee or assignees. Upon the assignment and transfer of any Certificate or any portion thereof, a new substitute Certificate or Certificates shall be issued in conversion and exchange therefor in the manner herein provided. The Initial Certificate, to the extent of the unpaid principal balance thereof, may be assigned and transferred by the initial registered owner thereof once only, and to one or more assignees designated in writing by the initial registered owner thereof. All Certificates issued and delivered in conversion of and exchange for the Initial Certificate shall be in any denomination or denominations of any integral mukiple of $5,000 (subject to the requirement hereinafter stated that each substitute Certificate shall have a single stated principal maturity date), shall be in the form prescribed in the FORM OF SUBSTITUTE CERTIFICATE set forth in this Ordinance, and shall have the characteristics, and may be assigned, transferred, and converted as hereinafter provided. If the Initial Certificate or any portion thereof is assigned and transferred or converted the Initial Certificate must be surrendered to the Paying Agent/Registrar for cancellation, and each Certificate issued in exchange for any portion of the Initial Certificate shall have a single stated principal maturity date, and shall not be payable 0705.055\CO-Ordinance March 15, 2002 7 in installments; and each such Certificate shall have a principal maturity date corresponding to the due date of the installment of principal or portion thereof for which the substitute Certificate is being exchanged; and each such Certificate shall bear interest at the single rate applicable to and borne by such installment of principal or portion thereof for which it is being exchanged. If only a portion of the Initial Certificate is assigned and transferred, there shall be deliveredto and registered in the name of the initial registered owner substitute Certificates in exchange for the unassigned balance of the Initial Certificate in the same manner as if the initial registered owner were the assignee thereof. If any Certificate or portion thereof other than the Initial Certificate is assigned and transferred or converted each Certificate issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Certificate for which it is exchanged. A form of assignment shall be printed or endorsed on each Certificate, excepting the Initial Certificate, which shall be executed by the registered owner or its duly authorized attorney or representative to evidence an assignment thereof. Upon surrender of any Certificates or any portion or portions thereof for transfer of registration, an authorized representative of the Paying Agent/Registrar shall make such transfer in the Registration Books, and shall deliver a new fully registered substitute Certificate or Certificates, having the characteristics herein described, payable to such assignee or assignees (which then will be the registered owner or owners of such new Certificate or Certificates), or to the previous registered owner in case only a portion of a Certificate is being assigned and transferred, all in conversion of and exchange for said assigned Certificate or Certificates or any portion or portions thereof, in the same form and manner, and with the same effect, as provided in Section 6(d), below, for the conversion and exchange of Certificates by any registered owner of a Certificate. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such transfer and delivery of a substitute Certificate or Certificates, but the one requesting suchtransfer shall pay any taxes or other governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be required to make transfers of registration of any Certificate or any portion thereof during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date. (b) Ownership of Certificates. The entity in whose name any Certificate shall be registered in the Registration Books at any time shall be deemed and treated as the absolute owner thereof for all purposes of this Ordinance, whether or not such Certificate shall be overdue, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on account of, the principalof, premium, if any, and interest on any such Certificate shall be made only to such registered owner. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Certificate to the extent of the sum or sums so paid. (c) Payment of Certificates and Interest. The Issuer hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the Certificates, and to act as its agent to convert and exchange or replace Certificates, 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 to the Certificates, and of all conversions and exchanges of Certificates, and all replacements of Certificates, 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 payment (a "SpecialRecord 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 ("Special Payment Date", which shall be fifteen (15) days after the SpecialRecord Date) 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 Holder of a Certificate appearing on the 0705.055\CO-Ordinance March 15, 2002 8 registration books of the Paying Agent/Registrar at the close of business on the 15th business day next preceding the date of mailing of such notice. (d) Conversion and Exchange or Replacement; Authentication. Each Certificate issued and delivered pursuant to this Ordinance, to the extent of the unpaid principal balance or principal amount thereof, may, upon surrender of such Certificate at the principal corporate trust office of the Paying Agent/Registrar, together with a written request therefor duly executed by the registered owner or the assignee or assignees thereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, may, at the option of the registered owner or such assignee or assignees, as appropriate, be converted into and exchanged for fully registered certificates, without interest coupons, in the form prescribed in the FORM OF SUBSTITUTE CERTIFICATE set forth in this Ordinance, in the denomination of $5,000, or any integral multiple of $5,000 (subject to the requirement hereinafter stated that each substitute Certificate shall have a single stated maturity date), as requested in writing by such registered owner or such assignee or assignees, in an aggregate principal amount equal to the unpaid principal balance or principal amount of any Certificate or Certificates so surrendered, and payable to the appropriate registered owner, assignee, or assignees, as the case may be. If the Initial Certificate is assigned and transferred or converted each substitute Certificate issued in exchange for any portion of the Initial Certificate shall have a single stated principal maturity date, and shall not be payable in installments; and each such Certificate shall have a principal maturity date corresponding to the due date of the installment of principal or portion thereof for which the substitute Certificate is being exchanged; and each such Certificate shall bear interest at the single rate applicable to and borne by such installment of principal or portion thereof for which it is being exchanged. If any Certificate or portion thereof(other than the Initial Certificate) is assigned and transferred or converted, each Certificate issued in exchange therefor shall have the same principal maturity date and bear interest at the same rate as the Certificate for which it is being exchanged. Each substitute Certificate shall bear a letter and/or number to distinguish it from each other Certificate. The Paying Agent/Registrar shall convert and exchange or replace Certificates as provided herein, and each fully registered certificate delivered in conversion of and exchange for or replacement of any Certificate or portion thereof as permitted or required by any provision of this Ordinance shall constitute one of the Certificates for all purposes of this Ordinance, and may again be converted and exchanged or replaced. It is specifically provided that any Certificate authenticated in conversion of and exchange for or replacement of another Certificate on or prior to the first scheduled Record Date for the Initial Certificate shall bear interest from the date of the Initial Certificate, but each substitute Certificate so authenticated after such first scheduled Record Date shall bear interest from the interest payment date next preceding the date on which such substitute Certificate was so authenticated, unless such Certificate is authenticated after any Record Date but on or before the next following interest payment date, in which case it shall bear interest from such next following interest payment date; provided, however, that if at the time of delivery of any substitute Certificate the interest on the Certificate for which it is being exchanged is due but has not been paid, then such Certificate shall bear interest from the date to which such interest has been paid in full. THE INITIAL CERTIFICATE issued and delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Certificate issued in conversion of and exchange for or replacement of any Certificate or Certificates issued under this Ordinance there shall be printed a certificate, in the form substantially as follows: "PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE It is hereby certified that this Certificate has been issued under the provisions of the Certificate Ordinance described on the face of this Certificate; and that this Certificate has been issued in conversion of and exchange for or replacement of a certificate, certificates, or a portion of a certificate or certificates 0705.055\CO-Ordinance March 15, 2002 9 of an issue which 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. BANK ONE, NATIONAL ASSOCIATION Austin, Texas Paying Agent/Registrar Dated By Authorized Representative" An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Certificate, date and manually sign the above Certificate, and no such Certificate shall be deemed to be issued or out- standing unless such Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all Certificates surrendered for conversion and exchange or replacement. 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 or replacement of any Certificate or portion thereof, and the Paying Agent/Registrar shall provide for the priming, execution, and delivery of the substitute Certificates in the manner prescribed herein, and said Certificates shall be of type composition printed on paper with lithographed or steel engraved borders of customary weight and strength. Pursuant to Chapter 1201, Texas Government Code, the duty of conversion and exchange or replacement of Certificates as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the above Paying Agent/Registrar's Authentication Certificate, the converted and exchanged or replaced Certificate shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Initial Certificate which originally was issued pursuant to this Ordinance, approved by the Attorney General, and registered by the Comptroller of Public Accounts. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging any Certificate or any portion thereof, but the one requesting any such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the exercise of such privilege of conversion and exchange. The Paying Agent/Registrar shall not be required to make any such conversion and exchange or replacement of Certificates or any portion thereof during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date. (e) In General All Certificates issued in conversion and exchange or replacemem of any other Certificate or portion thereof, (i) shall be issued in fully registered form, without interest coupons, with the principalof and interest on such Certificates to be payable only to the registered owners thereof, (ii) may be transferred and assigned, (iii) may be converted and exchanged for other Certificates, (iv) shall have the characteristics, (v) shall be signed and sealed, and (vi) the principal of and imerest on the Certificates shall be payable, all as provided, and in the manner required or indicated, in the FORM OF SUBSTITUTE CERTIFICATE set forth in this Ordinance. (f) Payment of Fees and Charges. The Issuer hereby covenants with the registered owners of the Certificates that it will (i) pay the standard or customary fees and charges of the Paying Agent/Registrar for its services with respect to the payment of the principal of and interest on the Certificates, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect to the transfer of 0705.055\CO-Ordinance March 15, 2002 10 registration of Certificates, and with respect to the conversion and exchange of Certificates solely to the extent above provided in this Ordinance. (g) Substitute Paying Agent/Registrar. The Issuer covenants with the registered owners of 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 agency 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 one 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 payment date after suchnotice. 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 it will promptly appoint a competent and legally qualified bank, trust company, financial institution, 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 shall promptly transfer and deliver the Registration Books (or a copy thereof), 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, 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. Section 7. FORM OF SUBSTITUTE CERTIFICATES. The form of all Certificates issued in conversion and exchange or replacement of any other Certificate or portion thereof, including the form of Paying Agent/Registrar's Certificate to be printed on each of such Certificates, and the Form of Assignment to be printed on each of the Certificates, shall be, respectively, substantially as follows, with such appropriate variations, omissions, or insertions as are permitted or required by this Ordinance. FORM OF SUBSTITUTE CERTIFICATE (Book-Entry Only Legend, if appropriate) NO. UNITED STATES OF AMERICA PRINCIPAL AMOUNT STATE OF TEXAS $. COUNTY OF DENTON CITY OF DENTON CERTIFICATE OF OBLIGATION SERIES 2002 INTEREST RATE MATURITY DATE DATED DATE CUSIP NO. % ON THE MATURITY DATE specified above the CITY OF DENTON, in Denton County, Texas (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to 0705.055\CO-Ordinance March 15, 2002 11 or to the registered assignee hereof (either being hereinafter called the "registered owner") the principal amount of and to pay interest thereon, calculated on the basis of a 360-day year composed of twelve 30-day months, from April 1, 2002, to the maturity date specified above, at the interest rate per annum specified above; with interest being first due and payable on February 15, 2003, and semiannually on each August 15 and February 15 thereafter, except that if the date of authentication of this Certificate 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 (hereinafter defined) 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. THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money of the United States of America, without exchange or collection charges. The principal of this Certificate shall be paid to the registered owner hereof upon presentation and surrender of this Certificate at maturity, at the principal corporate trust office of BANK ONE, NATIONAL ASSOCIATION, AUSTIN, TEXAS, which is the "Paying Agent/Registrar" for 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 dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing the issuance of the Certificates (the "Certificate Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check 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 the address of the registered owner, as it appeared at the close of business on the last day of the month next preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. However, the payment of such interest may be made by any other method acceptable to the Paying Agent/Registrar and requested by, and at the risk and expense of, the registered owner hereof. The Issuer covenants with the registered owner of this Certificate that on or before each principal payment date, interest payment date, and accrued interest payment date for this Certificate it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Certificates, when due. 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 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 Special Record Date and of the scheduled payment date of the past due interest (" SpecialPayment Date", which shall be fifteen (15) days after the Special Record Date) 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 Holder of a Certificate appearing on the registration books of the Paying Agent/Registrar at the close of business on the 15th business day next preceding the date of mailing of such notice. IF THE DATE for the payment of the principal of or interest on this Certificate shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where 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 which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are 0705.055\CO-Ordinance March 15, 2002 12 authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. THIS CERTIFICATE is one of an issue of Certificates initially dated April 1, 2002, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $12,590,000, for the purpose of paying all or a portion of the City's contractual obligations incurred pursuant to contracts for the purchase of certain real and personal property, to-wit: (a) improvements at the City's airport, (b) equipment for the City's public parks, (c) improvements to the City's solid waste disposal system, (d) computer and technology equipment and upgrades for the City's information technology systems, (e) road and street improvements and equipment and (f) miscellaneous renovations and improvements to City owned facilities; 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 connection with said Certificates of Obligation. ON FEBRUARY 15, 2012, or on any date whatsoever thereafter, the Certificates of this Series may be redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived from any available and lawful source, as a whole, 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 maybe redeemed only in an integral multiple of $5,000), at the redemption price of the par or principal amount thereof, 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 to send, mail, or 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 which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such written notice of redemption is given and if due provision for such payment is made, all as provided above, the Certificates or portions thereof which are to be so re- deemed thereby automatically shall be treated as redeemed 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 plus accrued interest from the Paying Agent/Registrar out of the funds provided for such payment. If a portion of any Certificate shall be redeemed a substitute Certificate or Certificates having the same maturity date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, and in aggregate principal amount equal to 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 Bond Ordinance. THIS CERTIFICATE OR ANY PORTION OR PORTIONS HEREOF IN ANY INTEGRAL MULTIPLE OF $5,000 may be assigned and shall be transferred only in the Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity of registrar for the Certificates, upon the terms and conditions set forth in the Certificate Ordinance. Among other requirements for such assignment and trans- fer, 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 0705.055\CO-Ordinance March 15, 2002 13 Agent/Registrar, evidencing assignment of this Certificate or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Certificate or any such portion or portions hereof is or are to be transferred and registered. The form of Assignment printed or endorsed on this Certificate shall be executed by the registered owner or its duly authorized attorney or representative, to evidence the assignment hereof. A new Certificate or Certificates payable to such assignee or assignees (which then will be the new registered owner or owners of such new Certificate or Certificates), or to the previous registered owner in the case of the assignment and transfer of only a portion of this Certificate, may be delivered by the Paying Agent/Registrar in conversion of and exchange for this Certificate, all in the form and manner as provided in the next paragraph hereof for the conversion and exchange of other Certificates. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such transfer, but the one requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto. The Paying Agent/Registrar shall not be required to make transfers of regis- tration of this Certificate or any portion hereof during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment date. The registered owner of this Certificate shall be deemed and treated by the Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and discharge of liability upon this Certificate to the extent of such payment, and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary. 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 converted into and exchanged for a like aggregate principal amount of fully registered certificates, without interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case may be, having the same maturity date, and bearing interest at the same rate, in any denomination or denominations in any 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 to the Paying Agent/Registrar for cancella- tion, all in accordance with the form and procedures set forth in the Certificate Ordinance. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for transferring, converting, and exchanging any Certificate or any portion thereof, but the one requesting such transfer, conversion, and exchange shall pay any taxes or governmental charges required to be paid with respect thereto as a condition precedent to the exercise of such privilege of conversion and exchange. The Paying Agent/Registrar shall not be required to make any such conversion and exchange during the period commencing with the close of business on any Record Date and ending with the opening of business on the next following principal or interest payment 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 will promptly cause written notice thereof 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 to 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 law; that this Certificate is a general obligation of the Issuer, issued on the full faith and credit thereof; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal 0705.055\CO-Ordinance March 15, 2002 14 matures, have been levied and ordered to be levied against all taxable property in the Issuer, and have been pledged irrevocably for such payment, within the limit prescribed by law; and that, together with other parity obligations, this Certificate, and the other Certificates of this Series, additionally are payable from and secured by certain surplus revenues (not to exceed $10,000 in aggregate amount) derived by the Issuer from the ownership and operation of the City's Utility System (consisting of the City'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 right 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 of the City's Utility System, on a parity with, or with respect to said revenues, superior in lien to, this Certificate. 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 bound by such terms and provisions, acknowledges that the 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 terms 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 signed with the manual or facsimile signature of the Mayor of the Issuer and countersigned and attested with the manual or facsimile signature of the City Secretary of the Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Certificate. ATTEST: CITY OF DENTON, TEXAS By: By: Jennifer Walters City Secretary, City of Denton, Texas Euline Brock Mayor, City of Denton, Texas (CITY SEAL) 0705.055\CO-Ordinance March 15, 2002 15 FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE It is hereby certified that this Certificate has been issued under the provisions of the Certificate Ordinance described on the face of this Certificate; and that this Certificate has been issued in conversion of and exchange for or replacement of a certificate, certificates, or a portion of a certificate or certificates of an issue which 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. BANK ONE, NATIONAL ASSOCIATION AUSTIN, TEXAS Paying Agent/Registrar Dated By Authorized Representative (INSERT BOND INSURANCE LEGEND, IF ANY) FORM OF ASSIGNMENT: ASSIGNMENT FOR VALUE RECEIVED, the undersigned registered owner of this Certificate, or duly authorized representative or attorney thereof, hereby assigns this Certificate to / / (Assignee's Social Security or Taxpayer Identification Number (print or typewrite Assignee's name and address, including zip code) and hereby irrevocably constitutes and appoints attorneyto transfer the registration of this Certificate on the Paying Agent/Registrar's Registration Books with full power of substitution in the premises. Dated: Signature Guaranteed: 0705.055\CO-Ordinance March 15, 2002 16 NOTICE: Signature(s) must be guaranteed by an eligible guarantor institution participating in a securities transfer association recognized signature guarantee program. Registered Owner NOTICE: This signature must correspond with the name of the Registered Owner appearing on the face of this Certificate in every particular without alteration or enlargement or any change whatsoever. Section 8. TAX LEVY. 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 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 Certificates. All ad valorem taxes levied and collected for and on account of the Certificates, together with any premium and accrued interest received upon 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 Certificates 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 (but never less than 2% of the original principalamount of the Certificates as a sinking fund each year). Said tax shall be based on the latest approval tax rolls of the Issuer, with full allowance 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 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, are hereby pledged for such payment, within the limit prescribed by law. Section 9. SURPLUS REVENUES. The Certificates additionally shall be payable from and secured by surplus revenues, to the extent hereinafter permitted, derived by the Issuer from the ownership and operation of the Issuer's Utility System (consisting of its combined waterworks system, sanitary sewer system, and electric light and power system) remaining after (a) payment of all amounts constituting operation and maintenance expenses of said Utility System, and (b) payment of all debt service, reserve, and other requirements and amounts required to be paid under all ordinances heretofore or hereafter authorizing (i) all bonds and (ii) all other obligations not on a parity with the Certificates, which are payable from and secured by any Utility System revenues, and (c) payment of all amounts payable from any Utility System revenues pursuant to contracts heretofore or hereafter entered into by the Issuer in accordance with law (the "Surplus Revenues"). If, for any reason, the Issuer fails to deposit ad valorem taxes levied pursuant to Section 8 hereof to the credit of the Interest and Sinking Fund in an amount sufficient to pay, when due, the principal of and interest on the Certificates, then Surplus Revenues, to the extent hereinafter permitted, shall be depos- ited to the credit of the Interest and Sinking Fund and used to pay such principal and/or interest. A maximum aggregate of $10,000 of Surplus Revenues may be used to pay principal and/or interest on the Certificates and any obligations on a parity therewith. The Certificates and any obligations on a parity therewith are not, and shall not be deemed to be, payable from or secured by any Surplus Revenues in excess of an aggregate of $10,000. Until and unless an aggregate of $10,000 of Surplus Revenues actually is used to pay any such principal and/or interest, additional obligations, payable from and secured by all or any remaining unused part 0705.055\CO-Ordinance March 15, 2002 17 of said aggregate of $10,000 of Surplus Revenues, may be issued by the Issuer on a parity with the Certificates and any other then outstanding parity obligations, with the Certificates and all such additional parity obligations to be payable from and secured equally and ratably by all or any remaining unused part of said aggregate. The Issuer reserves, and shall have, the right to issue bonds, and other obligations not on a parity with the Certificates, and to enter into contracts, in accordance with applicable laws, to be payable from and secured by any Utility System revenues other than the aggregate of $10,000 of Surplus Revenues as described above. The Certificates are on a parity with those issues of City of Denton Certificates of Obligation, Series 1993, Series 1993-A, Series 1994, Series 1995, Series 1996, Series 1998, Series 1999, Series 2000 and Series 2001 (the "Outstanding Certificates"), as permitted in the Ordinances authorizing same; and it is hereby found and determined that none of the above defined Surplus Revenues have ever been used to pay any principal and/or interest on the Outstanding Certificates. Section 10. 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 subsection (d) of this Section, when payment of the principalof such Certificate, plus interest thereon to the due date either (i) shall 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 for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Government 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 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 entitled 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. (b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer 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 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. (c) The term "Government Obligations" as used in this Section shall mean direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, which may be United States Treasury obligations such as its State and Local Government Series, which may be in book-entry form. (d) Until all Defeased 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. Section 11. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED CERTIFICATES. (a) Replacement Certificates. In the event any outstanding Certificate is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new certificate 0705.055\CO-Ordinance March 15, 2002 18 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) Application for Replacement Certificates. Application for replacement of damaged, mutilated, lost, 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. Also, in every case of loss, theft, or destruction of a Certificate, the registered owner shall furnish to the Issuer and the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Certificate, as the case may be. In every case of damage or mutilation of a Certificate, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or mutilated. (c) No Default Occurrec[ Notwithstanding the foregoing provisions of this Section, in the event of any such Certificate shall have matured, and no default has occurred which is then continuing in the payment of the principal of, 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) Charge for Issuing Replacement 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) Authority for Issuing Replacement Certificates. In accordance with Chapter 1201, Texas Government Code, this Section of this Ordinance shall constitute authority for the issuance of any such replacement 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 the form and manner and with the effect, as provided in Section 6(d) of this Ordinance for Certificates issued in conversion and exchange for other Certificates. Section 12. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES; CERTIFICATE COUNSEL'S OPINION, CUSIP NUMBERS, PREAMBLE AND INSURANCE. The Mayor of the Issuer is hereby authorized to have control of the Initial Certificate issued hereunder and all necessary records and proceedings pertaining to the Initial Certificate pending its delivery and its investigation, examination, and approval by the Attorney General of the State of Texas, and its registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of the Initial Certificate said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate on the Initial Certificate, and the seal of said Comptroller shall be impressed, or placed in facsimile, on the Initial Certificate. The approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Initial Certificate or on any Certificates issued and delivered in conversion of and exchange or replacement of any Certificate, but neither shall have any legal effect, and shall be solely for the convenience and information of 0705.055\CO-Ordinance March 15, 2002 19 the registered owners of the Certificates. The preamble to this Ordinance is hereby adopted and made a part hereof for all purposes. If insurance is obtained on any of the Certificates, the Initial Certificate and all other Certificates shall bear an appropriate legend concerning insurance as provided by the insurer. Section 13. COVENANTS REGARDING TAX-EXEMPTION OF INTEREST ON THE CERTIFICATES BONDS. (a) Covenants. The Issuer covenants to take any action necessary to assure, or refrain from any action which would adversely affect, the treatment of the Bonds 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 income 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 Bonds or the projects financed therewith (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 the Issuer, with respect to such private business use, do not, under the terms of this Order 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 contravention 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 Bonds 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" which is "related" and not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use; (3) to take any action to assure that no amount which 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 finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code; (4) to refrain from taking any action which would otherwise result in the Bonds 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 resuk in the Bonds being "federally guaranteed" within the meaning of section 149(b) of the Code; (6) to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Bonds, other than investment property acquired with -- (A) proceeds of the Bonds 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 such 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 Treasury Regulations, and 0705.055\CO-Ordinance March 15, 2002 20 (C) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent 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 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 date of delivery of the Bonds) an amount that is at least equal to 90 percent of the "Excess Earnings," within the meaning of section 148(f) 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 Earnings under section 148(f) of the Code. (b) Proceeds. 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 Bonds. 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 U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify or expand provisions of the Code, as applicable to the Bonds, the Issuer will not be required to comply with any covenant contained herein to the extent that such failure 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 regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Bonds, 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 Bonds under section 103 of the Code. In furtherance of 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, which may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. Section 14. SALE OF INITIAL CERTIFICATE. The Initial Certificate is hereby sold and shall be delivered to for cash for the par value thereof and accrued interest thereon to date of delivery, plus a cash premium of $ . Such premium shall, upon receipt, be deposited into the Interest and Sinking Fund. It is hereby officially found, determined, and declared that the Initial Certificate has been sold at public sale to the bidder offering the lowest interest cost, after receiving sealed bids pursuant to an Official Notice of Sale and Bidding Instructions and Preliminary Official Statement dated ., 2002 prepared and distributed in connection with the sale of the Initial Certificate. Said Official Notice of Sale and Bidding Instructions, Preliminary Official Statement and the Official Statement dated ,2002, and any addenda, supplement, or amendment thereto have been and are hereby approved by the Issuer, and their use in the offer and sale of the Certificates is hereby approved. It is further officially found, determined, and declared that the statements and representations contained in said Official Notice of Sale, Preliminary Official Statement and Official Statement are true and correct in all material respects, to the best knowledge and belief of the City Council and the Issuer. 0705.055\CO-Ordinance March 15, 2002 21 Section 15. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE PROJECT. The Issuer covenants to account for the expenditure of sale proceeds and investment earnings to be used for the purposes described in Section 1 of this Ordinance (the "Project") on its books and records in accordance with the requirements of the Internal Revenue Code. The Issuer recognizes that in order for the proceeds to be considered used for the reimbursement of costs, the proceeds must be allocated to expenditures within 18 months of the later of the date that (1) the expenditure is made, or (2) the Project is completed; but in no event later than three years after the date on which the original expenditure is paid. The foregoing notwithstanding, the Issuer recognizes that in order for proceeds to be expended under the Internal Revenue Code, the sale proceeds or investment earnings must be expended no more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Certificates, or (2) the date the Certificates are retired. The Issuer agrees to obtain the advice of nationally-recognized bond counsel if such expenditure fails to comply with the foregoing to assure that such expenditure will not adversely affect the tax-exempt status of the Certificates. For purposes hereof, the Issuer shall not 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. Section 16. DISPOSITION OF PROJECT. The Issuer covenants that the property constituting the Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash 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 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 purposes from gross income of the interest. Section 17. INTEREST EARNINGS ON CERTIFICATE PROCEEDS. Interest earnings derived from the investment of proceeds from the sale of the Initial Certificate shall be used along with other proceeds for the purposes for which the Certificates are issued; provided that after completion of such purposes, 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 certificate proceeds which are required to be rebated to the United States of America pursuant to Section 13 hereof in order to prevent the Certifi- cates from being "arbitrage bonds" within the meaning of the Code shall be so rebated and not considered as interest earnings for the purposes of this Section. Section 18. DTC REGISTRATION. The Certificates initially shall be issued and delivered in such manner that no physical distribution of the Certificates will be made to the public, and The Depository Trust Company ("DTC"), New York, New York, initially will act as depository for the Certificates. DTC has represented that it is a limited purpose trust company incorporated under the laws of the State of New York, 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 under Section 17A of the federal Securities Exchange Act of 1934, as amended, and the Issuer accepts, but in no way verifies, such representations. The Initial Certificate authorized by this Ordinance shall be delivered to and registered in the name of the Purchaser. However, it is a condition of delivery and sale that the Purchaser, immediately after such delivery, shall cause the Paying Agent/Registrar, as provided for in this Ordinance, to cancel said Initial Certificate and deliver in exchange therefor a substitute Certificate for each maturity of such Initial Certificate, with each such substitute Certificate to be registered in the name of CEDE & CO., the nominee of DTC, and it shall be the duty of the Paying Agent/Registrar to take such action. It is expected that DTC will hold the Certificates on behalf of the Purchaser and/or the DTC Participants, as defined and described in the Official 0705.055\CO-Ordinance March 15, 2002 22 Statement referred to and approved in Section 14 hereof (the "DTC Participants"). So long as each Certificate is registered in the name of CEDE & CO., the Paying Agent/Registrar shall treat and deal with DTC in all respects the same as if it were the actualand beneficial owner thereof. It is expected that DTC will maintain a book entry system which will identify beneficial ownership of the Certificates by DTC Partici- pants in integral amounts of $5,000, with transfers of ownership being effected on the records of DTC and the DTC Participants pursuant to rules and regulations established by them, and that the substitute Certificates initially deposited with DTC shall be immobilized and not be further exchanged for substitute Certificates except as hereinafter provided. The Issuer is not responsible or liable for any functions of DTC, will not be responsible for paying any fees or charges with respect to its services, will not be responsible or liable for maintaining, supervising, or reviewing the records of DTC or the DTC Participants, or protecting any interests or rights of the beneficial owners of the Certificates. It shall be the duty of the Purchaser and the DTC Participants to make all arrangements with DTC to establish this book-entry system, the beneficial ownership of the Certificates, and the method of paying the fees and charges of DTC. The Issuer does not represent, nor does it in any way covenant that the initial book-entry system established with DTC will be maintained in the future. The Issuer reserves the right and option at any time in the future, in its sole discretion, to terminate the DTC (CEDE & CO.) book-entry only registration requirement described above, and to permit the Certificates to be registered in the name of any owner. If the Issuer exercises its right and option to terminate such requirement, it shall give written notice of such termination to the Paying Agent/Registrar and to DTC, and thereafter the Paying Agent/Registrar shall, upon presentation and proper request, register any Certificate in any name as provided for in this Ordinance. Notwithstanding the initial establishment of the foregoing book-entry system with DTC, if for any reason any of the originally delivered substitute Certificates is duly filed with the Paying Agent/Registrar with proper request for transfer and substitution, as provided for in this Ordinance, substitute Certificates will be duly delivered as provided in this Ordinance, and there will be no assurance or representation that any book-entry system will be maintained for such Certificates. Section 19. CONTINUING DISCLOSURE. (a) Annual Reports. (i) The Issuer shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year ending in or after 2001, financial information and operating data with respect to the Issuer of the general type included in the final Official Statement authorized by Section 14 of this Ordinance, being the information described in Exhibit A hereto, which Exhibit is attached to and incorporated in this Ordinance as if written word for word herein. 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) audited, 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 financial statements is not complete within such period, then the Issuer shall provide unaudited financial statements by the required time and will provide audited financial statements for the applicable fiscal year to each NRMSIR and any SID, when and if the audit report on such statements become available. (ii) If the Issuer changes its fiscal year, it will notify each NRMSIR and any SID 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 each NRMSIR and any SID or filed with the SEC. 0705.055\CO-Ordinance March 15, 2002 23 (b) MaterialEvent Notices. The Issuer shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, 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. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Certificates; 7. Modifications to rights of holders of the Certificates; 8. Certificate calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Certificates; and 11. Rating changes. The Issuer shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the Issuer to provide financial information or operating data in accordance with subsection (a) of this Section by the time required by such subsection. (c) Limitations, 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 the notice required by Subsection (b) hereof of any Certificate calls and defeasance that cause the Issuer to no longer be such an "obligated person". (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 financialinformation, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation 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. 0705.055\CO-Ordinance March 15, 2002 24 (iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER, ITS OFFICERS, AGENTS AND EMPLOYEES, BE LIABLE TO THE REGISTERED 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 ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. (iv) No default by the Issuer in observing or performing its obligations under this Section shall comprise a breach of or default under the Ordinance for purposes of any other provision of this 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 may 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 law, or a change in the identity, nature, status, or type of operations of the Issuer, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Certificates in the primary offering of the Certificates in compliance with the Rule, taking into account any amendments or interpretations of the Rule 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 outstanding 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 of the registered owners and beneficial owners of the 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 (a) 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 operating data so provided. The Issuer may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction 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 the Certificates. (d) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. 0705.055\CO-Ordinance March 15, 2002 25 "SID" means any person designated by the State of Texas or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. Section 20. PROTECTION OF PLEDGE. Chapter 1208, Government Code, applies to the issuance of the Certificates and the pledge of the taxes and surplus revenues granted by the Issuer under Sections 8 and 9 of this Ordinance, and is therefore valid, effective, and perfected. If Texas law is amended at any time while the Certificates are outstanding and unpaid such that the pledge of the taxes and surplus revenues granted by the Issuer under Sections 8 and 9 of this Ordinance is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, then in order to preserve to the registered owners of the Certificates the perfection of the 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 to perfect the security interest in said pledge to occur. Section 21. FURTHER PROCEDURES. The Mayor of the Issuer, the City Secretary of the Issuer, 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 all such instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Certificate Ordinance, the Certificates, the sale of the Certificates, and the Notice of Sale and Official Statement; and the Assistant City Manager/Finance of the City shall cause the expenses of issuance of the Certificates to be paid from the proceeds of sale of the Initial Certificate or from other lawfully available funds of the Issuer. In case any officer whose signature shall appear on any Certificate shall cease to be such officer before the delivery of such Certificate, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. Section 22. OPEN MEETINGS. The City Council has found and determined that the meeting at which this Ordinance is considered is open to the public and that notice thereof was given in accordance with the provisions of the Texas Open Meetings, Law, Tex. Gov't. Code, Chapter 551, as amended. Section 23. EFFECTIVE DATE. This Ordinance shall become effective immediately upon its passage and approval. 0705.055\CO-Ordinance March 15, 2002 26 PASSED AND APPROVED this the 2nd day of April, 2002. ATTEST: Euline Brock, Mayor Jennifer Walters, City Secretary APPROVED AS TO LEGAL FORM: Herbert L. Prouty, City Attorney By: 0705.055\CO-Ordinance March 15, 2002 27 EXHIBIT A DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 19 of this Ordinance: Annual Financial Statements and Operating Data 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 tables of the Official Statement referred to) below: Tables numbered 1 through 15, inclusive, under the captions "Tax Information", "Debt Service Requirements" and "Financial Information" in the Official Statement. Appendix B in the Official Statement. Accounting Principles The accounting principles referred to in such Section are the accounting principles described in the notes to the financial statements referred to in the paragraph above. 0705.055\CO-Ordinance March 15, 2002 THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 WS1 AGENDA INFORMATION SHEET AGENDA DATE: DEPARTMENT: CM/DCM/ACM: April 2, 2002 General Government Betty Williams, Director of Management & Public Information Michael A. Conduff, City Manager SUBJECT: Receive a report and hold a discussion concerning cable television regulated rate adjustment filing by Charter Communications. BACKGROUND: The City is certified to regulate cable television rates for basic cable service, equipment, changing tiers, and the hourly service charge. Under thc current franchise agreement, Charter Communications has agreed to file for new rates only once per year. The city received thc appropriate rate adjustment filing Federal Communications Commission Forms (1240 and 1205) on March 1, 2002. Thc City has one year from that date to issue a rate order establishing the Maximum Permitted Rates (MPR) that Charter Communications may charge. However, Charter has the right to implement these proposed rates on June 1, 2002 until City C6uncil sets thc new MPR's. In their filing, Charter Communications indicates that the new rates are the result of "certain external costs, (i.e., programming, channel changes, copyright), inflation, tree-up adjustments and increased cost associated with delivering cable service." FCC Form 1240 calculates the maximum permitted rate for basic cable service. Form 1205 calculates maximum permitted rates for equipment, changing tiers, and the hourly service charge. We contracted with Connie Cannady of C2 Consulting to assist staff with the rate analysis. Ms. Cannady is familiar with Charter Communication's cost analysis practices and has done our rate analysis for the past several years. Ms. Cannady's report will be available for the regular council meeting on May 14. There is also a public hearing scheduled for the regular council meeting on April 16. Notification of these meeting will be posted on our website, Channel 26, several Charter Media channels, and the media will be sent a press release. This time schedule will allow Council an opportunity to pass a rate resolution prior to June 1, 2002. However, this schedule is dependent on the quickness that Charter responds to our request for information. ADA/EOE/ADEA www.cityofdenton.com (TDD 800-735-2989) April 2, 2002 Council WS Agenda Cable Rates Page 2 of 3 A comparison of the cable operator's existing Maximum Permitted Rates follows: Charter Communications Maximum Permitted Rates Item Current Proposed Basic Cable $9.78/month $10.19/month Non-addressable Converter $0.98/month N/A Digital Converter $3.95/month $6.60/month Remote Control $0.20/month $0.20/month Changing Tiers $2.00 $1.99 Hourly Service Charge $22.12/hour $26.79/hour Unwired Install-Aerial $39.37 $46.09 Unwired Install-Underground $42.02 $50.11 Install-Prewired Reconnect $23.66 $29.47 A/O at time of Installation $12.83 $14.20 A/O Return Trip $23.66 $29.47 Analog Prewired A/O None* $25.46 Analog Relocate A/O None* $29.47 Analog Truck Roll $20.57 $24.12 Digital Install-Aerial $47.11 $55.47 Digital Install-Underground $49.76 $59.48 Digital Upgrade $31.40 $38.85 Digital A/O at time of Installation $18.58 $17.42 Digital A/O Return Trip $28.75 $34.30 Digital Prewired A/O None* $29.47 Digital Relocate A/O None* $32.96 Digital Truck Roll $20.57 $27.60 Modem Install $44.70 None** *Charter had not previously filed a rate for this type of service work. It appears that these filings are giving a cost break to customers with prewired connections. ** Charter did not file a rate for this category. Internet service is not a regulated service, however staff thinks that because Charter requires intemet customers to subscribe to basic only cable service we might have a persuasive argument for regulating this rate. ADA/EOE/ADEA www.cityofdenton.com (TDD 800-735-2989) April 2, 2002 Council WS Agenda Cable Rates Page 3 of 3 Charter's latest filing indicates that they intend to raise the basic cable service rate $0.41 per month ($9.78 to $10.19). Their filing also contains an increase of $2.65 for the digital converter rental ($3.95 to $6.60). They did not file a rate for the non-addressable converter because we no longer have these converters in our system. Their rate for changing tiers is reduced by $0.01, while their remote rentals will increase will remain the same ($0.20). The proposed hourly service charge will increase $4.67 ($22.12 to $26.79). Regarding the hourly service rate, it should be noted that Charter has set certain time standards for certain types of installations which we asked our rate consultant to examine. OPTIONS: 1) Direct staff to prepare a resolution approving Charter Communications' rates as filed. 2) Direct staff to prepare a resolution approving rates as determined by C2 Consulting. 3) Take no official action prior to June 1, 2002 and Charter Communications may implement their filed rates on June 1, 2002. If Charter Communications implements their filed rates on June 1, 2002, and if Council approves lower rates after June 1, 2002, then Charter Communications must implement the lower rates immediately. Charter Communications may attempt to obtain an order by the FCC or a court staying the effectiveness of the City's rate order and thus allowing implementation of the filed rates. However, if the FCC or the courts uphold the lower rates, Charter Communications would have to rebate the difference to subscribers or factor the overcharges into next year's calculations. PRIOR ACTION/REVIEW (Council, Boards, Commission): None FISCAL INFORMATION: Higher rates would impact subscribers. City receives 5% of Charter Communications gross revenues as franchise fees. Respectfully~submitted: t~t~'y- Wi~lia~ms Director of Management and Public Information Prepared by: J~ Cabrales Jr. C~ Pu~ic Information Officer ,,o Attachments 1. FCC Form 1240 and 1205 ADA/EOE/ADEA www.cityofdenton.com (TDD 800-735-2989) oCharter MMUNICATIONS A WIRED WORLD COMPANY February 28, 2002 r REC-EIVED MAR - 1 2002 CITY MANAGER'S OFFICE John Cabrales, Public Information Officer City of Denton 215 E. McKinney Denton, TX 76201 Dear Mr. Cabrales: Enclosed, please find Charter Communication's ("Charter") annual rate justification filing for 2002. Charter is hereby submitting this filing pursuant to the Federal Communication Commission's ("FCC") rate-setting methodology. Upon receipt of this letter, the City is notified of Charter's updated maximum permitted rate effective June 2002. Please refer to the "Additional Information Attachment", following this cover letter, for the rate to be implemented on the Basic Service Tier. These changes are the result of certain external costs (i.e., programming, channel changes, copyright), inflation, tree-up adjustments, and increased costs associated with delivering cable service. Please be advised that all customers will be notified of any rate changes in accordance with FCC rules. If you have any questions about the filings, please feel free to call me at (214) 523-8529. Respectfully submitted, Denise M. Jones Director of Regulatory Compliance and Planning Enclosures cc: Dusty Matthews 2911 Turtle Creek Boulevard · Suite 600 · Dallas, Texas · 75219 www, chartercom.com · tel: 214.521.7898 · fax: 214.526.2154 Charter Communications Form 1240 Filing - Additional Information Attachment Denton 1 Basic Rate Structure: Charter Communications plans to implement the following rate structure: ~ New Rate Basic Service Tier $9.78 $10.19 2 Basic Channel Activity: True-up Period: None Projected Period: 3/02: The Hallmark Channel will replace Weather Radar on Basic. The following schedule details progrzmming costs per customer for the true-up & projected periods. Beginning of the true-up period 1: End of the true-up period 1: Beginning of the projected period: End of the projected period: Basic ~;ervice Tier $0.3067 $0.2626 $0.2626 $0.3789 4 The following schedule details franchise related costs per customer for the true-up & projected periods: Basic Service Tier True-up period: $0.0000 Projected period: $0.0000 Type: n/a Calculation: n/a Federal Communications Commission Approved by OMB 3060-0685 Washington, DC 20554 FCC FORM 1240 UPDATING MAXIMUM PERMITTED RATES FOR REGULATED CABLE SERVICES Cable Operator: Name of Cable Operator Charter Comm~nle_~i_oI~ Mailing Address of Cable Operator 2911 Turtle Creek Boulevard City D~llag I State IZ1P Code Texas 175219 1. Does this filing involve a single franchise authority and a single community unit? If yes, complete the franchise authority information I TX0SS0 below and enter the associated CUff) number here: I 2. Does this filing involve a single franchise authority but multiple community units? YES NO x YES NO I x I If yes, enter the associated CUIDs below and complete the franchise authority information at the bottom of this page: n]a 3. Does this ~ing involve multiple franchise authorities? If yes, attach a separate sheet for each franchise authority and include the following franchise authority information with its associated CUID(s): Franchise Authority Information: Name of Local Franchising Authority I)e_n_~on Mailing Address of Local Franchising Authority 215 E. MeKinney City [~j~te [ZW Code ~_-eon flax Number 176201 Telephone number I 940) 349-8509 4. For what purpose is this Form 1240 being Fded? Please put an "X" in the appropriate box. a. Original Form 1240 for Basic Tier b. Amended Form 1240 for Basic Tier c. Original Form 1240 for CPS Tier d. Amended Form 1240 for CPS Tier 5. Indicate the one year time period for which you are setting rates (the Projected Period). 6. Indicate the time period for which you are performing a true-up. 7. Status of Previous Filing of FCC Form 1240 (enter an "x" in the appropriate box) a. Is this the first FCC Form 1240 filed in any jurisdiction? b. Has an FCC Form 1240 been filed previously with the FCC? X TO TO 311/01 I 2/28/021 YES NO If yes, enter the date of the most recent filing: c. Has an FCC Form 1240 been filed previously with the Franchising Authority? If yes, enter the date of the most recent filing: 8. Status of Previous Filing of FCC Form 1210 (enter an "x" in the appropriate box) a. Has an FCC Form 1210 been previously filed with the FCC? If yes, enter the date of the most recent filing: ] (mm/dd/yy) YES NO x I I 2/28/01 I (mm/dd/yy) YES NO I I I (mm/dd/yy) (mm/yy) (mm/yy) FCC Form 1240 Page I Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Washington, DC 20554 YES NO b. Has an FCC Form 1210 been previously filed with the Franchising Authority? I I If yes, enter the date of the most recent filing: [ ] (mm/dd/yy) 9. Status of FCC Form 1200 Filing (enter an "x" in the appropriate box) YES NO a. Has an FCC Form 1200 been previously filed with the FCC? I I If yes, enter the date filed: I ] (mm/dd/yy) YES NO b. Has an FCC Form 1200 been previously filed with the Franchising Authority? [ If yes, enter the date filed: I I (mm/dd/yy) 10. Cable Programming Services Complaint Status (enter an "x" in the appropriate box) YES NO a. Is this form being filed in response to an FCC Form 329 complaint? [ I X If yes, enter the date of the complaint: I I (mm/dd/yy) YES NO 11. Is FCC Form 1205 Being Included With This Filing Approved by OMB 3060-0685 12. Selection of "Going Forward" Channel Addition Methodology (enter an "x" in the appropriate box) ~]Check here if you are using the original roles [MARKUP METHOD]. ~Check here if you are using the new, alternative rules [CAPS METHOD]. If using the CAPS METHOD, have you elected to revise recovery for YES NO channels added during the period May 15, 1994 to Dec. 31, 19947 [ I x I 13. Headend Upgrade Methodology *NOTE: Operators must certify to the Commission their eligibility to use this upgrade methodology and attach an equipment list and depreciation schedule. ['~Check here if you are a qualifying small system using the streamlined headend upgrade methodology. Part h Preliminary Information Module A: Maximum Permitted Rate From Previous Filing a b c d e Line l.inn Descrirtion Basic Tier 2 Tier 3 Tier 4 Tier iA1Current Maximum Permitted Rate I$9.77881 I I [ Module B: Subscribemhip a b c d e Line l.in~ Description Basic Tier 2 Tier 3 Tier 4 Tier B 1 Average Subscribership For True-Up Period 1 19,313 B2 Average Subscribership For True-Up Period 2 n/a B3 l~timated Average Subscribernhip For Projected Period 19,506 Module C: Inflation Information ~ Line ~ Cl Unclaimed Inflation: Operator Switching From 1210 To 1240 C2 Unclaimed Inflation: Unregulated Operator Responding to Rate Complaint C3 Inflation Factor For True-Up Period 1 [Wks 1 ] C4 Inflation Factor For True-Up Period 2 [Wks 1 ] C5 Current FCC Inflation Factor FCC Form 1240 Page 2 Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Approved by OMB 3060-0685 Washington, DC 20554 Module D: Calculating the Base Rate a b c d e Line Line Description Basic Tier 2 Tier 3 Tier 4 Tier 5 D1 Current Headend Upgrade Segment $0.0000 02 Current External Costs Segment $0.3067 D3 Current Caps Method Segment $0.0000 D4 Current Markup Method Segment $0.0300 D5 Current Channel Movement and Deletion Segment ($0.3604) D6 L~rrent Tree-Up Segment ($0.0719) D7 Chtrrent Inflation Segment $0.1521 D8 Base Rate [AI-D1-D2-D3-D4-D5-D6-D7] $9.7223 Part II: True-Uo Period Module E: Timing Information Line Line Description E1 What Type of Tme-Up Is Being Performed? (Answer "1", "2", or "3". See Instructions for a description of these types.) If "I", go to Module I. If "2", answer E2 and E3. If "Y', answer E2, E3, F_A, and ES. E2 Number of Months in the Tme-Up Period 1 E3 Number of Months between the end of Tree-Up Period 1 and the end of the most recent Projected Period ~44 Number of Months in Tree-Up Period 2 Eligible for Interest 12 E5 Number of Months Tree-Up Period 2 Ineligible for Interest Module F: Maximum Permitted Rate For True-Up Period 1 a b c d e Line Line Description Basic Tier 2 Tier 3 Tier 4 Tier Fl Caps Method Segment For Tree-Up Period 1 [Wks 2] $0.0000 F2 Markup Method Segment For Tree-Up Period 1 [Wks 3] $0.0300 F3 Chan Mvmnt Deletn Segment For Tree-Up Period I [Wks' 4/5] ($0.3604) F4 Tree-Up Period 1 Rate Eligible For Inflation [DS+FI+F2+F3] $9.3919 F5 Inflation Segment for Tree-Up Period 1 [(F4*C3)-F4] $0.2151 F6 Headend Upgrade Segment For Tree-Up Period 1 [Wks 6] $0.0000 F7 External Costs Segment For Tree-Up Period 1 [Wks 7] $0.2626 F8 Tree-Up Segment For Tree-Up Period 1 ($0.0714) F9 Max Perm Rate for Tree-Up Period 1 [F4+F5+F6+F7+FS] $9.7982 Module G: Maximum Permitted Rate For True-Up Period 2 a b c d e ~i~ Line Description Basic Tier 2 Tier 3 Tier 4 Tier G 1 Caps Method Segment For True-Up Period 2 [Wks 2] 32 Markup Method Segment For Tree-Up Period 2 [Wks 3] 33 Chan Mvmnt Delem Segment For Tree-Up Period 2 [Wks' 4/5] 34 TU Period 2 Rate Eligible For Inflation [D8+F5+GI+G2+G3] 35 Inflation Segment for Tree-Up Period 2 [(G4*CA)-G4] 36 Headend Upgrade Segment For Tree-Up Period 2 [Wks 6] 37 External Costs Segment For Tree-Up Period 2 [Wks 7] 38 Tree-Up Segment For Tree-Up Period 2 .39 Max Penn Rate for Tree-Up Period 2 [G4+G5+G6+G7+GS] FCC Form 1240 Page 3 Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Approved by OMB 3060-0685 Washington, DC 20554 Module H: True-Up Adjustment Calculation a b c d e Line Line Description Basic Tier 2 Tier 3 Tier 4 Tier 5 IAdj-~ment For True-Up Period 1 H1 Revenue From Period 1 $2,273,526.36 FI2 Revenue From Max Permitted Rate for Period 1 $2,270,791.6392 FI3 Tree-Up Period 1 Adjustment [H2-HI] ($2,734.7208) [-14 Interest on Period 1 Adjustment ($235.0685) Adjustment For True-Up Period 2 [45 Revenue From Period 2 Eligible for Interest H6 Revenue From Max Perm Rate for Period 2 Eligible For Interest H7 Period 2 Adjustment Eligible For Interest [H6-H5] H8 Interest on Period 2 Adjustment (See instructions for formula) H9 Revenue From Period 2 Ineligible for Interest H10 Revenue From Max Perm Rate for Period 2 Ineligible for Interest Hll Period 2 Adjustment Ineligible For Interest IH 10-H9] Yotal True-Up Adjustment H12 Previous Remaining True-Up Adjustment H13 Total Tree-Up Adjustment [H3+H4+H7+HS+H 11+H 12] ($2,969.7893) H14 Amount of True-IJp Claimed For This Projected Period ($2,969.7893) H15 Remaining True-Up Adjustment [H13-H14] $0.0000 Part III: Projected Period Module I: New Maximum Permitted Rate a b c d e Lin~ Line Descril~tion Basic Tier 2 Tier 3 Tier 4 Tier $ I1 Caps Method Segment For Projected Period [Wks 2] $0.0000 I2 Markup Method Segment For Projected Period [Wks 3] $0.0300 I3 Chan Mvmnt Deletn Segment For Projected Period [Wks 415] ($0.3604) I4 Proj. Period Rate Eligible For Inflation [DS+F5+G5+I 1 +12+I3] $9.6070 I5 Inflation Segment for Projected Period [(14'C5)-I4] $0.2162 I6 Headend Upgrade Segment For Projected Period [Wks 6] $0.0000 17 External Costs Segment For Projected Period [Wks 7] $0.3789 I8 Tree-Up Segment For Projected Period ($0.0127) I9 Max Permitted Rate for Projected Period [I4+15+16+I7+I8] $10.1894 I9.1 Max Permitted Rate from Form 1235 n/a 19.2 Total Maximum Permitted Rate $10.1894 110 Operator Selected Rate For Projected Period $10.1900 Note: The maximum permitted rate figures do not take into account any refund liability you may have. lf you have previously been ordered by the Commission or your local franchising authority to make refunds, you are not relieved of your obligation to make such refunds even if the permitted rate is higher than the contested rate or your current rate. Certification Statement WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE PUNISHABLE BY FINE AND/OR IMPRISONMEN~ U.S. CODE TITLE 18. SECTION 1001). AND/OR FORFEITURE (U.S. CODE, TITLE 47, SECTION 503). I certifv that the stat~ment~ made in this form are tree and correct to the best of mv knowledge and belief, and are made in ~,ood faith. Signature ~_~[/~¢.~_~/q~ ~ IZaS~°zIDate I Name and Title of Person Completing this Form: Denise M. Jones, Director of Regulatory Compliance & Planning Telephone number IFax Number (214) 521-7898 1(214) 522-6830 FCC Form 1240 Page 4 Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 Worksheet 1 - True-Up Period Inflation For instructions, see Appendix A of Instructions For FCC Form 1240 Line Period FCC Inflation Factor 101 March 3.23% 102 April 2.08% 103 May 2.08% 104 June 2.08% 105 July 2.25% 106 August 2.25% 107 September 2.25% 108 October 2.25 % 109 November 2.25% 110 December 2.25% 111 January 2.25% 112 February 2.25% 113 Average Inflation Factor for 1.0229 Tme-Up Period 1 114 Month 13 115 Month 14 116 Month 15 117 Month 16 118 Month 17 119 Month 18 120 Month 19 121 Month 20 ! 22 Month 21 123 Month 22 124 Month 23 125 Month 24 126 Average Inflation Factor for Tree-Up Period 2 FCC Form 1240 Page 1 Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Approved By OMB 3060-0685 Washington, DC 20554 Worksheet 3 - Markup Method True-Up Period, Basic Tier For instructions, see Appendix A of Instructions For FCC Form 1240 Tree-Up Period Projected Period X Question 1. Indicate the period for which this worksheet is being used. (Put an "X" in the appropriate box.) Question 2. Indicate the tier for which this worksheet is being used. (Put an "X" in the appropriate box.) Question 4. How long is the second period, in months, for which rates are being set with this worksheet? 0 ILine 3O2 3O8 310 311 312 313 Period Previous Month March April May June July August September October November December January February ~ Period 1 1 2 3 4 5 6 7 Sum of Previous Sum of Current Average Per Cb~pnel Channels Total Cumulative Regulated Regulated Channels Adjustment Added Adjustment Adjustment C~nnnels Channel 27 27 27 27 27 27 27.0 $0.01 0 $0.00 $0.03 27.0 $0.01 0 $0.00 $0.03 27.0 $0.01 0 $0.00 $0.03 27 27.0 $0.01 0 $0.00 $0.03 27 27 27.0 $0.01 0 $0.00 $0.03 27 27 27.0 $0.01 0 $0.00 $0.03 27 27 27.0 $0.01 0 $0.00 $0.03 27 27 27.0 $0.01 0 $0.00 $0.03 27 27 27.0 $0.01 0 $0.00 $0.03 27 27 27.0 $0.01 0 $0.00 $0.03 27 27 27.0 $0.01 0 $0.00 $0.03 27 27.0 $0.01 0 $0.00 $0.03 $0.0300 315 Month l3 316 Month l4 317 Month l5 318 Month l6 319 Month l7 320 Month l8 321 Month l9 322 Month20 323 Month21 324 Month22 Month23 326 Month24 327 FCC Form1240 Page 1 Microso~ Excel5.0 Version July 1996 Federal Communications Commission Approved By OMB 3060-0685 Washington, DC 20554 Worksheet 3 - Markup Method Projected Period, Basic Tier For instructions, see Appendix A of Instructions For FCC Form 1240 Question 1. Indicate the period for which this worksheet is being used. (Put an "X" in the appropriate box.) Question 2. Indicate the tier for which this worksheet is being used. (Put an "X" in the appropriate box.) Basic I Tier 2 I X Question 3. How long is the first period, in months, for which rates are being set with this worksheet? Question 4. How long is the second period, in months, for which rates are being set with this worksheet? True-Up Perio~ Projected Period X Tier 3 Tier 4 Tier 5 12 0 1 2 3 4 5 6 7 Sum of Previous Sum of Current Average Per Channel Channels Total Cumulative Line Period Regulated Regulated Channels Adjustment Added Adjustment Adjustment Channels Chnnnel llllll---- 301 Previous $0.03 Month 302 June 27 27 27.0 $0.01 0 $0.00 $0.03 303 July 27 27 27.0 $0.01 0 $0.00 $0.03 304 August 27 27 27.0 $0.01 0 $0.00 $0.03 305 September 27 27 27.0 $0.01 0 $0.00 $0.03 306 October 27 27 27.0 $0.01 0 $0.00 $0.03 307 November 27 27 27.0 $0.01 0 $0.00 $0.03 308 December 27 27 27.0 $0.01 0 $0.00 $0.03 309 January 27 27 27.0 $0.01 0 $0.00 $0.03 310 February 27 27 27.0 $0.01 0 $0.00 $0.03 311 March 27 27 27.0 $0.01 0 $0.00 $0.03 312 April 27 27 27.0 $0.01 0 $0.00 $0.03 313 May 27 27 27.0 $0.01 0 $0.00 $0.03 514 Aver e Period 1M~ku Method nd'ustment FCC Form 1240 Page 1 Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 Worksheet 4 - Residual True-Up Period For instructions, see Appendix A of Instructions For FCC Form 1240 Question 1. Indicate the period for which this worksheet is being used. (Put an "X" in the appropriate box.) True-Up Period Projected Period X I a b c d e l,in~ Line Description Basic Tier 2 Tier 3 Tier 4 Tier 5 Period One ¢01 Average Permitted Charge $9.8100 ¢02 Average External Costs $0.2626 403 Average Total Per Channel Adjustments after 5/14/94 for Channels Added Usin~ Caps Method 404 Average Tier Residual [401-402-403] $9.5474 405 Average Channels per Regulat~l Tier 27.0000 406 Average Caps Method Channels per Tier 0.0000 407 Average Remaining Channels [405-406] 27.0000 408 Average Period 1 Per Channel Residual [404/407] $0.3536 Period Two 409 Average Permitted Charge 410 Average External Costs 411 Average Total Per Channel Adjustments after 5/14/94 for Channels Added Usin~ Caps Method 412 Average Tier Residual [409-410-411] 413 Average Channels per Regulated Tier :414 Average Caps Method Channels per Tier ~15 Average Remaining Channels [413-414] ~16 Average Period 2 Per Channel Residual [412/415] FCC Form 1240 Page 1 Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Approved By OMB 3060-0685 Washington, DC 20554 Worksheet 4 - Residual Projected Period Question 1. Indicate the period for which this worksheet is being used. (Put an "X" in the appropriate box.) Tree-Up Period Projected Period X a b c d e Line Description Basic Tier 2 Tier 3 Tier 4 Tier 5 Period One ~01 Average Permitted Charge $9.7788 1502 Average External Costs $0.3789 $03 Average Total Per Channel Adjustments after 5/14/94 for Channels Added Usinl~ Caps Method ~04 Average Tier Residual [401-402403] $9.3999 105 Average Channels per Regulated Tier 27.0000 ~06 Average Caps Method Channels per Tier 0.0000 107 Average Remaining Channels [405406] 27.0000 ¢08 Average Period 1 Per Channel Residual [404/407] $0.3481 FCC Form 1240 Page 2 Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Approved By OMB 3060-0685 Washington, DC 20554 Worksheet 5 - Channel Movement and Deletion True-Up Period, Basic Tier For instructions, see Appendix A of Instructions For FCC Form 1240 Question 1. Indicate the period for which this worksheet is being used. (Put an "X" in the appropriate box.) Tme-UxP Period Question 2. Indicate the tier for which this worksheet is being used. (Put an "X" in the appropriate box.) BaSiCx Tier2 I Tier3 I Tier4 Question 3. How long is the first period, in months, for which rates are being set with this worksheet? Question 4. How long is the second period, in months, for which rates are being set with this worksheet? Period 01 Previous Period 502 March 503 April 504 May 505 June 506 July 507 August 508 September 509 October 510 November 511 December 512 Janllal'y 513 February Projected Period Tier 5 12 0 I 2 3 4 Residual of Channels Deleted Residual of Channels Moved From Tier $0.0000 (added) to Tier Net Per-Channel Cost Adjustment [Column 2 - Column 1] $0.0000 $0.0000 $0.0000 $0.OOOO $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.0000 $0.000o $0.oooo $0.0000 Cumulative Net Per- Channel Cost Adjustment ($O36O4) ($03604) ($0.36O4) ($03604) ($03604) ($03604) ($03604) ($03604) ($03604) ($03604) ($03604) ($036o4) ($036O4) 1514 Avera · Period 1 Channel Movement and Deletion Ad'ustment 515 Month 13 516 Month 14 517 Month 15 518 Month 16 519 Month 17 520 Month 18 521 Month 19 522 Month 20 523 Month 21 524 Month 22 525 Month 23 526 Month 24 527 Average Period 2 Channel Movement and Deletion Adjustment FCC Form 1240 Page 1 Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Washington, DC 20554 Approved By OMB 3060-0685 Worksheet 5 - Channel Movement and Deletion Projected Period, Basic Tier For instructions, see Appendix A of Inslxuctions For FCC Form 1240 Question 1. Indicate the period for which this worksheet is being used. (Put an "X" in the appropriate box.) Tree-Up Period Question 2. Indicate the tier for which this worksheet is being used. (Put an "X" in the appropriate box.) Projectedx Period I Question 3. How long is the first period, in months, for which rates are being set with this worksheet? Question 4. How long is the second period, in months, for which rates are being set with this worksheet? 1 2 3 4 Net Per-Channel Cost Residual of Channels Deleted Residual of Channels Moved Cumulative Net Per-Channel Adjustment [Colllmn 2 - Cost Adjustment Line Period From Tier (added) to Tier Column 1] 501 Previous Period ($0.3604) 502 June $0.0000 $0.0000 $0.0000 ($0.3604) 503 July $0.0000 $0.0000 $0.0000 ($0.3604) 504 August $0.0000 $0.0000 $0.0000 ($0.3604) 505 September $0.0000 $0.0000 $0.0000 ($03604) 506 October $0.0000 $0.0000 $0.0000 ($0.3604) 507 November $0.0000 $0.0000 $0.0000 ($0.3604) 508 December $0.0000 $0.0000 $0.0000 ($0.3604) 509 January $0.0000 $0.0000 $0.0000 ($0.3604) 510 February $0.0000 $0.0000 $0.0000 ($0.3604) 511 March $0.0000 $0.0000 $0.0000 ($0.3604) 512 April $0.0000 $0.0000 $0.0000 ($0.3604) 513 May $0.0000 $0.0000 $0.0000 ($0.3604) i14 Av e Period 1 Channd Movement and Deletion Ad'ustment ~ ($03~04) FCC Form 1240 Page I Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Approved By OMB 3060-0685 Washington, DC 20554 Worksheet 7 - External Costs True-Up Period For instructions, see Appendix A of Instructions For FCC Form 1240 Question 1. For which time period are you filling out this worksheet? [Put an "X" in the appropriate box.] Question 2. How long is the first period, in months, for which rates are being set with this worksheet? Question 3. How long is the second period, in months, for which rates are being set with this worksheet? a O Line Line Description Basic Tier 2 Period 1 Tree-Up Period Projected Period X C O e Tier 3 T~er 4 Tier External Costs l*.llgihle for Markup Cost of Programming For Channels Added Prior 701 to 5/15/94 or After 5/15/94 Using Markup $36,432.04 Method For Period 102 Retran;migsion Consent Fees For Period $0.00 103 Copyright Fees For Period $20,185.95 104 External Costs Eligible For 7.5% Markup $56,617.99 105 Marked Up External Costs $60,864.3393 I~xternal Costs Not Eligible for Markup 706 Cable Specific Taxes For Period $0.0O 107 Franchise Related Costs For Period $0.0O 708 Commiggioll Regulatory Fees For Period $0.0G 709 Total External Costs For Period $60,864.3393 710 Monthly, Per-Subscriber External Costs For $0.2626 Period 1 Period 2 External Costs Eligible for Markup Cost of Programming For Channels Added Prior 711 to 5/15/94 or After 5/15/94 Using Markup Method For Period 712 Retransmission Consent Fees FOr Period 713 Copyright Fees For Period 714 External Costs Eligible For 7.5% Markup 715 Marked Up External Costs External Costs Not l~,llvoihle for Markup 716 Cable Specific Taxes For Period 717 Franchise Related Costs For Period 718 Commission Regulatory Fees For Period 719 Total External Costs For Period 720 Monthly, Per-Subscriber External Costs For Period 2 FCC Form 1240 Page 1 Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Approved By OMB 3060-0685 Washington, DC 20554 Worksheet 7 - External Costs Projected Period For instructions, see Appendix A of Instructions For FCC Form 1240 Question 1. For which time period are you filling out this worksheet? [Put an "X" in the appropriate box.] Question 2. How long is the first period, in months, for which rates are being set with this worksheet? Question 3. How long is the second period, in months, for which rates are being set with this worksheet? i a D I .ine Line Deseription Basic Tier 2 Period 1 True-Up Period Projected Period X c fl e Tier 3 Tier 4 Tier 5 External Costs IZliooihle for Markup Cost of Programming For Channels Added Prior ?01 to 5/15/94 or After 5/15/94 Using Markup $62,122.71 Method For Period 702 Retxansmission Consent Fees For Period $0.00 703 Copyright Fees For Period $20,387.67 704 External Costs Eligible For 7.5% Markup $82,510.38 705 Marked Up External Costs $88,698.6585 IZxternal Costs Not ~li~ihle for Markup 706 Cable Specific Taxes For Period $0.0(3 707 Franchise Related Costs For Period $0.0~ 708 CommL~nion Regulatory Fees For Period $0.0~ 709 Total External Costs For Period $88,698.6585 710 Monthly, Per-Subscriber External Costs For $0.3789 Period I FCC Form 1240 Page 2 Microsoft Excel 5.0 Version July 1996 Federal Communications Commission Approved By OMB 3060-0685 Washington, DC 20554 Worksheet 8 - True-Up Rate Charged For inslxuctions, see Appendix A of Instructions For FCC Form 1240 Question 1. How long is the True-Up Period 1, in months? 12 ] Question 2. How long is the True-Up Period 2, in months? 0 I a b c d e !,ine l.ine Description Basic Tier 2 Tier 3 Tier 4 Tier 5 801 March $9.9000 802 April $9.9000 803 May $9.9000 804 June $9.7800 805 July $9.7800 806 August $9.7800 807 September $9.7800 808 October $9.7800 809 November $9.7800 810 December $9.7800 811 January $9.7800 812 February $9.7800 H3 Period 1 Average Rate $9.8100 ]14 Month 13 ]15 Month 14 316 Month 15 317 Month 16 318 Month 17 319 Month 18 320 Month 19 821 Month 20 822 Month 21 823 Month 22 824 Month 23 825 Month 24 826 Period 2 Average Rate FCC Form 12z[0 Page I Microsoft Excel 5.0 Version July 1996 Comamnily L~it Idmfifie~ (CUID) of c~ble system Nnn~: of Cnble FORM 1205 DETERMINING REGULATED EQUIPMENT AND INSTALLATION COSTS "EQUIFMENT FORM" Mailing Address bf Cable Opcrnto~ 2911 TUfl~ C~ek BIrd, Suite 600 De~ise Jones, Director M' R~,lnlnf~ Cw~lLllnte [(214) 521.7898 ZIP Code 75219 1, This form is being filed: [Enter an 'x" In Ihe apptupdate box] ----'lin conjunction wiih FCC Form 1200, FCC Fm'm 1220, or FCC Fo~m 1225. 2, Enter the date oa wMch you dosed yeur boeks foF the f~al year wTflected In thh form: No~e: Tl~s will indicate the e~l of thc 12-month fiscal y~r fe~ which ~u Me fillng this fo~n~ 12/31/01 3. Indicate Ihe eorperat~ status of your ~ble system [Enter an "x*' in the torrid bex) C-Ccc~otnfion Subc~pm S cmp~ation Otis' IPl~ ¢~hi~ I~lowl Lini~d Li~lblilit y Com~ FCC F(xm 1205 Pngc 1 Excel 4.0 for Windows June 1996 SC~DULE A: CAPITAL COSTS OF SERVICE INSTALLATION AND MAINTENANCE OF EQUIPMENT AND PLANT Ik~;,,;.,.,~ Other 1. Other 2. A F~uiproent and Plmt y,,hleh~ TO~s Fac#ilks (Spe~f,/below) (Spetlfy below) D ~ T~xe~ $0.00 $0.00 $0.00 $0.00 $0.00 E Net Book Vnloe [B-(C+D)] $110,491,122.36 $222,1'/3,459.46! $362,276,259.94 $34,900,$48.29$338,853,915.54 F Rete of Retm'n 0.1125 G Calculation o[ Gross-u~ Rate 33 Net Total locon~ T~x Rate [(G I+G2)-(GI x G2)] 0.3789 34 Ad)usmznt to Refill lnt~t Dedm:tibilit~, 34c Ba~e Retmn an Inve~tmmt Amount {G4b x Iq $2,725.$28,174.~125 34d Inl~sest Dedm:fibili~ Fngto~ [G4a/g4c] 0.0982 35 Effective Tax Rate [G3 x (I-G4d)] [C-C~J~ skip to GT] 0.3417 36 M~mtmmts fo~ Non-C Co~o~afiom 36~ Bas~ Rgmm oa lnv~m~at Ammml [G4c] $2.72~,~28,174.91~5 ~6~ Conttibutiom (ma~/not exceed G6b) $0.00 ~6d Reton~ Sub~cl to lncon~ Tax [G6n-G6b+G6~] $~,72~,g2~,174.9125 ~6e ReUm~ Pe~c~n~ Sub~cl to lnco~e Tax [G6d/O6a] I. ~7 ~mss-U~ R~te {C-Cc~: 1/(I -GS) Othe~ I/( I -(G5 x G6e))] 1,519 H Gge~ed-U[u Rate o~ Return IF x GT] 0.1709 ~etom on Inve~umm Caused-Up for Tax~[E x HI $ I g,$g 1,597.6991 $~7,966,759,603~4 $61,905,640.4091 $5,964,133.2507: $ 57,906,039.6469 Cun~nt Pmvisio~ f~t ~l)e-~. '-~um ~10,149,573.59 $63,003.736.29$18,70~,383.95 I$7,733,029.35S66,354,905.25S $59,031,171.2891 $100,~70,495.$934 $80.617,024.3591 ! $13,697,162.6307 $124,260,947.9049 K Annual Capilal Co,tm Il+J] L GRAND TOTAL [sam ~ Line K entrks] $378~7&~802.0772 Box 1. Sp~if~ Oth~ 1. Furniture & Fi*m~ Sp~if~ Other 2. CapiUdized Labor [SCI~DULE B: ANNUAL OPERATING EXPF~NSES FOR SERVICE INSTALLATION AND MAINTENANCE OF EQUIPMENT lB IGRAND TOTAL [sum ~f Line A entries] I $~'$~'!~:~ I (Sl~f-/ $23,268,$48.00 $1,470,628.00 $0.0o I Box Specify: Othe~ 3. Coavu't~' Speci~ ~ 4. l~C Form 1205 Page 2 Excel 4.0 for Windows June 1996 Federal Communications Con~nission Approved by: OMB 3060-0703 Wnshlngton, D.C. 20554 SCBtI,.DULE C: CAPITAL CO~TS OF LEASED CUSTOMER EQUIPMENT ENu;p.~t Refno(e I Remmc 2 Rerno~e 3 C~vc~l~ 1 Converter 2 Co.vm~ 3 Oth~ E~uip. Book Value [D-(E+F)] $~;237;206.30 $$75,706~624,4975 i 3s~-l~ Rate of Remm [Prmn Sched. A, Line HI 0,i709. ~.etum on ln.~h~t Oro~sed-Up for Taxes IGxH] $1,407,63910229 , $150,160'34413315 , SCHEDULE D: AVERAGE HOUI~ P~R INSTALLATION A. Av~ ~ ~r Afl~ ~ !,z.ll.~ - A~sl 1.7~ B. Av~ ~ ~ ~ ~ ~la~ - ~ 1.~q C. Av~ ~ p~ lAC D. Avm~ H~ ~ ~ ~ ~ ~ of ]~tnll~li~ F. Aw.~ ~ ~ ~ ~ ~ o.9~ J. Av~a~ ~ ~ ~i~ !~nlln~. U~ 2.22 K. A,~ H~ ~ ~ ~~ 1.45 L Avmle ~ ~ ~ ~ at ~ ~ ~lafi~ 0.65 M. Av~ ~ ~ ~ ~ R~ ~p 1.28 N. Avun~ H~ ~ Di~ ~ ~ 1. I 0 . Avmp Hm ~ Di~ Rel~ ~ I .~ Av~e ~ ~ ~i~ ~ of ~i~ R~ a T~k Roll 1.03 ~V ORKSFfl~ET FOR CALCULATING pERMITTED EQUIPMENT AND INSTALLATION CHAR(ES STEP A. Hourl~ $ervke I. Tolnl Capital Costs of Tr.~.ll~;~ ~nd ld.;.~.~ [Schedule A, Box l ] $378~576,802.0772 ='. To~nl Anmud ~ P'tnee"u~ fe~ !,~,-..,;~ .nd l~-;n'~-~ [Sched. lc B, Box 2] $87~0~0. L To~l on,hal Cosu and O~fin[ Expms~ fo~ £--~-!!,.';~m and l~.;.tmnnee [Line I + Lira: 2].$465~606,~11.0772 {. C..i~ F~.i~I ~ lndAIInlim pel~cznm[Ic tattn~ s~ explanation). 0.3963 5. ~ual Cuslom~ I:~,fi[~t M.h~ ~d Installation Cost~, ~-~!,,a;-[ Cc~ts of Leas~ F..quipmmt BAne 3 x Line 4] $184,520.018~8599 5. TeOd l.albol' Ho'~ fo~ Mn{-,~ nlld l.~t.ll.t;~ of Cuslo~nc~ E~uipn~t m~d Se~wices (allnch ex[~lnnafiont 6,886.424 I. Hourly Seswke Cha~e (HSC) (Lin~ 5/Line 6) S26:7948 FCC Fo~m 1205 Page 3 Excel 4.0 for Windows Sure 1996 { ~=_.~HOD OF BILLING FOR INSTALLATIONS (place an "x' in the appropriate hex) Imtallntiom billed by the hour based on Ibc HSC calculated in Line 7. Uniform HSC for all !,.d...*L~ (From Step A, line 7) 526,7948 OR 9. AvC~nl~e Cha~ for !~,.t.,.,i~ T~ b. Amaolf Unwircd !,,.*.,.,i~. u ~,-t-,~md I S26'7948 I b3. dl. HSC [Linc 71 e. Atudo~ .a~O Rehnn T~ip el. HSC [Line c2. Average 14outs f. Ana~ .~..~.~ A/O fl. HSC [Mne 71 f2. Ave~e Hou~ i. Di[lilal lc--n-,{m~ - A~isl i2. Avera{e 14ou~ ,it. ~sc lU~ 71 I I j3, C1~'~ $59?843 L Digital A/O at T'm]e of Inmllation I $26.7948 l 0'65[ $i?.4i66 13. Charp FCC Form 1205 Pngc 4 Excel 4.0 foir Windows June 1996 Fed~al Comsmmications Conmission Approved by: OMB 3060~0703 Washingloa, D.C. 20554 m Di~ilalml. HscAK)[LineRetumT] Tri~ [ $26.7948 [ nO. Charge [ $34~2973 hi. HSC [Line 7] n2. Average Hours $26.7948 18. T~al M'"':= -:::: =-~rvice Hmus [Cotm~a h'~ colunm fl°m S~"m'~' C, Line BI S26j794~ , 19. HSC [Line 7] , ~. TolalM,: ....... ':-"'oe~vi~C~t [LinelSxlg] $i!i9i0;i3~'007i ' ~,2. Total Co~ of Coav~ [Li~ 20+ Linz 21 ] $3~'028,~i416029 ~4. ~tC~t ~23] ~5. R~ ~ r~ ~ 2~(12)]  HOD OF BILLING FOR CHANGING SERVICE 11ERS OR EQUI?MENT [place an "x" in the appropriate box] as a Nominal Charge (Enter the noninal charge in Line 34) - If No Track Roll Is Required STEP F. Clmr~s for (~!~ Ser~Jct Tkrs or 34.Nflmlnal ~"'~ for C~'~!=~ Se~km ~'~rs ' If No Tn~k R°ll is R~uimd If ~u use ~ ~'!";"~ scale of d~a~es, pla~ an "x" in th~ box at the OR 35. Uniform Hou~, s~,i~ Chaq~ $1.99 OR 36. A--'~.~; ~ for ~[;-[ ~ T'm's - If A Tru~k Roll Is Requited 36a. HSC lUne 71 36b. Average Ho~s to c~,,,? Seo&:e Tie~ 36c. Average Charge for Ohnn~._= Sm, ice T~r~ [Line 36a x Line 36b] $26.7948 [ 24.!D~ 37. Average Chnr~ for f~a,~in~ Sea'vi~ Tm's - If A Truck Roll Is Required - Digital 37a. HSC [Lin~ 7] FCC Fo~n 1205 Pag~ 5 Excel 4.0 fe~ Windows June 1996 Chaqges for Cable Se~h:e installafiom a. Hourly Rat~ [Step A. Line 7] $26.79 [ $26.79 m b. Averse Installation Chnr~cs: Ando[ Unwhed !,,o*.!m.~. Und~0und Analol~ A/O at T'ur~ Analo~ t-h~e of Service u ,.,].i,;..~ a Trt~k Roll Digital Unwind s-?.!!~ - Aerial Di~itol AK} Re,mn Digital C'hm~ of Se~vim It ,~.teh~. m Track Roll :'. iVlomhly Clwx~e for Lease of Ren~e Coattols [Ste~ C, Line 17, o~lu~, a=c] $29.47 $14.20 $29.47 $25.46 $29.47 $24.12 $55.47 $38.85 $17.42 $29.47 $32.96 $27.60 $46.09 $50.11 $29.47 Sl4.20 $29.47 $25.46 $29.47 $24.12 S55.47 $59.48 $38.85 $17.42 $29.47 $32.96 $27.60 $0.20 $0.20 3. Moeltldy Chaqge fo~ Leame of Convefler Boxes [$te~ D, Line 25,~1"~* a'¢] Convemr ~ox ~ I: Converters (also called RecMvas C~mvefl~ Box T~l~e 2: Box T~ 3: 4. MonOd), Cha~e for Lease of Other s~')"~--' ISte~ E,Line 33) $1.99 for ~,m~.~.~ 'r'~-s ~o~ ~u ,T,;a,~ a ~ Roll) tStep F. t~ ~, )s ~r ~6c1 LABOR COiF AND POLICY CHANGES Indicate your nnsw= to lhe following th~ qu~iions by placing an "x" in the appropriate box 1. Have y~u incl uakd the labor co~ta associated with sub.tiber cable drops in y~ur dmrgea for initial in~tallatiott? [5t: FCC Form 1205 Page 6 Excel 4.0 for Windows June 1996 Explanations To FCC Form 1205 Schedule C: Line B - Total MalntenanceJServlce Hours: The hours listed on Line B of Schedule C represents annual maintenance and service hours for converters incurred from both in-house and third party contract sources. Schedule D: Average Hours Per Installation: Tho hours listed in Schedule D were determined based on a sample of systems surveyed. JOB TASK WORK ORDER HANDLING ROUTING WORK ORDERS MATERIAL ISSUANCE DRIVE TIME CALL IN WHILE AT THE HOME CHECK-IN AFl"ER RETURN TO OFFICE FOLLOW-UP SUBTOTAL INSTALLER LABOR TOTAL - Minuted'I'ask TOTAL - Hours/Task ANALOG ANALOG ANALOG ANALOG ANALOG Chan~e of UNWIRED- UNWIREI% RECONNECT ANALOG A/O ANALOG MO ANALOG RF_J.~CAT~ Service (Truck AP-RI.~L UNDERGROUND (Prewired) @ INSTALL RETURN TRIP PREWIRED MO MO Ih}ti Required) 3.0 3,0 3.0 n/a 3.0 3.0 3.0 3.0 3.0 3.0 3.0 n/a 3.0 3.0 3.0 3.0 5.0 5.0 4.0 3.0 4.0 4.0 4.0 4.0 15.0 15.0 15.0 n/a 15.0 15.0 15.0 15.0 3.0 3.0 3.0 2.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 n/a 3.0 3.0 3.0 3.0 3.0 3.0 3.0 n/a 3.0 3.0 3.0 3.0 35.0 35.0 34.0 5.0 34.0 34.0 34.0 34.0 68.0 7"/.0 32.0 27.0 32.0 23.0 32.0 20.0 103.0 112.0 66.0 32.0 66.0 57.0 6~.0 54.0 1.72 1.87 1.10 0.53 1.10 0.95 !.10 0,90 DIGITAL DIGITAL DIGITAL DIGITAL RECONNECT/ DIGITAL Change of UNWIRED - UNWIRED - LrI~RADE DIGITAL MO DIGITAL MO DIGITAL RELOCATE Service (Truck A~.R]AL UNDERGROUND (Prewlred) @ INSTALL R.~TURN TRIP PRF. WIRF. D MO MO Roll Required) 3.0 3.0 3.0 n/a 3.0 3.0 3.0 3.0 3.0 3.0 3.0 n/a 3.0 3.0 3.0 3.0 5.0 5.0 4.0 4.0 5.0 4.0 5.0 4.0 15.0 15.0 15.0 n/a 15.0 15.0 15.0 15.0 4.0 4.0 4,0 3.0 4.0 4.0 4.0 4.0 3.0 3.0 3.0 n/a 3.0 3.0 3.0 3.0 3.0 3.0 3.0 n/a 3.0 3.0 3.0 3.0 36.0 36.0 35.0 7.0 36.0 35.0 36.0 35.0 88.0 97.0 52.0 32.0 41.0 31.0 38.0 27.0 124.0 133.0 87.0 39.0 77.0 66.0 74.0 62.0 2.07 2.22 1.45 0.65 1.28 1.10 1.23 !.03 JOB TASK WORK ORDER HANDLING ROUTING WORK ORDERS MATF_,RIAL ISSUANCE DRIVE TIME CALL IN WHILE ATTHE HOME CHECK-IN AF'fER RETURN TO OFFICE FOLLOW-UP SUBTOTAL INSTAIJ..ER LABOR TOTAL- Minutes/Task SUBTOTAL - Hours/Task Worksheet for Calculating Permitted Equipment and Installation Charges - Line 4 (Allocation %) and Line 6 (Hours): Line 4 - Customer Eauipment and Installation Percentaoe: The percentage listed on line 4 is used to allocate tho capital costs (shown on Schedule A) and tho operating expenses (shown on Schedule B) to the equipment basket. This percentage was determined based on a personnel time survey developed for the Form 1205 calculation. ' Line 6 - Total Labor Hours for Maintenance and Installation of Customer Eauioment and Services: The hours listed on Line 6 were determined based on a personnel time survey developed for the Form 1205 calculation. FCC Form 1205 Page 7 Excel 4.0 for Wimiows June 1996 THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 WS2 AGENDA INFORMATION SHEET AGENDA DATE: DEPARTMENT: CM/DCM/ACM: April 2, 2002 Planning & Development Dave Hill, 349-8314 SUBJECT Receive a report, hold a discussion, and give staff direction regarding the Small Area Planning Program. BACKGROUND As required by Resolution 98-002, the Ci(v qf Denton 2001 Small Area Planning Program Annual Report is provided for City Council review (attached). On January 6, 1998, City Council passed Resolution R98-002, which created the City of DeNon Small Area Planning Program. The Small Area Planning program was designed and implememed to address specific areas in greater detail than in the DeNon Plan, with the imem that property owners and residems of within the area initiate and champion their own plan. Before 2002 Small Area Planning Program activities begin, Council is asked to confirm or revise the following prioritized activities recommended by staff: · Complete the two small area plans in process 1. Continue work on the Downtown Master Plan 2. Resume work on the Southeast Denton Plan by reopening the process · Initiate four Small Area Plans 3. West Oak Area 4. University of North Texas 5. Fort Worth Drive 6. Elm Courts · Facilitate Neighborhood Preservation research activities (June 11th long range planning session) OPTIONS City Council may confirm the staff recommendations, revise the priorities listed, or add or remove small area plans to be addressed by staff. RECOMMENDATION Staff recommendations are listed above, and are discussed in more detail in the annual report. PROJECT SCHEDULE The schedules identified for different activities are noted in the annual report. projects identified, if approved, will likely extend staff activities into 2003. The FISCAL INFORMATION The cost of each plan for publication and meeting materials, beyond already budgeted city staff hours, is estimated to be $8,000-$10,000. Staff is proposing an aggressive work plan, however it is unlikely that we will be able to initiate and complete all four proposed small area plans in the 2002 calendar year. Pending City Council direction, staff will identify alternative resources beyond the small area planning staff. ATTACHMENTS 1. 2001 Small Area Plan Annual Report 2. Small Area Planning Program Overview and Draft Selection Criteria Respectfully submitted: Douglas S. Powell, AICP Planning and Development Director Prepared by: Dedra Den6e Ragland, AICP Small Area Planning Manager SMALL AREA PLANNING PROGRAM Prepared By: Dedra Ragland, AICP Small Area Planning Manager 221 2'E. ~,/~ Xtreet De~to~ Teoca~ 7~201 2002 CITY OF DENTON SMALL AREA PLANNING PROGRAM 2001 ANNUAL REPORT The City of DeNon Small Area Planning Program was created by City Council on January 8, 1998. The program started slowly in 1998 and began to accelerate in 1999 with the adoption of the Fry Street Small Area Plan, the first in a series of community plans that implemem The DeNon Plan. Following adoption of the Fry Street Plan, in 2000, two major small area plans were proposed. The Southeast DeNon Neighborhood Plan and the Downtown University Core District (DUCD) Plan. In 2001, the Small Area Planning Program experienced mixed results. The Dowmown Master Plan was initiated in May 2001, but was delayed pending the outcome of the DeNon Developmem Code adopted in February 2001. In addition, an incomplete draft of the Southeast DeNon Small Area Plan was presemed to City Council in March 2001, and plan completion has been delayed indefinitely in response to criticisms that neighborhood participation was not all-inclusive. At the present time, the Southeast Denton Small Area Plan process is on hold pending Council direction. The Denia Neighborhood Small Area Plan was adopted by the City Council in December 2001, and the rapid progress made on this plan is a credit to the energy of the neighborhood. In 2001, the Comprehensive Planning Division functions and the Small Area Planning Division functions were consolidated. While the Division has taken on additional duties including annexations, policy studies, long-range planning activities and planning research; the developmem of small area plans remains a primary function of the new Division. As required by Resolution Number R98-002, an annual report outlining the activities of the Small Area Planning Section of the Planning and Development Department must be submitted to City Council. This is the third Small Area Planning Program Annual Report, and covers all 2001 activities. The 2001 Small Area Planning Goals idemified below were approved by City Council on February 27, 2001: Pursue three small area plans: a. Dowmown University Core District Plan (Dowmown Master Plan) b. Southeast Denton Small Area Plan c. Denia Neighborhood Small Area Plan II. Develop Small Area Planning Selection Criteria to assist City Council in idemifying future small area planning sites The following is an itemized established 2001 goals: accounting of the progress made towards -1- accomplishing the On February 20, 2001, the City Council authorized the DowNown Master Plan contract with Fregonese Calthorpe Associates (FCA) in the amouN of $112,000. The primary focus of the plan is the balance between encouraging developmeN and exploring partnership opportunities with private investors, while at the same time ensuring that proper design practices are employed. A second area of iNerest is that of connectivity within the larger DowNown/University Core district. Five separate tasks are to be undertaken by the consultants. The following three tasks have been completed. Task 1: Market Assessment Assessment of the market potential of Denton's historic downtown area is a critical element of the downtown master plan. The market assessment identifies the types of development that are most likely to occur in the area will help guide local planning decisions now and in the future. It also ideNifies the existing barriers to dowNown developmeN and underlying issues that might affect future development. Task 2: Parking, Transportation and RedevelopmeN Analysis The consultaNs ideNified redevelopmeN costs associated with areas of the dowNown based on property valuation, renal rates and construction assumptions based on the DowNown University Core Zoning Districts as part of the Draft Demon DevelopmeN Code. Task 3: Street Design The ConsultaNs and staff looked at the street hierarchy of the Study Area and worked on assigning different types of street cross sections to help integrate the transportation, land use, and pedestrian environment. A long range planning work session will be held by City Council on April 9, 2002 to discuss the progress of the Downtown Master Plan. City Council ideNified the Southeast DeNon Area as an area in need of revitalization and rehabilitation and as having unique characteristics, issues and attributes warranting special attention. On August 24, 1999, at the request of former Council Member Carl Young, City Council directed staff to initiate the Southeast Denton Small Area Plan. The scope of work for the small area plan ideNified a 12-15 month schedule, with the plan's adoption aNicipated for March 2001. Work on the plan proceeded throughoN 2001, and several neighborhood meetings were conducted to work with stakeholders. A preliminary draft of the plan was completed in February 2001. In March 2001, the DeNon Housing Authority unveiled plans for developmeN projects that would require five separate rezoning petitions. The Planning & Zoning Commission reviewed the petitions in June 2001, and prior to City Council review in July 2001, copies of the draft small area plan were presented to the Council. At that time, staff considered the draft Southeast Denton Small Area Plan to be incomplete, and intended to pursue further revisions and improvements. -2- The Denton Housing Authority rezoning petitions met with considerable public debate, and during this time, the draft plan was criticized. A major concern voiced was that the draft plan did not involve a majority of the residents and property owners in the neighborhood, and that improved participation would be necessary for the plan to move forward. Comments were received indicating that a small area plan is not needed and that current efforts should be discontinued. In keeping with the thought that small area plans should be facilitated only at the request of stakeholders, and in response to the criticisms, staff postponed further attempts to work on the Southeast Denton plan. At the current time, the Southeast Denton Small Area Plan is on hold. The City Council approved the Denia Neighborhood Small Area Plan on December 4, 2001. The plan provides a number of recommendations and strategies to address the physical and social concerns identified by Denia area stakeholders. The plan also identifies the neighborhood vision statement, which will be used as a conceptual guide in helping the neighborhood obtain the quality of life it desires. Plan recommendations were developed in ways to create public and private partnerships. The partnerships that were developed include: Code Enforcement Volunteers are organizing a neighborhood action committee to conduct regularly scheduled neighborhood audits of neglected properties. Committee will work with Code Enforcement Department to determine what the audits should focus on identifying. Results of audit will be submitted to Code Enforcement officers for follow-up action. This public/private partnership encourages the neighborhood to take a proactive role in addressing code enforcement violation in the neighborhood. The neighborhood audits are not punitive in nature. Neighborhood audits that identify repeat code violators will be submitted to City Code Enforcement officers for follow-up action. Drainage and Parks Residents want to develop a neighborhood trail following the existing drainage easement that runs parallel to McCormick Street. This public/public partnership has paired the Drainage Section of the Engineering Department and the Parks and Recreation Department. Both Departments have consented to study the feasibility of developing a neighborhood trail along the McCormick Drainage Channel. Housing Residents have agreed to create a "Housing Review Committee" of the Denia Area Community Group. Duties of the Committee include the following: o Developing an inventory of potential sites for new housing and making site-specific recommendations for the appropriate type of housing. o Developing criteria for newly constructed housing, relocated housing, and major housing rehabilitation projects. o Making criteria known to developers, investors, and public agencies that have either decision-making authority or resources available to assist development. o Working with potential developers early in the process. -3- This private/private partnership encourages potemial developers in the area to form an open line of communication with the residems and to work with the community early in the developmem process to resolve any potential issues. Staff has developed criteria for small area planning sites that is specific yet flexible enough to address both developed and undeveloped areas. The criteria manual provides the rationale for submitting potemial small area planning sites to City Council. The Small Area Planning Overview, which includes the draft criteria manual, is attached to this report. The draft criteria manual will be reviewed and refined before finalized. Neighborhood Planning: Advocacy and Education a. Staff makes presentations on the Small Area Planning Program to various neighborhood groups and associations. Staff has attended meetings with and provided technical assistance to the Panhandle-Egan-Congress Area of Neighbors Association (PECAN), the Southeast DeNon Neighborhood Association (SEDNA), the Fort Worth Drive Association and the West Oak Area Neighborhood Association. City staff partnered with the University of North Texas and other city departmems to host a seminar on "Celebrating Communities-Building On Our Strengths". Small Area Planning staff developed and delivered a presemation emitled "Can Cities Empower Neighborhoods?" c. Staff also regularly attends neighborhood meetings related to zoning cases and proposed developments. -4- Since the Small Area Program's inception, many citizens have become familiar with the benefits and merits of small area planning. More and more groups are becoming involved in neighborhood planning and are requesting that the City consider their neighborhood for a small area plan. As a required component of the Small Area Planning Program Annual Report, a list of candidate projects is provided for Council review: a. Downtown Master Plan Target Schedule: May 2002 June 2002 July 2002 August 2002 September 2002 October 2002 Public Workshop Consultants meet with staff and steering committee to review first draft of the concept plan, based on workshop results Consultants meet with staff to review refined concepts, draft plan and public advertisement campaign/agenda Draft plan completed by steering committee and staff Planning and Zoning Commission review City Council review b. Southeast Denton Small Area Plan Staff is prepared to complete the Southeast Denton Small Area Plan, pending Council direction. If resumed, staff recommends reopening the process to examine if neighborhood participation can be improved. Several areas have been identified as potential candidates for small area planning activities. Council endorsement is needed to pursue small area plans and a commitment of city resources is also needed to complete them. Staff recommends the following priorities: The West Oak area is generally located south of Scripture, north of Hickory, east of Bonnie Brae and west of Welch. (Specific definition of the study area boundary will occur once meetings begin.) The members of the West Oak Homeowners Association have formally requested that a Small Area Plan be developed for their neighborhood. Staff recommends beginning the process with the homeowners association. The City has extended an offer to UNT to jointly develop a "University Mobility Plan" intended to address pedestrian, bicycle, transit, and vehicular access and linkages to -5- UNT. If a plan is developed, grant opportunities to implement the plan should improve as well. As UNT student enrollment increases, pressure to develop suitable student housing is becoming a significant issue. UNT needs to address student needs, while neighborhoods in the area desire to preserve their quality of life. The role of UNT is very important to the City of Denton - the development of a strong working relationship is possible if coordinated planning efforts are undertaken. If directed by City Council, staff will begin formal contact with UNT to initiate a UNT Area Plan. The Fort Worth Drive area is generally located south of Eagle, north of Hobson, and east and west of Fort Worth Drive. (Specific definition of the study area boundary will occur once meetings begin.) Staff has met with the Fort Worth Drive Association and discussed the Small Area Planning Program. The Association has been asked to submit a letter indicating that there is interest in City Council pursuing a small area plan. Several discussions related to the zoning classifications assigned to this area led to the conclusion that a small area plan might allow a more detailed land use approach. The subject area is generally located east of Bolivar to Taliaferro, west of Locust (to the properties fronting west side of Elm), north of Sherman, and south of Orr. The Planning and Zoning Commission has recommended that this area be considered as a future small area plan. City Council has scheduled a long range planning work session to address Neighborhood Preservation on June 11, 2002. Several city departments and outside groups will participate in the development of information related to this topic, such as infill development, rental housing regulations, utilities policies, regulatory barriers, impacts of development-related fees, availability of housing program benefits, impacts of liens and tax delinquencies, historic preservation, and other issues. Small area planning staff will be involved; small area plans may provide an existing mechanism to coordinate implementation strategies targeting neighborhood preservation. -6- SMALL AREA PLANNING PROGRAM OVERVIEW AND DRAFT CRITERIA MANUAL PURPOSE A small area plan is the City of Denton's policy guide regarding the future of a specific area within the city. The small area planning process provides analysis, recommendations, and implementation guidelines for specific areas of Denton. The small area planning documents are supplementary to Denton's Comprehensive Plan. These planning documents address important issues in specific areas of Denton in greater detail than the Comprehensive Plan. Small area plan recommendations are devised through a review process with residents, business owners, and other stakeholders. These recommendations most often address issues of land-use, zoning, economic development, transportation, infrastructure, safety, and social service delivery. The scope of the plans can vary from addressing only a few specific issues, to providing a comprehensive approach to all issues and opportunities in the area. Small area plans are based on a thorough analysis of the area and generally represent a consensus of the residents and other stakeholders who have participated in the planning process. The small area planning process is an interdisciplinary approach to planning and will rely on the cooperation of all City of Denton departments and other governmental entities. The planning document produced for the area is adopted by City Council resolution and provide direction of long and short-term planning issues ranging from the protection of existing neighborhoods to encouraging growth where appropriate. WHEN AND WHERE TO PLAN There are two ways that a small area plan can be initiated. First, area residents or an organization representing area residents may request a plan for their area. Second, the City Council, Planning and Zoning Commission, or city staff may initiate a small area plan. The Planning Department will submit an annual list of potential small area plan sites to the City Council. Based upon established criteria, the City Council will prioritize the small area plan sites in a framework similar to the Capital Improvements Program, which covers several years. It is not the intent of the small area planning program to divide the city into target areas and prepare plans for those areas. Therefore, residents and stakeholders will determine plan boundaries for the proposed planning area. The planning area should be characterized by common interests, geographic features, and shared services. Small area plans maybe initiated for residential neighborhoods, business and commercial areas, transportation corridors, and environmentally sensitive areas. Criteria for the selection of small area plan sites are flexible enough to address issues of both developed and undeveloped areas. Criteria for small area plan site selection are listed below. -7- DRAFT SELECTION CRITERIA -8- -9- The small area planning process may also be used when city construction projects are proposed. If a project involves several neighborhoods, or a business area and a neighborhood, or several governmental entities, a small area plan is encouraged. In these cases, the City of Denton will review the immediate need of a project to determine if the planning process will negatively impact the ability to complete the project. Staff will determine whether or not a guide to development is needed for those areas that do not meet the minimum small area plan selection criteria. CITIZEN PARTICIPATION The small area planning process is an excellent way for citizens to become actively involved in municipal government and the future of the community. A series of community meetings will be held in each area to review the analysis prepared by the staff and for citizens, landowners, business operators, civic organization and other stakeholders in the area to provide direction on area issues. A questionnaire will be distributed at these meetings to obtain more information from citizens. Citizens have the best understanding of the strengths and weaknesses of their neighborhood. The small area planning process provides citizens with an opportunity to present these facts to the City Council, Planning and Zoning Commission, and other appointed boards and commissions. As a result of the development of small area plans, the public will have an opportunity to become better educated about the planning process. The small area planning process will involve citizens from the earliest stages. An outreach strategy will be developed for each area. Staff will request time on the agenda of existing groups such as neighborhood organization, PTA or school groups, business associations, and/or civic organizations to discuss the planning process. Other strategies to involve and inform citizens may include: · Door-to-Door flyers · Notices to neighborhood organizations and businesses · Program on Local access channel · Use of community bulletin boards · Announcements to PTA and schools · Signs announcing meeting · Notice on utility bills · Newspaper articles PHASES OF DEVELOPMENT There are six phases in the small area planning process. The phases are: Preliminary Planning; Data Collection and Analysis; Recommendations; Implementation Strategies; Public Review and Plan Adoption; and Implementation and Evaluation. The time it takes to complete a small area plan is influenced by the issues to be addressed in the plan. Typically, it will take five to nine months to complete Phases I through V of the planning process. Phase VI, Implementation and Evaluation, is an ongoing process that will occur throughout the lifespan of the plan. Descriptions of the objectives and action steps of each planning phase are listed below. Phase I: Preliminary Planning (1 month) Once the City Council has selected and prioritized the small area planning sites, the Research and Development Division will identify a small area planning team to facilitate the planning process. The team may include representatives from Planning, Engineering, Economic Development, Utilities, Parks, and Police Departments. Representatives from other entities such as the Denton Housing Authority, Denton Independent School District, Texas Women's University, and the University of North Texas may -11- be asked to participate. The team's make-up will be determined based on issues to be addressed in the area. The Research and Development Division of the Planning Department will coordinate the planning process and be responsible for the Plan publication. Action Steps: · Develop maps of potential sites with preliminary boundaries · Prepare written analysis of why each area is a candidate for the small area planning process · Present potential sites to the Planning and Zoning Commission and City Council. · Develop team for areas selected by City Council. · Prepare and provide team training. Phase II: Data Collection and Analysis (1 to 2 months) The objective of this phase is to gather and analyze background information. Public meetings are used to hear area concerns and identify the study area boundaries, issues and problems. A thorough analysis of collected data will include analyzing population trends; reviewing zoning and building permit history; reviewing traffic and circulation patterns; reviewing environmental considerations such as floodplains, soils, and aesthetic factors; analyzing commercial needs and employment opportunities; and analyzing public facilities including roads, parks, utilities, and schools. Action Steps: · Prepare a preliminary overview based on staff analysis of existing conditions, forecast projections, and area history. · Present preliminary information to citizens and stakeholders · Confirm plan boundaries. · Collect information from citizens and stakeholders on area issues, needs, and opportunities. · State goals, objectives, and priorities of the plan. Phase III: Making Recommendations (1 to 2 months) Staff, with the direction and advice of area residents and stakeholders, will prepare draft recommendations that address the issues and solve the problems identified in Phase ! of the small area planning process. The recommendations should reflect the stakeholders' desires for future development and growth of the area. Action Steps: · Prepare draft recommendations based on the issues identified and the data collected. · Review comments with residents and stakeholders and amend recommendations to address comments, as needed. Phase IV: Develop Implementation Strategies (1 to 2 months) The objective of this phase is to develop tools and policies to best implement the recommendations made in Phase II. This will address any conflicts between the recommendations and existing city policies and ordinances. The implementation strategies outline duties and responsibilities of the city, residents, business owners and other stakeholders in accomplishing the tasks identified in the recommendations. The implementation strategies will also establish timeframes and funding sources needed to implement the recommendations made in Phase II. - 12- Action Steps: · Develop tools and policies best suited to implement plan recommendations. · Establish implementation timeframes and funding sources. Phase V: Public Review and Plan Adoption (1 to 2 months) The staff and team will develop a conceptual small area planning document for review by the Planning Department, other city departments, and interested public officials. A presentation will be made to the public with an opportunity for public response. Staff will provide the City Council with progress reports outlining the preliminary analysis, citizens' involvement, and schedule for completion. Based on the review, the small area planning document will be revised or forwarded to the City Council for adoption by resolution. Action Steps: · Present small area planning document for public comment. · Submit the document to the Planning and Zoning Commission for advisory recommendation. · Submit the document to the City Council for adoption by resolution. · Publish completed small area planning document for the area. Phase VI: Implementation and Evaluation (Ongoing) After the plan is adopted, staff will present options for the specific implementation tools outlined in the small area planning document such as ordinances, funding, or regulations. No ordinance will be amended as the result of adopting a small area planning document, however, ordinance amendments may be presented separately to the Planning and Zoning Commission and City Council. The small area planning document will provide a framework for decision makers to use in malting decisions and to guide the case- by-case development of the area. The progress of the plan should be monitored and evaluated on a regular basis to ensure its success. Periodic evaluations should be performed to determine successes, detect problems, and suggest improvements to the plan. Action Steps: · Implement the plan. · Perform periodic evaluations to determine plan success and shortcomings. · Provide annual review of implementation to City Council. PRODUCTS OF SMALL AREA PLANNING A document will be produced for each small area plan site. The document may be considered a guide or a plan depending on the content and recommendations for the area. The contents of each document will vary depending on the specific needs and characteristics of the area. If no amendment to the Comprehensive Plan is recommended and no changes to ordinances are proposed, the final document will be considered a guide. However, if amendments are recommended, the document will be referred to as a plan. This flexibility will help clarify the planning process for each area. Guide Each guide will include the following sections: Introduction; Citizen Participation Process; Area Plan Boundaries and Overview; Existing Conditions and Trends; and Issue Identification and Definition. The -13- document may also include attachments within an appendix. A copy of the City Council approval resolution will be attached. Introduction The basic information will be the same in each document. The section will include an overview of why planning review is being done. The purpose of small area planning will be reviewed, and the connection between the Development Plan and Comprehensive Plan will be explained. A section on "How to use the Document" will also be included in the Introduction. The section will enable a reader to see the connection between the small area document and other planning documents. Citizen Participation Review The citizens' participation process will be described and outlined. citizens in the process will be described. The methods used to involve Area Boundaries and Overview One map showing the location within the City of Denton and a second map showing the specific boundaries of the area will be in this section. A description of the area including streets and other landmarks will be provided in this section. Existing Conditions and Trends General demographic information will be included to give the reader a picture of the planning area. Historical information will be outlined including the age of development and noteworthy activities in the area. Recent land use cases will be listed as background information. Infrastructure and public facilities will be described. Projections of economic and population trends will be presented. The area will be reviewed in comparison with the Comprehensive Plan and the Development Plan. Information will be presented in both written and graphic forms. Issue Identification and Definition The issue(s) identified by the stakeholders will be outlined in this section. Both real and perceived issue(s) will be addressed. Survey results will be included. Issues will vary depending on the area, but may include housing, density, land-use diversity, traffic congestions, aesthetics, utility infrastructure, new development, drainage, or area decline. Each topic will be addressed separately. Appendix Surveys, reports, and details of specific cases may be included. Information will vary depending on the small planning area site. Resolution A copy of the resolution adopting the small area plan/guide will be a part of the document. Plan The Small Area Plan document will include all of the sections contained in the Guide. In addition, the Plan will include a section on planning recommendations and may include specific site studies. Recommended Actions This section will address the specific policies and implementation tools recommended for the area. The section will address any conflicts between the recommendations and existing policies - 14- and ordinances. The section may also include information on stakeholder involvement in accomplishing the tasks identified. Site Studies If specific projects are identified, a section addressing these small areas within the area will be added. The section may include projects that will be accomplished without affecting the entire area covered by the study or undeveloped property that will be key to the planning of the area. -15- A02-011 4-2-02 WS3 AGENDA DATE: DEPARTMENT: CM/DCM/ACM: AGENDA INFORMATION April 2, 2002 Planning & Development Dave Hill, 349-8314 SHEET SUBJECT ReceNeareportandholdadiscussionregardingCityofDemontransportmionprQects. BACKGROUND During the March 26, 2002 Council meeting, several Council Members asked for transportation-related information. Among the issues raised were: (1) a request for a progress update of major road improvemem projects, including the status of partnership projects with DeNon County and the Texas Departmem of Transportation (TXDOT); (2) a request for information regarding dangerous imersections in the city; and (3) a request for an update on the Windsor Drive / Loop 288 imerchange project. Staff will make a presemation to City Council during the work session covering these topics. Copies of the presentation will be given to Council Members on April 2nd. OPTIONS The transportation project presemation is a progress update. If City Council needs further information or raises additional concerns that need to be addressed, staff will act accordingly. RECOMMENDATION Not applicable. ESTIMATED PROJECT SCHEDULE Not applicable. PRIOR ACTION/REVIEW City Council participates in the review and approval of transportation-related projects on a regular basis each year. Many of the projects idemified in the presemation are at various stages of commitmem that have required city funding and support to maimain completion schedules. FISCAL INFORMATION The fiscal information of each transportation project will be provided during the presemation. ATTACHMENTS None Respectfully submitted: Dave Hill Assistam City Manager, Developmem Services THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 RS4 CITY OF DENTON CITY COUNCIL MINUTES March 13, 2002 Joint Meeting of the City of Denton City Council and the Denton Independent School District Board of Trustees on Wednesday, March 13, 2002 at 12 noon in the Council Work Session Room at City Hall, 215 E. McKinney, Denton, Texas. PRESENT: Mayor Brock; Mayor Pro Tem Beasley; Council Members Burroughs, McNeill, Phillips, and Redmon. ABSENT: Council Member Fulton 1. Mayor Brock called the meeting to order and announced a quorum. 2. The Council received a report and held a discussion regarding an update on the Aquatic Center/Natatorium development, including but not limited to construction, joint use agreement and fund raising. Janet Simpson, Assistant Director of Parks and Recreation, stated that the project was on schedule for a ground breaking in mid-May. The two entities were still working on a draft of the operational agreement. Funding was still an issue with various groups working on fund raising for the "Lazy River" portion of the center. 3. The Council received an update and held a discussion on the status of the DISD bond committee. Norm Sisk and Gene Holloway of the DISD reviewed the background of the bond committee including the advisory committee activities. 4. The Council received an update and held a discussion on the Denton Assistance Center. Curtis Ramsey, DISD Board member, reviewed the history of the organization and the philosophy regarding the need for a centralized location for social and health care services in Denton. 5. With no further business, the meeting was adjourned at 1:00 p.m. EULINE BROCK, MAYOR CITY OF DENTON, TEXAS JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON CITY COUNCIL MINUTES March 25, 2002 The City of Denton City Council convened in a Work Session on Monday, March 25, 2002 at 12 noon in the City of Denton Work Session Room, Denton City Hall, 215 E. McKinney, Denton. PRESENT: Mayor Brock; Mayor Pro Tem Beasley; Council Members Burroughs, Fulton, McNeill, Phillips, and Redmon. ABSENT: None 1. The Council held a discussion regarding the Mayor's role on the council and in the council meetings. Mayor Brock indicated that she would like to communicate better with the Council. She asked for the Council's perception of the Mayor's role. Council Member Burroughs suggested that Council might like to know the Mayor's current and future travel plans. Mayor Brock indicated that that information could be added to the weekly memo sent out by the Council's secretary. Council discussed the Charter provisions relative to the Mayor's role. Basic functions of the Mayor according to the Charter were to chair the meetings, keep order in the meetings and to participate in various ceremonial functions. Council Member McNeill felt that the Council meeting regulations needed to be better enforced. Mayor Brock indicated that she would begin reminding citizens of the Council's regulations prior to the start of the citizen reports. Council discussed the sharing of information by at-large members when meetings were held with various groups representing single member district interests. A consensus of the Council was that each member would be more aware of communication among members. 2. The Council received a report, held a discussion, and gave staff direction regarding the paperless agenda. Robert Hanna, Management Assistant, reviewed the paperless agenda process and showed a demonstration of how such an agenda would work. Consensus of Council was to proceed with the project. 3. The Council held a discussion and gave staff direction regarding meeting times, council retreat, council website information, and communication equipment. Mike Conduff, City Manager, discussed with Council the following topics: Council Planning Session - the session this year would be a one-day session held off-site. Three dates were suggested but an alternate date in June would probably have to be found. The facilitators that were used last year would be used again for this planning session. City of Denton City Council Minutes March 25, 2002 Page 2 Website information - samples of web site information from several other cities were discussed. Staff would develop a form for what type of information each member would like on his/her web site. Meeting times - consensus of the council was that the new format for meeting times was working well. Communication equipment - Council indicated that at this time there were no new needs for communication equipment. With no further business, the meeting was adjourned at 1:30 p.m. EULINE BROCK, MAYOR CITY OF DENTON, TEXAS JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 RS5 AGENDA DATE: DEPARTMENT: ACM: AGENDA INFORMATION SHEET April 2, 2002 Fiscal Operations, Tax Department Kathy DuBose, Fiscal and Municipal Services SUBJECT Consider approval of tax refunds for the following property taxes: Name A. Stewart Title for David Morris B. Mark Morris & Melissa Franklin C. Texas Title for Melanie L. Cullum D. American Title Company for David L. Wicker Jr. E. Stewart Title for Donna McElravy F. Metroplex Title for Eric & Ruby Hjelte G. Metroplex Title for Michael & Teresa Contallos H. Healthcare Administration I. Carolyn Sargent J. James Renaud K. Denton Lodging Partners L. Bromley Williams & Lori Moo M. Mark & Shara Collins Reason Tax Year Amount Duplicate Payment 2001 $691.72 Overpayment 2001 618.10 Duplicate Payment Duplicate Payment Duplicate Payment 2001 2001 2001 2001 Duplicate Payment 574.97 688.94 575.49 815.97 Overpayment 2001 931.19 Overpayment 2001 974.14 Duplicate Payment 2001 649.50 Duplicate Payment 2001 1,666.25 Duplicate Payment 2001 6,468.14 Duplicate Payment 2001 985.66 2001 Duplicate Payment 849.61 N. Commonwealth Title for Danny J. O'Brien O. Texas Title for Jeffery Cope P. Robert Boso Q. Raymond Abbott R. Raymond Abbott S. Transamerica Real Estate Tax Service for Billy B. Farmer T. Transamerica Real Estate Tax Service for Paul Jenkins U. Transamerica Real Estate Tax Service for John Brown V. Transamerica Real Estate Tax Service for Wanda Woodward W. Transamerica Real Estate Tax Service for Charles & Jeanne Sears X. Transamerica Real Estate Tax Service for Paul & Susan Willenbrock Y. Transamerica Real Estate Tax Service for Donald & Gail Yount Z. Transamerica Real Estate Tax Service for Erich Klein Duplicate Payment Duplicate Payment Duplicate Payment Value Decrease per DCAD Value Decrease per DCAD Duplicate Payment Duplicate Payment Duplicate Payment Duplicate Payment Duplicate Payment Duplicate Payment Duplicate Payment Duplicate Payment 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 2001 677.20 567.64 542.86 501.70 987.60 975.71 520.82 659.88 504.39 1,087.53 643.79 936.05 517.56 AA. James Wood Motors Duplicate Payment 2001 9,286.01 BACKGROUND Chapter 31.11 of'the Texas Property Tax Code requires the approval of'the governing body of' thc taxing unit for refunds in excess of` $500.00. These accounts fall under Chapter 31.11. FISCAL INFORMATION The total tax overpayment revenue fund would be reduced by $34,898.42. Respectfully submitted: Diana G. Ortiz Director of` Fiscal Operations THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 RS6 AGENDA INFORMATION SHEET AGENDA DATE: April 2, 2002 DEPARTMENT: Police ACM: Jon Fortune, Assistant City Manager, Public Safety and Transportation SUBJECT An Ordinance authorizing the Mayor to execute an interlocal cooperation agreement between the City of DeNon and the City of Corinth for the impoundmem and disposition of dogs and cats and the collection of fees pursuant to the provisions of said agreement; and providing for an effective date. BACKGROUND The City of DeNon and the City of Corimh have had imerlocal agreements for the impoundmem and disposition of dogs and cats for the past eight years. The animals delivered to the City of DeNon under this agreemem have not caused conditions of overcrowding at the Animal Comrol facility. The agreement states that the City of Denton will provide the following services to the City of Corimh for the impoundmem and disposition of animals delivered to the City of DeNon from the City of Corimh: (1) The City of DeNon will hold these animals for ninety-six (96) hours if not claimed by an owner. If the owner does not claim the animal within the prescribed ninety-six (96) hours, the animals will be euthanized or made available for adoption. (2) The City of DeNon will accept and hold rabid suspects in quaramine for ten (10) days. (3) The City of DeNon will remove and ship the heads of rabid suspects for rabies testing by the Texas Department of Health. For the services, the City of Corinth agrees to pay fees set forth in the agreemem as follows: (1) A holding fee in the amoum of fifteen dollars ($15.00) for the first day or part of a day and five dollars ($5.00) for each subsequem day per animal held for reclamation by the owner. (2) A holding fee in the amoum of fifteen dollars ($15.00) for the first day or part of a day and five dollars ($5.00) for each subsequem day per animal held in quarantine as a rabies suspect. (3) Thirty dollars ($30.00) for each animal euthanized. (4) Seventy ($70.00) for each decapitation and shipmem. OPTIONS 1. The City Council can choose not to renew the imerlocal agreemem with the City of Corinth. 2. The City Council can approve the ordinance and renew the imerlocal agreemem. RECOMMENDATION The Department recommends approval of the ordinance and renewal of the interlocal agreemem with the City of Corimh. 1. The interlocal agreement provides a valuable service to the citizens of Corinth. The housing and disposal of dogs and cats received from the City of Corimh has not, and is not projected to, create a hardship for the City's Animal Control operation. 3. The imerlocal agreemem is a source of revenue for the City. PRIOR ACTION/REVIEW The attached interlocal agreement has been reviewed for legal form and content by the City of DeNon Legal Departmem. The agreemem has been approved by the Corimh City Council. FISCAL IMPACT The prescribed fees in the agreemem are calculated to recover all costs of all services rendered and, therefore, this agreemem does not result in an increase in expenditures. Based on prior years, the agreemem will result in an additional $1,500.00 in revenue. Prepared by: Respectfully submitted, Jon Fortune, Interim Chief of Police Joanie Housewright, Captain Support Services Division ORDINANCE NO. AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN INTERLOCAL COOPERATION AGREEMENT BETWEEN THE CITY OF DENTON AND THE CITY OF CORINTH FOR THE IMPOUNDMENT AND DISPOSITION OF DOGS AND CATS AND THE COLLECTION OF FEES PURSUANT TO THE PROVISIONS OF SAID AGREEMENT; AND PROVIDING FOR AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I. That the Mayor, or in her absence, the Mayor Pro Tem, is hereby authorized to execute an Inteflocal Cooperation Agreement between the City of Denton and the City of Corinth for the impoundment and disposition of dogs and cats, a copy of which is attached hereto and incorporated by reference herein. SECTION 2. That the City Council authorizes the collection of all fees as provided pursuant to the provisions of said Agreement. SECTION 3. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the __ day of ,2002. ATTEST: JENNIFER WALTERS, CITY SECRETARY EULINE BROCK, MAYOR BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: STATE OF TEXAS § COUNTY OF DENTON § INTERLOCAL COOPERATION AGREEMENT WHEREAS, the City of Denton, Texas ("DENTON") and the City of Corinth, Texas ("CORINTH") axe both local governments with the authority and power to contract; and WHEREAS, DENTON is engaged in the services of holding and disposing of dogs and cats for the benefit of the citizens of DENTON; and WHEREAS, DENTON is the owner of certain facilities and equipment designed for the holding and disposition of dogs and cats and has in its employ trained personnel whose duties are related to the use of such facilities and equipment; and WHEREAS, CORINTH desires to obtain impoundment and disposition services for dogs and cats rendered by DENTON, as more fully hereafter described, for the benefit of the citizens of CORINTH; and WHEREAS, CORINTH and DENTON mutually desire to be subject to the provisions of Texas Government Code, Chapter 791, the Interlocal Cooperation Act and contract pursuant thereto; and WHEREAS, both DENTON and CORINTH have the authority to perform the services set forth in this Agreement individually in accordance with Texas Government Code §791.01 l(c); and WHEREAS, CORINTH will make all payments for services out of available current revenues and DENTON agrees that the payments made by CORINTH hereunder will fairly compensate it for the services provided; NOW, THEREFORE, CORINTH and DENTON, for the mutual consideration hereinafter stated, agree as follows: A. COVENANTS OF THE CITY OF DENTON Holdin~ of Dogs and Cats. DENTON agrees to accept and hold dogs and cats lawfully impounded by authorized representatives of CORINTH under the following terms and conditions: Holding Period for Dogs and Cats. DENTON agrees to hold such dogs and cats for a period of ninety-six (96) hours from the time they are accepted by the Animal Control Center in order to allow the owners of the impounded animal a reasonable amount of time to reclaim the impounded animal. If the animal is not ANIMAL CONTROL INTERLOCAL COOPERATION AGREEMENT - co~rm PAGE 1 OF 5 reclaimed within the ninety-six (96) hour period, the ownership of the animal shall revert to the Animal Control Center. Animals will be humanely destroyed or placed for adoption at the discretion of the Animal Control staff. Holding Fees for Impounded Dogs and Cats. For the purpose of this Agreement, DENTON will charge Fifteen Dollars ($15.00) for the first day or part of a day and Five Dollars ($5.00) for each subsequent day holding fee that an animal is held at the Animal Control Center. in determining the meaning of the term "animal" as used herein, it is agreed that a pregnant animal which has its litter while being held, or an animal which is nursing its litter and is being kept in the same cage, will be considered one animal for the assessment of charges provided for in this Agreement. This fee will be assessed against the owner of the animal at the time the animal is reclaimed. No animal will be released until all applicable fees are paid in full. Holding of Quarantine Animals. DENTON agrees to accept and hold rabid suspects in quarantine for COR1NTH when conditions permit, and such action is authorized by a representative of CORINTH. Holding Fees for Quarantined Animals. The holding fee for quarantined animals shall be Fifteen Dollars ($15.00) for the first day or part of a day and Five Dollars ($5.00) for each subsequent day that the animal is held. eo Head Shipments and Rabies Testing. Upon request of CORINTH, DENTON will provide for the removal and shipment of heads of rabid suspects for clinical rabies testing at the Texas Department of Health. The fee for this service shall be Seventy Dollars ($70.00) for each head shipped. B. COVENANTS OF THE CITY OF CORINTH Financial Responsibilities. In order to reimburse DENTON for its costs incurred under this Agreement, CORINTH agrees to pay for the holding fees and euthanasia fees on dogs and cats received from COR1NTH or its authorized agent if the animal(s) is not reclaimed by the owner. These fees will be assessed on the following basis: Euthanized Animal: Fifteen Dollars ($15.00) for the first day or part of a day and Five Dollars ($5.00) for each subsequent day holding fee for each animal as determined herein, plus Thirty Dollars ($30.00) euthanasia fee. bo Adopted Animal: Fifteen Dollars ($15.00) for the first day or part of a day and Five Dollars ($5.00) for each subsequent day holding fee for each animal as determined herein. c. Head Shipments: Seventy Dollars ($70.00) shipping fee. ANIMAL CONTROL INTERLOCAL COOPERATION AGREEMENT - C01~rR PAGE 2 OF 5 DENTON will collect impound fees duly authorized by CORINTH and as specified in this paragraph from the owners of dogs and cats received from CORINTH. Impound fee monies will be applied to fees owed DENTON by CORINTH for animals not reclaimed by the owner: IMPOUND FEE 1 st Impoundment - $20.00 2nd Impoundment - $30.00 3ra Impoundment - $45.00 4th Impoundment - $70.00 3. CORINTH agrees payment shall be made within forty-five (45) days of receipt of invoice by CORINTH. DENTON agrees to and accepts full responsibility for the acts, negligence, and/or omissions of all DENTON's employees and agents, DENTON's subcontractors and/or contract laborers doing work under a contract or agreement with DENTON in performance of this Agreement with CORINTH. CORINTH agrees to and accepts full responsibility for the acts, negligence, and/or omissions of all CORINTH's employees and agents, CORINTH's subcontractors and/or contract laborers doing work under a contract or agreement with COR1NTH in performance of this Agreement with DENTON. It is further agreed that if claim or liability shall arise from the joint or concurring negligence of both parties hereto, it shall be borne by them comparatively in accordance with the laws of the State of Texas. This paragraph shall not be construed as a waiver by either party of any defenses available to it under the laws of the State of Texas. it is understood that it is not the intention of the parties hereto to create liability for the benefit of third parties, but that this Agreement shall be for the benefit of the parties hereto. The fact that CORINTH and DENTON accept certain responsibilities relating to the collection and impounding of dogs and eats under this Agreement as part of their responsibility for providing protection for the public health and welfare and, therefore, makes it imperative that the performance of these vital services be recognized as a governmental immunity shall be, and is hereby invoked to the full extent possible under the law. Neither DENTON nor CORINTH waives or shall be deemed hereby to waive any immunity or defense that would otherwise be available to it against the claims arising from the exercise of governmental functions. The term of this Agreement shall be for a period of one (1) year, commencing as of February 1, 2002 and ending January 31, 2003. Thereafter, this Agreement shall be renewed for successive AN IMAL CONTROL INTERLOCAL COOPERATION AGREEMENT - corn gn-: PAGE 3 OF 5 additional one (1) year terms conunencing on February 1 of each year if CORINTH and DENTON agree in writing on or before the first day of February to a successive term and the amount of consideration to be paid hereunder for each successive term; provided, however, either party may terminate this Agreement upon thirty (30) days written notice to the other. This Agreement represents the entire and integrated agreement between DENTON and CORINTH and supersedes all prior negotiations, representations, and/or agreements, either written or oral. This Agreement may be amended only by written instrument signed by both DENTON and CORINTH. This Agreement and any of its terms or provisions, as well as the rights and duties of the parties hereto, shall be governed by the laws of the State of Texas. In the event that any portion of this Agreement shall be found to be contrary to law, it is the intent of the parties hereto that the remaining portions shall remain valid and in full force and effect to the extent possible. The undersigned officer and/or agents of the parties hereto are the properly authorized officials and have the necessary authority to execute this Agreement on behalf of the parties hereto, and each party hereby certifies to the other that any necessary resolutions extending said authority have been duly passed and are now in full force and effect. 20 EXECUTED in duplicate originals this the day of , CITY OF DENTON, TEXAS BY: EULINE BROCK, MAYOR ANIMAL CONTROL INTERLOCAL COOPERATION AGREEMENT - comma PAOE 4 OF 5 ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: CITY OF CORINTH, TEXAS MAYOR ATTEST: CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: CITY ATTORNEY BY: ANIMAL CONTROL INTERLOCAL COO?EKA'I'ION AGREEMENT- comtql~ PAGE 5 OF 5 THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 RS7 AGENDA INFORMATION SHEET AGENDA DATE: April 2, 2002 DEPARTMENT: Police ACM: Jon Fortune, Assistant City Manager, Public Safety and Transportation SUBJECT Consider adoption of an ordinance authorizing the Mayor to execute an interlocal cooperation agreemem between the City of DeNon and the City of Aubrey for the impoundment and disposition of dogs and cats and the collection of fees pursuant to the provisions of said agreemem; and providing for an effective date. BACKGROUND This represents the fourth year for an imerlocal agreemem with the City of Aubrey for the impoundment and disposition of dogs and cats. This agreement is submitted at the request of the City of Aubrey. The estimated number of animals delivered to the City of Denton under this agreement should not result in conditions of overcrowding at the Animal Comrol facility. The agreement states that the City of Denton will provide the following services to the City of Aubrey for the impoundmem and disposition of animals delivered to the City of DeNon from the City of Aubrey: (1) The City of DeNon will hold these animals for ninety-six (96) hours if not claimed by an owner. If the owner does not claim the animal within the prescribed ninety-six (96) hours, the animals will be euthanized or made available for adoption. (2) The City of DeNon will accept and hold rabid suspects in quaramine for ten (10) days. (3) The City of DeNon will remove and ship the heads of rabid suspects for rabies testing by the Texas Department of Health. For the services, the City of Aubrey agrees to pay fees set forth in the agreement as follows: (1) A holding fee in the amoum of fifteen dollars ($15.00) for the first day or part of a day and five dollars ($5.00) for each subsequem day per animal held for reclamation by the owner. (2) A holding fee in the amoum of fifteen dollars ($15.00) for the first day or part of a day and five dollars ($5.00) for each subsequem day per animal held in quarantine as a rabies suspect. (3) Thirty dollars ($30.00) for each animal euthanized. (4) Seventy ($70.00) for each decapitation and shipmem. OPTIONS 1. The City Council can choose not to renew the imerlocal agreemem with the City of Aubrey. 2. The City Council can approve the ordinance and renew the imerlocal agreemem. RECOMMENDATION The Department recommends approval of the ordinance and renewal of the interlocal agreemem with the City of Aubrey. 1. The imerlocal agreemem provides a valuable service to the citizens of the City of Aubrey. 2. The housing and disposal of dogs and cats for the City of Aubrey has not, and is not projected to, create a hardship on the City's Animal Comrol operation. 3. The imerlocal agreemem is a source of revenue for the City. PRIOR ACTION/REVIEW The attached interlocal agreement has been reviewed for legal form and content by the City of DeNon Legal Departmem. The agreemem was approved by the Aubrey City Council on February 19, 2002. FISCAL IMPACT The prescribed fees in the agreemem are calculated to recover all costs of all services rendered and, therefore, this agreemem does not result in an increase in expenditures. The most recent interlocal agreement resulted in no revenue generated, due in part to a change in Aubrey Animal Control personnel. Based on prior years, this agreement should generate up to $1,000 in revenue Respectfully submitted, Jon Fortune, Interim Chief of Police Prepared by: Joanie Housewright, Captain Support Services Division ORDINANCE NO. AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN INTER_LOCAL COOPERATION AGREEMENT BETWEEN THE CITY OF DENTON AND THE CITY OF AUBREY FOR THE IMPOUNDMENT AND DISPOSITION OF DOGS AND CATS AND THE COLLECTION OF FEES PURSUANT TO THE PROVISIONS OF SAID AGREEMENT; AND PROVIDING FOR AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the Mayor, or in her absence, the Mayor Pro Tem, is hereby authorized to execute an Intedocal Cooperation Agreement between the City of Denton and the City of Aubrey for the impoundment and disposition of dogs and cats, a copy of which is attached hereto and incorporated by reference herein. SECTION 2. That the City Council authorizes the collection of all fees as provided pursuant to the provisions of said Agreement. SECTION 3. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the __ day of ,2002. ATTEST: JENNIFER WALTERS, CITY SECRETARY EULINE BROCK, MAYOR BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: S:\Our Documents\Cantracts\02\City cf Aubrey animal control.doc STATE OF TEXAS § COUNTY OF DENTON § INTERLOCAL COOPERATION AGREEMENT WHEREAS, the City of Denton, Texas ("DENTON") and the City of Aubrey, Texas ("AUBREY") are both local governments with the authority and power to contract; and WHEREAS, DENTON is engaged in the services of holding and disposing of dogs and cats for the benefit of the citizens of DENTON; and WHEREAS, DENTON is the owner of certain facilities and equipment designed for the holding and disposition of dogs and cats and has in its employ trained personnel whose duties are related to the use of such facilities and equipment; and WHEREAS, AUBREY desires to obtain impoundment and disposition services for dogs and cats rendered by DENTON, as more fully hereafter described, for the benefit of the citizens of AUBREY; and WHEREAS, AUBREY and DENTON mutually desire to be subject to the provisions of Texas Government Code, Chapter 791, the Interlocal Cooperation Act and contract pursuant thereto; and WHEREAS, both DENTON and AUBREY have the authority to perform the services set forth in this Agreement individually in accordance with Texas Government Code §791.01 l(c); and WHEREAS, AUBREY will make all payments for services out of available current revenues and DENTON agrees that the payments made by AUBREY hereunder will fairly compensate it for the services provided; NOW, THEREFORE, AUBREY and DENTON, for the mutual consideration hereinafter stated, agree as follows: A. COVENANTS OF THE CITY OF DENTON Holding of Dogs and Cats. DENTON agrees to accept and hold dogs and cats lawfully impounded by authorized representatives of AUBREY under the following terms and conditions: Holdin~ Period for Dogs and Cats. DENTON agrees to hold such dogs and eats for a period of ninety-six (96) hours from the time they are accepted by the Animal Control Center in order to allow the owners of the impounded animal a reasonable amount of time to reclaim the impounded animal. If the animal is not ANIMAL CONTROL INTERLOCAL COOPERATION AGREEMENT - AUBREY PAGE I OF 5 S:\Our Documents\Contracts\02\Ciiy ofAubrey anima contro doc Bo reclaimed within the ninety-six (96) hour period, the ownership of the animal shall revert to the Animal Control Center. Animals will be humanely destroyed or placed for adoption at the discretion of the Animal Control staff. Holding Fees for Impounded Dogs and Cats. For the purpose of this Agreement, DENTON will charge Fifteen Dollars ($15.00) for the first day or part of a day and Five Dollars ($5.00) for each subsequent day holding fee that an animal is held at the Animal Control Center. In determining the meaning of the term "animal" as used herein, it is agreed that a pregnant animal which has its litter while being held, or an animal which is nursing its litter and is being kept in the same cage, will be considered one animal for the assessment of charges provided for in this Agreement. This fee will be assessed against the owner of the animal at the time the animal is reclaimed. No animal will be released until all applicable fees are paid in full. Holding of Quarantine Animals. DENTON agrees to accept and hold rabid suspects in quarantine for AUBREY when conditions permit, and such action is authorized by a representative of AUBREY. Holding Fees for Quarantined Animals. The holding fee for quarantined animals shall be Fifteen Dollars ($15.00) for the first day or part of a day and Five Dollars ($5.00) for each subsequent day that the animal is held. Head Shipments and Rabies Testing. Upon request of AUBREY, DENTON will provide for the removal and shipment of heads of rabid suspects for clinical rabies testing at the Texas Department of Health. The fee for this service shall be Seventy Dollars ($70.00) for each head shipped. COVENANTS OF THE CITY OF AUBREY Financial Responsibilities. In order to reimburse DENTON for its costs incurred under this Agreement, AUBREY agrees to pay for the holding fees and euthanasia fees on dogs and cats received from AUBREY or its authorized agent if the animal(s) is not reclaimed by the owner. These fees will be assessed on the following basis: ao Euthanized Animal: Fifteen Dollars ($15.00) for the first day or part of a day and Five Dollars ($5.00) for each subsequent day holding fee for each animal as determined herein, plus Thirty Dollars ($30.00) euthanasia fee. Adopted Animal: Fifteen Dollars ($15.00) for the first day or part of a day and Five Dollars ($5.00) for each subsequent day holding fee for each animal as determined herein. c. Head Shipments: Seventy Dollars ($70.00) shipping fee. ANIMAL CONTROL INTERLOCAL COOPERATION AGREEMENT -- ^IJBREY PAGE 2 OF 5 S:\Our Documents\Contracts\02\City cf Aubrcy ~imal control.doc DENTON will collect impound fees duly authorized by AUBREY and as specified in this paragraph from the owners of dogs and cats received from AUBREY. Impound fee monies will be applied to fees owed DENTON by AUBREY for animals not reclaimed by the owner: IMPOUND FEE 1 st Impoundment - $20.00 2nd Impoundment - $30.00 3rd Impoundment - $45.00 4th Impoundment - $70.00 3. AUBREY agrees payment shall be made within forty-five (45) days of receipt of invoice by AUBREY. DENTON agrees to and accepts full responsibility for the acts, negligence, and/or omissions of all DENTON's employees and agents, DENTON's subcontractors and/or contract laborers doing work under a contract or agreement with DENTON in performance of this Agreement with AUBREY. AUBREY agrees to and accepts full responsibility for the acts, negligence, and/or omissions of all AUBREY's employees and agents, AUBREY's subcontractors and/or contract laborers doing work under a contract or agreement with AUBREY in performance of this Agreement with DENTON. It is further agreed that if claim or liability shall arise from the joint or concurring negligence of both parties hereto, it shall be borne by them comparatively in accordance with the laws of the State of Texas. This paragraph shall not be construed as a waiver by either party of any defenses available to it under the laws of the State of Texas. It is understood that it is not the intention of the parties hereto to create liability for the benefit of third parties, but that this Agreement shall be for the benefit of the parties hereto. o The fact that AUBREY and DENTON accept certain responsibilities relating to the collection and impounding of dogs and cats under this Agreement as part of their responsibility for providing protection for the public health and welfare and, therefore, makes it imperative that the performance of these vital services be recognized as a governmental immunity shall be, and is hereby invoked to the full extent possible under the law. Neither DENTON nor AUBREY waives or shall be deemed hereby to waive any immunity or defense that would otherwise be available to it against the claims arising from the exercise of governmental functions. The term of this Agreement shall be for a period of one (1) year, commencing as of February 1, 2002 and ending January 31, 2003. Thereafter, this Agreement shall be renewed for successive additional one (1) year terms commencing on February 1 of each year if AUBREY and ANIMAL CONTROL INTERLOCAL COOPERATION AGREEMENT - ^UBREY PAGE 3 OF 5 $:\Our Documents\Conaacls\02\Ciiy of Aubrey anima contro .doc DENTON agree in writing on or before the first day of February to a successive term and the amount of consideration to be paid hereunder for each successive term; provided, however, either party may terminate this Agreement upon thirty (30) days written notice to the other. o This Agreement represents the entire and integrated agreement between DENTON and AUBREY and supersedes all prior negotiations, representations, and/or agreements, either written or oral. This Agreement may be amended only by written instrument signed by both DENTON and AUBREY. o This Agreement and any of its terms or provisions, as well as the rights and duties of the parties hereto, shall be governed by the laws of the State of Texas. 7. In the event that any portion of this Agreement shall be found to be contrary to law, it is the intent of the parties hereto that the remaining portions shall remain valid and in full force and effect to the extent possible. 8. The undersigned officer and/or agents of the parties hereto are the properly authorized officials and have the necessary authority to execute this Agreement on behalf of the parties hereto, and each party hereby certifies to the other that any necessary resolutions extending said authority have been duly passed and are now in full force and effect. EXECUTED in duplicate originals this the day of ., 20 CITY OF DENTON, TEXAS BY: EUL1NE BROCK, MAYOR ANIMAL CONTROL INTERLOCAL COOPERATION AGREEMENT - ^UBKEY PAGE 4 OF 5 S:\Our Documcnls\Contmcls\0 2\City of Aubrey animal control.doc ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: CITY OF AUBREY, TEXAS MAYOR ATTEST: CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: CITY ATTORNEY BY: ANIMAL CONTROL INTERLOCAL COOPERATION AGREEMENT- AUBREY PAGE 5 OF 5 THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 RS8 AGENDA DATE: DEPARTMENT: ACM: AGENDA INFORMATION SHEET April 2, 2002 Materials Management Questions concerning this acquisition may be directed to Jim Coulter 349-7194 Kathy DuBose, Fiscal and Municipal Services SUBJECT An Ordinance accepting competitive bids and awarding a public works contract for the construction of a 54" finished transmission waterline; providing for the expenditure of funds therefore; and providing an effective date (Bid 2811 - Lake Ray Roberts 54" Waterline awarded to S.J. Louis Construction of Texas, LTD., in the amount of $6,129,855). BID INFORMATION The Lake Ray Roberts 54" Waterline project will be approximately 39,500 feet in length (7.5 miles) and travel generally in a north - south direction beginning at the high service pump station at the Lake Ray Roberts Water Treatment Plant, west down Burger Road to FM 2153, south down FM 2153 to FM 428, west then south down FM 428 to Loop 288. The new transmission line will connect the new water plant under construction at Lake Ray Roberts with existing and proposed water transmission lines along Loop 288. The 54" pipeline will have a total capacity of 62 Million Gallons per Day (MGD). There was one bid item that was included as an additive alternate to remove a pier that was improperly placed in the City's easement by HBC Inc. for the installation of their communications tower along FM 2153. HBC Inc. has agreed to compensate the City of Denton for costs associated with removing this pier from the City's easement and staff is recommending that this alternative bid item be included in the bid award, bringing the total contract amount to $ 6,129,855. PRIOR ACTION/VIEW (COUNCIL, BOARDS, COMMISIONS) The Public Utility Board will consider this acquisition on April 1, 2002. Staff will advise City Council of the PUB recommendation at the meeting of April 2, 2002. RECOMMENDATION Staff recommends award of the construction contract to S.J. Louis Construction of Texas LTD., utilizing the MCS Pipe plus Alternate 1, in the amount not to exceed $ 6,129,855. PRINCIPAL PLACE OF BUSINESS S.J. Louis Construction of Texas, LTD. Mansfield, TX Agenda Information Sheet April 2, 2002 Page 2 ESTIMATED SCHEDULE OF PROJECT Project is estimated to start the first week of May 2002 and to be completed by mid-December 2002. FISCAL INFORMATION A total of $9.592 million was included in the CIP for the Lake Ray Roberts 54 - Inch Finished Water Transmission Line. Of this total, $9.42 million was for construction. The project was to be funded through a combination of bond funds ($8.092 million) and impact fees ($1.5 million). The bid for construction is under the budget estimate and will be funded from bond funds. Attachment 1: Tabulation Sheet Attachment 2: Location Map 1-AlS-BID 2811-Lake Ray Roberts 54" Waterline Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent ORDINANCE NO. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A PUBLIC WORKS CONTRACT FOR THE CONSTRUCTION OF A 54" FINISHED TRANSMISSION WATERLINE; PROViDiNG FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING AN EFFECTIVE DATE (BID 2811 - LAKE RAY ROBERTS 54" WATERLINE AWARDED TO S.J. LOUIS CONSTRUCTION OF TEXAS, LTD., IN THE AMOUNT OF $6,129,855). WHEREAS, the City has solicited, received and tabulated competitive bids for the construction of public works or improvements in accordance with the procedures of STATE law and City ordinances; and WHEREAS, the City Manager or a designated employee has received and recommended that the herein described bids are the lowest responsible bids for the construction of the public works or improvements described in the bid invitation, bid proposals and plans and specifications therein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the following competitive bids for the construction of public works or improvements, as described in the "Bid invitations", "Bid Proposals" or plans and specifications on file in the Office of the City's Purchasing Agent filed according to the bid number assigned hereto, are hereby accepted and approved as being the lowest responsible bids: BID NUMBER CONTRACTOR AMOUNT 2811 S.J. LOUIS CONSTRUCTION OF TEXAS, LTD. $6,129,855 SECTION 2. That the acceptance and approval of the above competitive bids shall not constitute a contract between the City and the person submitting the bid for construction of such public works or improvements herein accepted and approved, until such person shall comply with all requirements specified in the Notice to Bidders including the timely execution of a written contract and furnishing of performance and payment bonds, and insurance certificate after notification of the award of the bid. SECTION 3. That the City Manager is hereby authorized to execute all necessary written contracts for the performance of the construction of the public works or improvements in accordance with the bids accepted and approved herein, provided that such contracts are made in accordance with the Notice to Bidders and Bid Proposals, and documents relating thereto specifying the terms, conditions, plans and specifications, standards, quantities and specified sums contained therein. SECTION 4. That upon acceptance and approval of the above competitive bids and the execution of contracts for the public works and improvements as authorized herein, the City Council hereby authorizes the expenditure of funds in the manner and in the amount as specified in such approved bids and authorized contracts executed pursuant thereto. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of ., 2002 EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: 4-ORD-BID 2811-Lake Ray Roberts 54" Waterline ATTACHMENT 1 TABULATION SHEET BID # 2811 Date: 3/14/02 LAKE RAY ROBERTS 54 INCH WATER PIPELINE 1 S.J. Louis Construction of Texas, LTD. $ 6,222,160.00 $ 6,127,355.00 $ 7,328,720.00 $ 2,500.00 2 BRB Contractors, Inc. $ 6,595,870.00 $ 6,795,870.00 $ 6,861,870.00 $ 2,500.00 3 Oscar Renda Constracting, Inc. $ 6,773,965.00 $ 6,633,965.00 No Bid $ 2,000.00 4 KENKO, Inc. dba McGrand & Associates $ 7,001,655.00 $ 6,704,425.00 $ 7,175,790.00 $ 2,000.00 5 Garney Companies, Inc. $ 6,903,510.00 $ 6,793,510.00 No Bid $ 5,000.00 6 Pate & Pate, LLC $ 6,936,392.75 $ 14,467,612.00 $ 8,104,760.00 $ 3,321.70 7 Jalco, Inc. $ 7,369,220.00 No Bid $ 7,726,085.00 $ 5,000.00 8 Archer Western Contractors, Inc. $ 7,373,510.00 No Bid No Bid $ 15,000.00 9 Johnson Bros. Corporation $ 7,816,350.00 $ 7,899,710.00 $ 8,345,800.00 $ 4,000.00 10 Laughlin Enivironmental $ 8,616,155.00 $ 9,325,015.00 $ 9,393,665.00 $ 50,000.00 11 ERS Constructors - Pipeline Division of TIC No Bid $ 8,624,092.50 No Bid $ 25,000.00 2-TS-BID-2811-LAKE RAY ROBERTS 54 WATERLINE Attachment2 Li~e A02-011 4-2-02 RS9 AGENDA DATE: DEPARTMENT: ACM: AGENDA INFORMATION SHEET April 2, 2002 Materials Management Questions concerning this acquisition may be directed to Cary Tower 349-8424 Kathy DuBose, Fiscal and Municipal Services SUBJECT An Ordinance accepting competitive bids by way of an Interlocal Agreement with Tarrant County and awarding a contract for the purchase of police sedans; providing for the expenditure of funds therefore; and providing an effective date (File 2733 - interlocal Agreemem for Police Sedans with Tarram County, comract awarded to Classic Chevrolet in the amoum of $36,618). INTERLOCAL AGREEMENT INFORMATION An imerlocal Agreemem for Cooperative Purchasing was approved on June 16, 1998 with Tarrant County allowing the City of Denton to participate in Tarrant County contracts for the supply of goods and services. The City of DeNon joined a Metroplex Regional Co-op for the purchase of Police Sedans headed by Tarrant County with the intention of pooling our buying power. Fourteen counties, 47 cities, two school districts and one university combined to purchase approximately 831 vehicles for the 2001-2002 contract. Bids were solicited from 84 qualified vendors and eleven responded. During the 2001-2002 budget development process, the Police Department was authorized to replace seven police patrol sedans and two CiD Sedans (Criminal investigation Sedans). The seven patrol sedans were purchased in October 2001. We are now purchasing the CiD Sedans. PRIOR ACTION/VIEW (COUNCIL, BOARDS, COMMISIONS) The City Council approved an imerlocal Agreemem with Tarram County on June 16, 1998 (98- 175). Tarram County Commissioners Court approved the 2001-2002 bids and awarded a comract to Classic Chevrolet on September 18,2001 (Bid No. 2001-125). RECOMMENDATION We recommend award be approved to Classic Chevrolet in the total amoum of $36,618 for two CID patrol sedans, with full size spare tire option. Agenda Information Sheet April 2, 2002 Page 2 PRINCIPAL PLACE OF BUSINESS Classic Chevrolet Grapevine, TX ESTIMATED SCHEDULE OF PROJECT The estimated delivery of these CID police sedans is approximately the last week in June 2002. FISCAL INFORMATION This acquisition will be funded from Motor Pool account (810001.8535). Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: Tabulation Sheet from Tarrant County (Bid 2001-125) 1-AIS-FILE 2733 INTERLOCAL AGREEMENT FOR POLICE SEDANS ORDINANCE NO. AN ORDINANCE ACCEPTING COMPETITIVE BIDS BY WAY OF AN INTERLOCAL AGREEMENT WITH TARRANT COUNTY AND AWARDING A CONTRACT FOR THE PURCHASE OF POLICE SEDANS; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING AN EFFECTIVE DATE (FILE 2733 - iNTERLOCAL AGREEMENT FOR POLICE SEDANS WITH TARRANT COUNTY, CONTRACT AWARDED TO CLASSIC CHEVROLET iN THE AMOUNT OF $36,618). WHEREAS, pursuant to Ordinance 95-175, Tarrant County, Texas has solicited, received and tabulated competitive bids for the purchase of necessary materials, equipment, supplies or services in accordance with the procedure of state law on behalf of the City of Denton; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described materials, equipment, supplies or services can be purchased by the City through the Tarrant County Cooperative Purchasing programs at less cost than the City would expend if bidding these items 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. That the numbered items in the following numbered purchase order for materials, equipment, supplies, or services, shown in the "Purchase Orders" listed hereon, and on file in the office of the Purchasing Agent are hereby accepted and approved as being the lowest responsible bids for such items: FILE NUMBER VENDOR AMOUNT 2733 Classic Chevrolet $36,618 SECTION 2. That by the acceptance and approval of the above numbered items set forth in the attached purchase orders, the City accepts the offer of the persons submitting the bids to Tarrant County 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 Tarrant County (Bid 2001-001), and the purchase orders issued by the City. SECTION 3. That should the City and persons submitting approved and accepted items set forth in the attached purchase orders wish to enter into a formal written agreement as a result of the City's ratification of bids awarded by the Tarrant County, the City Manager or his designated representative is hereby authorized to execute the written contract which 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 Tarrant County, quantities and specified sums contained in the City's purchase orders, and related documents herein approved and accepted. SECTION 4. That by the acceptance and approval of the above numbered items set forth in the attached purchase orders, the City Council hereby authorizes the expenditure 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. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this day of ,2002. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: 3-ORD- FILE 2733 - 1NTERLOCAL COOPERATIVE PURCHASING ORDINANCE 4-02 A [TA[HHENT 1 0 0 0 0 0 0 0 d [] THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 RS10 AGENDA DATE: DEPARTMENT: ACM: AGENDA INFORMATION SHEET April 2, 2002 Materials Management Questions concerning this acquisition may be directed to Eva Poole 349-7735 Kathy DuBose, Fiscal and Municipal Services SUBJECT An Ordinance approving the annual contract for the lease of library books, a service available from only one source in accordance with the provisions of State law exempting such purchases from requirements of competitive bidding; providing for the expenditure of funds therefore; providing an effective date (File 2835 - McNaughton Book Service in the amount of $26,550). CONTRACT INFORMATION This annual contract is for the lease of adult books for the Central and South Library. This is a participatory agreement through the North Texas Regional Library System and only available to member libraries. This agreement allows the library to offer several copies of a popular book, but not lose valuable space after the popularity diminishes. We have the option of purchasing books at a 75% discount or returning the books. RECOMMENDATION We recommend this annual contract be approved, and Purchase Order 104006 to McNaughton Book Service in the amount of $26,550 be released. PRINCIPAL PLACE OF BUSINESS McNaughton Book Service Williamsport, PA ESTIMATED SCHEDULE OF PROJECT Books are readily available or will be shipped as published and requested. FISCAL INFORMATION This book lease will be funded from the Library 2001-2002 budget account (301001.8595). Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: Purchase Order 104006 to McNaughton Book Service 1-AlS-File 2835-Lease of Adult Library Books ORDINANCE NO. AN ORDINANCE APPROVING THE ANNUAL CONTRACT FOR THE LEASE OF LIBRARY BOOKS, A SERVICE AVAILABLE FROM ONLY ONE SOURCE IN ACCORDANCE WITH THE PROVISIONS OF STATE LAW EXEMPTING SUCH PURCHASES FROM REQUIREMENTS OF COMPETITIVE BIDDING; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFORE; PROVIDING AN EFFECTIVE DATE (FILE 2835 - MCNAUGHTON BOOK SERVICE IN THE AMOUNT OF $26,550). WHEREAS, Section 252.022 of the Local Government Code provides that procurement of items that are only available from one source, including; items that are only available from one source because of patents, copyrights, secret processes or natural monopolies; films, manuscripts or books; electricity, gas, water and other utility purchases; captive replacement parts or components for equipment; and library materials for a public library that are available only from the persons holding exclusive distribution rights to the materials; need not be submitted to competitive bids; and WHEREAS, the City Council wishes to procure one or more of the items mentioned in the above paragraph; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the following purchase of materials, equipment or supplies, as described in the "Purchase Orders" listed hereon, and on file in the office of the Purchasing Agent, and the license terms attached hereto are hereby approved: PURCHASE ORDER VENDOR AMOUNT McNaughton Book Service 104006 $26,550 SECTION 2. That the acceptance and approval of the above items shall not constitute a contract between the City and the person submitting the quotation for such items until such person shall comply with all requirements specified by the Purchasing Department. SECTION 3. That the City Manager is hereby authorized to execute any contracts relating to the items specified in Section I and the expenditure of funds pursuant to said contracts is hereby authorized. SECTION 4. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of ,2002. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: 3-ORD-FILE 2835-PURCHASE ORDER 104006-SOLE SOURCE - 2002 ~8 E i A02-011 4-2-02 RS11 AGENDA DATE: DEPARTMENT: ACM: AGENDA INFORMATION SHEET April 2, 2002 Materials Management Kathy DuBose, Fiscal and Municipal Services Questions concerning this acquisition may be directed to Cary Tower 349-8424 SUBJECT An Ordinance accepting competitive bids and awarding a contract for the purchase of a 35' Aerial Device (Bucket Truck); and providing for the expenditure of funds therefore; and providing an effective date (Bid 2783 - 35' Aerial Device awarded to lowest responsible bidder, Ford Country, in the amount of $62,916). BID INFORMATION This bid is for the purchase of a 35' working height aerial device (bucket truck) for the Traffic Control Division. This is a motor pool replacement for an existing unit that is no longer economical to repair and maintain. The recommended bidder is offering a hydraulic telescopic bucket with utility bed mounted on a 17,500 lb (GVWR cab/chassis). RECOMMENDATION We recommend this bid be awarded to the lowest responsible bidder, Ford Country, in the amount of $61,583 plus $1,333 for an extended warranty on Cab/Chassis for a total award of $62,916. PRINCIPAL PLACE OF BUSINESS Ford Country Garland, TX ESTIMATED SCHEDULE OF PROJECT Delivery is quoted to be 90-120 days after receipt of an order or approximately mid July 2002. FISCAL INFORMATION This aerial device will be funded from Motor Pool fund account (810001.8535). Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: Tabulation Sheet 1-AlS-Bid 2783- 35' Hydraulic Telescopic Aerial Device ORDINANCE NO. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A CONTRACT FOR THE PURCHASE OF A 35' AERIAL DEVICE (BUCKET TRUCK); AND PROViDiNG FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING AN EFFECTIVE DATE (BID 2783 -35' AERIAL DEVICE AWARDED TO LOWEST RESPONSIBLE BIDDER, FORD COUNTRY, iN THE AMOUNT OF $62,916). WHEREAS, the City 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 and City ordinances; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bids are the lowest responsible bids for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted therefore; 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. That the numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: BID NUMBER VENDOR AMOUNT 2783 Ford Country $ 62,916 SECTION 2. That by the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid invitations, Bid Proposals, and related documents. SECTION 3. That should the City and persons submitting approved and accepted items and of the submitted bids wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the bids, the City Manager or his designated representative is hereby authorized to execute the written contract which shall be attached hereto; provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and related documents herein approved and accepted. SECTION 4. That by the acceptance and approval of the above numbered items of the submitted bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids or pursuant to a written contract made pursuant thereto as authorized herein. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this __ day of ,2002. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: 3-ORD-Bid 2783 35' AerialDevice THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 RS12 AGENDA INFORMATION SHEET AGENDA DATE: DEPARTMENT: April 2, 2002 Materials Management Questions concerning this acquisition may be directed to Cary Tower 349-8424 ACM: Kathy DuBose, Fiscal and Municipal Services SUBJECT An Ordinance accepting competitive bids and awarding a contract for the purchase of (six) each 12 cubic yard dump trucks and (one) haul truck tractor; and providing for the expenditure of funds therefore; and providing an effective date (Bid 2784 - 12 Yd Dump Trucks and Haul Truck Tractor awarded to lowest responsible bidder as listed below in the amount of $447,662). BID INFORMATION This bid is for the purchase of (six) each 12 cubic yard diesel powered dump trucks and (one) heavy-duty haul truck tractor. Three dump trucks will be assigned to the Water/Sewer Field Services and three to Streets/Drainage. The haul truck will be assigned to and Streets/Drainage Division. Three dump trucks and the haul truck are additions to the Motor Pool fleet. The others are replacements for existing units. RECOMMENDATION We recommend this bid be awarded to the lowest responsible bidder for each item: Item Qty Description Supplier Cost with Option Extended Cost 1. 6 12 Yd Dump Truck Dallas Freightliner $63,344 $380,064 2. 1 Haul Tractor Dallas Freightliner $67,598 $ 67,598 Total Award $447,662 PRINCIPAL PLACE OF BUSINESS Dallas Freightliner Dallas, TX ESTIMATED SCHEDULE OF PROJECT Delivery of all seven units has been quoted to be 110 days after receipt of an order. Agenda Information Sheet April 2, 2002 Page 2 FISCAL INFORMATION Funding for these units are available from the: · Motor Pool funds account (810001.8535) · Third Party Lease/Purchase $257,630 $190,032 $447,662 Attachment 1: Tabulation Sheet Attachment 2: Option List 1-AlS-Bid 2784 12 Yd Dump Tracks & Haul Truck Tractor Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent ORDINANCE NO. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A CONTRACT FOR THE PURCHASE OF (SIX) EACH 12 YARD DUMP TRUCKS AND (ONE) HAUL TRUCK TRACTOR; AND PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING AN EFFECTIVE DATE (BID 2784 - 12 YD DUMP TRUCKS AND HAUL TRUCK TRACTOR AWARDED TO LOWEST RESPONSIBLE BIDDER AS LISTED BELOW iN THE AMOUNT OF $447,662). WHEREAS, the City 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 and City ordinances; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bids are the lowest responsible bids for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted therefore; 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. That the numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: BID ITEM NUMBER NO VENDOR AMOUNT 2784 1, 2 Dallas Freightliner $447,662 SECTION 2. That by the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid invitations, Bid Proposals, and related documents. SECTION 3. That should the City and persons submitting approved and accepted items and of the submitted bids wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the bids, the City Manager or his designated representative is hereby authorized to execute the written contract which shall be attached hereto; provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and related documents herein approved and accepted. SECTION 4. That by the acceptance and approval of the above numbered items of the submitted bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids or pursuant to a written contract made pursuant thereto as authorized herein. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this __ day of ,2002. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: 3-ORD-Bid 2784-12 Yd Dump Truck and Haul Truck Tractor iii ~T UJz W - _ SSS SSS g ·._ 0 SSS ~ ~ ~ o - ~ o ~ ~ ~ ~ o ~ ~ o w ~ ~ ~ ~ o ~ ~ o ~ o o W ~ ~ ~ ~ W ~ ~ W Z W ~ W m-o ,,~ 0 A02-011 4-2-02 RS13 AGENDA DATE: DEPARTMENT: ACM: AGENDA INFORMATION SHEET April 2, 2002 Materials Management Questions concerning this acquisition may be directed to Cary Tower 349-8424 Kathy DuBose, Fiscal and Municipal Services SUBJECT An Ordinance accepting competitive bids and awarding a contract for the purchase of a Hydraulic Detachable Gooseneck Trailer; providing for the expenditure of funds therefore; and providing an effective date (Bid 2785 - Hydraulic Detachable Gooseneck Trailer awarded to lowest responsible bidder, Darr Equipmem, in the amoum of $32,317). BID INFORMATION This bid is for the purchase of a 48 foot, 100,000 lb capacity lowboy trailer for hauling heavy equipmem. This triple axle trailer has a detachable hydraulic operated gooseneck hitch to allow the from loading of equipmem such as loaders, dozers and pavers. RECOMMENDATION We recommend this bid be awarded to the lowest responsible bidder, Dart Equipmem in the amoum of $32,317. PRINCIPAL PLACE OF BUSINESS Darr Equipment Dallas, TX ESTIMATED SCHEDULE OF PROJECT Delivery of this trailer is quoted to be 84 days after receipt of an order. FISCAL INFORMATION Funding for this equipmem is available from Motor Pool accoum (810001.8535). Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: Tabulation Sheet 1-AlS-Bid 2785 Hydraulic Detachable Gooseneck Trailer ORDINANCE NO. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A CONTRACT FOR THE PURCHASE OF A HYDRAULIC DETACHABLE GOOSENECK TRAILER; PROViDiNG FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROViDiNG AN EFFECTIVE DATE (BID 2785 - HYDRAULIC DETACHABLE GOOSENECK TRAILER AWARDED TO LOWEST RESPONSIBLE BIDDER, DARR EQUIPMENT, IN THE AMOUNT OF $32,317). WHEREAS, the City 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 and City ordinances; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bids are the lowest responsible bids for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted therefore; 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. That the numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: BID NUMBER VENDOR AMOUNT 2785 Darr Equipment $ 32,317 SECTION 2. That by the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid invitations, Bid Proposals, and related documents. SECTION 3. That should the City and persons submitting approved and accepted items and of the submitted bids wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the bids, the City Manager or his designated representative is hereby authorized to execute the written contract which shall be attached hereto; provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and related documents herein approved and accepted. SECTION 4. That by the acceptance and approval of the above numbered items of the submitted bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids or pursuant to a written contract made pursuant thereto as authorized herein. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this __ day of ,2002. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: 3-ORD-Bid 2785-Hydraulic Detachable Gooseneck Trailer ATTACHMENT 1 TABULATION SHEET BID # 2785 Date: 2/21/02 HYDRAULIC DETACHABLE GOOSENECK TRAILER CONTINENTAL TRAILER EQUIPMENT BEAVER/GENERAL EQUIPMENT ENGINES Principle Place of Business: MANSFIELD,TX DALLAS, TX LAKE WALES, FL DALLAS, TX HYDRAULIC 1 1 DETACHABLE $44,387.00 $32,317.00 $36,511.00 $42,943.00 GOOSENECK TRAILER MANUFACTURE INTERSTATE LOAD KING EAGER BEAVER TRAIL KING MODEL 100S DGN 553SS 50GSL/3 TK110HDG DELIVERY 60 DAYS 84 DAYS 90 DAYS 77 DAYS 2-TS-BID 2785 HYDRAULIC DETACHABLE GOOSENECK TRAILER A02-011 4-2-02 RS14 AGENDA DATE: DEPARTMENT: ACM: AGENDA INFORMATION SHEET April 2, 2002 Materials Management Questions concerning this acquisition may be directed to Cary Tower 349-8424 Kathy DuBose, Fiscal and Municipal Services SUBJECT An Ordinance accepting competitive bids and awarding a contract for the purchase of a Crawler Dozer, Motorgrader, Rubber Tired Loader and Tractor Loader Backhoe; and providing for the expenditure of funds therefore; and providing an effective date (Bid 2786 - Earth Moving Equipment awarded to lowest responsible bidder, as listed below, in the amount of $436,386). BID INFORMATION This bid is for the purchase of a series of earth moving equipment consisting of a Crawler Dozer for the Drainage Division, a Motorgrader for the Streets Division, and a Rubber Tired Loader for the Wastewater Biosolids Treatment Division and a Tractor Loader Backhoe for the Water Distribution Division. Items 1, 3 and 4 are Motor Pool replacements, and Item 2 is a fleet addition. Each item bid required a guaranteed buy back amount at the end of 36 months, and that is the basis of our recommended award. RECOMMENDATION We recommend this bid be awarded to the lowest responsible bidder, taking into consideration the guaranteed buy back amount, as listed below: Item Qty Description Supplier Purchase Preventive 36 Month Buy Net Cost Price Maint. Service Back 1 1 Cra~vlerDozer DarrEquipment $ 94,247 $ 1,573 $ 51,450 $ 42,797 2 1 Motorgrader Romco Equipment $162,875 $11,800 $128,375 $ 34,500 3 1 Rubber Tired Loader Darr Equipment $100,437 $ 1,434 $ 64,200 $ 36,237 4 1 Backhoe RDO Equipment $ 64,020 $ 25,000 $ 39,020 $421,579 $14,807 $152,554 PRINCIPAL PLACE OF BUSINESS Darr Equipment Romco Equipment RDO Equipment Dallas, TX Dallas, TX Ft. Worth, TX ESTIMATED SCHEDULE OF PROJECT Delivery for this equipment ranges from 60 to 90 days after receipt of an order. Agenda Information Sheet April 2, 2002 Page 2 FISCAL INFORMATION Funding for Items 1, 2 and 4 is available from Motor Pool fund account (810001.8535). Item 3 will be funded from a Third Party Lease Agreement approved by Council in February 2002. Attachment 1: Tabulation Sheet 1-AlS-Bid 2786-Earth Moving Equipment Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent ORDINANCE NO. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A CONTRACT FOR THE PURCHASE OF A CRAWLER DOZER, MOTORGRADER, RUBBER TIRED LOADER AND TRACTOR LOADER BACKHOE; AND PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING AN EFFECTIVE DATE (BID 2786-EARTH MOVING EQUIPMENT AWARDED TO LOWEST RESPONSIBLE BIDDER, AS LISTED BELOW, iN THE AMOUNT OF $436,386). WHEREAS, the City 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 and City ordinances; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bids are the lowest responsible bids for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted therefore; 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. That the numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: BID ITEM NUMBER NO VENDOR AMOUNT 2786 1,3 Darr Equipment $197,691 2786 2 Romco Equipment $174,675 2786 4 RDO Equipment $ 64,020 SECTION 2. That by the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid invitations, Bid Proposals, and related documents. SECTION 3. That should the City and persons submitting approved and accepted items and of the submitted bids wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the bids, the City Manager or his designated representative is hereby authorized to execute the written contract which shall be attached hereto; provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and related documents herein approved and accepted. SECTION 4. That by the acceptance and approval of the above numbered items of the submitted bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids or pursuant to a written contract made pursuant thereto as authorized herein. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this __ day of ,2002. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: 3-ORD-Bid 2786-Earth Moving Equipment ~--W ~T Z~ Wz W k- Z UJ Z 0 ~ ~ ,,z, ~ o o o o ~ o ~ o~ o o~ ,~- 0 0 -- 0 0 0 LO 0 LO ~1-- X 0 0 C~l 0 C~l CO 0 CO C~l 0 C~l C) m Z Z .ce O~ n r.,.o SSi }-z X co o >'- cD C~l o g 58 ° ® ~ ~ o o - 0 ~ ~ ~ 0 0 0 ~ z ~ ~ m z z o ~ < ~ = o o ~ ~ o ~0 ~ Z Z ~ Z o ~ ~ o ~ < o ~~ ~ ~ 0 0 m : 0 w 0 z ~ ~ w z ~ ~ m ~ 0 w 0 z m : > w~ oo ~ ~~ ~ ~ _ a_ ~ ~ x x d~ ~ x ~ ~ x ~ ~ z ~ ~ z ~ z ~ z THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 RS15 AGENDA DATE: DEPARTMENT: ACM: AGENDA INFORMATION SHEET April 2, 2002 Materials Management Questions concerning this acquisition may be directed to Tom Shaw 349-7100 Kathy DuBose, Fiscal and Municipal Services SUBJECT An Ordinance accepting competitive bids and awarding a contract for the purchase of a 6,000 lb Capacity Electric Forklift; providing for the expenditure of funds therefore; and providing an effective date (Bid 2800 - 6,000 lb Capacity Electric Forklift awarded to lowest responsible bidder, Powr-Lift Corporation, in the amount of $28,696). BID INFORMATION This bid is for the purchase of a 6,000 lb capacity electric powered forklift. This unit is a fleet addition for the Warehouse Operation. An electric powered lift with pneumatic tires was chosen so the unit could be utilized indoors without concern for pollution, for sufficient ground clearance, and traction for outside operation. RECOMMENDATION We recommend this bid be awarded to the lowest responsible bidder, Powr-Lift Corporation in the amount of $26,608 for the forklift, plus $2,088 for the charger, for a total award of $28,696. PRINCIPAL PLACE OF BUSINESS Powr-Lift Corporation Irving, TX ESTIMATED SCHEDULE OF PROJECT Delivery is quoted to be 100 days from receipt of an order. FISCAL INFORMATION Funding for this equipment is available from Warehouse Capital Equipment account (800001.8535) approved in the 2001-2002 budget process. Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent Attachment 1: Tabulation Sheet 1-AlS-Bid 2800-6,000 lb Capacity Electronic Forklift ORDINANCE NO. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A CONTRACT FOR THE PURCHASE OF 6,000 LB CAPACITY ELECTRIC FORKLIFT; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING AN EFFECTIVE DATE (BID 2800 - 6,000 LB CAPACITY ELECTRIC FORKLIFT AWARDED TO LOWEST RESPONSIBLE BIDDER, POWR-LiFT CORPORATION, IN THE AMOUNT OF $28,696). WHEREAS, the City 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 and City ordinances; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bids are the lowest responsible bids for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted therefore; 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. That the numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: BID NUMBER VENDOR AMOUNT 2800 Powr-Lift Corporation $ 28,696 SECTION 2. That by the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid invitations, Bid Proposals, and related documents. SECTION 3. That should the City and persons submitting approved and accepted items and of the submitted bids wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the bids, the City Manager or his designated representative is hereby authorized to execute the written contract which shall be attached hereto; provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and related documents herein approved and accepted. SECTION 4. That by the acceptance and approval of the above numbered items of the submitted bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids or pursuant to a written contract made pursuant thereto as authorized herein. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this __ day of ,2002. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: 3-ORD-Bid 2800-Electric Forklift ATTACHMENT 1 TABULATION SHEET BID # 2800 Date: 2/19/02 6,000 LB. CAPACITY ELECTRIC FORKLIFT Shannon Stewart & Powr-Lift Depot of Corporation Stevenson Dallas Principle Place of Business:Grand Prairie, TX Dallas, TX Irving, TX Dallas, TX 1 1 6000 Lb Capacity Electric Forklift $29,880 $24,755 $26,608 $26,415 Addendum # 1 Yes No Yes No Delivery Will Advise Will Advise 100 DAYS 140 Days Charger Included Not Bid $2,088 Not Bid 2 Truck, Battery & $29,880 $28,696 Charger Total 2-TS-BID 2800 - 6,000 ELECTRIC FORKLIFT A02-011 4-2-02 RS16 AGENDA DATE: DEPARTMENT: ACM: AGENDA INFORMATION SHEET April 2, 2002 Materials Management Questions concerning this acquisition may be directed to Cary Tower 349-8424 Kathy DuBose, Fiscal and Municipal Services SUBJECT An Ordinance accepting competitive bids and awarding a contract for the purchase of a Self- Loading 3 Reel Trailer; and providing for the expenditure of funds therefore; and providing an effective date (Bid 2804 - Self-Loading 3 Reel Trailer awarded to lowest responsible bidder, OK Champion in the amount of $106,845). BID INFORMATION This bid is for the purchase of a self-loading reel trailer. The trailer has a capacity of three reels weighing 12,000 lbs per reel. The trailer is designed to hydraulically lift and load wooden reels of wire/cable. The self-loading name is derived from the hydraulic lifting mechanism omitting the need for a second piece of equipment to load the wire or cable. RECOMMENDATION We recommend this bid be awarded to the lowest responsible bidder, OK Champion in the amount of $106,845. PRINCIPAL PLACE OF BUSINESS OK Champion Hammond, IN ESTIMATED SCHEDULE OF PROJECT Shipment is quoted to be 90-120 days or mid July 2002. FISCAL INFORMATION Funding for this trailer is available from Motor Pool fund account (810001.8535). Attachment 1: Tabulation Sheet 1-AlS-BID 2804-Three Reel Trailer Respectfully submitted: Tom Shaw, C.P.M., 349-7100 Purchasing Agent ORDINANCE NO. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A CONTRACT FOR THE PURCHASE OF A SELF-LOADING 3 REEL TRAILER; AND PROViDiNG FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING AN EFFECTIVE DATE (BID 2804 - SELF-LOADiNG 3 REEL TRAILER AWARDED TO LOWEST RESPONSIBLE BIDDER, OK CHAMPION iN THE AMOUNT OF $106,845). WHEREAS, the City 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 and City ordinances; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bids are the lowest responsible bids for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted therefore; 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. That the numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: BID NUMBER VENDOR AMOUNT 2804 OK Champion $106,845 SECTION 2. That by the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid invitations, Bid Proposals, and related documents. SECTION 3. That should the City and persons submitting approved and accepted items and of the submitted bids wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the bids, the City Manager or his designated representative is hereby authorized to execute the written contract which shall be attached hereto; provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and related documents herein approved and accepted. SECTION 4. That by the acceptance and approval of the above numbered items of the submitted bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids or pursuant to a written contract made pursuant thereto as authorized herein. SECTION 5. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this __ day of ,2002. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: 3-ORD-Bid 2804 Self Loading 3 Reel Trailer ATTACHMENT 1 TABULATION SHEET BID # 2804 Date: 2-19-02 SELF LOADING 3 REEL TRAILER BODY Principle Place of Business: HAMMOND, IN SAN ANTONIO, TX Total Base Bid $106,845 $115,462 1 OPTION: $11,735 $11,551 Second Reel Rim Drive 2 DELIVERY 90-120 DAYS 90-120 DAYS 2-TB-BID-2804 SELF LOADING 3 REEL TRAILER A02-011 4-2-02 RS17 AGENDA INFORMATION SHEET AGENDA DATE: DEPARTMENT: ACM: April 2, 2002 Utility Administration Howard Martin, 349-8232 SUBJECT AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE MAYOR TO EXECUTE AN INTERLOCAL COOPERATION AGREEMENT BY AND BETWEEN THE CITY OF DENTON, TEXAS AND THE CITY OF KRUM, TEXAS PERTAINING TO THE DESIGN AND CONSTRUCTION BY KRUM AND THE OVERSIZE COST PARTICIPATION BY DENTON FOR THE KRUM GRAVITY FLOW WASTEWATER MA1N; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. BACKGROUND The City of Krum has proposed to construct a sewer main to bring wastewater flows from Krum to the City of Denton wastewater collection system. The proposed sewer line from Krum will discharge into the Hickory Creek Interceptor sewer in the Denton collection system (see Exhibit I-Map). Staff presented the initial proposal from the City of Krum for wastewater service to the PUB on August 20, 2001, and to the City Council on September 11, 2001. The PUB and the Council authorized staff to proceed on negotiations with the City of Krum. On December 1, 2001 staff presented to PUB the sewer main oversize concept and costs, where by Krum will construct a sewer line to convey the wastewater flows from Krum to the Denton collection system, and Denton will oversize this sewer line to accommodate flows from the northwest corridor within the Denton CCN. PUB approved this concept negotiated with the City of Krum. This oversize concept was presented to the Council on December 11, 2001 in the work session where the Council approved the sewer main oversize concept. With this authorization, staff has worked with the City of Krum to develop a Interlocal Agreement (see Exhibit III). The Interlocal Agreement provides the mechanism for Denton and Krum to enter into a joint participation for construction of the Krum sewer line. The highlights of the Interlocal Agreement are as follows: · Krum to design the sewer line, acquire all easements and manage the construction that meets City of Denton design criteria and specifications. · Denton will pay for the oversizing of the sewer line to serve the northwest corridor. · Project is estimated to cost 3.2 million dollars. · Krum's share is estimated at 1.8 million dollars. Krum will provide 1.4 million dollars initial capital and get $400,000 financing from Denton. · Krum will make bi-annual payments to Denton for a period of 20 years to amortize the $400,000 financed amount. Denton's oversize cost is estimated at 1.4 million dollars. Krum will pay impact fees for all existing and future connections at the prevailing rate. To help expedite construction of the sewer line project Denton authorizes Krum to purchase easements within the city limits of Denton by eminent domain proceedings including condemnation if necessary. The Denton legal department has reviewed this request from Krum and determined it is permissible to provide Krum the eminent domain authority. PRIOR ACTION/REVIEW (Council, Boards, Commissions) PUB: August 20, 2001 - Authorized staff to negotiate wholesale wastewater treatment services agreement with Krum. City Council: September 11, 2001 - Authorized staff to negotiate wholesale wastewater services agreement with Krum PUB: December 1, 2001- Approved the oversize sewer main cost participation concept with the City of Krum City Council: December 11, 2001- Approved the oversize sewer main cost participation concept with the City of Krum FISCAL INFORMATION The Pecan Creek Water Reclamation Plant Expansion project bids were received on October 30, 2001. The project construction budget was 19.5 million dollars. From the bids received it is estimated there will be savings of 1.3 million dollars from the budgeted amount. In the FY2002 $200,000 is included for sewer main oversize participation. These monies along with the bond sale in spring 2002 will be used to fund the Krum sewer line project. EXHIBITS Exhibit I Exhibit II Exhibit III Map Ordinance Inteflocal Cooperation Agreement Respectfully submitted: Jim Coulter Director, Water Utilities Prepared by: P. S. Arora, P.E. Assistant Director Wastewater ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE MAYOR TO EXECUTE AN INTERLOCAL COOPERATION AGREEMENT BY AND BETWEEN THE CITY OF DENTON, TEXAS AND THE CITY OF KRUM, TEXAS PERTAINING TO THE DESIGN AND CONSTRUCTION BY KRUM AND THE OVERSIZE COST PARTICIPATION BY DENTON FOR TIlE KRUM GRAVITY FLOW WASTEWATER MAIN; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the Mayor, or in her absence the Mayor Pro Tern, is hereby authorized to execute, on behalf of the City, an Interlocal Cooperation Agreement between the City of Denton, Texas and the City of Krum, Texas for the design and construction by Krum and the oversize cost participation by Denton, and eoncoming certain condemnation provisions contained therein, for the Knun Gravity Flow Wastewater Main, substantially in accordance with the Interlocal Cooperation Agreement which is attached hereto and incorporated by reference herein. SECTION2. That the expenditure of funds as set forth in the Interlocal Cooperation Agreement is hereby authorized. SECTION 3. That this ordinance shall become effective immeAiately upon its passage and approval. PASSED AND APPROVED this the day of ,2002. ATTEST: JENNIFER WALTERS, CITY SECRETARY EULINE BROCK, MAYOR By: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY 5:\Our Docummts~)rdinances~02qnt~-Iocal Agnm-City ofKrum WW Line 2002.dec EXHIBIT II THE STATE OF TEXAS § COUNTY OF DENTON § INTERLOCAL COOPERATION AGREEMENT BY AND BETWEEN THE CITY OF DENTON, TEXAS AND THE CITY OF IGRUM, TEXAS PERTAINING TO THE DESIGN AND CONSTRUCTION BY KRUM AND OVERSIZE COST PARTICIPATION BY DENTON FOR THE KRUM GRAVITY FLOW WASTEWATER MAIN THIS AGREEMENT is made and entered into by and between the City of Denton, Texas, a Texas municipal corporation (hereafter "Denton"), whose principal offices are located at 215 East McKinney Avenue, DeNon, Texas 76201; and the City of Krum, Texas, a Texas municipal corporation (hereafter "Krum"), whose principal offices are located at 102 West McCart, P.O. Box 217, Krum, Texas 76249; each organized and existing under the laws of the State of Texas, and acting by and through the authority of their respective goveming bodies and officials; and WHEREAS, Denton and Krum are local governmental entities, both of whom have the authority to perform the activities set forth in this Agreement individually, and who mutually desire to emer imo an imeflocal cooperation agreemem, as provided for in Chapter 791 of the Texas Government Code (Vernon 1994) in order to maximize the benefits to the citizens of Denton and Krum to be derived from each taxpayer and/or ratepayer dollar expended; and WHEREAS, Krum has planned, and intends to construct, install, and manage a wastewater transmission line that is to be located in Denton and Krum, in Denton County, Texas, in order to provide wastewater infrastructure to existing and future developments, which line is called the "Krum Gravity Flow Wastewater Main" (hereafter the "Krum Line''); and this Project is called the Krum Wastewater Main Project (hereafter the "Project"); and which Krum Line shall extend generally along a tributary of Hickory Creek; along Egan Road; then crossing Highway 380 to Masch Branch Road; and then parallel to Masch Branch Road to Denton's Hickory Creek Wastewater Interceptor; and WHEREAS, Denton and Krum, each in accordance with its respective ordinances, desire to jointly implement the Project. WHEREAS Krum will design, construct, manage, and install a sewer line; and Denton will participate in oversizing the above sewer line for Krum. The oversizing is anticipated to be twenty-one (21") inch, twenty-four (24'') inch, and twenty-seven (27") inch diameter sewer pipe. The final oversize line for the Krum Line Project, for the purposes of providing facilities to adequately receive, transport, treat, and dispose of wastewater, shall be determined during the final design of the Project; and WHEREAS, Denton has been and is willing to accept the responsibility of providing improved wastewater treatment and services to entities located outside of its corporate limits to protect water quality and develop reuse potential; and Denton and Krum intend to enter into a separate contract entitled "Wholesale Wastewater Treatment Services Contract Between the City EXHIBIT HI of Denton, Texas and the City of Krum," (hereafter the "Contract") wherein Krum desires to obtain wastewater treatment service on behalf of its customers, and Denton shall provide Krum with regional wastewater treatment service on a wholesale basis; and WHEREAS, Denton and Krum desire to pool their respective financial resources to avoid unnecessary or duplicitous costs and expenses; intend to coordinate the collection, treatment, and reclamation of wastewater; and intend to attain mutual advantage and benefit by achieving economies of scale, resulting in savings to the taxpayers and ratepayers of Denton and Krum; and WHEREAS, Denton and Krum, by this Interlocal Cooperation Agreement (hereafter the "Agreement") express their mutual understanding that the relationship to be created by implementation of Agreement is that of two local governmental entities providing resources for the construction of the Krum Line; and there is a valid governmental purpose served by this Agreement by Denton and Krum to provide for construction and installation of the Krum Line; and WHEREAS, Denton and Krum represent that all payments made in connection with governmental functions provided for by this Agreement, shall be made from revenues available to Krum in accordance with the provisions of Section 791.011(d)(3) of the Texas Government Code; and that the payments received by Denton hereunder are adequate and fairly compensate Denton for the services, functions, or activities performed, in accordance with the provisions of Section 791.01 l(e) of the Texas Government Code; and WHEREAS, the Intedocal Cooperation Act, now contained in Chapter 791 of the Texas Government Code (Vernon 1994), authorizes Denton and Krum to enter into this Agreement for the purpose of achieving the governmental functions and providing the services, functions, or activities represented by this collective, cooperative undertaking; and NOW, THEREFORE, Denton and Krum, for and in consideration of the premises and the mutual promises and covenants set forth in this Intedocal Cooperation Agreement, and pursuant to the authority granted by the respective governing bodies of each of the parties hereto, in accordance with Section 791.011(d)(1) of the Texas Government Code, do hereby AGREE as follows: I. ADOPTION OF PREAMBLE All matters and recitations stated in the Preamble of this Agreement are true and correct and are hereby incorporated by reference into the provisions of this Agreement for all purposes pertinent. II. DEFINITION OF TERMS In addition to the definitions stated in the Preamble hereof, some of the terms and expressions as hereinafter used in this Agreement, unless the context clearly indicates otherwise, shall have the following meanings: (a) "Average Day Wastewater Flow" means the daily average flow rate computed by dividing the total quantity of wastewater flow generated over a calendar year divided by 365 days per year. (b) "Project" means the Krum Wastewater Main Project. (c) "Bonds" as used herein, means the issuance of debt, including principal and interest, by Denton for the purpose of financing the Project. (d) "Interest Factor" as used herein, means the rate utilized herein which consists of Denton's average interest cost paid to retire the issuance of debt pertaining to the Project. (e) "SFE" means single-family equivalent. On a daily average basis, one (1) SFE generates 320 gallons per day (GPD) ofwastewater flow. (f) "Maximum Day Flow Rate" means the expected maximum wastewater quantity generated over a 24-hour day. For purposes of this Agreement, the maximum day flow rate equals to the average day flow rate times two (2). (g) "Peak Hourly Flow Rate" means the expected maximum wastewater quantity that could occur in any given sixty (60)-minute period. For purposes of this Agreement, the peak hourly flow rate equals to the average day flow times four (4). "Project Costs" means all capital, construction, planning, engineering, surveying, easement/right-of-way acquisition, Financing, and other typical costs associated with the implementation of the Project; including without limitation, the bond issuance costs, bond insurance premiums, underwriter's discount, and deposits to the deposit reserve fund. (i) "Parties" means Denton and Krum referred to collectively. III. TERMS AND PROVISIONS OF THE AGREEMENT 1. Krum shall design, install, and construct the Krum Wastewater Main Project which includes, but is not limited to, approximately 26,000 linear feet of a fifteen (15")-inch diameter capacity sewer pipe; along with all necessary appurtenances thereto (including, without limitation, metering station, manholes, etc.), and Denton will participate in the oversizing of a fifteen (15") inch diameter capacity sewer line, as generally shown on Exhibit I, attached hereto and incorporated herein by reference. The Project shall commence at the current downstream terminus of a sewer main located immediately upstream of Krum's proposed metering station (termed the "Point of Beginning"). The Project shall terminate at Denton's existing Hickory Creek Wastewater Interceptor Main (termed the "End-Point"). 2. The Parties agree that in the Krum Line Project, Krum shall have access up to the full capacity of a fifteen (15',) inch diameter sewer line and Denton will have access to the oversize capacity above and beyond the capacity of a fifteen (15',) inch diameter sewer line 3. Prior to the beginning of construction of the Krum Line Project, Krum shall obtain, as part of the Project Cost, all necessary permits and licenses. Krum shall also obtain, as part of the Project Cost, all necessary easements. The deeds, plats, md other documents so obtained by Krum shall be reviewed and approved as to form and substance by Denton prior to the beginning of construction. Krum has informed Denton that it needs to speed up the development of the Krum Line Project by possibly performing construction of the line in phases. Denton recognizes that fact, and agrees to reasonably approve a construction contract providing for multiple phases; and Denton is willing to approve the easements obtained, as to form and substance, in construction phases, if need be; but Krum understands that Denton will not, and cannot assume any additional financial risks or liabilities attributable to its serial approval of easements throughout the term of the Project. In the event Krum is unable to acquire any needed easements and condemnation becomes necessary, Denton shall immediately assist Krum, upon its request. Krum shall provide Denton with information and any requested documentation of its efforts to obtain such easements, including evidence of the negotiations and offers made to the affected property owners. Prior to condemnation suits brought by Krum, the City of Denton reserves the right to negotiate with the property owners, in order to assist Krum. Any easements for the Krum Line Project obtained by Krum within the City of Denton shall be assigned to Denton, if easements are not already acquired in Denton's name, prior to acceptance of the Krum Line Project. Further, that subject to the terms and conditions contained herein, Denton authorizes Krum to acquire such easements within the city limits of Denton by purchase or by eminent domain proceedings. Denton finds that there is a public need and necessity to acquire these easements by purchase or eminent domain proceedings. Should eminent domain proceedings be necessary, Krum is authorized to condemn and acquire said easements for this Project, in the name of Denton. 4. Krum's share of the Project Cost shall be computed as the cost to survey, design, acquire easements, and construct a fifteen (15',) inch diameter sewer line, including all appurtenances such as manholes, metering station, etc. for a complete project. 5. Denton's share of the Project Costs as between Denton and Krum shall be computed as the difference between the total Project Costs and Krum's share of the Project Costs. Each party's respective share of the Project Costs shall be based upon final audited numbers. 6. By way of example, Krum's portion of the Project Costs for the Krum Line Project is currently estimated and projected to be $1,800,000. Krum will fund $1,400,000 from its existing bond sale. The remainder of the Krum share: $400,000 plus $20,000 in estimated bond selling costs (hereinafter termed the "Principal Component Amount"), is computed by the procedure and methodology as set forth in the "Contract Payment Schedule" which is marked as Exhibit II, and is attached hereto and incorporated herewith by reference. The Principal Component Amount shall include Krum's share of the capital cost for the Krum Line Project plus Krum's share of the portion of the other Project Costs, as defined in paragraph II.(h.) hereinabove, also including, without limitation, any interest accruing on the Bonds during the construction phase of the Project. Krum shall also pay its share of the portion of such other and further costs and expenses, if any, as calculated by Denton to Krum that are reasonably incurred and are associated with the construction and installation of the Krum Line Project, that are mutually agreeable as between the Parties. 7. The Principal Component Amount plus the total Interest Factor amount [i.e., the cumulative annual interest amortized over a payout period of twenty (20) years based upon Financing the Principal Component Amount at the Interest Factor] computed over twenty (20) years at Denton's Interest Factor, which is 5.25% [estimated until fixed by Bond Sale] per annum, and which shall be hereinafter termed the "Repayment Amount." By way of example, the annual Repayment Amount on a projected Principal Component Amount of $420,000 is $34,170.68 [estimated until the interest rate is fixed by Bond Sale], as computed and set forth in Exhibit II attached hereto and incorporated herewith by reference. 8. Krum shall pay Denton the Repayment Amount in contractual payments in accordance with the following provisions and factors, and as shown as the "Contract Payment Schedule" attached hereto as Exhibit II: Krum will pay 1/40 of the product of Krum's allocable percentage share of Project Costs times the combined total of the Principal Component Amount and the Interest Factor amount portion of each payment respecting total Project Costs in level payments, due and payable on January 1 and July 1 of each calendar year for a period of twenty (20) successive years; such payments being hereinafter referred to as the "Contractual Payments," with the fa'st such Contractual Payment being payable from Krum to Denton on July 1, 2003; and The Interest Factor amount utilized over the twenty (20) year Contract Payment Schedule to determine the amount of the level Contractual Payments, shall be that interest rate paid by Denton on the Bonds issued by Denton used to finance the Project, which is the rate of 5.25% [estimated rate until fixed by Bond sale] per annum. For purposes of determining the level Contractual Payment amount due hereunder, the Principal Component Amount shall be based and amortized on a standard twenty (20) year debt amortization schedule and upon the declining balance method (applying the Interest Factor amount) respecting the determination of the Contract payoff balance in the event that Krum's contractual obligations to Denton hereunder are prepaid as permitted by the provisions of paragraph III.8.d. hereinbelow. Provided however, Krum reserves the right to prepay its contractual obligations arising hereunder to Denton, without penalty, at any time after the fifth anniversary date of the execution date of this Agreement. Prepayment during the fa'st five (5) years following the execution date of this Agreement shall be prohibited, unless both the City of Denton and the City of Krum mutually agree to waive such prepayment restriction in writing. The Contractual payoff balance shall be determined at the time of the prepayment, as if the Contract Payment Schedule attached hereto as Exhibit II, were a mortgage debt being prepaid. In the event of prepayment, Krum shall be responsible only for the Interest Factor amount calculated to the date of prepayment, and shall not be responsible for the payment of any further sums hereunder to Denton, other than the remaining, unpaid Principal Component Amount. In the event Krum prepays its contractual obligations hereunder, in whole or in part, on a date other than a scheduled Contract payment due date, then the Parties agree that interest shall be prorated through the date of such payment(s). 9. To determine the final Project Costs of the Krum Line, Denton shall have the right to inspect any and all records of Krum, its agents, employees, contractors or subcontractors, and shall have the right to require Krum to submit any necessary information, documents, invoices, receipts or other records to verify the final audited Project Costs of the Krum Line Project. 10. Krum will deliver wastewater to the Denton wastewater system at the following "Point of Entry": a. To the Hickory Creek Interceptor Main 11. Under this Agreement Denton agrees to receive wastewater from Krum up to the full capacity of a fifteen (15',) inch diameter sewer line. The capacity of a fifteen (15',)inch sewer line shall be determined based on the minimum slope in the sewer line from the final design drawings, and may be revised based on as-built conditions. The Parties agree that Krum's contractual right respecting the foregoing amount of capacity shall survive the payment and/or prepayment of this Agreement, and is a contractual property right owned by Krum that survives the term of this Agreement. 12. Krum will pay one hundred (100%) percent of the cost to construct wastewater metering stations, meeting Denton criteria, to measure the quantity and rate of wastewater being delivered at each Point of Entry to the Denton wastewater system. Upon construction and completion of the metering stations, Denton shall own and operate these facilities. Denton shall calibrate these facilities with regard to flow measurements at least once a year, or more often if required. The cost of calibration of these facilities shall be borne by Denton as a System Cost under the Wholesale Wastewater Treatment Services Contract Between the Cities of Denton and Krum, Texas. 13. Under this Agreement, Krum is purchasing and acquiring a contractual right and interest in and to the equivalent of the capacity of a fifteen (15',) inch diameter sewer pipe of wastewater service capacity within the Krum Line Project and shall have an exclusive right to retain such capacity. This contractual right and interest in and to such capacity shall survive the term of this Agreement unless otherwise lawfully terminated. Krum reserves the right to sell, trade, transfer, or assign to any other entity all or a part of its fifteen (15") inch diameter sewer capacity interest in the Krum Line Project, provided that such transfer meets all four (4) of the following conditions: Only wastewater, as defined in Denton's Sewer Use Ordinance, is delivered to the Denton wastewater system; and b. Wastewater can only be delivered at the point of entry described in paragraph iii. 10. hereinabove; and Quantity and rate of wastewater delivery shall not exceed those specified in paragraph III. 2., above; and Denton provides written approval for any such transfer or assignment of Krum's ownership in the contractual rights and wastewater capacity rights acquired pursuant to this Agreement. Denton agrees that it shall not unreasonably withhold its approval of any such transfer or assignment, if the proposed transfer or assignment does not violate the intent or spirit of this Agreement. 14. This AgreemeN may be terminated by Krum at any time after the fifth anniversary date of the execution of this Agreement by Krum paying and/or pre-paying the total amount due and owing DeNon as determined by paragraphs III.7. and III.8. hereinabove, and as set forth in Exhibit ii attached hereto. In the event of such termination, Krum's rights and interests respecting the fifteen (15'3 inch diameter pipe wastewater capacity, as described in paragraph iii. 13. hereinabove, shall survive and shall not be terminated. 15. In the even that Krum does not "begin construction" (hereafter defined as the date that a Notice to Proceed document is executed and issued by a duly-authorized representative of Krum with the prime contractor for the Krum Line Project) of the Project within twelve (12) months from the date of execution of this Agreement by Krum and Denton, then Denton shall have the option to terminate this AgreemeN, upon thirty (30) days written notice delivered to Krum. 16. During the Krum Line Project design and construction phases, Krum and Denton shall hold construction meetings at least once per month, and more often, as may be necessary and appropriate, in order to coordinate their activities on the Project. 17. This AgreemeN embodies the entire agreemeN of the parties hereto and there are no promises, terms, conditions, understandings, or obligations other than those contained or incorporated herein. This AgreemeN shall supersede all previous communications, representations or agreements, whether verbal or written, between the parties hereto with respect to the subject matter of this AgreemeN. 18. This AgreemeN is subject to modification, waiver, amendment, addition, or deletion, only by means of a written documeN duly executed by both of the Parties hereto. 19. This Agreement shall not be assigned by Denton without the express written consent of Krum, which consent shall not be unreasonably withheld. 20. Any and all suits for breach of this Agreement, or any other suit pertaining to or arising out of this Agreement, shall be brought in a court of competent jurisdiction in Denton County, Texas. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 21. The paragraph headings contained in this Agreement are for convenience only and shall in no way enlarge or limit the scope or meaning of the various and several paragraphs hereof. 22. Both of the Parties hereto have actively participated in the negotiation and preparation of this Agreement and the Exhibits attached hereto, and the Parties accordingly agree that this Agreement shall not be construed either more or less strictly against or for either party hereto. EFFECTIVE DATE AND TERM This Agreement shall become effective as of the date of execution hereof by both Parties, following the approval of their respective goveming bodies. This Agreement shall be for a term of one (1) year, from and after the date that this Agreement is approved by the goveming bodies of Denton and Krum (hereafter the "Effective Date"), and shall thereafter be automatically renewable, without further action by Denton and Krum for successive one (1) year terms thereafter, as provided by and as permitted under applicable State law MUTUAL HOLD HARMLESS COVENANT 1. To the extent allowed by the Constitution and statutes of the State of Texas, and without waiving any immunity or limitation as to liability, Krum agrees to and shall indemnify and hold harmless Denton, its officials, officers, agents, employees, attorneys, and its independent contractors from and against any and all claims, damages, causes of action, lawsuits, and reasonable attorney's fees and costs of court, for injury or death of any person; or for damages to any property, real, personal, or mixed, arising out of or in connection with the construction, installation and operation of the Krum Line, where the injury or death or property damage is caused by the negligence of Krum, its officials, officers, agents, employees, attorneys, and its independent contractors, except that Krum assumes no liability for the sole negligent acts of Denton, its officials, agents, employees, attorneys, and its independent contractors. 2. To the extent allowed by the Constitution and statutes of the State of Texas, and without waiving any immunity or limitation as to liability, Denton agrees to and shall indemnify and hold harmless Krum, its officials, officers, agents, employees, attorneys, and its independent contractors from and against any and all claims, damages, causes of action, lawsuits, and reasonable attorney's fees and costs of court, for injury or death of any person, or for damages to any property, real, personal, or mixed, arising out of or in connection with the construction, installation, and operation of the Krum Line, where the injury or death or property damage is caused by the negligence of Denton, its officials, officers, agents, employees, attorneys, and its independent contractors, except that Denton assumes no liability for the sole negligent acts of Krum, its officials, agents, employees, attorneys, and its independent contractors. FORCE MAJEURE 1. Krum shall construct and shall provide Denton with use of a fully-functional Krum Line. The Parties agree that Denton shall not be liable for any damages, costs, or losses, if such wastewater transmission line should fail; should use of the line be interrupted or reduced; should the Krum Line become defective; be seriously impacted by either an Act of God, a catastrophic disaster, an action of the elements, a serious flooding condition, accidents, strikes, labor problems, sabotage, terrorism, the breakdown of equipment, or arising out of a lawful order or action of a governmental authority having jurisdiction over the Krum Line and the Parties, or for any other cause beyond the reasonable control of Denton. 2. The Parties agree that in no event shall Denton be liable in consequential damages to Krum hereunder for any force majeure event, as set forth in this Paragraph VI hereof. VII. NOTICE PROVISIONS 1. Any notice, request or other communication made by either party pursuant to this Agreement shall be given in writing and shall be deemed to have been given by either party to the other party at the addresses shown below upon any of the following dates: a. The date of notice by telecopy or other similar telecommunications, the receipt of which is confmned promptly in writing by the recipient; b. Three (3) business days after the date of receipt stated on the return receipt showing the mailing thereof by U.S. Mail, postage prepaid (as shown by the post office receipt if mailed to the other party hereto by means of registered or certified mail, return receipt requested); c. The date of actual receipt of notice by the other party hereto, if not provided pursuant to V. 1.a. or V. 1.b. hereinabove. 2. The addresses of the Parties for the purpose of providing the other party notices under this Agreement shall be as follows, unless written notification of a change of address is provided by either or both Parties to this Agreement: City Manager City of Denton, Texas 215 East McKinney Street Denton, Texas 76201 Mayor City of Krum, Texas P.O. Box 609 Krum, Texas 76226-0609 VIII. MEDIATION AND ALTERNATE DISPUTE RESOLUTION The Parties agree that if any dispute arises under this Agreement, that they will, in good faith, attempt to resolve such dispute in a reasonable and expedient manner. The Parties recognize that they should strongly consider settling any such dispute by submitting the dispute to mediation or some other form of dispute resolution. No mediation or other form of alternate dispute resolution activity arising out of, or relating to this Agreement, may be required or forced by one party upon the other party, without the Parties' mutual agreement. In the event that the Parties agree that mediation or some other form of alternate dispute resolution is appropriate, then they hereby agree to expedite such mediation or other alternate dispute resolution activity, and further agree to each be responsible for one-half of all mediation or other alternate dispute resolution activity fees and expenses incurred. SEVERABILITY If any clause, provision or paragraph of this Agreement should be held illegal or invalid by any court, the invalidity of such clause, provision or paragraph shall not affect any of the remaining clauses, provisions or paragraphs hereof, and this Agreement shall be construed and enforced as if such illegal or invalid clause, provision or paragraph had not been contained herein. IN WITNESS WHEREOF, the Parties have executed this Agreement in original counterparts by and through the duly-authorized officials and officers of the Denton, Texas and the City of Krum, Texas on this the __ day of 2002. duplicate City of "DENTON" CITY OFDENTON, TEXAS ATexasMu~c~alCorporation By: EULINEBROCK, MAYOR 10 ATTEST: JENNIFER WALTERS, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY CITY OF KRUM, TEXAS A Texas Municipal Corporation By: DAVID POLLEY, MAYOR ATTEST: KATHY RENSHAW, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: PATRICK WRIGHT, CITY ATTORNEY By: EXHIBIT III S:\Our Documents\Contracts\02\Final Draft-Interlocal Cooperation Agreement- Denton Krum WW Line 031802.doc 11 A02-011 4-2-02 RS18 AGENDA INFORMATION SHEET AGENDA DATE: DEPARTMENT: ACM: April 2, 2002 Utility Administration Howard Martin, 349-8232 SUBJECT AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A WHOLESALE WASTEWATER TREATMENT SERVICES CONTRACT BETWEEN THE CITY OF DENTON, TEXAS AND THE CITY OF KRUM, TEXAS; WHEREIN DENTON AGREES TO PROVIDE WHOLESALE WASTEWATER TREATMENT SERVICES TO KRUM; AUTHORIZING THE CITY MANAGER TO EXECUTE SAID CONTRACT; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. BACKGROUND The City of Krum has proposed to construct a sewer main to convey wastewater flows from Krum to the City of Denton wastewater collection system. The proposed sewer line from Krum will discharge into the Hickory Creek Interceptor sewer in the Denton collection system (see Exhibit X-Map). Staff presented the initial proposal from the City of Krum for wastewater service to the PUB on August 20, 2001, and to the City Council on September 11, 2001. The PUB and the Council authorized staff to proceed on negotiations with the City of Krum. On December 1, 2001, staff presented to PUB the sewer main oversize concept and costs, where by Krum will construct a sewer line to convey the wastewater flows from Krum to the Denton collection system, and Denton will oversize this sewer line to accommodate flows from the northwest corridor within the Denton CCN. PUB approved this concept negotiated with the City of Krum. This oversize concept was presented to the Council on December 11, 2001 h the work session where the Council approved the sewer main oversize concept. With this authorization, staff has worked with the City of Krum to develop a Wholesale Wastewater Treatment Services Contract (see Exhibit III). This contract provides the mechanism through which Denton can provide wastewater treatment services to Krum as a wholesale customer. The wholesale contract is similar to the contract executed with the City of Argyle in the Year 2000. PRIOR ACTION/REVIEW (Council, Boards, Commissions) PUB: August 20, 2001 - Authorized staff to negotiate wholesale wastewater treatment services agreement with Krum. City Council: September 11, 2001 - Authorized staff to negotiate wholesale wastewater services agreement with Krum PUB: December 1, 2001- Approved the oversize sewer main cost participation concept with the City of Krum City Council: December 11, 2001- Approved the oversize sewer main cost participation concept with the City of Krum EXHIBITS Exhibit I Exhibit II Exhibit III Map Ordinance Wholesale Wastewater Treatment Services Contract Respectfully submitted: Jim Coulter Director, Water Utilities Prepared by: P. S. Arora, P.E. Assistant Director Wastewater ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A WHOLESALE WASTEWATER TREATMENT SERVICES CONTRACT BETWEEN THE CITY OF DENTON, TEXAS AND THE CITY OF KRUM, TEXAS; WI-tE~IN DENTON AGREES. TO PROVIDE WHOLESALE WASTEWATER TREATMENT SERVICES TO KRUM; AUTHORIZING THE CITY MANAGER TO EXECUTE SAID CONTRACT; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the City Manager is hereby authorized to execute on behalf of the City, a Wholesale Wastewater Treatment Services Contract between the City of Denton, Texas and Kmm, Texas for wholesale wastewater treatment services to Kmm, substantially in accordance with the Contract which is attached hereto and incorporated by reference herein. SECTION2. That the expenditure of funds as set forth in the Contract Agreement is hereby authorized. SECTION 3. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of ~ 2002. ATTEST: JENNIFER WALTERS, CITY SECRETARY EULINE BROCK, MAYOR By: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY S:\Our Dooummts\Ordinanees~02\Wholesale Wa~t~ater Tr~mt Contract-Krum-2002.doc EXHIBIT II STATE OF TEXAS § COUNTY OF DENTON § WHOLESALE WASTEWATER TREATMENT SERVICES CONTRACT BETWEEN THE CITIES OF DENTON AND ICRUM, TEXAS THIS AGREEMENT made this __ day of _, 2002, by and between the City of Denton, Texas, a Municipal Corporation, acting herein by and through its City Manager, hereinafter referred to as "Denton"; and the City of Krum, Texas, a Municipal Corporation, acting herein by and through its Mayor, hereinafter referred to as "Krum"; and WHEREAS, Denton owns and operates a wastewater collection, treatment, and disposal system in Denton County, Texas, and of their respective systems, both the City of Denton and the City of Krum desire to avoid the duplication of services through coordination of the collection, treatment, and reclamation of wastewater; and WHEREAS, Denton and Krum desire to enter into a Contract for Denton to treat wastewater on a wholesale basis for Krum; and WHEREAS, the public health, welfare, and safety of the residents of Denton and Krum require the development of adequate systems of sewage collection and disposal; the elimination of water pollution; and the preservation of the water resources of the area; and WHEREAS, Denton and Krum are required to comply with standards and treatment methods for wastewater as set forth in federal, state and local, laws, regulations and permits; and WHEREAS, Denton and Krum have an interest in maintaining and restoring the chemical, physical, and biological integrity of waters and water resources, especially those being used by Denton and Krum; and insuring the reduction of pollution in said waters and water resources; and planning the use, development, restoration, preservation and enhancement of said waters and water resources; and EXHIBIT III VOtEREAS, Krum desires to contract for wastewater treatment service on behalf of Customers of Krum; and Denton desires to provide regional wastewater treatment service on a wholesale basis to Krum; and VOtEREAS, the enabling statute of the City of Krum authorizes Denton and Krum to enter into this Contract; and NOW, THERFORE, Denton and Krum, in consideration of the terms, covenants, and conditions herein contained, do hereby AGREE as follows: CONTRACT Adoption of Preamble. All matters stated in the Preamble of this Contract are true and correct, and are hereby incorporated into the body of this Contract as though fully set forth in their entirety herein. 1.0 Definitions. When used in this Contract, these terms shall be defined as follows: 1.01 Act or "the Act". The Federal Water Pollution Control Act, also known as the Clean Water Act ("CWA"), as amended (33 U.S.C. 1251, et seq.). 1.02 Biochemical Oxygen Demand (BOD). The quantity of oxygen utilized in the biochemical oxidation of organic matter specified by procedure in Standard Methods, and results expressed in terms of weight and concentration [milligrams per liter (mg/1)]. 1.03 Calibration. Verification of meter accuracy utilizing standard primary device procedures and calibration signals and/or a separate flow measurement instrument. 1.04 Capital Improvements. Any of the following facilities which provide utility services and benefits common to all wholesale and retail Customers, and that have a life expectancy of one or more years located within the jurisdictional limits of Denton or the City of Krum: wastewater treatment facilities; metering and sampling facilities; control systems; appurtenances; all major collectors and interceptors that are twelve inches (12") and greater in diameter; and lift stations associated therewith. 1.05 Categorical Industrial User (CIU). An industrial user that is subject to Categorical Pretreatment Standards according to 40 CFR Section 403.6 and 40 CFR Chapter I, subchapter N, which are technology-based standards developed by EPA setting industry-specific effluent limits. 1.06 Knnn. Depending upon the context, this may refer to the City of Krum, or to Krum's Customer, or other Customers of Krum being provided service pursuant to this Contract. 1.07 KrumSystems. The facilities of Krum used for pretreatment, collection, and transportation of Wastewater to the Points of Entry into Denton's System. 1.08 Delivery Facilities. All facilities necessary for the transmission of Wastewater from the City of Krum System to the Denton System, that are on the City of Krum's fide of the Point of Entry which are constructed specifically to allow Denton to serve Krum. 1.09 Director. The Denton Water/Wastewater Utilities Director or the designee. 1.10 Direct Cost. Costs directly assignable to the wholesale customer, Krum. 1.11 Domestic Accounts. Single family and residential duplex dwellings served by one water meter. This definition is used only in the context of determining billing on a per- connection basis. 1.12 Denton Expense. Expenses incurred by Denton related to wholesale wastewater service, such expenses to be allocated as a System Cost in future cost-of-service studies. 1.13 Denton System. Denton's wastewater collection and treatment system, including the Point of Entry provided for herein. 1.14 Krum Representative. Mayor of the City of Krum or designee. 1.15 Facili.ty Expansion. The expansion of the capacity of an existing facility that serves the same function as an otherwise necessary new Capital Improvement, in order that the existing facility may serve new or expanded development. The term does not include the repair, maintenance, modemization, or an expansion of an existing facility to better serve existing development. 1.16 General BenefitCapitalFacilities. Wastewater facilities that provide utility services and benefits common to both Denton retail and Denton wholesale Customers, including wastewater treatment facilities, metering and sampling facilities, control systems and appurtenances, and all collectors and interceptors that are twelve inches (12') and greater in diameter. 1.17 Indirect Discharge. The discharge or the introduction of industrial wastes from any source regulated under Section 307(b) or (c) of the Act (33 U.S.C. 1317), into the Denton System (including holding tank waste discharged into the system). 1.18 Industrial User. A source of Indirect Discharge, which does not constitute a "discharge of pollutants" under regulations, issued pursuant to Section 402, of the Act (33 U.S.C. 1342). 1.19 Industrial Wastes. All water-borne solids, liquids or gaseous substances resulting from industrial, manufacturing or food processing operations; or from the development of a natural resource; or any mixture of these with water or domestic sewage. 1.20.1 Infiltration. Water that has migrated from the ground into the wastewater system. 1.21 Inflow. Water, other than wastewater that enters a sewerage system (including sewer service connections) from sources such as, but not limited to: roof drains, cellar drains, yard drains, area drains, drains from springs and swampy areas, manhole covers, cross connections between storm sewers and sanitary catch basins, cooling towers, storm waters, surface runoff, street wash waters or drainage. Inflow does not include, and is distinguished from infiltration water. 1.22 Liquid Waste. The water-borne solids, liquids, and gaseous substances derived from certain sources including, but not limited to: a grease trap, septic tank, chemical toilet waste, and sand trap waste. 1.23 Metering andSamplingFacili.ty. The meter, meter vault, and all metering and telemetry equipment required to measure and/or sample wastewater flows of the City of Krum at the Point of Entry(s) or into Denton's System. 1.24 Non-domesticAccount. Commercial, industrial, multifamily or other accounts that are not considered Domestic Accounts. This definition is used only in the context of determining billing on a per-connection basis. 1.25 Non-MeteredArea. Areas within the City of Krum's boundaries that generate wastewater that do not drain into a part of the City of Krum system for which wastewater flow is measured by an approved metering and sampling facility. 1.26 Non-Categorical Industrial User {IU). Any non-domestic Industrial User, other than a CIU, which introduces Wastewater into a publicly-owned treatment works (POTW). 1.27 Point of Entry.. The metering facility; the point of connection to the Denton System. 1.28 Pretreatment. The reduction of the amount of pollutants, the elimination of pollutants, or the alteration of the nature of pollutant properties in wastewater to a less harmful state prior to or in lieu of discharging or otherwise introducing such pollutants into a Publicly Owned Treatment Works. Physical, chemical or biological processes can obtain the reduction or alteration, or process changes by other means, except as prohibited by 40 CFR Section 403.6(d). 1.29 Pretreatment Requirements. Pollutant concentration discharge limitation and reporting requirements stipulated in Denton's Sewer Use Ordinance No. 93-112 and any amendments thereto, Krum's ordinance, and Federal Pretreatment Standards promulgated by the U.S. Environmental Protection Agency. 1.30 Significant lndustrialUser(SIU). Any industry, which discharges industrial wastes, directly or indirectly into the City of Krum's System and/or Denton's System: Discharges 25,000 gallons per day or more of regulated industrial wastewater. Is subject to the National Pretreatment Standards or Categorical Standards of the U.S. Environmental Protection Agency; or, Has a reasonable potential, in the opinion of the Director, to adversely affect the Denton System due to discharge of wastewater with abnormally high strength or containing limited or prohibited substances. 1.31 Standard Methods. Those testing or analysis procedures as prescribed in the current edition of "Standard Methods for Examination of Water and Wastewater," published by the American Public Health Association and/or the U.S. Environmental Protection Agency "Manual of Methodologies for the Examination of Water and Wastewater;" or will ctherwise comply with procedures specified in state and federal discharge permits held by Denton. 1.32 System Costs. Operating expenses and capital related costs incurred by Denton in the provision of wastewater collection and treatment service to the wholesale class of wastewater customers. Such costs are to be specifically identified by Denton as a component of the annual cost of providing wholesale wastewater treatment service. 1.33 Total Suspended Solids (TSS). Solids, measured in mg/1, that either float on the surface of, or are in suspension in, water, wastewater or other liquids, and which are largely removable by a laboratory filtration device. 1.34 Wastewater. All liquid or water-carried waste products from whatever source derived, whether treated or untreated, which are discharged into or permitted to enter into the Denton System. The words "wastewater" and "sewage" are interchangeable. 1.35 Wastewater System Impact Fee. A capital contribution or recouping of the costs of General Benefit facilities, capital improvements or Facility Expansion necessitated by and attributable to new growth and development, and/or expanded growth and development of existing Customers. 2.0 Connection to the Denton System. 2.1 Denton hereby grants to Krum, upon compliance with the terms and conditions contained herein, permission to connect Krum Systems to the Denton System. The City of Krum shall deliver and discharge wastewater into the Denton System; and, Denton shall transport, treat, and dispose of the wastewater received from the City of Krum, in accordance with this Contract, unless the Parties otherwise agree in writing. The City of Krum shall provide all lines, metering station(s), lift stations, and associated facilities and shall acquire all property, interests, licenses, and permits that are necessary to collect and transport Wastewater from the City of Krum to the Denton System. 2.2 It shall be the sole responsibility of the City of Krum to convey and deliver the Wastewater to the Point or Points of Entry approved by Denton and designated in Exhibit I. Denton agrees to accept all Wastewater from Krum at the Point(s) of Entry as designated on Exhibit I, attached hereto and incorporated herein; and at such additional Points of Entry as may later be mutually agreed upon by the Director for Denton and the Krum Representative. A Point of Entry may be changed, or additional Points of Entry added upon mutual agreement, signed by an authorized representative of each Party. The City of Krum shall pay for Denton's reasonable operational and administrative costs incurred due to any change in the location of a Point of Entry, if the change was requested by the City of Krum, or necessitated by the City of Krum discharge characteristics. Provided however, that if such change is necessitated by Krum's discharge characteristics, Denton shall notify Krum of such need by providing written notice to Krum at least sixty- (60) days prior to taking any action on such relocation. The notice shall specify the total cost for which the City of Krum shall be responsible. 2.3 The cost of all Delivery Facilities necessary to convey Wastewater to the designated Points of Entry, whether shown on Exhibit I, or mutually agreed upon at a later date, together with the cost of connection of the City of Krum System to the Denton System including the metering and sampling facilities, shall be borne by the City of Krum in accordance with the Interlocal Cooperation Agreement for construction of the Krum Line. 2.4 Unless mutually agreed to in writing by Denton and Krum, Krum shall be responsible for the design, contracting, construction and Financing of Delivery Facilities and acquisition of any necessary rights-of-way and easements for such facilities. All designs, materials and specifications for the Krum Line shall conform to Denton's requirements as a minimum standard. Plans and specifications for Delivery Facilities, which connect to the Denton System, shall be submitted to the Director for written approval, which shall be acted tpon within ten (10) business days, and which approval of Director, shall not be unreasonably withheld. No construction shall begin until such approval has been given. Approval by Denton shall not be unreasonably withheld, if the plans and specifications satisfy or exceed Denton's minimum standards. Krum agrees that Denton has the right to make periodic inspections during the construction phase of the Delivery Facilities. Final acceptance of such facilities from the point of connection up to and including the metering and sampling point is subject to the inspection and written approval of the Director, or his designee. 2.5 To facilitate adequate five-year planning for the transportation and treatment of wastewater, Denton will require that the following approval process be utilized when large volume contributors are anticipated to be added to the system. Denton will require that a five- year planning document revised annually that details projected increases in wastewater flow to the Denton System be submitted to the Director for incorporation into the Denton planning document. The City of Krum's planning document will be submitted annually by November 1. The Fa'st such planning document shall be due on or before November 1, 2002, and a like document is due to be submitted by Krum to the Director annually, on each November 1 thereafter. Krum agrees not to provide service to, or contract or subcontract with, any new single retail customer (or any customer located outside the boundaries of the City of Krum whose need for Wastewater service would exceed 25,000 gallons per day (GPD) additional treatment requirements without the prior written approval by the City of Denton Director, which approval shall not be unreasonably withheld. 2.6 Facilities within Denton CCN. Pipelines and other facilities constructed by or for the City of Krum for the purposes of carrying out this Contract which are located within an area for which Denton holds a certificate of public convenience and necessity to provide sewer utility service, shall comply with standards and specifications approved by Denton. For such pipelines and facilities, Denton may require that the improvements be oversized pursuant to a separate participation agreement with the City of Krum. Denton shall have the fight to approve the location of any such oversized facilities. Upon completion of an oversized line and payment by Denton of its participating share, the City of Krum shall transfer to Denton the ownership of the oversized line and associated easements and property interests. Notwithstanding the foregoing, Krum shall maintain ownership of its wastewater capacity in the Krum Line Wastewater Project, as described in the "Interlocal Cooperation Agreement for the Construction, Installation, and Oversize Cost Participation of the Krum Gravity Flow Wastewater Main" (hereafter the Interlocal Cooperation Agreement) by and between the Cities of Denton and Krum, Texas. 2.7 Service Requirements. At such time in the future, should service requirements become an issue, then Denton and Krum shall immediately discuss, and if resolution of the problem is not susceptible to remediation, then to mediation on a good faith basis. 3.0 Maintenance of Denton and Customer Systems 3.1 Krum agrees to maintain its wastewater system(s) in good condition and to make repairs in a timely manner and to require its customers to maintain and repair their respective systems. Denton shall have the right to refuse to accept Wastewater for treatment if Krum's System(s) is not being maintained to those generally accepted standards set forth in TNRCC rules and regulations, Chapter 317. Denton shall not have any responsibility or liability now or ever for the operation of the City of Krum's System(s), except as agreed to in writing by the parties hereto. 3.2 Denton agrees to maintain its system in good condition and to make repairs in a timely manner. Krum shall not have any responsibility or liability now or ever for the operation of the Denton System, except as specifically provided herein, or under separate written modification or Agreement. 4.0 Metering and Sampling Facilities 4.1 Beginning on the effective date of this Contract, Denton shall have the exclusive right to operate and maintain Krum metering and sampling facilities at all existing and future Points of Entry, and Denton shall become solely responsible for the operation and maintenance associated with these facilities. Krum shall have access to the metering facilities for inspection purposes only. Krum shall not adjust or calibrate the meter and will continuously provide a route of ingress and egress to said metering and sampling facilities for Denton. Denton shall have the discretion to construct improvements, expansions, and replacements to said facilities as a System Cost, subject to review and approval by Krum of all proposed construction, expansion, and replacement plans and costs. Approval by Krum shall not be unreasonably delayed or withheld. Krum will also grant and provide to Denton such permits or easements as are necessary for the continuous operation and maintenance of all metering and sampling facilities. All such costs incurred by Denton for operation, maintenance, construction, expansion, and replacement of Krum metering and sampling facilities shall be considered System Costs. Such System Costs shall be specifically identified by Denton as a component of the annual cost of providing wholesale wastewater treatment service. 4.2 Unless otherwise agreed to by both parties in writing, Denton shall have the option to construct Krum metering and sampling facilities not currently in existence. All construction costs, including, but not limited to, site acquisition and preparation, design and engineering, construction, and equipment for such facilities, together with the costs of necessary easements and rights-of-way, shall be System Costs, and shall be subject to review and approval by Krum, including all necessary modifications to accommodate a complete installation satisfactory to Denton. Such approval shall not be unreasonably withheld or delayed. If Krum constructs new metering and sampling facilities, Krum may either transfer ownership of such newly constructed l0 facilities, together with all necessary access easements and rights-of-way, to Denton in a form satisfactory to Denton or may grant Denton the right of ingress and egress to such facilities, together with the authority to operate and maintain the facilities as specified in Section 4.1, within sixty (60) days of such completion. Thereafter, Denton shall operate, maintain and replace the facilities as a System Cost and treat any ownership transfer as a contribution for rate purposes, but the same shall not be indicative of equity ownership. 4.3 Expenses incurred by Denton for the operation and maintenance of Krum metering and sampling facilities shall be System Costs and shall include the following: A. Cost of electricity at the facility. B. Cost of the installation of the telemetry service at the facility and to the control center and cost of monthly lease charge for the telephone line. C. Cost of meter calibration; including cost of insert meter, twice per year. D. Cost of parts, materials and supplies required for repairs, calibrations and upgrading of the facilities. E. Normal labor cost plus fringe benefits and indirect costs for repairs, calibrations and upgrading of the facilities. F. Maintenance of ingress and egress and meter facility site. G. Meter reading costs. H. Any other reasonable and customary operations and maintenance costs or charges appropriately included in system costs applicable to wholesale wastewater customers. 4.4 Replacement of Metering and Sampling Facilities or components thereof as may be occasioned by obsolescence due to age, excessive maintenance, growth or other reasons as determined by the Director, shall be a System Cost. 4.5 The City of Krum shall construct, install, and maintain for each Point of Entry a control manhole to allow Denton to monitor Wastewater received from Krum. Control manholes shall be located and constructed in accordance with specifications approved by Denton, to allow Denton to have unrestricted access at all reasonable times. Upon completion, the control manholes shall become the property of Denton and shall be maintained and repaired by Denton, at Denton's sole cost and expense. 4.6 Upon expiration or termination of this Contract, Denton shall transfer to Krum the ownership of any property easements, metering and sampling facilities and rights-of-way conveyed to Denton pursuant to the terms of this Section. In the event the contract is transferred to another entity and Denton continues to treat wastewater from the City of Krum, ownership of the aforementioned items shall remain with Denton. 5.0 Rights-of-Way Krum shall grant, without charge to Denton, such easements and the use of rights-of-way along public highways or other property owned by Krum, as requested by Denton; or maintaining mains or facilities within the boundaries of the City of Krum or of any present or future Krum wastewater certificate of convenience and necessity ('CCN") to convey Wastewater delivered to the Points of Entry. The parties hereto (and applicable Customers of he City of Krum) will be required to restore the other's property to a condition equal to its original condition, unless otherwise mutually agreed in writing. Denton and Krum agree to coordinate their location of the mains and/or facilities in the other's easements and rights-of-way in order to prevent future conflicts insofar as reasonably practicable. 6.0 Metering and Sampling 6.1 All flow discharged into the Denton System by Krum shall be metered, unless specifically agreed to by both parties in writing. Should both parties agree in writing that metering is not possible, the agreed-upon method for determining the volume shall include an adjustment for infiltration and inflow. 6.2 If, in the judgment of the Director, the sewage generated within one or more areas of the City of Krum or of any present or future Krum wastewater CCN cannot be accurately measured by an approved type of metering station, then the charge for sanitary sewer service within that drainage area will be made on a per-connection Nsis. In such cases, the volume of sewage for billing purposes will be determined by adding the product derived from multiplying the number of Domestic Accounts within the area, times the average gallons of Wastewater flow per 12 Domestic Account within the metered area, plus the estimated Wastewater flow for Non- Domestic Accounts based on an agreed-upon percentage of metered water consumption. The total volume so derived each month will be used for calculating the total sewer charges due each month for that drainage area and such charges will be added to other charges, if any, based on metered connections. For all such non-metered areas, Krum will be responsible for providing data each month on the number of Domestic Accounts and the metered water volume of all Non- Domestic Accounts. Krum will provide this data to Denton no later than the 5th day of each calendar month. Alternatively, the Director and Krum Representative may agree in writing to a non-metered system for such areas, based on water usage for the area during the three winter months of December, January, and February. 6.3 Krum shall have access to the metering and sampling facilities at all reasonable times; provided however, that any reading, calibration, or adjustment to such metering equipment shall be done by employees or agents of Denton, or by other mutually approved third party Calibration Agent, in the presence of representatives of Krum and Denton, if so requested by Krum. Notification of any proposed tests shall be provided to the City of Krum at least seventy-two (72) hours prior to such test being conducted. 6.4 All readings of meters will be entered in ink upon bound journals maintained by Denton. Krum shall have access to such records during reasonable business hours and shall be furnished with monthly "totalizer" readings for each Point of Entry metering and sampling facility. 6.5 Denton shall calibrate and routinely service the meters at least once during each six- (6) month period. Copies of the results of such Calibration and all related information shall be promptly provided to Krum. Denton shall notify the City of Krum at least seventy-two (72) hours in advance of the date and time for any Calibration, and Krum may observe if so desired. 6.6 Upon any Calibration, if it is determined that the accuracy envelope of such meter is found to be lower than ninety-five percent (95%), or higher than one hundred five percent (105%) expressed as a percentage of the full scale of the meter, the registration of the flow (and billings related thereto) as determined by such defective meter shall be corrected for a period extending back to the time such inaccuracy began. If such time is ascertainable; or, if such time 13 is not ascertainable, then for a period extending back one-half (1/2) of the ime elapsed since the date of the last calibration, but in no event further back than a period of six (6) months. 6.7 If additional meter calibrations are requested by the City of Krum over the normal calibration frequency, then the following payment procedure will be used. Corrections to meter Calibrations that are inside the plus or minus 5% range will be paid for by the City of Krum and will be added to the City of Krum's next monthly bill for receipt of payment. Corrections outside the plus or minus 5% range will be paid to Krum by Denton during the month following such determinatior[ 6.8 If any meter used to determine volume from the City of Krum is out of service or out of repair so that the amount of Wastewater delivered through the period cannot be ascertained or computed, within five percent (5%) accuracy, Wastewater volume shall be estimated and agreed upon by the parties hereto upon the basis of the best data available. If a meter is determined to be reading inaccurately by more than five percent (5%), a correction to the billing shall be made as follows: (a) Take the number of gallons measured by the meter for a period extending back ~Sfthe time elapsed since the date of the last calibration of the meter; (b) Multiply that amount by the percentage of inaccuracy to obtain the total number of gallons not properly registered; (¢) Multiply the gallons by the applicable rate during the time of the inaccuracy to get the amount to be debited or credited, as appropriate. If a meter completely fails, a correction shall be made by using the average of the gallons of wastewater billed for the prior three months, or some other mutually agreeable method, to obtain a daily average, which shall be applied to the days for which the meter was not working. In the event that the parties hereto cannot agree on the estimate of Wastewater volume delivered, agreement on the flow volume will be determined by a committee composed of the Director (or his designee) the City of Krum Representative (or his designee) and a third person to be mutually agreed upon and the cost of the reconciliation process will be equally shared. Any adjustments in billing provided in this Section, whether a credit or debit, may be satisfied immediately, or may be made in equal installments over the time equal to the time for which the failure or inaccuracy was calculated. 14 6.9 Denton shall obtain samples three (3) times per year to determine the quality of the wastewater for billing for the extra strength of the wastewater. Each set of samples will apply to a four-month period for billing purposes. These samples shall be obtained at the designated metering and sampling facilities or other mutually agreed-upon sampling points for the purposes of billing for the strength of the wastewater. To determine the quality of the wastewater for each of the three (3) sampling periods, Denton shall collect twenty-four (24) hour flow-weighted composite samples for five (5) consecutive days. In case of a malfunction of the sampling equipment for whatever reason for one or more days, additional days shall be added to obtain five (5) samples. The five (5) samples will be averaged to determine the wastewater strength for billing purposes. Unless the BOD or TSS exceeds 250 mg/1, no fee for extra strength shall be applicable or charged. Denton will provide Krum with a minimum of seven (7) day advance notification of intent to sample. If, at the request of Krum or at the request of the Director, more extensive monitoring is desired, such additional monitoring shall be paid for by the party making the request and shall be done in compliance with Section 7.5. If Krum requests such additional monitoring, Denton shall invoice Krum for the operational and administrative costs and payment shall be made within (30) thirty days after receipt of invoice. The notification required in this section shall include the planned dates, times, and locations(s) of sampling. Denton shall analyze the samples collected in accordance with Standard Methods. Krum may be present during the initial set-up of sampling equipment and at the time of pick up for each twenty-four (24) hour composite sample. Denton agrees, if requested, to split said wastewater samples with Krum for independent analyses. 6.10 If, in the opinion of the Director, compliance monitoring is required, the Director may order that additional monitoring be performed with or without prior notice to Krum. Said compliance monitoring is to be in addition to the periodic sampling set forth in Section 6.9. All information obtained because of such compliance monitoring shall be provided to the City of Krum. Denton will provide notice of the results of such compliance monitoring to Krum within a reasonable time thereafter. Denton shall pay all costs for additional monitoring ordered at the Director's discretion, pursuant to this paragraph. 6.11 Costs incurred by Denton under this Section 6 will be considered a System Cost. 7.0 Rates and Charges 7.1 Wholesale wastewater rates will be based upon generally accepted cost-of-service rate methodologies developed by independent utility rate consultants as described herein. The Director shall select the independent utility rate consultant. The cost of such studies will be a Direct System Cost. All cost-of-service studies shall be conducted utilizing the utility cost basis of determining revenue requirements applicable to the wholesale Wastewater class. The last rate study was completed during 1999 by an independent consultant. Rate studies by an independent utility rate consultant will be conducted a least every six (6) years. Internal rate reviews will be conducted annually, based upon consultant rate study methodology, to review rates and charges, to recover allocated costs. The City of Krum shall have access to all data used to calculate the proposed rate to be charged, and the City of Krum will be provided at least sixty (60) -days advance notice with opportunity to review and comment on any proposed rate changes. 7.2 The cost-of-service for the wholesale class shall include allocated reasonable and necessary operation and maintenance expense, depreciation expenses, administrative expenses, a fair and reasonable return on allocated capital facilities, and a street rental fee. To determine the allocation, including inflow and infiltration of costs to the City of Krum, the following factors shall be considered: total volume, rate of flow, wastewater quality, metering, and Krum-related costs (such as accounting, billing, monitoring, and Krum service). "Capital-related costs" consists of depreciation expenses and return on the original cost rate base. "Depreciation expense" will be based upon the original cost of all capital facilities, both invested and contributed capital, which facilities are expected to be replaced by Denton at a future date in order to maintain service. Costs to transport the wastewater will be based on interceptor lines twelve inches (12'3 in diameter and greater. A street rental fee equal to four percent (4%) of total wastewater operation and maintenance costs will also be charged by Denton. On a periodic basis as determined by the Director, the depreciation rates on all General Benefit Capital Facilities shall be studied, and new salvage values, useful lives, and annual rates of depreciation shall be developed from such studies. The "net-book" rate base shall consist of all allocated capital facilities (net of accumulated depreciation and less contributions to the Demon System), and shall include construction work in progress, a reasonable allowance for working capital, and a reasonable inventory of materials and supplies necessary for the efficient operation of the Denton System. Working capital shall be based on one-eighth (forty-five days) of annual wastewater operation and maintenance costs. Records of the original cost, the accumulated depreciation on all capital facilities, and contributions to the Denton System shall be maintained in the Denton fuxed asset-tracking system. These records shall be available for inspection at the Denton Utilities Financial Depamnent during reasonable business hours upon request by Krum. 7.3 Denton shall be allowed an adequate opportunity to earn a reasonable return on its investment. The rate of return shall be sufficient to assure confidence in the financial soundness of the utility, adequate to maimain and support its credit, enable it to raise the money necessary for the proper discharge of its public duties, and shall be equal to the weighted average imbedded rate of interest on all outstanding wastewater system revenue bonds plus one-and-one-haft percem (1.5%). 7.4 No more than every six (6) years, a detailed wholesale revenue requirement shall be developed on an actual historical cost, test-year basis, allowing for reasonable and necessary expenses of providing such wastewater service, and allowing for known and measurable changes in costs. Such changes shall allow the spreading of non-recurring expenses over an appropriate benefit period. The first test year occurred October 1, 1997, through September 30, 1998. On a not to exceed six (6) year cycle thereafter, a complete, detailed rate study will be performed with the same methodology used in the previous rate study by an independem utility rate consultant. Thereafter, changes in the methodology will be allowed if recommended by the independem consultant. In the interim between complete detailed rate studies, wholesale wastewater rates shall be adjusted by Demon using the same methodology adopted at the same time, of the last complete detailed rate study utilizing the actual operating data for the twelve month period ending September 30th of the prior year, adjusted for known and measurable changes in cost data which may have occurred since the last audited statement. 7.5 The initial rates for this Contract shall be those adopted by the Denton City Council in Ordinance No. 2001-335, enacted September 4, 2001, and effective October 1,2001, as follows: Volume Charge $2.00 per 1,000 gallons BOD Strength Charges TSS Strength Charges Facility Charges Sampling Charge Analysis Charge $0.004228 mg/1 of BOD above 250 mg/1 $0.002317 mg/1 of TSS above 250 mg/1 $180.00/30 days $35.00 $15.00 7.6 Amendment of Rate The rate charged the City of Krum shall increase or decrease in accordance with any amendment to the Rate Schedule applicable to the City of Krum, as approved by Ordinance of the City Council of Denton, and normal and reasonable in cost of service. At least sixty- (60) days prior to the effective date of any proposed amendment of the rate charged to Krum, Denton shall send written notice of the proposed rate amendment to the City of Krum. If Denton fails to give written notice at least sixty- (60) days prior to the effective date of the amended rate, the amended rate shall become effective, as it applies to the City of Krum, on the sixty-first (61st) day after the written notice is sent. 7.7 Denton shall render bills for Wastewater treatment and disposal service to Krum monthly. The billing address, until further written notice is delivered to Denton, is the current location of the Krum, Texas City Hall: City of Krum, Texas, 102 West McCart, P.O. Box 217, Krum, Texas 76249. All such bills shall be due and payable by Krum not more than thirty- (30) days from the billing date. The bills will show current charges, as well as past-due charges. Current charges shall be the amount due for Wastewater collection, treatment and disposal service provided since the prior billing period. Past-due charges shall be the total amount unpaid from all prior billings as of the current billing date. Payments received shall First be applied to the past due charges, if any, and thereafter to the current charges. For late payments, a finance charge of ten percent (10%) per annum may be calculated from the date when the payment was due until paid. 7.8 If Krum disputes a bill and is unable to resolve the difference informally, Krum shall notify the Director in writing. Dispute of a bill is not grounds for nonpayment. If Krum at any time disputes the amount to be paid to Denton, Krum should nonetheless promptly make such payment; but, if it is subsequently determined by agreement or court decision that such disputed payment should have been less, or more, Denton shall promptly correct the charges. All such amounts due and owing to Denton by Krum, or due and owing to Krum by Denton, shall be paid plus ten (10%) percent per annum from the date when due until paid. 7.9 The parties agree that services obtained pursuant to this Contract are essential and necessary to the operation of Krum's wastewater facilities, and that all payments made by Krum shall constitute reasonable and necessary operating expenses of wastewater systems within the meaning of Article 1113, Vernon's Annotated Texas Statutes, with the effect that the obligation to make such payments shall have priority over any obligation to make any payments from such revenue, with respect to all bonds or other debt obligations heretofore or hereafter issued by Krum. 7.10 Krum agrees, throughout the term of this Contract, to fN and collect such rates and charges for wastewater service in its system as will produce revenues in an amount equal to at least: (i) All the operation and maintenance expenses of such system, including specifically, its payments under this Contract. (ii) All other amounts as required by law and the provisions of the ordinances or resolutions authorizing its revenue bonds or other obligations now or hereafter outstanding, including the amounts required to pay all principal of, and interest on such bonds and other obligations. 8.0 Krum Concems and Disputes 8.1 Krum shall notify the Director regarding any concern or dispute related to the wholesale Customer volumes billed and/or wholesale rates charged. Denton shall provide explanations and/or documentation which outlines the processes used by Denton in order for Krum to fully understand how the monthly volumes and billings were determined and/or wholesale rates were calculated. 8.2 If Krum disputes the monthly billing and/or rates, Krum must continue to make prompt monthly payments as required by this Contract. if, after a thorough review, Krum's concern or dispute is determined to have merit and justification, the area of concern or dispute shall be promptly adjusted and corrected. Unless otherwise specified in this Contract, the determination or settlement in areas of dispute, will generally be judged in accordance with standard practices used in the wastewater treatment and collection industry, while considering fairness to both parties. 9.0 Industrial Connection and Monitoring 9.1 Krum agrees that it will not permit any Significant Industrial User within its jurisdiction to connect directly or indirectly, either to its system, without at least thirty- (30) days prior written notification to the Director of such intent to connect. Krum shall provide the Director with such information pertaining to volume and composition of expected flow as may be requested. After a review of the submitted data, the Director has the right to refuse the permit only if such SiU would cause Wastewater discharged by the City of Krum at the Point of Entry to be in violation of this Contract. 9.2 Krum agrees to conduct any and all monitoring, sampling and inspection of Krum System and industrial Users as necessary to insure that industrial waste introduced into the Ctty of Krum System meets the quality standards set out in Section 10.2 hereof. Upon request to Krum, a representative of Denton will be permitted to observe Krum's collection of samples from industrial Users, and Krum agrees to fumish Denton separate duplicate samples for independent testing; and, upon request, to provide the Director sample analysis results and Pretreatment records. 9.3 Krum agrees that Denton shall have the right to sample wastewater at all Points of Entry and at such other locations as may be mutually agreed to in writing by both parties, for the purpose of determining the volume and quality of wastewater entering the Denton System. Krum agrees to disconnect from its system any industrial User found to be in violation of allowable discharges or who refuses access to its facilities for the purpose of sampling wastewater being discharged into the City of Krum System; provided, however, that said disconnected industrial User shall be afforded the same rights and privileges of appeal as industrial Users operating within Denton's jurisdiction. Provided, however, Denton may not 20 require such Industrial User to disconnect from Krum's System, if the quality of the wastewater delivered to the Point of Entry is in compliance with this Contract. 9.4 Following reasonable notice to the City of Krum by Denton, Denton may enter Krum's jurisdiction if Denton determines that questionable discharges or prohibited discharges are entering the Denton System through the Point of Entry. Krum agrees to assist Denton and to coordinate with its Customers in locating and eliminating such prohibited discharges within the Krum System. 9.5 The Director shall send written notice to the City of Krum if it is determined that a Customer is failing to provide a satisfactory pre-treatment program, or a discharge by the City of Krum is in violation of the sue or this Contract. The notice shall contain the following: (a) the nature and description ofthe violation; (b) the provision of the sue or of this Contract being violated; (c) the corrective action that must be taken; and (d) the time in which the corrective action must be taken. Denton and Krum shall cooperate to determine the source of any wastewater discharge violation and agree to cooperate in remedying the violation; but, Krum shall be responsible for insuring that the violation is properly and timely corrected. Krum's failure to take reasonable efforts to have the violation corrected in the time specified shall be a breach of this Contract for which Denton may terminate service to the particular Customer wherein the offending violation is taking place. 10.0 Wastewater Quali.ty 10.1 Krum agrees that it shall enact operating policies and enforce an ordinance goveming industrial waste that are at least as stringent as the provisions of the current Denton Sewer Use Ordinance No 93-112 (sue). 10.2 The parties recognize that federal and state laws and regulations concerning Wastewater treatment and discharges may periodically change during the term of this Contract, requiting revisions in the sue. It is the intent of this Contract that the sue be reviewed periodically by 21 Denton and revised in accordance with the latest laws and regulations of federal and state agencies having jurisdiction over wastewater treatment and discharges. Krum agrees, upon reasonable notice, to enact and enforce ordinances or any amendments to the sue, or any future ordinances relating to industrial discharges, prohibited or controlled wastes, or Pretreatmem Requirements. 10.3 Denton shall give written notice to Krum at least ninety- (90) days prior to consideration by the Denton City Council of any amendment of the sue that amends a provision of the sue that applies to this Contract, or that adds a new provision to the sue that Denton is required to apply to wastewater received by Denton under this Contract. 10.4 Krum shall be responsible for giving notice of the proposed amendmem to any of its Customers affected by the amendment. Upon the effective date of the amendment to the sue, it shall be considered an amendmem to this Contract and shall be attached hereto, showing the amendmem made. Krum shall adopt and enforce such proposed ordinances or amendmems as soon as reasonably practicable after the effective date of the Denton ordinance or amendmem, provided that Krum is properly notified of the ordinance or amendmem required herein. 10.5 Krum agrees that the quality of the wastewater discharged into the Denton System shall be equal to or better than the quality standards established by DeNon Ordinance No. 93-112, or to any amendment thereto adopted pursuant to Section 10.1. 10.6 Krum shall require all Significant Industrial Users within its jurisdiction that ultimately discharge into the Denton System to apply for and obtain a permit from Krum allowing such discharge. Such permit shall require Industrial Users to abate prohibited substances from their discharge as a condition to discharging wastewater into the Krum System. The permit application shall contain, as a minimum, the following: 1. Name and address of discharger 2. Agent for discharger 3. Type of industry 4. Products produced or services rendered 5. Chemicals being stored and/or used 22 6. Anticipated daily wastewater flow rates Krum shall provide Denton a copy of such application and permit, if issued, within fourteen (14) days after issuance. 11.0 Title to and Liability for Damages and Responsibility for Treatment and Disposal of Wastewater. Liability for damages arising from the transportation, delivery, reception, treatment, and/or disposal of all wastewater discharged into the Denton System hereunder shall remain with Krum to the Point of Entry, and upon passing through Point of Entry, title to such wastewater and liability for such damages shall pass to Denton. As between Denton and Krum, each party agrees to indemnify the other to the extent permitted by law and to save and hold the other party harmless from any and all claims, demands, causes of action, damages, losses, costs, fines, and expenses, including reasonable attorney's fees, which may arise or be asserted by anyone at any time on account of the transportation, delivery, reception, treatment, and/or disposal while title to the wastewater is in such party, or on account of a prohibited discharge by the City of Krum. Denton has the responsibility for the proper reception, transportation, treatment and disposal of all wastewater discharged into the Denton System, but not for prohibited discharges by any party at any Point of Entry. Denton may, a~er treatment of such wastewater, reclaim, use or sell the water, sludge or any other product for reuse. Wastewater entering the Denton system becomes the property of Denton. 12.0 Infiltration and Inflow Krum agrees that it has an obligation to prevent infiltration and inflow into its system and then into the Denton System. Krum further agrees that all future sewer connections within its jurisdiction, which ultimately enter the Denton System, will be constructed in accordance with applicable specifications and standards at least equal to those of the Denton System Further, Krum covenants and agrees to maintain strict supervision and maintenance of its system to reasonably prevent connections through which surface drainage can enter the Denton System. Krum shall not make, nor shall it permit to be made, any connection, which will contribute storm 23 water mn-off from rainwater, spouts, drainage areas, streets, gutter drain or other source of rainwater into Kmm's System. 13.0 Assistance 13.1 In the event, Kmm requests assistance with the Kmm System, Denton may, at its option, assist Kmm. Kmm agrees to pay Denton its actual costs incurred, including, but not limited to, administration, labor and material expended, as documented by Denton. Nothing herein shall be construed to require Denton to assist Krum. Such costs will be invoiced to Kmm and payment made within thirty- (30) days after receipt of invoice. Should the City of Kmm request a long term Operations and Maintenance Contract for the Kmm system, then, in that event, a separate contract can be prepared. 13.2 In the event, Denton requests assistance with the Denton System, Krum may, at its option, assist Denton. Denton agrees to pay Krum its actual costs incurred, including, but not limited to, administration, labor and material expended, as documented by Krum. Nothing herein shall be construed to require Krum to assist Denton. Such costs will be invoiced to Denton and payment made within thirty- (30) days after receipt of invoice. 14.0 Pretreatment Program If requested by Kmm, Denton will enter into a separate contract with Kmm, or directly with a particular Customer, to develop and/or administer a local Pretreatment service program for such Customer on a cost reimbursement basis. 15.0 Reports and Records If requested by the Director, Krum, shall provide the following data on an annual basis: A. Actual number of Customer accounts discharging into the Krum System; B. Classification of Domestic and Non-Domestic Accounts within its service number and percentage of accounts discharging into the Krum System. area by 24 Additional data which may assist Denton and/or Krum in developing methodology for cost of service studies, planning studies for analyzing federal grants, and wholesale system Impact Fees; provided, however that Denton shall not request data that will require Krum to incur unreasonable expenses in providing such data. 16.0 Notices Any notice, communication, request, reply or advice herein provided or permitted to be given, made or accepted by either party to the other party must be in writing to: City of Denton: mrum~ City Manager City of Denton, Texas 215 East McKinney Denton, Texas 76201 Mayor City of Krum 102 West McCart, P.O. Box 217 Krum, Texas 76226 The parties hereto shall provide notice in writing of any change that may occur in their respective addresses from time to time. 17.0 Inspection and Audit Complete records and accounts required by each party hereto shall be kept for a period of five (5) years. Each party shall at all times, upon notice, have the fight at reasonable times to examine and inspect said records and accounts during normal business hours; and further, if required by any law, rule or regulation, make said records and accounts available to federal and/or state auditors. Whenever, under the terms of this agreement, Denton is permitted to give its written consent or approval, Denton may give or may refuse such written consent or approval and, if given, may restrict, limit or condition such consent or approval in any manner it shall deem advisable; however, consent will not be unreasonably withheld. 25 Whenever, under the terms of this agreement, Krum is permitted to give its written consent or approval, Krum may give or refuse such written consent or approval and, if given, may restrict, limit or condition such consent or approval in any manner it shall deem advisable; however, consent will not be unreasonably withheld. 18.0 Waiver, Remedy, Severability 18.1 No waiver by either party hereto of any term or condition of this Contract shall be deemed or construed to be a waiver of any other term, or condition, or subsequent waiver of the same term or condition. 18.2 In addition to any other remedy as may be provided by law, this Contract shall be specifically enforceable by the parties hereto. Venue for any action shall be in Denton County, This Contract shall be governed in accordance with, and by the laws of the State of Texas. Texas. 18.3 It is agreed that, in the event any term or provision herein contained is held to be invalid by any court of competent jurisdiction, the invalidity of such term or provision shall in no way affect any other term or provision contained herein; further, this Contract shall then continue in full force and effect as if such invalid term or provision had not been contained herein. 19.0 Ownership and Liabilit~ 19.1 Except as expressly provided herein, this Contract shall not be construed to create any type of joint or equity ownership of any property, any partnership or joint venture, nor create any other property rights or liabilities. Krum payments (whether past, present, or future) will not be construed as granting to Krum any partial ownership of, prepaid capacity in, or equity in the Denton System. Provided however, Krum shall have the continuing right to receive the services provided for herein under the terms of this Contract. 19.2 Contracts made and entered into by either Krum or Denton for the construction, reconstruction or repair of any Delivery Facility shall include the requirement that the independent contractor(s) must provide adequate insurance protecting both the City of Krum and Denton as insured. Such contract must also provide that the independent contractor(s) covenant 26 to indemnify, hold harmless and defend both the City of Krum and Denton against any and all suits or claims for damages of any nature arising out of the performance of such contract. 20.0 Compliance with Permit Conditions Krum acknowledges that Denton is the holder of discharge permits issued by the United States of America and the State of Texas. Krum agrees that it will comply with all permit conditions in any way relating to its collection system and any discharge into the Denton System. Krum agrees that in the event, a fine is assessed against Denton for any violation of any permit condition, and the violation is attributable to any act of omission or commission by Krum, Krum will pay to Denton the amount of such fine. If such f'me is not attributable to Krum, such fine shall be paid by Denton. 21.0 Term of Contract/Effective Date The term of this Contract shall be for thirty -(30) years, with the provision for two (2) 10-year term extensions based on mutual agreement from the date first stated above. Thereafter this Contract shall be subject to re-negotiation between the Parties hereto. Any party electing to terminate this Contract must provide the other party with five (5) year's advance notice. 22.0 Force Ma.ieure No party hereto shall be considered to be in default in the performance of any of the obligations hereunder (other than obligations of either party to pay costs and expenses), if such failure of performance shall be due to an uncontrollable force beyond the control of the parties, including but not limited to: failure of facilities, flood, earthquake, tornado, storm, fire, lightning, epidemic, war, riot, civil disturbance or disobedience, labor dispute, and action or non-action by a failure to obtain the necessary authorizations and approvals from any governmental agency or authority or the electorate, labor or material shortage, sabotage, or restraint by a court order or public authority, which by the exercise of due diligence and foresight such party could not have reasonably been expected to avoid and which by exercise of due diligence it shall be unable to 27 overcome. Either party rendered unable to fulfill any such obligation shall exercise due diligence to remove such inability with all reasonable dispatch. In the event the proper operation of the Denton System, as a result of the above, requires Denton to temporarily interrupt all or part of the services to Krum, no claims for damage shall be made by Krum against Denton. Denton will exercise its best efforts to insure that such interruptions will not adversely affect the health and welfare of Krum's residents, in the event the proper operation of Krum System, as a result of the above, requires Krum to temporarily interrupt, reduce or increase flow to the Denton System, no claims shall be made by Denton against Krum. 23.0 Wastewater Impact Fees The Denton City Council has adopted "Impact Fees" by amending Chapter 26 "Utilities" of the Code of Ordinances, Ordinance No. 98-301, providing for the Assessment of Such "impact Fees." 23.1 When Denton wastewater service to Krum initially begins, Krum agrees to pay to Denton a Wastewater System impact Fee based on the calculated number of Single Family Equivalents ("SFE's") initially served by Denton. The calculation of SFE's shall be based on the Krum average daily wastewater flow, as mutually agreed upon by each party, divided by 320 gallons. The number of calculated SFE's shall be multiplied by the Denton wastewater impact fee to determine the total amount of impact fees due Denton. This impact fee methodology shall apply to all Krum wastewater customers/connections in existence at the time Denton wastewater service to Krum initially begins. If, at a date after Denton wastewater service to Krum initially begins, Krum desires that Denton serve additional customers/connections that were in existence at the time service initially began, the impact fee shall be based on the mutually agreed upon average daily wastewater flow divided by 320 gallons times the impact fee in existence at the time service begins to these customers/connections. Nothing within this Contract shall be deemed to prevent either Denton or Krum from charging their own respective retail Customers an impact fee in excess of the Wastewater System Impact Fee provided for herein. 28 23.2 On a quarterly basis, Krum agrees to pay to Denton a Wastewater System Impact Fee for each new or enlarged connection for Wastewater service made within Krum's service area served by the General Benefit Capital Facilities of the Denton System. Krum agrees to place quarterly impact fees received in an interest-beating account and remit to Denton on a quarterly basis the impact fees plus interest earned. The Wastewater System impact Fee to the City of Krum for each such connection shall be based upon the size of water meter and shall be equal to the Wastewater System Impact Fee collected for the same size water meter made within the retail service area of Denton, except as provided in Subparagraph 23.6 of this Section. Water meters installed solely for irrigation purposes shall not be assessed a Wastewater System impact Fee. The calculation of the Wastewater System Impact Fee shall be consistent with all applicable state and federal regulations, including Chapter 395, Texas Local Government Code, or any amendment or successor statute, it shall include only those costs associated with wastewater system capital expansions and capital improvements identified by Ordinance No. 98-301 or amendments of said Ordinance, necessary to provide service to new growth and development, and/or expanded growth and development of existing Customers. Nothing within this Contract shall be deemed to prevent either Denton or Krum from charging their own respective retail Customers an impact fee in excess of the Wastewater System Impact Fee provided for herein. 23.3 Denton agrees that all monies for Impact Fees remitted to it pursuant to this section will be placed in a separate interest-beating account to pay only for the cost of constructing capital improvements or facility expansions for the wastewater system as permitted by Chapter 395, Texas Local Government Code, or any amendment thereto, or by any successor statute thereto, and will not be used for operation and maintenance expenses. Once expended on capital projects, such funds and all interest earned thereon will be considered a "contribution" for rate setting purposes and shall not be included in the rate base for wholesale service or return on investment calculation purposes. Depreciation expense will be based on the original cost of all capital facilities both invested and contributed capital, which facilities are expected to be replaced by Denton at a future date in order to maintain service. 29 23.4 Krum shall provide to Denton such information that relates to the making of new and/or upsized connections within its jurisdiction as may be requested by the Director, including but not limited to building permits, with each quarterly payment required in this Section. 23.5 Should Denton or Krum waive any impact fee due from a retail Customer for a new or upsized connection to its respective system within its jurisdiction, Denton or Krum shall pay such impact fee from other sources into the fund required for paying for the capital improvements. 23.6 Denton agrees that only those capital improvements related to the wastewater system identified in Ordinance No. 98-301 or amendments of said ordinance, shall be included in the capital improvements plan for the purpose of determining Wastewater System Impact Fee; provided, however, Denton may include other capital improvements for the purpose of determining impact fees to its own retail Customers. 23.7 Prior to the adoption of any land use assumptions, capital improvements, or Impact Fees, the City of Krum shall be furnished a copy of the proposed land use assumptions, capital improvement plan or proposed impact Fee at least thirty- (30) days prior to any scheduled hearing thereon. Any revised impact Fee adopted pursuant to such updated capital improvements plan shall not take effect for a period of at least ninety- (90) days after adoption by Denton. 24.0 Termination 24.1 This Contract is not intended to specify an exclusive remedy for any default, but all such other remedies (other than termination) existing at law or in equity may be availed of by either party and shall be cumulative. Recognizing, however, that the failure of either party to perform cannot be adequately compensated in money damages alone, both parties agree that in the event of any default on its part, the other shall have available to it the equitable remedy of mandamus and specific performance, in addition to any other legal or equitable remedies (other than termination) which may be available. The remedy of termination for default precluded by this 30 paragraph does not prohibit either Party from terminating this Agreement for default in accordance with the terms of this Agreement, or as otherwise specifically provided herein. 24.2 Also this Contract may be terminated in whole or in part by the mutual consent of the governing bodies of the City of Krum and the City of Denton. Notwithstanding anything contained herein to the contrary, any material breach, as defined herein, by either party hereto shall be cause for termination of this Contract by the other Party in the manner set forth in this Section. 24.3 For failure to pay for undisputed costs for services rendered in accordance with this Contract, Denton may terminate this Contract sixty -(60) days following the date notice of nonpayment is received by the City of Krum, unless full payment is made by the City of Krum within that time. 24.4 Denton shall deliver to Krum ninety- (90) days prior written notice of its intention to so terminate this Contract if Krum fails to cure or adjust any breach other than non-payment provided in Section 24.3 above, such breach, including in such notice a reasonably complete description of the breach. In the event Krum does not agree that it is in such breach, default or failure, Krum may respond in writing for Denton's further review; or, in the altemative Krum may respond with a plan of action for Denton's approval, which approval will not be unreasonably denied. Denton shall advise the City of Krum in writing immediately upon acceptance of the cure of any such breach. If within said ninety- (90) days Krum shall fail or refuse to cure such breach to the reasonable satisfaction of Denton, then and in such event, Denton shall have the right with six (6) months advance written additional notice to Krum, to declare this Contract terminated. In the event of termination of this Contract, all rights, powers, and privileges of Krum hereunder shall cease and terminate. The following breaches, defaults or failure to perform a duty or obligation of any of the below subsections, shall be considered a material breach of this Contract: Failure to adopt and enforce any ordinance required to be adopted and enforced herein, if Krum has received notice as required in Section 10 of this Agreement; 31 f. g. h. j. or if by a Customer of Krum, the failure of Krum to take reasonable steps to obtain such action by Customer. Making any connection to the Denton system at any point except as provided in Section 2.2 hereof. Failure to provide Denton ingress and egress for purposes of sampling and operation and maintenance of any metering or any sampling facility. Failure to provide Denton with rights-of-way as required herein. Failure to permit any sampling of Wastewater as provided for herein. Failure to disconnect industrial users of Krum pursuant to this Contract. Failure to maintain the quality of discharge as required in this Contract. Failure of Krum to comply with Section 10 hereof. Failure of Krum to comply with Section 23 hereof. Failure of Denton to provide the services required by this Contract or to carry out its duties and responsibilities under this Contract. 24.5 In case of any alleged breach, default, or failure to perform duties under this Contract, not addressed by Sections 24.3 and 24.4 above, and in the event that Krum does not agree that it is in such alleged breach, default or failure, Krum may respond in writing for Denton's further review; or in the alternative Krum may respond with a plan of action for Denton's approval, which approval will not be unreasonably denied. Krum may timely appeal Denton's determination of breach or Denton's failure to approve its plan cure the alleged breach to the Utility Account Review Committee of the City of Denton, Texas, as provided for in the Denton Code of Ordinances, Chapter 26, as amended. Pending the outcome of Krum's appeal, the charges shall not be due and payable by Krum. 24.6 Any failure by Denton to terminate this Contract or the acceptance by Denton of any benefits under this Contract for any period of time after such material breach, default, or failure by Krum, shall not be determined to be a waiver by Denton of any rights to terminate this Contract for any subsequent material breach, default, or failure. 24.7 Any failure by Krum to so terminate this Contract, or the acceptance by Krum of any benefits under this Contract, for any period of time after ~tch material breach, default, or failure 32 by Denton, shall not be determined to be a waiver by Krum of any rights to terminate this Contract for any subsequent material breach, default or failure. 25.0 Miscellaneous 25.1 This Contract is subject to all applicable federal and state laws and any applicable permits, ordinances, or amendments adopted pursuant to Section 10.0 and any rules, orders, or regulations of any state or federal governmental authority having or asserting jurisdiction. Nothing contained herein shall be construed as a waiver of any fight by either party to question or contest any such law, ordinance, order, rule or regulation in any forum having jurisdiction. 25.2 The parties hereto agree to make any changes in this Contract made necessary by any amendment or revision to state or federal regulations. 25.3 Upon prior notice by Denton, any duly authorized employee of Denton beating proper credentials and identification shall notify Krum of need for access to any premises located within Krum's boundaries limits, or served by Krum for the purpose of inspections and observation, measurement, sampling and testing and/or auditing, in accordance with the provisions of this Contract. Krum may elect to accompany the Denton representative. To the ~xtent permitted by law, Denton agrees to indemnify Krum and hold Krum harmless for any damage or any injury to person or property caused by the negligence of such duly authorized employee while such employee is in the course and scope of his employment. 25.4 In each instance herein where reference is made to a federal or state regulation, it is the intention of the parties that, at any given time the current federal or state regulation shall apply. If a publication or reference work referred to herein is discontinued or ceases to be the generally accepted work in its field, or if conditions change, or new methods or processes are implemented by Denton, new standards shall be adopted which are in compliance with state and federal laws and any valid rules and regulations pursuant thereto. 33 25.5 Section headings in this Contract are for convenience only and do not accurately or completely describe the contents of any Section. Such headings are not to be construed as a part of this Contract, or in any way defining, limiting or amplifying the provisions hereof. 25.6 Whenever any disputed matter herein is to be specifically determined by the use of a mediator, the following procedure is to be followed. The party requesting that the dispute be settled by mediation shall serve on the other party a request in writing that such matter be handled by mediation. Krum Representative and Director shall mutually agree in writing on the selection of an impartial mediator. Such agreement shall be made within ten (10) days from the date that the request for mediation is received. If agreement is not reached on the selection of the impartial mediator on or before the tenth (10th) day after the date that notice is received, the Director shall immediately request a list of seven qualified neutral mediators on the list. If they do not agree within five (5) working days after the receipt of the list, Krum Representative and Director shall alternate striking a name from the list and the name remaining shall be the impartial mediator. Krum Representative and Director shall mutually agree on a date for the mediation. The decision of the mediator shall not be final. Mediation shall not in any event toll any default period under the Contract, unless approved mutually in writing by Denton and Krum. IN WITNESS WHEREOF, the Parties hereto have caused this Contract to be executed in duplicate originals by their respective officers thereunto duly authorized. "DENTON" CITY OF DENTON, TEXAS A Texas Municipal Corporation MICHAEL A. CONDUFF City Manager 34 ATTESTED: JENNIFER WALTERS, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY CITY OF KRUM, TEXAS A Texas Municipal Corporation By: DAVID POLLEY, Mayor ATTEST: KATHY RENSHAW, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: PATRICK WRIGHT, CITY ATTORNEY By: S:\Our Documents\Contracts\02\Final Draft-Krum-Denton Wholesale WW Contract 031802.doc 35 A02-011 4-2-02 RS19 AGENDA INFORMATION SHEET AGENDA DATE: DEPARTMENT: ACM: April 2, 2002 Parks and Recreation Dave Hill, Assistam City Manager SUBJECT: Consider adoption of an ordinance of the City of DeNon, Texas, authorizing the City Manager to submit an application under the National School Lunch Act to obtain funding for the 2002 Summer Food Service Program; if such funding is grained, the City Manager is authorized to execute the Summer Food Service Program agreement with the Texas Department of Human Services and execute a contract with the Denton Independent School District and all additional documents and agreements, as required; authorizing the expenditure of funds to administer the program; and providing an effective date. BACKGROUND: This free lunch program is designed to serve children in areas of low-income populations during the summer months when traditional school lunch programs are not on effect. This program is sponsored and funded by the United States Department of Agriculture, Food and Nutrition Service. This Summer Food Service Program is a cominuation of the free lunch program that is offered during the school year. The Texas Departmem of Human Services has made an effort through outreach to increase the number of cities participating in the program. Cold sack lunches will be prepared by the DeNon Independem School District and served at the following locations: 1) MLK Recreation Cemer, 2) Phoenix Park, 3) Denia Park, 4) Civic Cemer Park, 5) Owsley Neighborhood, 6) Optimist Club , 7) Village East Apartmems, 8) Fred Moore Park, 9) Rivera Elememary Summer School, 10) Lee Elememary Enrichmem Program, 11) Borman Elememary Summer School, 12) Pebblebrook Apartmems, 13) Mack Park Apartmems, 14) Applecreek Apartmems. The total estimated cost for this program is approximately $59,412 which is reimbursed by the Texas Departmem of Human Services. The Parks and Recreation Departmem first offered the Summer Food Service Program in 1992 at Denia Park, Phoenix Park, Fred Moore Park, Civic Cemer Park, and two summer school locations. At these six locations, a total of 14,776 lunches were served to children 1 through 18 years of age. The Summer Food Service Program expanded to eight locations during the summer of 1993. The additional locations were the TWU Clubhouse Program and the Owsley Neighborhood. The total number of lunches served throughout the summer was 14,748. In 1994 the Village East Apartmems were idemified as a low-income area and became a Summer Food Program Site. Through the summer 15,094 lunches were served at the nine sites. In 1995, the nine summer food sites served 15,585 lunches at a cost of $32,712. A slight decrease occurred in 1996 because the two summer school sites were enrolled sites with lower attendance. In 1996 the nine summer food sites served 13,511 lunches at a cost of $30,111. In 1997 the Boys and Girls Club requested to be part of the summer food program. The addition of tenth summer food site increased the number served to 17,609 lunches at a cost of $38,342. In 1998 the ten summer food sites served 17,843 lunches at a cost of $38,535. in 1999, the ten summer food sites served 15,970 lunches at a cost of $36,969.10. in 2000, the addition of 2 summer school sites increased the lunches served to 19,089 lunches at a cost of $42,017. in 2001, lunches served increased to a grand total of 24, 124 lunches served at a cost of $51,448. OPTIONS: Approval of the contracts with the United States Department of Agriculture, Food and Nutrition Service and Denton Independent School District in its entirety. RECOMMENDATION: Staff recommends approval of the proposed ordinance. ESTIMATED SCHEDULE OF PROJECT: Summer lunches will be served from June 3, 2002, to August 2, 2002. No lunches will be served on Thursday, July 4, 2002, in observance of the independence Day Holiday. PRIOR ACTION/REVIEW: The Denton Independent School District recommended approval to contract the preparation of cold sack lunches for this program when the issue was presemed to their board on February 26, 2002. The program is scheduled for implememation on June 3, 2002. FISCAL INFORMATION: The Texas Department of Human Services will reimburse all costs associated with the program, which administers this gram. BID INFORMATION: Not applicable. EXHIBITS: A: Ordinance B: Food Site Location Map C: Certificate of Authority Respectfully submitted: Prepared by: Kathy Schaeffer, Youth/Teen Services Manager Parks and Recreation Department Ed Hodney, Director Parks and Recreation Department S:\Our Documents\Ordinances\02\summer food service.doc EXHIBIT "A" ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY MANAGER TO SUBMIT AN APPLICATION UNDER THE NATIONAL SCHOOL LUNCH ACT TO OBTAIN FUNDING FOR THE 2002 SUMMER FOOD SERVICE PROGRAM; IF SUCH FUNDING IS GRANTED, THE CITY MANAGER IS AUTHORIZED TO EXECUTE THE SUMMER FOOD SERVICE PROGRAM AGREEMENT WITH THE TEXAS DEPARTMENT OF HUMAN SERVICES AND EXECUTE A CONTRACT WITH THE DENTON INDEPENDENT SCHOOL DISTRICT AND ALL ADDITIONAL DOCUMENTS AND AGREEMENTS, AS REQUIRED; AUTHORIZING THE EXPENDITURE OF FUNDS TO ADMINISTER THE PROGRAM; AND PROVDING AN EFFECTIVE DATE. WHEREAS, the City of Denton, Texas will submit an application for funding under the National School Lunch Act, to the Texas Department of Human Services for the purpose of making meals available to eligible children at the City's Summer Action Site programs; and WHEREAS, pursuant to the grant, if received, the City will contract with the Denton Independent School District to provide the meals at the various sites; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Manager is hereby authorized to execute, on behalf of the City, an application for funding under the National School Lunch Act, and if funded, the Summer Food Service Program Agreement with the Texas Department of Human Services, a copy of which is attached hereto and incorporated by reference herein, along with any other documents and certificates necessary to obtain such funding. SECTION 2. The City Manager is hereby authorized to execute a contract with the Denton Independent School District, substantially in the form of the contract which is attached to and made a part of this ordinance for all purposes, to provide meals for eligible individuals at the various sites, and such other documents and certifications as are necessary to carry out the 2002 Summer Food Service Program, if such program is fimded per the terms set forth in Section I above, and to handle all fiscal and administrative matters relating to the application and the program. SECTION 3. The expenditure of funds necessary to administer the 2002 Summer Food Service Program is hereby authorized. SECTION 4. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the __ day of .,2002. EULINE BROCK, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: ............................ EXHIBIT~-'tB" AVONDALE (:ELM TRAIL PARK UNIVF. BSITY DR. OAKS'T, -- NIIGI4IOI~ Optimist Club Village East Apt. Lee Elem Mack Applecreek Apt. Apt. MCKINHEY ST. PARK Peb Apt. Borman Elem BENT CREEK PARK HOBSO~4 ST. PA~K :OOPER CREEK OPEN SPACE .,4. I~11 Trail 1) Bray R'ya. mgh Sdml 2) Denton HIg# School 3) ~aJhoun High School 4) Stdcld,.nd Wddle School 5) Bm, man Bement~ $) Evers P~ Bemem~ 7) ~ Moore IJ~111nl ~MK 8) IIInnln~s Elemm~ ,) Hedge Ebm.t~ 10) H~--w~-- Beme.~ 11) LM Eleme.t~ry 12) McN~ir Benm. Mry 13) Reyzor Elemelt~ 14) Wibon Beme.t~ry 15) T~aas Rlwa ~ 18) MGMeth Middle ~ EXHIBIT "C" State of Texas County of Denton AGREEMENT TO FURNISH FOOD SERVICE CITY OF DENTON and DENTON INDEPENDENT SCHOOL DISTRICT FOOD SERVICES THIS AGREEMENT is made and entered into by and between the Denton Independent School District and the City of Denton both of 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; whereas, the payments provided by the City of Denton are in an amount that fairly compensates the Denton Independent School District for the services that it is performing. Witnesseth: I. Provision of Meals Denton Independent School District .agrees to supply unitized meals inclusive of milk and juice to the City of Denton Parks and Recreation Department~ at the MLK Recreation Center, Phoenix Park, Denia Park, Civic Center, Owsley Neighborhood, North Lakes Recreation Center, Village East Apartments, Fred Moore Park, Optimist Club, Pebblebrook Apartments, Mack Park Apartments, Applecreek Apartments, Lee Elementary School, Borman Elementary School and one additional elementary site to be determined by Denton Independent School District: Breakfast ...... $ 0.00 each Lunches ....... $ 1.80 each Snacks ......... $ 0.00 each Supper ......... $ 0.00 each II. Menu Records It is further agreed that the Denton Independent School District pursuant to the provisions of the Summer Food Service Program Regulations, will assume 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 of food prepared. 2. Meals, including daily number of meals delivered by type. III. Retention of Records These records must be reported to the institution promptly at the end of each week. Denton Independent School District agrees also to retain records .required under the preceding clause 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, all records must retain beyond the required time period until all issues are resolved in accordance with the Summer Food Service Program Agreement between The City of Denton and The Texas Department of Human Services. IV. Compliance With Immigration Laws The Denton Independent School District agrees to comply with the requirements of the Immigration Reform Control Act of 1986 regarding employment verification and retention of verification forms for any individuals hired after November 6, 1986 who will perform labor or services under this contract. V. Audit The Denton Independent School District agrees to allow for purposes of audit, examination, excerpt, and transcription: the USDA, the Comptroller of the United States, D.S. and any of their authorized representatives to have access to any of the contractor's books, documents, papers, and records that are pertinent to the contract. VI. Energy Efficiency The Denton Independent School District agrees to comply with the required mandatory 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 of Contract The Denton Independent School District agrees that except for small purchase contracts, it will comply with and enforce provisions that allow for administrative, contractual, or legal remedies if contractors violate or breach contract terms, and any appropriate sanctions and penalties. VIII. Compliance With Labor Regulations The Denton Independent School District agrees to be in compliance with Sect. ion 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 compute the wages of mechanics and laborers on the basis of standard workday of eight hours and a standard workweek of 40 hours. Work that exceeds the standards must be compensated at least 172 times the basic pay rate for overtime hours worked. These requirements do not apply to the purchase of supplies or materials ordinarily available on the open market or contracts for transportation. IX. Equal Emplownent Opportunity The Denton Independent 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 (41CFR, Part 60). X. Compliance With Laws The Denton Independent School District agrees to comply with all other applicable laws, including without limitation, any additional applicable Federal Laws or regulations contained in the Summer Food Program Agreement between the Ci_ty of Denton and the Texas Department of Human Services. XI. Remedy For Breach If the Denton Independent School District fails to provide services in accordance with the provisions of this contract, the City of Denton may, upon written notice of default to the contractor, immediately terminate the whole or part of this contract. XII. Consideration The City of Denton..agrees to pay Demon Independent Sch(~ol District for all meals ordered on daily basis at the rate agreed upon in this contract. XIII. Term The agreement shall be effective as of June 3, 2002 and shall have the same term as the Summer Food Program Agreement between the City of Denton and the Texas Department of Human Services. 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 agreement shall be interpreted in accordance with the laws of the State of Texas. Any litigation filed with regard to this contract shall be tried in a court of competent jurisdiction setting in Denton County, Texas. IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the dates indicted below: Agreed to this date Sponsor Official Title: City Manager Agreed to this date School Sponsor ~~ Title DISD School Board President 9 The location of the food preparation site will be: Rivera Elementary School 701 Newton Denton, Texas 76205 APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: 10 TEXAS DEPARTMENT OF HUMAN SERVICES SPECIAL NUTRITION PROGRAMS AGREEMENT EXHIBIT STATE OF TEXAS § COUNTY OF TRAVIS § TheTexasDepartmentofHuman services, hereinaRerre~edt°asTDHS' City of Denton, Texas, A Texas Municipal Corporation at 321 E. McKinney St, Denton, Texas 76201 hereinafter referred to as the Contractor, do hereby, make and enter into this contract, as required by the National School Lunch Act and the Child Nutrition Act, as amended, and the following program regulations: the National School Lunch Program CNSLP), 7 Code of Federal Regulations (CFR) Part 210; the Special Milk Program (SMP), 7 CFR Part 215; the School Breakfast Program (SBP), 7 CFR Part 220; the Summer Food Service Program (SFSP), 7 CFR Part 225; and the Child and Adult Care Food Program (CACFP) 7 CFR Part 226. This agreement establishes or continues the fights and respongibilities of TDHS and the Contractor pursuant to the Contractor's participation in one or more of the above named programs as stipulated herein. If this agreement continues an existing agreement, all existing terms, conditions, liabilities and obligations of the parties under the prior agreement remain in full force and effect, except to the extent that those terms, conditions, liabilities and obligations conflict with this agreement, in which case 'this agreement takes precedence. By signing this agreement, both parties are bound by its terms and conditions from its beginning effective date, or the beginning effective date of any prior agreementJs continued by this agreement, until terminated in accordance with this agreement. MUTUAL AGREEMENTS Thc Parties mutually agree: · A. If the Contractor fails to provide services in accordance with the provisions of this contract, TDHS may, upon written not,ce of default to the Contractor, mediately terminate the whole or any part of this contract, including refusal to pay claims for. reimbursement, and such termination shall not be an exclusive remedy but shall be in addition to any other rights and remedies provided by law or under this contract. B. If federal or state laWs or other requirements are amended or judicially interpreted so that the continued fulfillment of this contract, on the part of either party, is substantially unreasonable or impossible, or if the parties are unable to agree upon any amendment which would therefore be needed to enable the substantial continuation of the services contemplated by this contract then, the parties shall be discharged from any further obligations created under the terms of this contract, except for the equitable settlement of the respective accrued interest or obligations, including audit findings, incurred up to the date of termination. C. This contract may be canceled by mutual consent. However, if such mutual consent cannot be attained, then and in that event, either party to this contract may consider it to be canceled without cause by giving thirty (30) days notice in writing to the other party and this contract shall thereupon be canceled upon the expiration of such thirty (30) day period. Nothing in this paragraph shall be construed to prohibit immediate cancellation pmsuant to above paragraphs A and/or B. 11 ho II. CONTRACTOR PROGRAM ADMINISTIL¥1'ION AND FINANCIAL MANAGEMENT The Contractor will Comply with the applicable regulations for its designated program, as well as 7 CFR Parts 245 and 250, as amended, the Uniform Federal Assistance Regulation (7 CFR, Part 3015, as amended), Audits of State, Local Governments, and Non-Profit Organizations (7 CFR 3052, as amended)and state policies and procedures as issued and mended by TDHS. The Contractor further agi:ees to perform as described in its application (including its Policy statement and supporting documents, and approved amendments tp the application) for participation in the designated program. B. The Contractor accepts final administrative and financial responsibility for food service operations in each school, summer feeding site, and child and/or adult care facility, hereinafter referred to as a site, operated or sponsored by the Contractor. The responsibility includes any audit exceptions or payment deficiency in the program covered by this contract, and all subcontracts hereunder, which are found after monitoring or auditing by TDHS or USDA and will be responsible for the collections and payback of any amount paid in excess of the proper claim amount. C. The Contractor submits for TDHS approval only those applications for sites which have delegated the authority for the administration of food service operations to the Contractor or which have executed subagreements with the Contractor for the administration of food services operations. D. Contractors participating in the NSLP agree - -- 1. that the official signing the Claim for Reimbursement will be responsible for reviewing and analyzing meal counts to ensure accuracy and compliance with federal regulations 2. to enter into an agreement to receive donated foods as required by federal regulations, and 3. to price lunch as a unit E. Contractors participating in the CACFP provide or accept responsibility f°r the pr°visi°n °f°rganized' n°n'residential child day care and will immediately report to The Texas Department of Protective and Regulatory Services (TDPRS) Licensing or Child Protective Services staff, any suspected violations of TDPRS Licensing standards or suspected abuse of children in sponsored centers or day homes. RECORD KEEPING A. The Contractor will keep financial and supporting documents, statistical records, and any other records pertinent to the services for which a claim was submitted in the manner and detail prescribed by TDHS. The records and documents will be kept for a minimum of 3 years and 90 days after the termination of the federal fiscal year for the relevant program. If any litigation, claim, or audit involving these records begins before such period expires, the Contractor will keep the records and documents for not less than 3 years and 90 days and until all litigation, claims or audit findings are resolved. The case is considered resolved when there is a final order issued in litigation, or a written agreement is entered into between TDHS and the Contractor. The Contractor will keep records of non-expendable property acquired under the contract for 3 years and 90 days after final disposition of the property. B. The Contractor and its subcontractors will allow TDHS and USDA officials and other appropriate officials determined by TDHS to inspect facilities and records and to audit, examine, and copy records at any reasonable time. This includes access to all records of costs paid, even in part, by TDHS. C. The Contractor and its subcontractors will establish a method to secure the confidentiality of records and other information relating to clients in accordance with the applicable federal law, rules, and regulations, as well as the applicable state law and regulations. The provision shall not be construed as limiting the Department's right of access to recipient case records or other information relating to clients served under this contract. D The Contractor ce~ifies that the goods and/or service(s) covered by this contract are designated to be used prior to, during, and after calendar year 2000 AD. The goods and/or service(s) will be operated during such time periods without error relating to date which represents different centuries or more than one century. IV. CIVIL RIGHTS POLICY COMPLIANCE A. The Contractor agrees to comply with Title VI of the Civil Rights Act of 1964 (Public Law 88-352) and all requirements imposed by the regulations of the Department of Agriculture (7 CFR Part 15), Department of Justice (28 CFR Parts 42 and 50) and FNS directives or regulations issued pursuant to that act and the regulations. Section 504 of the Rehabilitation Act of 1973 (Public Law 93-112), the Americans with Disabilities Act of 1990 (Public Law 101-336), Title IX of the Education Amendments of 1972 (7 CFR Part 1 Sa), the Age Discrimination Act of 1975 (Public Law 94-135), and all amendments to each, and all requirements imposed by the regulations issued pursuant to these acts. In addition the contractor agrees to comply with Title 40, Chapter 73, of the Texas Administrative Code. These provide in part that no person in the United States shall, on the ground of race, color, national origin, sex, age, disability, political beliefs, or religion be excluded from participation in, or denied anY aid, care, service or other benefits provided by federal and/or state funding, or otherwise be subjected to discrimination. The contractor also agrees to comply with Health and Safety Code Section 85.113 (relating to workplace and confidentiality guidelines regarding AIDS and HIV). The contractor hereby gives assurance that it will immediately take any measures necessary to effectuate this agreement. B. This assurance is given in consideration of and for the purpOse of obtaining ~any and all federal financial assistance, grants and loans of federal funds, reimbursable expenditures, grant or donation of federal prOperty and interest in property, the detail of federal personnel, the sale and lease of, and the permission to use, federal property or interest in such property or the furnishing of services without consideration or at a nominal consideration, or at a consideration which is reduced for the purpose of assisting the recipient, or in recognition of the public interest to be served by such sale, lease or famishing of services to the recipient, or any improvements made with federal financial assistance extended to the program applicant by the TDHS. This includes any federal agreement, arrangement, or other contract which has as one of its purposes the provision of cash assistance for the purchase of food, and cash assistance for purchase or rental of food service equipment or any other financial assistance extended in reliance on the representation and agreements made in this assurance. C. The Contractor agrees to compile data, maintain records, and submit reports as required, to permit effective enforcement of the above Acts and permit authorized TDHS, USDA and FNS personnel during normal working hours to review such records, books, and accounts as needed to ascertain compliance with the above Acts. If there are any violations of this assurance, TDHS, USDA and FNS have the right to seek judicial enfomement of this assurance. This assurance is binding on the Contractor, its successors, transferees, and assignees as long as it receives assistance or retains possession of any assistance from the department. The person whose signature appears on this contract is authorized to sign this assurance on the behalf of the Contractor. D. A religious or charitable organization is eligible to be a contractor on the same basis as any other private organization. The contractor retains its independence from State and local governments, including the contractor's control over the definition, development, practice, and expression of its charitable or religious beliefs. Except as provided by federal law, TDHS shall not interpret this contract to require a charitable or religious organization to alter its form of internal governance or remove religious art, icons, scripture, or other symbols. Furthermore, if a religious or charitable organization segregates the government funds provided under the contract, then only the financial assistance provided by these funds will be subject to audit. However, neither TDHS's selection of a charitable or faith-based contractor of services nor the expenditure of funds under this contract is an endorsement of the contractor's charitable or religious character, practices, or expression. The purpose of this contract is the provision of services; no State expenditures have as their objective the funding of sectarian worship, instructions, or proselytization. A charitable or faith-based provider of services under this contract shall reasonably apprise all assisted individuals of the following: "Neither TDHS's selection of a charitable or faith-based provider of services nor the expenditure of funds under this contract is an endorsement of the provider's charitable or religious character, practices, or expression. No provider of services may discriminate agaiast you on the basis of religion, a religious belief, or your refusal to participate in a religious practice. If you object to a particular provider became of itsreligious character, you may request assignment to a different provider. If you believe that your rights have been violated, please discuss the complaint with your provider or notify your local TDHS Special Nutrition Programs office. Section 104 of The Personal Responsibility and Work Opportunity Reconciliation Act of 1996.42 U.S.C. § 604a, sets forth certain additional rights and responsibilities for charitable and faith-based providers of services, certain additional rights of assisted individuals, and certain additional responsibilities of TDHS to these providers and assisted individuals. This contract is subject to those additional rights and responsibilities. 12 Ve Ao TDHS CLAIMS PAYMENT TDHS will, subject to the federal appropriation and availability to TDHS of sufficient funds for the applicable program, make program payment to the Contractor in accordance with the terms of this agreement. No reimbursement shall be made for performance under this agreement occurring prior to (a) the beginning effective date of this agreement or (b) a later date established by TDHS based on the date of receipt of a fully executed copy of this agreement. In accordance with Section 403.055(h) of the Government Code, as added by Act of May 19, 1999, 76th Leg. R.S., ch. 583, See. 1, 1999 Tex. Sess. Law Ser. 3125 (Vernon), a~y payments owing to the contractor under this contract will be applied toward elimination of the contractor's indebtedness to the state, delinquency in payment of taxes to the state, or delinquency in payment of taxes that the comptroller administers or collects until the indebtedness or delinquency is paid in full. This clause does not apply if federal law requires payment to be made to the contractor for goods and services provided in support of any of the USDA child and adult nutrition programs, and may not apply if federal law conditions the receipt of the money for these goods or services to the state on the basis of payment being made to the contractor. Vie IMMIGRATION The Contractor agrees to comply with the requirements of the Immigration Reform and Control Act of 1986 regarding employment verification and retention of verification forms for any individuals hired after November 6, 1986, who will perform any labor or services under this contract. Vile CERTIFICATION Regarding Debarment, Suspension, Ineligibility, or Voluntary Exclusion For Covered Contracts - The contractor certifieS, by execution of this agreement, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participating in this contract by any federal department or agency or by the State of Texas. By making this certification the contractor agrees to the following terms: 1. The above certification is a material representation of fact upon which reliance was based when this contract was' entered into. If it is later determined that the contractor knowingly rendered an erroneous certification, in addition to other remedies available to the federal government, the Department of Health and Human Services, United State Department of Agriculture or other federal department of agency, or the Texas Department of Human Services may pursue available remedies, including suspension and/~r debarment. 2. The contractor shall provide immediate written notice to the person to which this certification is submitted if at any time the contractor learns that the certification was erroneous when submitted or has become erroneous by reason of changed circumstances. 3. The words "covered contract," "debarred," suspended," "ineligible," "participant," "person," "principal," "proposal," and voluntarily excluded," as used in this certification have meanings based upon materials in the Definitions and Coverage sections of federal roles implementing Executive Order 12549. Usage is defined in the attachment. 4. The contractor agrees by submitting this certification that, should the proposed covered contract be entered into, it shall not knowingly enter into any subcontract with a person who is debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized by the Department of Health and Human Services, United States Department of Agriculture or other federal department or agency, and/or the Texas Department of Human Services, as applicable. VII. CERTIFICATION (Continued) 'B. Co Do 5. The contractor further agrees by submitting this certification that it will include TDHS Form 2046 titled "Certification Regarding Debarment, Suspension, Ineligibility, and Voluntary Exclusion for Covered Contracts" without modification, in all covered subcontracts and in all solicitation for all covered subcontracts. 6. A contractor may rely upon a certification of a subcontractor that it is not debarred, suspended, ineligible, or voluntarily excluded from the covered contract, unless it knows that the certification is erroneous. A contractor must, at a minimum, obtain certificates from its covered subcontractor upon each subcontractor's initiation and upon each renewal. 7. Nothing contained in all the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this certification document. The knowledge and information of a contractor is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. 8. Except for contracts authorized under paragraph 4 of these terms, if a contractor in a covered contract knowingly enters into a covered subcontract with a person who is suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the federal government, Department of Health and Human Services, United States Department of Agriculture, or other federal department or agency., as applicable, and/or the Texas Department of Human Services may pursue available remedies, including suspensxon and/or debarment. Regarding Federal Lobbying - This certification applies only to this contract and is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or'entering into this transaction imposed by section 1352, title 31, U.S. 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 $I00,000 for each such failure. The contractor certifies, to the best of his or her knowledge and belief, that: No federally appropriated funds have been paid or will be paid, by or on behalf of the undersigned, 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 the awarding of any federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, or the extension, continuation, renewal, amendment, or modification of any federal contract, grant, loan, or cooperative agreement. If any funds other than federally appropriated funds have been paid 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 this federally funded contract, subcontract, subgrant, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions; The contractor shall require that the language of this certification be included in the award documents for all covered subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all covered subrecipients shall certify and disclose accordingly. The contractor certifies that if it is a corporation, it is either a for-profit corporation that is not delinquent in its franchise tax payments to the State of Texas, or is a non-profit corporation or is otherwise not subject to payment of franchise taxes to the State of Texas. ~ The contractor certifies that all information submitted pursuant to this agreement is tree and correct. The contractor understands that the deliberate misrepresentation or withholding of information is a violation of this contract and may result in prosecution under applicable state and federal statutes. E. Under Section 231.006, Family Code, the vendor or applicant certifies that the individual or business entity named in this contract, bid, or application is not ineligible to receive the specified grant, loan, or payment and acknowledges that this contract may be terminated and payment may be withheld if this certification is inaccurate. 13 VIII. EFFECTIVE DATE AND SIGNATURES The parties hereto in their capacities stated, affix their signatm'es and bind themselves for the faithful performance of the terms of this contract pursuant to participation in the following program or programs:  National School Lunch Program .. [~ Child and Adult Care Food Program School:Breakfast Program [Xi Summer Food Service Program Special Milk Program City o~ Do_nt-_on Name of Contracting Organization (Please prim or type) ..... Signature of chairman of the board of directors or other official who has been authorized to sign contracts on behalf of the contracting organization. Mike Conduff Name of Official Signing (Please print or type) City Manaqer Title of Official (Please print or type) TEXAS DEPARTMENT OF HUMAN SERVICES Effective from By: TDHS Representative until terminated. Date: Approved for Form by OGC: Signature on file Revised May 2001 Texas Department of Human Services EXHIBIT "E" Form 4508 May 2000 SPECIAL NUTRITION PROGRAM CERTIFICATE OF AUTHORITY This is to certify that the following person(s): type or print) Mike Conduff ilTM City Manager ~. n=t,,r _~-Authorized Representative Signature-Autho ' Rel: type or-~~~ Kathy schaeffer Youth/Teen Services Manager X Signature-Authorized Representative as an Authorized Representative of ------'-- ~ization City of Denton ---------- 321 E. McKinney St., Denton, Texas 76201 The representative(s) designated above, and myself, acknowledge that each is individually authorized on behalf Of the contracting organization to make written agreements with the Texas Department of Human Services to operate a food program, to sign documents or reports about the agreement, and to present claims for reimbursement, when appropriate, to the department By signing this document, we certify individually and collectively that to the best of our knowledge and belief, all documents submitted physically or electronically on behalf of the above named Contracting Organization pursuant to our participation in any and all programs administered by Special Nutrition Programs, TDHS, am/will be true and correct in all respects, that they am/will be completed according to the terms and conditions of existing agreements including amendments, that records are/will be available to support any and all claims, and that we will not submit claims (excluding amended/adjusted claims) for goods or services for which we have already received payment. We recognize that we are fully responsible for any excess amounts which may result from errors made in relation to the completion and submission of claims. We are also aware that deliberate misrepresentation or withholding of information may result in prosecution under applicable state and federal statutes. ame of Official of Contracting Agency (please type orprint) ilTM ~N Mike Conduff City Manager X cinn=t.re-Official of Contracting Agency Signature-Omcl DELETED AUTHORIZED REPRESENTATIVES: A contracting organization may not have more than three (3) Authorized Representatives, including the Official of the Contracting Agency. If you are replacing or deleting an Authorized Representative, list the name(s) of the individual(s) to be removed as Authorized Representative(s) below: Howard Martin FOR DHS USE ONLY IC0ntmct No. 75- R"~ed By 14 Received THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK. A02-011 4-2-02 RS25 AGENDA INFORMATION SHEET AGENDA DATE: April 2, 2002 DEPARTMENT: Legal Department CM/DCM/ACM: Herb Prouty, City Attorney SUBJECT: Hold a public hearing and consider and adopt an ordinance setting a gas utility services rate for electric generation trmsportation service customers within the City of Denton, Texas; making findings in accordance with the setting of this rate; providing for the recovery of rate case expenses and the payment of rate consultants; providing for rehearing and reservation of rights; providing a severability clause; and providing an effective date. BACKGROUND: On July 17, 2001 the City Council passed Ordinance No. 2001-251, which adopted gas utility service rates for commercial and residential customers within the City of Denton, but declined to set industrial rates. Instead, you found the rates under the then current contracts between industrial customers and TXU Gas Distribution to be just and reasonable. On December 13, 2001 Spencer Station Generating Company, L.P. ("Spenc~") filed a complaint docketed as Complaint 2001-1 with the City Council alleging that the rates proposed by TXU Gas Distribution and TXU Lone Star Pipeline (hereinafter "TXU Gas") for the Spencer Generating Station were unreasonable, unjust, and discriminatory and asked the City Council to order interim relief. On December 18, 2001 you held a public hearing on Complaint 2001-1. After hearing testimony, including testimony from our rate consultant, Diversified Utility Consultants, Inc. ("DUCt"), Spencer, and TXU, you approved an interim order under Ordinance No. 2001-482 requiring TXU Gas to continue to provide service to Spencer under the rates contained in the then-existing contract between TXU Gas and Spencer that expired on December 31, 2001. The order was contingent upon Spencer and TXU Gas agreeing on a rate and would dissolve upon the City being notified of such an agreement, tn the meantime, you began an investigation into the reasonableness of the electric generating transportation service rateswithin the City of Denton to determine what would be a fair, just, and reasonable rate. To assist you in this matter, you authorized the City Manager to hire DUCt and the Law Offices of Jim Boyle. In late December 2001 and early January 2002, Spencer fled a similar complaint with the Railroad Commission, which it has since withdrawn, and filed a lawsuit styled Spencer Generating Company, L.P.v. TXU Gas Company, et al. in the 211th District Court to enjoin TXU Gas from charging it a rate different thanthe rate set forth in the contract between the two parties that expired December 31, 2001. The City intervened in that suit. Meanwhile, TXU Gas appealed the rate ordinance to the Railroad Commission. Judge Shipman read into the record an order which, in part, required the City to complete its investigation of the rates in this matter in an expeditious manner. The Court has entered the order. The State Office of Administrative Hearings (SOAH) has scheduled a mediation on TXU's appeal for April 17, 2002 Finally TXU Gas on March 1, 2002, filed a Notice of Intent to Change Rates that would, if granted, significantly increase gas rates for all customer classes in Denton including Spencer. At your March 26, 2002 meeting you passed a Resolution suspending the rates for 90 days from the proposed effective date and allowing Spencer to intervene in that rate proceeding. S:\Our DocmmentshMiscellaneous\02\agenda infbrmarion sheer rare ordinance2.doc DUCt requested documents from both parties and also asked the parties to respond to requests for information. Spencer did so but TXU Gas dedined, taking the position that the City has no jurisdiction over this matter since the validity of Ordinance No. 2001-482 was on appeal to the Railroad Commission. We had originally scheduled this matter for your March 5, 2002 regular meeting. But we postponed the meeting to your April 2, 2002 meeting at the request of TXU Gas to give them adequate time to prepare for your hearing. DUCI FINDINGS AND ORDINANCE: Attached to this Agenda Information Sheet is the report of DUCt dated February 22, 2002, which makes certain findings, conclusions, and recommendations. Copies of this report have been sent to representatives of TXU Gas and Spencer by the City Manager. They have also been advised of your intent to hold a public hearing and take evidence on this matter and to make a finding concerning the rate. A copy of Mike Conduff's February 25th letter advising TXU Gas and Spencer of the public hearing is also attached. Under the findings, conclusions, and recommendations section of the report, DUCt makes 11 findings, which support a gas utility services rate for electric generation transportation customers of 2 cents per MCF. tf, after hearing the evidence at the public hearing, you believe that this is a fair, just, and reasonable rate for all electric gmeration transportation customers, including Spencer, you should pass an ordinance setting the rate. It is anticipated that TXU Gas will probably appeal such a finding to the Railroad Commission. Dan Lawton, of DUCt, will be available at the public hearing to provide evidence concerning the rate and to answer questions. OPTIONS: 2. 3. 4. Pass the ordinance as recommended setting the 2 cents per MCF rate. Decline to pass the ordinance. Pass the ordinance setting a different rate. Schedule additional public hearings and take additional evidence before setting a rate. RECOMMENDATION: Unless evidence presented at the public hearing by TXU Gas or Spencer is sufficient to overcome the findings of DUCt, we would recommend option 1, that you pass the ordinance setting the gas utility services rate for electric generation customers of 2 cents per MCF. Since TXU Gas has appealed the matter to the Railroad Commission, unless TXU Gas changes its position that you have no jurisdiction to make a determination of the rates, it is doubtful if delaying the matter further---TXU has already been granted a rescheduling of this hearing--will result in any more evidence or documents from TXU Gas. DUCt would probably not have additional documents to examine in aid of yotr investigation into a just and reasonable rate for electric generating transportation service customers, such as Spencer. You are also under some time constraints as a result of the Court's order to make an expeditious finding with regard to the rate. This ordinance is a final order, unlike the interim order you made in Ordinance No. 2001-482. The Railroad Commission would probably have appellate jurisdiction and TXU Gas will probably appeal any ordinance which approves DUCt's recommendation of 2 centsper MCF. You should, of course, carefully consider any additional evidence presented to you at the public hearing before making your decision. FISCAL INFORMATION: The recent TXU Gas Franchise exempts Spencer from payment of franchise fees. The setting of this rate would have no impact on the franchise fee revenue derived from TXU Gas. tf you enact the ordinance and TXU Gas appeals to the Railroad Page 2 S:\Our DocamentskMiscellaneous\02\agenda infbrmarion sheer rare ordinance2.doc Commission, there could be additional rate consultant and utility attorney fees which could exceed the maximum amounts set forth in the consultants current contracts. Respectfully submitted, Herb Prouty, City Attorney Page 3 S:\Onr DocmmentshMiscellaneous\02\agenda infbrmarion sheet rate ordinance2, doc SSOur DocumentsSOrdinances\025gas utilily transport rate.doc ORDINANCE NO. AN ORDINANCE SETTING A GAS UTILITY SERVICES RATE FOR ELECTRIC GENERATION TRANSPORTATION SERVICE CUSTOMERS WITHIN THE CITY OF DENTON, TEXAS; MAK1NG F1ND1NGS 1N ACCORDANCE WITH THE SETT1NG OF THIS RATE; PROVIDING FOR THE RECOVERY OF RATE CASE EXPENSES AND THE PAYMENT OF RATE CONSULTANTS; PROV1NG FOR A REHEARING AND RESERVATION OF RIGHTS; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on July 17, 2001, the City Council passed Ordinance No. 2001-251 ("Rate Ordinance") establishing permitted rates and charges TXU Gas DistribNion ("TXU-GD") may assess resideNial and commercial customers within the City of DeNon; and WHEREAS, on or aboN April 2, 2001, TXU-GD filed a revised cost of service with the City of DeNon; and WHEREAS, TXU-GD included in cost of service revenues of 2 cents per mcr as an intra- company transfer for distribution service at the Spencer Plant; and WHEREAS, TXU-GD's cost of service indicated that the just and reasonable rate for electric generation transportation is 2 cents per mcr; and WHEREAS, the Rate Ordinance did not approve rates for industrial customers requested by TXU-GD, but approved rates for industrial customers established by the then current contracts for industrial customers; and WHEREAS, TXU-GD accepted the Rate Ordinance and did not appeal to the Railroad Commission and the time for appeal expired; and WHEREAS, on December 13, 2001, Spencer Station Generating Company, L.P. ("Spencer") filed a complain against TXU Lone Star Pipeline ("TXU-LSP") and TXU-GD for failure to provide gas Nility service on reasonable terms stating it was unable to obtain just and reasonable rates for gas Nility service to the Spencer Electric Generating Station ("Spencer Station") as set oN more fully in the complaiN, and requested a public hearing on this issue and iNerim rate relief from the City of DeNon; and WHEREAS, at its regular meeting of December 18, 2001, the City Council passed Ordinance No. 2001-482 after notice and a public hearing where Spencer, TXU-GD, and TXU- LSP were given an opportunity to present evidence concerning allegations in the complaint. The Ordinance ordered TXU-GD and TXU-LSP (hereinafter referred to as "TXU Gas") not to change the rate to the Spencer Station under the then-existing agreement and further ordered TXU Gas to continue to provide gas utility service to the Spencer Station on an interim basis without interruption under the terms of the then existing agreement until the parties agreed on a rate or a rate was set, and that after December 31,2001 either: S :\O~r Docmnents \Ordinances\02\gas utility transpcct rate.doc TXU Gas file industrial rates with the City, demonstrating to the City Council that the proposed rates for gas utility service to the Spencer Station are just and reasonable and not prefereNial or discriminatory, and relevant facilities are properly classified as distribution facilities and those facilities are useful in providing utility service to the Spencer Station, and TXU Gas has these rates approved by the City Council or the Railroad Commission; or TXU Gas and Spencer negotiate a just and reasonable rate pursuant to Tex. Util. Code §104.003(b); and WHEREAS, as a result of the Ordinance No. 2001-482 and the complain filed by Spencer, the City Council undertook an investigation iNo the industrial/transportation rates for the Spencer Station; and WHEREAS, on January 2, 2002 Spencer filed a lawsuit in the 211th District Court of DeNon County styled Spencer Generating Company, L.P. v. TXU Gas Company, et al. against TXU Gas for failure to comply with Ordinance No. 2001-482; TXU Gas answered the lawsuit and the City iNervened, and a hearing was held on January 11, 2002; and WHEREAS, TXU Gas has appealed Ordinance No. 2001-482 to the Railroad Commission; and WHEREAS, the City's rate consultant, Diversified Utility Consultants, Inc., (DUCt) has tried to obtain information from both Spencer and TXU Gas in an attempt to determine a fair, just, and reasonable rate for gas utility transport service to the Spencer Station, and DUCt has transmitted its report and recommendations concerning the rate under Complaint No. 2001-1 to the City Council; and WHEREAS, Spencer has responded to discovery requests in this matter, TXU has refused to comply with any requests; and WHEREAS, both Spencer and TXU Gas have been provided with a copy of the consultant's report and have been given notice of the City Council's iNeN to hold another public hearing on this matter and take action; and WHEREAS, the public hearing on this matter was rescheduled from March 5, 2002 due to a Motion to Reschedule the Public Hearing and Deliberations by TXU Gas to give them adequate time to prepare for this matter; and WHEREAS, after notice and a public hearing where both Spencer and TXU Gas were given an opportunity to preseN evidence concerning the allegations in Spencer's complain - Complain No. 2001-1 and additional evidence was submitted by the City's rate consultant, DUCt, the Council deems it in the public iNerest to make the following findings and orders; NOW, THEREFORE, Page 2 S :\O~r Docmnents \Ordinances\02\gas utility transpcct rate.doc THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. FiNDiNGS. The City Council, pursuant to its exclusive original jurisdictional authority over the rates, operations, and services of TXU Gas within DeNon, and in the exercise of its sound legislative discretion after reasonable notice and hearing makes the following findings: 1.1 Under Tex. Util. Code §104.003(a), DeNon Charter §13.04, and Section 3 "Reservation of Rights" of the Rate Ordinance, the City Council has exclusive original jurisdictional authority over the subject matter in Complain 2001-1 and the rate matter set forth herein. 1.2 The rate set forth in the April 2, 2001 cost of service for electric generation transportation for the rate year beginning July 20, 2001 is just and reasonable. 1.3 Neither TXU Gas, nor Spencer has established that a rate, other than the rate set forth in the April 2, 2001 cost of service, is just and reasonable. 1.4 The City Council adopts the findings of its rate consultant, Diversified Utility Consultants, Inc., as follows: TXU Gas represented that the charges for transport service under its proposed rates for electric generating companies like Spencer would be 2 cents; TXU Gas represented in its rate filing to the cities, including Denton, that a 2-cent charge for transport service to electric generating companies like Spencer would allow TXU Gas to recover its costs; TXU Gas agreed to settle its rate proceeding with all cities in the Northwest Metro system, including Denton; Under the settlement, TXU Gas represented that its rate for transport service for electric generating customers like Spencer would be 2 cents; TXU Gas alleges that the distribution portion of the intra-company allocation for Spencer, an electric generation transportation service customer, is the same 2 cents that TXU Gas agreed would allow full cost recovery and allow TXU Gas to recover its revenue requirement under its rate request and settlement; The City approved the rate settlemeN for resideNial and commercial customers and service charges; in the Rate Ordinance, the City approved industrial rates consisteN with then-existing contracts; The City specifically denied TXU Gas's requested tariff industrial rates preseNed in TXU Gas's claimed compliance filing. Page 3 S :\O~r Docmnents \Ordinances\02\gas utility transpcct rate.doc SECTION 2. ORDER. Based upon the findings of facts set forth in Section 1 above and in accordance with previous findings and orders and the Rate Ordinance and Ordinance No. 2001-482, the City Council makes the following order: 2.1 The City Council finds that a just, reasonable, and fair gas mility services rate for all electric generation transportation service customers within the City of Denton, Texas is a rate of 2 cents per MCF. This rate shall be applicable to the Spencer Station and any other customers who receive such electric generation transportation service within the City of DeNon. The City Council orders TXU Gas and any other gas mility within the City of DeNon to charge the 2 ceres per MCF rate for such electric generation transportation service. 2.2 TXU Gas and Spencer are ordered to reimburse the City for all reasonable costs of the services of rate consultants, attorneys, accountants, auditors, and engineers necessary for this proceeding in accordance with Tex. Util. Code §103.002, including the fees of Diversified Utility Consultants, Inc. and the Law Offices of Jim Boyle. SECTION 3. RESERVATION OF RIGHTS. In order to ensure that rates and charges assessed by TXU Gas or any other gas mility in DeNon are just and reasonable to both TXU Gas or any other gas utility and its customers, Denton reserves the right and privilege at any time to increase, decrease, alter, change, or amend this ordinance or the rates established herein or to enact any ordinance or adopt any rates and charges which would effectuate that purpose. In this connection, DeNon reserves the right and privilege to exercise any authority and power granted to it under any applicable law, ordinance, or administrative rule or regulation. SECTION 4. FILING OF TARIFF. TXU Gas shall file an Electric Generation Transportation tariff, consistem with this ordinance, within five (5) working days of April 3, 2002 with the City Manager, along with a copy for the City Attorney. SECTION 5. SEVERABILITY. If any portion, section, or part of a section of this ordinance, or application thereof to any person or circumstance is held invalid by any court of competem jurisdiction, such holding shall not affect the validity of the remaining portions of this ordinance, and the City Council of the City of DeNon, Texas hereby declares it would have enacted such remaining portions despite any such validity. SECTION 6. It is hereby found and determined that the meeting at which this ordinance was passed was open to the public, as required by Texas law, and that advance public notice of the time, place, and purpose of the meeting was given. SECTION 7. EFFECTIVE DATE. This interim ordinance shall immediately take effect and be in full force and effect from and after the date of its adoption. The City Secretary is hereby directed to deliver a certified copy of this ordinance to TXU Gas by sending the ordinance by U.S. mail to TXU Gas's authorized representative, Autrey Warren, Regulatory Financial Manager, TXU Business Services, 1601 Bryan Street, Dallas, Texas 75201-3411, and Page 4 S :\O~r Docmnents \Ordinances\02\gas utility transpcct rate.doc to Spencer Station Generating Company, L.P. by sending the ordinance by U.S. mail to James A. Tramuto, V.P. External Relations, West Region, PG&E Natural Energy Group, 1100 Louisiana, Suite 1650, Houston, Texas 77002. PASSED AND APPROVED this the __ day of ,2002. RONI BEASLEY, MAYOR PRO TEM ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: Page 5 DUCI February 22, 2002 DIVEI~S1FIED UTILITY CONSULTANTS, INC. 12113 ROX[E DRIVE. SUITE llO, AUSTIN, TX 787~-,9 Michael A. Conduff- City Manager Herb Prouty - City Attorney 215 East McKinney Denton, Texas 76201 Letter Report Addressing Complaint of Spencer Station Generating Company, L.P., ,.Against TXU-Gas Distribution Claiming Unreasonable and Discriminatory Rates For Gas Service and City of Denton Ordinance No. 2001-482; C. omplaint No. 2001-1 Gentlemen: We have completed our investigation into the above referenced matter to determine the appropriate rate to be charged for transmission service by TXU-Gas Distribution at the Spencer Generating Station. This letter report addresses the background and history underlying this case which led to the complaint, previous City of Denton actions in this matter, and the analysis and basis for the recommendations regarding the appropriate transportation rate for the Spencer Generating Station. It is important to state that TXU has not cooperated in any way to resolve this matter and investigation by the City regarding Spencer's complaint. In a letter to the City, TXU takes the position that the Railroad Commission has jurisdiction over this matter. On the other hand, Spencer has cooperated and provided responses to our discovery requests regarding the issues surrounding the complaint. Given TXU's decision to not answer the most basic of our inquiries, we are not able at this time to analyze the issue of rate discrimination raised in Spencer's complaint. DUCI has reviewed the rate for Spencer based on TXU's most recent case, cost of service, rate request and rate settlement in the City of Denton. Based on the above, the rate currently authorized by Ordinance No. 2001-251 is the same 2-cent rate: requested by TXU and agreed to by TXU for transportation service to electric generating facilities like Spencer. TXU's claim of a $0.28 per Mcfrate lbr this service is not supported by a cost of service, the Company's agreement, the City of Denton Ordinance No. 2001-251, or the Gas Utility Regulatory Act. The basis and support for this recommendation is contained in the attached letter report. We thank you for the opportunity to provide you with these services. We stand ready to present these findings and recommendations to the Mayor and City Council. Should you have any additional questi.o/B~s, please feel free 'to call. rel Daniel J. L~iwton COMPLAINT OF SPENCER STATION GENERATING COMPANY, L.P. AGAINST TXU-GAS DISTRIBUTION COMPANY CLAIMING UNREASONABLE AND DISCRIMINATORY RATES FOR GAS SERVICE AND CITY OF DENTON ORDINANCE NO. 2001-482; COMPLAINT NO. 2001-1 Background/History On or about February 26, 2001, TXU-Gas Distribution (TXU) filed an application to change rates in approximately 40 cities, including Denton, in the Northwest Metro M/d-Cities service area. The Northwest Metro system annual increase to customers requested by TXU was about $10.16 million. On April 2, 2001, TXU revised the rate request and re-filed a revised application in the cities to correct for computational errors in the original application. The revised TXU request is based on a $7,358,605 annual rate increase. Included in Attaclanent 1 is the Company's rate request by city for the Northwest Metro system. The following table summarizes the Company system and Denton specific rate request by customer class: Residential $4,074,990 $575,214 Commercial $1,679,052 $89,187 Industrial $1,755,353 ~221,457 Servi~e Charges '<$150,790~" <$27,392> Total Increase $7,358,605-' $858~466 The above described TXU rate increase request is based on the Company's claimed costs to serve customers in the 40 cities in the Northwest Metro areas. A summary of the Company's claimed cost of service supporting the rate increase is shown in Attachment 2. The $1,755,353 industrial increase is based on service to industrial sales customersI and transport customers.2 The requested industrial sales increase in rates requested by TXU is $1,276,062.79 (See Attachment 3). The industrial transport increase requested by the Company is $479,290.82 (See Attachment 4). The sum o£the industrial sales and transport increase is $1,755,353 ($1,276,062.79 + $479,290.82), or the total industrial class increase the Company claimed. The Company unequivocally represented to the cities in the Northwest Metro system (including Denton) that a $479,290 rate increase for the transport customer class Industrial sales customers receive bundled gas service fi'om the Company. Transport customers purchase only transportation service. would be sufficient for the Company to recover its costs assigned or allocable to transport service. Included as Attaclm~ent 5 are the rates and billing units of service assumed by the Company in the revised rate application. As can be seen from Attachment 5, TXU assumed that the present and proposed rate for Electric Generating Transportation service, i.e., Spencer, would be 2 cents. In other words, TXU's own filing assumed a 2- cent rate from Spencer would be sufficient to recover the Company's claimed costs for the transport class of customers. The TXU/Northwest Metro Settlement On or about June 26, 2001 TXU presented the Settlement Agreement reached between TXU and the Northwest Metro Mid-Cities attorney/representative Geoffrey Gay. The following table outlines the Settlement Agreement by rate class: TXU RATE SETTLEMENT Residential $4,074,990 $2,5 l 1,719 $1,563,271 Commercial $1,679,052 "' $1,034,952 $6'44, 100 Industrial $1,755,35~' $1,755,138 $215 Service Charge <$150,790> <$150~790> 0 Total $7,3581605 $5,151,019 $2,207,586 Under the settlement, the residential and commercial class customer revenue requirements are reduced. The industrial class customer revenue requirement and service charge rates are not changed.3 On or about July t7, 2001, the City of Denton approved the TXU Settlement proposal with regard to the residential and commercial class customers and approved the proposed service charges. Ordinance No. 2001-251 at Section 1.1 states: "It]he agreed residential customer class annual increase is $2,511,718 and. the commercial customer class annual increase of $1,034,951...". These annual increases are the settlement increases proposed by the Company as outlined in the above table. With regard to industrial rates the July 17, 2001 Ordinance at Section 1.5 states: "...the City Council approves rates for industrial customers in Denton established by contract between TXU-Gas and such industrial customers." Given that the Spencer contract rate is 2 cents,4 the Company originally requested 2 cents in its rate application (See Attachment 5), and the Company's Settlement assumes 2 cents for service to Spencer, the City Council of Denton approved rates consistent with Spencer's contract or 2 cents, approved the 2 cent rate the Company originally requested There exists a slight $215 change to industrials due to rounding. See Spencer Station Generating Company, L.P.'s Original Complaint, page 3. from Spencer, and approved the Company's settlement rate for Spencer, 2 cents. In other words, by approving rates established by contract between TXU and the customers, the City of Denton approved the exact rate for Spencer that TXU included in its request for Spencer. Nothing more or less was approved. The transcript from the July 17, 2001 City Council session when the rate ordinance was approved shows that TXU not only agreed with the July 17, 2001 rate ordinance, but had input in making changes to the final rate ordinance approved by the City. Post Rate Ordinance Filings On or about August 2, 2001, TXU filed compliance tariffs, lncluded in these compliance tariffs was a transportation service tariff which included an average rate of about 28 cents per Mcf. The City of Denton did not approve such a transportation tariff and notified TXU that such tariff should be removed,s TXU has continued to insist that industrial sales and transport tariffs were approved implicitly through acceptance of the settlement. TXU has provided no documents, agreements or any other support for their implicit tariff rate approval theory. On the other hand, the City of Denton Ordinance is very specific in what was approved. The Spencer Rate Complaint On or about December 13, 2001, the Spencer complaint was filed with the City. Spencer claims that the transport contract between TXU and Spencer included a transport charge of 2 cents for transport service. Such charge is consistent with the rate filing shown in Attachment 5. Spencer's complaint alleges that the TXU contract would end on December 31, 2001 and that TXU notified Spencer that future transport service would be charged under a transport service tariff at an average rate of about 28 cents. Again, this transport service tariff was not approved in the July 17, 2001 tariff. If TXU were allowed to charge Spencer the 28 cents rather than the 2 cents that TXU requested in its rate application (the 2 cents TXU agreed under the rate settlement and the 2 cents approved in Ordinance No. 2001-251, with which TXU agreed), then TXU would enjoy about a $481,000 windfall. In other words, TXU represented and agreed in the recent rate proceeding that the Company would charge a 2-cent rate for transportation service for electric generating companies like Spencer. The settlement and final rate ordinance established rates to customers based on this representation. To now charge these customers a 28-cent rate for this service results in a windfall to the Company at the expense of customers, including Spencer. Conclusions and Recommendations The 40 cities including Denton just recently went through an extensive rate setting investigation with TXU regarding gas rates to be charged to customers in these respective municipalities throughout the Northwest Metro system. The following facts regarding 5 Tl~e rate approved in Ordinance No. 2001-251 did not include industrial sales or transport rates other than existing contract rates. transport service for electric generating customers can be found in documents fi'om the rate setting process: i. TXU represented that the charges for transport service under its proposed rates for electric generating companies like Spencer would be 2 cents; 2. TXU represented in its rate filing to the cities including Denton that a 2-cent charge for transport service to electric generating companies like Spencer would allow TXU to recover/ts costs; 3. TXU agreed to settle its rate proceeding with all cities in the Northwest Metro system including Denton; 4. Under the settlement, TXU represented that its rate for transport service for electric generating customers'like Spencer would be 2 cents; 5. The contract rate for Spencer, a transport electric generating customer, is the same 2 cents that TXU agreed would allow full cost recovery and allow TXU to recover its revenue requirement under its rate request and settlement; 6. The City of Denton approved the rate settlement for residential and commercial customers and service charges; 7. In Ordinance No. 2001-251, The City of Denton approved industrial rates consistent with then existing contracts; 8. The City of Denton approved a 2-cent rate for Spencer which was consistent with the cost based rate proposed by TXU in the Company's filing and rate settlement; 9. The City of Denton specifically denied TXU's requested tariff industrial rates presented in TXU's claimed compliance filing; 10. TXU has not filed an additional rate proceeding requesting authorization to charge rates different than those rates approved in Ordinance No. 2001-25 I; 11. The only rate approved for Spencer is the 2-cent contract rate. Given all of the above, the rates approved in Ordinance No. 2001-251, the agreements and representations made by TXU, the only rate authorized for transport service to generating customers is the 2 cents approved by Denton and agreed to by the Company. Moreover, any different rate would be inconsistent with Ordinance No. 2001- 251, inconsistent with the Company's agreements and representations to the City of Denton, and inconsistent with the Gas Utility Regulatory Act. Given that TXU refuses to cooperate in this important matter before the City, DUCI is unable to detemfine whether TXU's proposed 28-cent charges are discriminatory. DUCI requested information regarding TXU's other electric generating station transport rates, including those for TXU affiliate generating stations, but TXU has not provided such information. ATTACHMENT i Line City Name 1 Addison 2 A~gyle 3 Arlington 4 Aubrey 5 Bedlord 6 Carrollton 7 Celteyville 8 Coppe[~ 9 Copper Canyon '[0 Corinth 11 Cross Roe. ds !,2 Dalworthington Gardens 13 Denton 14 Double Oak 15 Euless 16 Farmers Branch 17 Flower Mound 18 Grapevine 19 Hickory Creek 20 High,and Village '21 Hurst 22 Iwing 23 Justin 24 Keller 26 Krum 26 Lake Dallas 27 Lewisville 28 !.Jncolo Park 29 Mansfield 30 Marshall Creek 3I Nor[hlake 32 Pantego 33 Pilot Point 34 Ponder 35 Roanoke 36' Sanger 37 Shady Shores 38 Southlake 39 Trophy Club 40 Wes,~lake 4t Other NORTHWEST METRO /,MID CITIES DISTRIBUTION SYSTEM Revenue Increase / (Decrease) by City Page I of 1 4/2/O t Increase / (Decrease) Residenlial CommerciaJ ~ndustrial Serv Chrq Amount Percenl $54,33l $115,358 $9,645 ($1,978) $177,357 3.89% (782) 233 $0 498 (50) -0-02% 607.548 171,451 $210,916 (36,097) g53,8'18 2.77% (I2.497) {149} $0 (1,050) {13,697} -5.44% 103.330 19,291 $15,854 (3,948) 134.527 2.61% 783,498 251,355 $298,867 (17,849) 1,315,871 7.05% 4,426 3,085 $0 (3,7,~3) 3,768 0.07% (15,266) (4,076} $0 (8,359) (25.701) -0.37% 31 0 $0 (24) 7 0.06% (142,677) (7,736) $10,807 (996) (140,601) -6.99% (274) 181 $0 (2) (95) -1.78% 2,856 1,036 $0 (361 } 3,530 0.85% 575,214 89,187 $221,457 (27,392) 858,466 6.12% 866 28 $0 (206} 687 0.5'~ % 109,101 19,179 $37,508 (4,242} 161,546 3.63% 262,566 104,498 $170,769 (5,512) 532,322 6.85% 110,663 3,597 $42,199 (12,813} 143,645 1.45% 155,979 63,861 $65,145 (7,055} 277,930 3,2I% 1,784 247 $0 (482} 1,550 0,60% 27.325 385 $0 (2,827) 25,084 0.9~ % 147,777 18,896 $2I ,647 1,997 190.316 3,43% 906,387 707,006 $321,678 11,359 1,946,430 6.27% (12,138) 3,023 $0 (286) (9,399) -3.10% 99,384 3,309 $9,859 (6,968) 105,584 2.15% 11,475 2,214 $0 1,079 14,769 4,92% 10,098 (1,090) $0 391 9,398 1.28% 32,775 (9,321) $141,806 (14,088) 151,172 1.42% (11,566) (487) $0 53 (12,000) -25.95% 85,549 13,875 $59,784 (4,580) 154,628 4,86% 6,464 226 $0 162 6,852 22,53% 0 0 $0 2 2 8,67% 9,540 3,000 $4,057 (615) 15,982 2.87% (29,282) 2,536 $0 165 (26,581 ) .4.16% 4,278 3,503 $3,411 239 11,431 7.97% 32,082 14,238 $0 809 47,129 17,05% (23,257} (6,706) $0 1,757 (28,206) .4.31% (16.858) (~56) $0 {186) (17,200) -7,93% (11,343} 4,998 $6,741 (5,602) (5,206) -0,08% 9,787 1 $0 (756) 9,032 1.80% 1,635 t ,147 $0 (119) 2,664 1,18% 194,181 87,829 $103.202 ¢3,367) 381.845 4.96% 42 Total Revenue $4,074,990 $1,679,052 $'[,755,353 (St50,790) $7,358,605 3,69% ATTACHMENT 2 'TXU' GAS DISTRIBUTION NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM COST OF SERVrCE ,STUDY FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000 SPONSOR: B. W. MYERS Page I oi 1 Rewsed 4-02-01 Line No. Descrip. t ion Northwest Metro.~M[d Cities Distribution System. Present Proposed - Propose~ Percen[ Rates Rates Increase Increase (a) 1 Operating revenues 2 Residential 3 Commercial 4 ~nc~ustrial {2) 5 Total Gas Sales Revenue 6 Olher Rev-Service Charges, etc, 7 Total Operating Revenues (b) (c) (d) 120,?.2.3.703 $ 124.298,810 $ 4,075,106 73,292.124 74.971.268 1,679,144 4.948.919 6,704.057 1. 755.138 198,464.747 205,974,135 7..509.389 !1.080,812 930,021 I~ 50.790) ,_.$ 199.545,558 $ 206.904.157 $ 7.358.598 3.39 2.29 35 47 3.78 H3.95) 3 69 8 9 tO 11 12 13 14 Total Revenue Requirement 15 Operating Ex,oenses 16 Gas Purchases 17 For Res[denUal Sales 81.862.752 18 For Commercial Sales (1) 56.716,371 19 For Inc~ustdal Safes (2} 2,755.085 29 Unaccounted for Gas 1,342.630 21 Olher O & M Expenses 22.O79.234 23 Taxes Other than Income T~ces 14,303,462 24 25 Provision for Depreciatio~ 7,901,643 26- 27 tnteresl on Customer Deposits 2!5, I34 28 Interest on Customer Advances 48.831 29 39 Federal Income Taxes 5,195,051 31 32 Return on Rate Base 14.483.985 33 34 Total Revenue Requirement S 206.904.157 35: ~ (1} Commercial class [nclucles schools as p~'oposed in this ,*ale ~'iiing. 37 {2.) Ir~dustr~a] class includes ~ranspo~tation and electdc generation customers. ATTACHMENT 3 ATTACHMENT 4 ATTACHMENT 5 TXU GAS DISTRIBUTION NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM SUMMARY PROOF O,F REVENUE AT PROPOSED RATE~ "-'-'~R THE-TF-ST YEAR ENDED SEPTEMBER 30, 2000 SPONSOR: G.L. GOEiLE Schedule L-4 Page 7 el 7 Revised 4-02-01 Line Description 3 25 26 27 29 30 31 32 33 34 35 36 37 38 39 40 TRANSPORTATION 1 2 3 Adjusted Transportation Volume-MCF 4 Adjusted Per BooksTransportation Volume 5 Transportation Volume Per Books 6 Adjustment tn Transportation Volume 7 Industr a Tr.ansportation Revenu~e 8 Transportation Fee 19,148 1.025 $1.26 0.5000 12,317 9 Transpertation Fee 124,079 1.025 0.82 0.5000 52,074 10 Transportation Fee 107,558 1.025 0,80 0.500o 44,281 11 Transportation Fee 1,482,326 1,025 0.79 o.5000 600,689 12 Transportation Fee 857,302 1.025 0.78 0.5000 34t,916 13 Transportation Fee 315,798 1.025 0.77 0.5000 123.910 14 Transportation Fee 188,062 1.025 0.75 0.5000 72,585 15 Transportation Fee 107,209 1.025 0.74 0.5000 40,686 16 Transportation Fee 94,299 1.025 0.73 0.5000 35,183 17 Transportation Fee 55,958 1.025 0.60 0.5000 17,098 18 Transportation Fee 481,399 1.025 0.57 0.5000 140,900 19 Transportation Fee 1,655,616 1.025 0.55 0.5000 463,283 20 Transportation Fee 226,358 1.025 0.47 0.5000 54,605 21 Transportation Fee 369,837 1.025 0.40 0.5000 76.120 22 Totaf industrial Transportation Revenue $2,075,646 Electric Generation Transportation Revenue Transportation Fee 1,848,808 1.025 $0.02 1.0000 42,449 · _,___ $42,449 Total' Electric Generation Transportation Revenue C~ommercial Transportation Revenue Transportation Fee 29,571 1.025 $0.63 1.0000 19,020 Transportation Fee 63,951 1.025 0.46 1.0000 30,277 Transportation Fee 39,211 1,025 0.36 '[.0000 'i4,630 Transportation Fee 9,437 1.025 0.38 1.0000 3,642 Transportation Fee 111,727 1.025 0.36 1.0000 4t,605 CommerciaICustomer Charge (t customers) 1 12.000 20.00 1.0000 240 CommerciaICustomer Charge (2customers) 18 12.000 12,00 1~0000 2,592 CommerciaICustomer Charge (3customers) 53 12.000 10.00 1,0000 6.360 Total Comrnerci~,l T~ansportstion Revenue Total Trans. Only Revenue 0.0586 Total Revenue Taxes Distribution Trans. Only Rev. Adiusted Less Trans, Only Rev Per Books Transportation Only Rev. Adiustment 8,187,654 8,093.821 93,833 118,446 2,236,541 131,054 2,367,594 1.91 ~,345 456.249 T~U GAS DISTRIBUTION NORTHWEST METRO/MID C~"I']ES DISTR£BLrTION SYSTEM RATE DESIGN - R~:VENUF SUMMARY BY CrFY FOR THE TEST YEAR ENDED SEPTEMBER 30, 2000 SPONSOR: G_L. GOBLE Scneaule L-2 Page tOottt Revised 4-02-01 Line 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 2O 21 22 25 27 28 2~ 30 31 32 33 34 35 3~ 37 36 39 aO Description TRANSPORTATION Adjusted Transportation Volume--MCF Adjusted Per BooksTransportation Votume Transportation Volume Per Books Adiustment to Trar~sportation Volume Industrial Transportation Revenue Transportalion Fee Tran~ ~o~t~tion Fee Tmn~ )or, at[on Fee Tmns ~onation Fee Trane ~ortation Fee Trane ~ortation Fee Tmns >ortation Fee Trane )ortation Fee Trane )o,'tation Fee Trans )o~ation Fee Trane >o~tation Fee Trans )ortation Fee Trane 3or,orion Fee Trane 3ortation Fee Total Industrial Transportation Revenue Electnc Generation Tra.n. sporlation Revenue Transportation Fee Total Electric Generation Transportation Revenue Commerce. al Transportation Revenue Transportation Fee Transporlat[on Fee Transportation Fee Transportation Fee Transportation Fee Commercial Customer Charge (1 customers) Commercial Customer Charge (2 customers} Commercial Customer Charge (3 customers) Total Commercial Transportation Revenue Total Trans. Only Revenue Total Revenue Taxes Dis[dbut[on Trans. Only Rev. Adjusted Less Trar~s. Only Rev Per Boo~s Transpo~lation Only Rev. Adjustment 19148 124079 107558 1482326 857302 315798 188062 1072O9 94299 55958 481399 1655616 226358 369837 1848808 29571 63951 39211 9437 111727 1 16 53 1.025 1.025 1.025 1.025 1.025 1.025 1.025 1,025 1.025 1.025 1.025 1.025 1.025 1.025 1.025 1.025 1.025 1.025 1.025 1.025 12.000 12.000 12.000 $1.00 0.65 0.64 0.63 0.82 0.61 0.60 0.59 0.58 0.48 0.46 0.44 0.38 0.32 $0.02 $0,50 0.37 0.29 0,30 0.29 20.00 12.00 10.00 0.5O00 0.5000 0.5000 0.5000 0.8000 0.5000 0.5000 0.5000 0.5000 0.5000 0.5000 0.5000 0.5000 0.5000 1.0000 4.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 0.05860 8187654 8093821 93,833 9,813 41,493 35,279 478,606 272,408 98,726 57,829 32,417 28,030 13,622 I12,256 369,099 43,503 60,653 $1,653,736 33.807 $33.807 15,155 24,122 11,655 2,902 33,2~1 240 2,592 6,360 96,237 1,783,780 104.523 1,888,303 1.9tl,345 (23,042) A02-011 4-2-02 RS26 AGENDA INFORMATION SHEET AGENDA DATE: DEPARTMENT: CM/DCM/ACM: April 2, 2002 Planning & Developmem Dave Hill, 349-8314 SUBJECT Consider approval of a resolution of the City of Demon, Texas establishing local governmem sponsor support for the "Land Use / Transportation Joint Venture" transportation grant funding awarded by the North Cemral Texas Council of Governmems (NCTCOG) Regional Transportation Council (RTC); and providing an effective date. BACKGROUND A resolution has been prepared for City Council consideration that is required by the North Central Texas Council of Governmems (NCTCOG) Regional Transportation Council (RTC) to receive an $883,092 transportation grant for the State School Road Connector and a nearby 1-35E ramp reversal project. If the resolution is not submitted to the RTC by April 10, 2002, the project may not be added to the NCTCOG Transportation Improvemem Program (TIP) because of an upcoming federally required air quality conformity cycle. If a project is not listed on the TIP, the funding cannot be used and the project cannot move forward. Two letters from NCTCOG are attached that explain the resolution requirements. The Teasley Lane Corridor Study was commissioned in late 1999, and initiated a series of discussions focused on traffic congestion and safety concerns as rapid residemial developmem began to overwhelm the capacity of this 2-lane rural farm-to-market road (FM 2181). The city and county have partnered to fund the engineering design expanding FM 2181 from two to six lanes, from Wind River Drive to Hickory Creek Road, and efforts to obtain construction funding are well under way. Even if Teasley Lane (FM2181) is expanded to six lanes, the northern portion of the road from Wind River Drive to Robinson Road will still operate at an unacceptable level of service. The Corridor Study recommended a new east-west collector street, which has been called the State School Road Collector. This road would allow access to Teasley from the 1-35E / State School Road exit, and would provide northbound motorists on 1-35E conveniem access to subdivisions such as Sundown Ranch and Wind River Estates. Traffic movemem through the State School Road exit would provide much-needed relief for the 1-35E / Loop 288 imerchange as motorists head south on Lillian Miller. The collector would not be a major arterial; FM 2499 will provide better access to subdivisions further south when built. When the RTC announced the availability of gram funds, the city partnered with Bob Shelton Emerprises to submit a joim venture application. The application requested $3 million; the gram ward was $883,092. Despite the lower award, the State School Road and 1-35E ramp reversals can still be constructed. Funding is already in place for the ramp reversal project as a result of matching funds being provided by the Texas Departmem of Transportation (TXDOT). For the State School Road Connector, a portion of the funds needed for construction will be provided as part of the Unicom Lake developmem. A traffic impact study is being conducted to determine the proportional share to be contributed by the private developer. OPTIONS If the resolution is not approved, the grant funds are not lost. with the project could be delayed for a period of a year or more. However, the ability to move forward RECOMMENDATION Staff recommends approval of the resolution. ESTIMATED PROJECT SCHEDULE Engineering work for the ramp reversal is expected to start in May 2002. Coordination of the State School Road Connector is underway, with design amicipated to begin in late summer. PRIOR ACTION/REVIEW City Council reviewed the Teasley Lane Corridor Study four times in the first half of 2000. The Planning & Zoning Commission conducted a public hearing to amend the Mobility Plan by adding the State School Road Connector in November 2001, and held two work sessions in December 2000 and April 2001. The State School Road Connector Mobility Plan amendmem has not been pursued since to allow more detailed Unicom Lake project design to guide the alignmem. FISCAL INFORMATION The gram amoum is $883,092. The State School Road Connector has been allocated $588,728, with a local match requiremem of $411,272. The ramp reversal project has been allocated $294,364, with a local match requiremem of $205,636. The local match requiremem does not hold the City of Demon responsible for all matching funds; private developer funds are also considered local match. For the ramp reversal project, the City of Demon has $500,000 in Capital Improvemem Program funds from the 2000 bond election specifically designated for use on ramp reversals. ATTACHMENTS November 5, 2001 and March 8, 2002 NCTCOG letters Draft Resolution Respectfully submitted: David M. Hill Assistam City Manager - Developmem Services S:\Our Documents\Resolutions\02\Unicorn LaJ~e Resolution.doc RESOLUTION NO. A RESOLUTION OF THE CITY OF DENTON, TEXAS ESTABLISHING LOCAL GOVERNMENT SPONSOR SUPPORT FOR THE "LAND USE / TRANSPORTATION JOINT VENTURE" TRANSPORTATION GRANT FUNDING AWARDED BY THE NORTH CENTRAL TEXAS COUNCIL OF GOVERNMENTS (NCTCOG) REGIONAL TRANSPORTATION COUNCIL (RTC); AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on January 25, 2000, February 8, 2000, April 11, 2000, and May 23, 2000, the Demon City Council conducted a series of work session devoted to resolving traffic capacity and congestion problems encountered on Farm-To-Market Road 2181 in south Denton by commissioning the "Teasley Lane Corridor Study", and WHEREAS, the Teasley Lane Corridor Study concluded that a Mobility Plan amendmem was needed to add a new east-west collector road, named the "State School Road Connector", to maimain acceptable levels of service within the Teasley Lane Corridor; and WHEREAS, on September 27, 2000, the Demon Planning & Zoning Commission held a public hearing and recommended approval of amending the Demon Mobility Plan by adding the State School Road Connector, and WHEREAS, the Demon City Council conducted a public hearing regarding amending the Demon Mobility Plan by adding the State School Road Connector on November 28, 2000, and conducted related work sessions on December 12, 2000 and April 10, 2001, and WHEREAS, the State School Road Connector is intended to connect Wind River Drive to State School Road, across privately owned land known as Unicom Lake, zoned as Planned Developmem 20 (PD-20) as per City of Demon Ordinance 98-366, a 136.4-acre tract that included conditioned light industrial, multi-family, single family, general retail, commercial, office, parkland, and a dedicated public street; and WHEREAS, in May 2001, the North Central Texas Council of Govemmems (NCTCOG) Regional Transportation Council (RTC) announced an opportunity to submit "Land Use / Transportation Joint Venture" applications to compete for transportation funding with projects that promote economic developmem, mixed use, public/private partnerships, use existing transportation systems efficiently, and alternative pedestrian / bicycle / transit transportation systems; WHEREAS, on July 9, 2001, the City of Demon Mobility Committee approved the submittal of a Land Use / Transportation Joint Venture funding application to the NCTCOG RTC, with Bob Shelton Enterprises as the private partner co-applicant, requesting $1.5 million for the State School Road Connector, $500,000 for public pedestrian, bicycle, and transit improvements to be located in the Unicom Lake project, and for $1.5 to make Interstate 35-E ramp improvements intended to improve access to the Unicom Lake site and reduce congestion at the IH-35E interchanges located at Loop 288 and State School Road; and S:\Our Documents\Resolutions\02\Unicorn Lake Resolution.doc WHEREAS, in a letter dated November 5, 2001, the NCTCOG RTC informed the City of DeNon and Bob Shelton ENerprises that funding had been awarded for the Unicorn Lake Land Use / Transportation Join Venture application, in an amount of $294,364 ($205,636 local match) for IH-35E ramp improvemeNs and $588,728 ($411,272 local match) for the State School Road Connector, comprising a total grant award of $883,092 ($616,908 local match), with the following conditions: (1) that the City Council approves a zoning change from "Light Industrial" to allow for mixed use and higher density resideNial, and (2) that block structure and pedestrian rights-of-way be donated, and WHEREAS, in a letter dated March 8, 2002, the NCTCOG RTC notified the City of Denton that a resolution is needed from the Denton City Council stating that the private sector developer has met land use commitmeNs for the Unicorn Lake project site, and that the resolution should be submitted to the NCTCOG RTC prior to April 10, 2002 to be added to the NCTCOG Transportation ImprovemeNs Program (TIP) before federal air quality conformity requirements prevent further TIP modifications; NOW THEREFORE THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES: Section 1. The Unicorn Lake private sector developer has met land use commitments through adoption of the DeNon DevelopmeN Code, Ordinance No. 2002-040, effective February 20, 2002, which changed the zoning classifications for the Unicorn Lake site from "Light Industrial" and other uses to a combination of single-family (NR-2 and NR-3), neighborhood resideNial / mixed use (NRMU), and regional ceNer commercial (RCC-D), and allows for mixed use and higher density resideNial uses. Section 2. The DeNon City Council affirms that Bob Shelton ENerprises is proceeding with the developmeN satisfactorily and according to the City of DeNon's application for Land Use / Transportation Join Venture funding and has prepared a preliminary site design indicating that block structure and pedestrian rights-of-way will be donated. Section 3. The DeNon City Council is committed to local matching fund requiremeN associated with the NCTCOG RTC Unicorn Lake project grant, through private sector and/or local government funds, and authorizes the execution of a contract with the Texas Department of Transportation in order to receive the NCTCOG RTC funds. Section 4. This resolution will take effect immediately upon adoption. PASSED AND APPROVED this the __ day of ,2002. EULINE BROCK, MAYOR S:\Our Documents\Resolutions\02\Unicom Lake Resolution.doc ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: HERBERT L. PROUTY, CITY ATTORNEY BY: North Central Texas Council Of Governments November 5, 2001 RECEIVED NOV -6 2001 i CITY MANAGER'S OFFICE Mr. David M. Hill City of Denton 215 E. McKinney Street Denton, TX 76021 Mr. Bob Shelton Bob Shelton Enterprises 3505 Teasley Lane Denton, TX 76205 Dear Mr. Hill and Mr. Shelton: The Sundown Ranch project that your partnership submitted for consideration under the Land-Use/Transportation Joint Venture Program has been selected for funding by the Regional Transportation Council. Your project will serve as a showcase of how the public and private sectors can work together to accomplish land-use projects that improve quality of life, reduce traffic congestion, and help achieve air quality goals. Thank you for your hard work and vision. Please find enclosed: · a list of all selected Land-Use/Transportation Joint Venture Projects (Attachment 1); · a map of the projects (Attachment 2); and, · a project detail sheet describing the limits and requirements for your project (Attachment 3). As the detail sheet notes, these are federal transportation funds from the Surface Transportation Program--Metropolitan Mobility (STP-MM) and/or the Congestion Mitigation and Air Quality Improvement Program (CMAQ). Federal transportation funds carry a variety of requirements and are provided to the local government through the Texas Department of Transportation (TxDOT) on a reimbursement basis. Each of the Joint Venture Projects will be placed in the Transportation Improvement Program (TIP) as one or more individual project listings in a fiscal year appropriate for the timing of the project. Each project must be included in a federally approved TIP consistent with air quality conformity findings before any implementation work can proceed. The role of the North Central Texas Council of Governments (NCTCOG) includes placing selected projects into the appropriate TIP years and assigning STP-MM or CMAQ funds. NCTCOG staff will also review and comment on site plans and facility elements that impact transportation issues. To aid in processing selected projects, NCTCOG staff should be provided with land-use information (e.g., tenant agreements, zoning ordinances, maps, definitions of uses, tables of permitted uses) as it becomes available. Any changes to site plans should also be provided to NCTCOG staff. The role of project sponsors (public and private) will be to cover ineligible costs, cost over-runs, TxDOT fees, and the added cost of the project's aesthetic features. Also, sponsors should be aware that no cost inflation adjustments will be made for the projects selected in this program. The donation of right- of-way must be coordinated by project sponsors with TxDOT as well. The public sponsor will lead the project with TxDOT and will sign an agreement with TxDOT in order to receive the funds. 616 Six Flags Drive, Centerpoint Two P. O. Box 5888, Arlington, Texas 76005-5888 (817) 640-3300 FAX: 817-640-7806 ~ recycled paper http://www.dfwinfo.com Mr. David M. Hill Mr. Bob Shelton Page Two November 5, 2001 This project will serve as a showcase for innovative ways to reduce vehicle miles traveled through land- use. As such, public and private project sponsors will be expected to assist NCTCOG staff in coordinating tours of the project and photographing project sites for publicity. Sponsors will also be expected to participate in travel data collection (such as personal transportation surveys of area residents and employees) and in the collection of transit, bike, and pedestrian traffic counts. Please note that elements of your initiative require your action prior to implementation. The project sponsors are obligated to continue developing the land-use initiative described to NCTCOG in the original letter of interest and subsequent project meetings. Your land-use initiative is summarized in the project detail sheet. Project sponsors are also required to complete any necessary steps listed as requirements for the project to move forward in the detailed sheet. When the private sector developer has met land-use commitments at the project site, NCTCOG must be provided with a governing council or board resolution from the local government sponsor to that effect. The resolution should also establish the private sector/local government commitment to the local match and authorize the local government to enter into a contract with the Texas Department of Transportation. In summary, please be aware of the following issues: · Your project cannot move forward until your local public sponsors' official resolution has been received by NCTCOG. · Your project must adhere to those items described in the attached project detail listing or NCTCOG will be obligated to remove funds from the project. Your project is subject to all applicable federal rules. Thus, please note that any work completed on the project (specifically on those project elements selected for funding in this program) prior to receipt of federal approval will not be eligible for federal reimbursement and, in fact, could endanger the project. If you have any questions or concerns regarding the program or the information on the enclosed sheets, please contact Mike Sims, Principal Transportation Planner, at (817) 695-9226. We look forward to working with you to implement these projects. Sincerely, Michael Morris, P.E. Director of Transportation MS:tmb Attachments cc: Jay Nelson, TxDOT, Dallas, District David Salmon, City of Denton Terry Sams, TxDOT, Dallas District Charles Tucker, TxDOT, Dallas District Mike Sims, NCTCOG 2001-02 UPWP Element 4.02 Project File Attachment 1 The Regional Transportation Council's Sustainable Development Initiative Land Use / Transportation Joint Venture Projects 1 Benbrook Town Center Streets $970,000 2 Burleson Villages of Wakefield Streets $850,000 3 The Colony Austin Ranch Streets $826,574 4 Dallas Prestonwood Pedestrian plaza, sidewalks $1,400,000 5 Dallas Victory Development Streets, sidewalks, trail $6,804,000 connection 6 DART Cedars Station Crosswalks, streetscape and $4,532,170 sidewalks 7 Denton Sundown Ranch Streets $883,092 Sidewalks, streetscape, $268,560 8 Fort Worth Handley crosswalks Streetscape, sidewalks, $1,233,688 9 Fort Worth Magnolia Village crosswalks, pedestrian plaza 10 Fort Worth West Seventh Streets, pedestrian $3,476,986 connection to CBD Sidewalks, streetscape, $380,349 11 Fort Worth Westridge Village crosswalks 12 Frisco Frisco Square Streets $2,328,420 Sidewalks, signalized 13 Hurst Pipeline Road crosswalk, pedestrian $122,800 linkages 14 Irving Northwest Corridor Light rail $6,900,000 15 Lewisville Lincoln/Lewisville Streets $2,649,277 16 Lewisville Old Town Plaza Sidewalks, pedestrian plaza $1,440,000 17 McKinney Craig Ranch Streets $2,312,637 North 18 Richland NRH Home Town Signalization $120,000 Hills Veloweb, sidewalks, street $2,089,616 19 Piano Piano Transit Village reconstruction Planning and Program Studies $1,225,000 I Federal Total $40~81%169 For more information, see http://www.dfwinfo.com/trans/landuse/joint_venture.html or call Mike Sims, Principal Transportation Planner, NCTCOG, (817) 695-9226 Attachment 2 Attachment 3 TO: FROM: North Central Texas Council Of Governments Local Project Sponsors DATE: Mike Sims Principal Transportation Planner SUBJECT: Deadlines ] ECEIVED] [ MAR 1 1.2oa / March 8, 2002 As your project was funded under the Land Use Transportation Joint Venture Program, the North Central Texas Council of Governments (NCTCOG) is providing you with this update on the current status of the funding process. (Please see the attached list of funded projects, that was also included with your award letter.) You may recall the update sent to you via e-mail on January 7, 2002, that announced that we needed your governing council or board resolution as soon as possible. The deadline for being placed in our first quarterly Transportation Improvement Program (TIP) revision this year has passed. Thank you to those of you who have submitted your resolution. The next quarterly TIP cycle requires TIP revisions to be submitted to NCTCOG by Wednesday, April 10, 2002. As a reminder, projects cannot move forward until they are listed in the TIP. For your project to move forward, NCTCOG needs to be provided with a governing council or board resolution from the local government sponsor stating that the private sector developer has met land-use commitments at the project site. Please refer to your award letter (dated November 5, 2001 ) for additional guidance. The resolution should include a statement that resembles the following: That the city affirms that .(name of the private sector developer of the property) is proceeding with the development satisfactorily and according to the city's application for joint venture funding. Projects that fail to meet the April 10, 2002 schedule for being included in the TIP may be impacted by the federally required air quality conformity cycle. We are expecting a period of time in the future when, due to federal air quality conformity scheduling, no TIP modifications can be made. This could result in a two-year delay for your project. In order to avoid that lengthy delay, project sponsors should contact NCTCOG immediately if they do not anticipate meeting the April 10, 2002 date for submitting a resolution. We will need to meet with you to discuss the viability of your project given the federal air quality conformity requirements related to your project. NCTCOG staff is available to assist you in developing the land use and transportation aspects of your project. Please contact Rachel Harshman, Jared White, or me at (817) 695-9240 for any assistance you need in implementing your project. Mike Sims MS:jt Attachment CC: Rachel Harshman Jared White 2001-02 UPWP Element 4.02 Project File 616 Six Flags Drive, Centerpoint Two P. O. Box 5888, Arlington, Texas 76005-5888 (817) 640-3300 FAX: 817-640-7806 (~) recycled paper http://www.dfwinfo.com The Regional Transportation Council's Sustainable Development Initiative Land Use/Transportation JOint Venture Projects ~ Joint YentUte Pa~nerSh!p joirtt Ven[t"re iD. Sponsor prQject Name :FaCilities Pa~e~h~ F~n~s 1 Benbrook Town Center Streets $ 970,000.00 2 Burleson Villages of Wakefield Streets $ 850,000.00 3 The Colony Austin Ranch Streets $ 826,574.00 4 Dallas Prestonwood Pedestrian plaza, sidewalks $ 1,400,000.00 5 Dallas Victory Development Streets, sidewalks, trail connection $ 6,804,000.00 Crosswalks, streetscape and $ 4,532,170.00 6 DART Cedars Station sidewalks 7 Denton Sundown Ranch Streets $ 883,092.00 Sidewalks, streetscape, $ 268,560.00 8 Fort Worth Handley crosswalks Streetscape, sidewalks, $ 1,233,688.00 9 Fort Worth Magnolia Village crosswalks, pedestrian plaza Streets, pedestrian connection $ 3,476,986.00 10 Fort Worth West Seventh to CBD Sidewalks, streetscape, $ 380,349.00 11 Fort Worth Westridge Village crosswalks 12 Frisco Frisco Square Streets $ 2,328,420.00 13 Hurst Pipeline Road Sidewalks, signalized crosswalk, pedestrian linkages $ 122,800.00 14 Irving Northwest Corridor Light rail $ 6,900,000.00 15 Lewisville Lincoln/Lewisville Streets $ 2,649,277.00 16 Lewisville Old Town Plaza Sidewalks, pedestrian plaza $ 1,440,000.00 17 McKinney Craig Ranch Streets $ 2,312,637.00 North 18 Richland NRH Home Town Signalization $ 120,000.00 Hills Veloweb, sidewalks, street 19 Piano Piano Transit Village reconstruction $ 2,089,616.00 Plannin~ and Pro~]ram Studies $ 1,225,000.00 I Federal Total $ 40,813,169.00 For more information, see http://www.dfwinfo.com/trans/landuse/joint venture.html or call Mike Sims, Principal Transportation Planner, NCTCOG (817) 695-9226.