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Home My WebLink About2017-04-18 Agenda with BackupCity of Denton Meeting Agenda City Council City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com Tuesday, April 18, 2017 2:00 PM Work Session Room & Council Chambers After determining that a quorum is present, the City Council of the City of Denton, Texas will convene in a Work Session on Tuesday, April 18, 2017 at 2:00 p.m. in the Council Work Session Room at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be considered: 1. Citizen Comments on Consent Agenda Items This section of the agenda allows citizens to speak on Consent Agenda Items only. Each speaker will be given a total of three (3) minutes to address any items he/she wishes that are listed on the Consent Agenda. A Request to Speak Card should be completed and returned to the City Secretary before Council considers this item. 2. Requests for clarification of agenda items listed on the agenda for April 18, 2017. 3. Work Session Reports A. ID 17-500 Receive a report, hold a discussion, and give staff direction regarding Downtown Reinvestment Grants for 112 W. Oak and 421 E. Oak. Attachments: Exhibit 1- Grant Application 112 W Oak Exhibit 2- Grant Application 421 Oak Exhibit 3- Grant presentation B. ID 17-503 Receive a report hold a discussion and give staff direction regarding fire sprinkler tap fees. Attachments: Exhibit 1 Fire Line Presentation. pdf C. ID 17-514 Receive a report and hold a discussion regarding an update from the Capital Projects department on the status of key projects and overall program update. Attachments: Exhibit 1 Maps of Key Projects Exhibit 3 Presentation on Capital Projects Following the completion of the Work Session, the City Council will convene in a Closed Meeting to consider specific items when these items are listed below under the Closed Meeting section of this agenda. The City Council reserves the right to adjourn into a Closed Meeting on any item on its Open Meeting agenda consistent with Chapter 551 of the Texas Government Code, as amended, or as otherwise allowed by law. 1. Closed Meeting: A. ID 17-457 Deliberations regarding 551.072; Consultation 551.071. Real Property - Under Texas Government Code Section with Attorneys - Under Texas Government Code Section City ofDenton Page 1 Printed on 4/14/2017 City Council Meeting Agenda April 18, 2017 Receive information from staff and discuss, deliberate, and provide staff with direction regarding real estate matters related to DME Hickory substation, and the potential acquisition of certain real property located at the intersection of W. Hickory St. and S. Bonnie Brae St.; where discussions had, deliberation, and direction given, by the Denton City Council in an open meeting would have a detrimental effect on the position of the City in negotiations with a third party. Consultation with the City's attorneys regarding legal issues associated with the potential condemnation or acquisition of the real property interests where a public discussion of these legal matters would conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or would jeopardize the City's legal position in any administrative proceeding or potential litigation. [Hickory Substation] ANY FINAL ACTION, DECISION, OR VOTE ON A MATTER DELIBERATED IN A CLOSED MEETING WILL ONLY BE TAKEN IN AN OPEN MEETING THAT IS HELD IN COMPLIANCE WITH TEXAS GOVERNMENT CODE, CHAPTER 551, EXCEPT TO THE EXTENT SUCH FINAL ACTION, DECISION, OR VOTE IS TAKEN IN THE CLOSED MEETING IN ACCORDANCE WITH THE PROVISIONS OF §551.086 OF THE TEXAS GOVERNMENT CODE (THE `PUBLIC POWER EXCEPTION'). THE CITY COUNCIL RESERVES THE RIGHT TO ADJOURN INTO A CLOSED MEETING OR EXECUTIVE SESSION AS AUTHORIZED BY TEX. GOV'T. CODE, §551.001, ET SEQ. (THE TEXAS OPEN MEETINGS ACT) ON ANY ITEM ON ITS OPEN MEETING AGENDA OR TO RECONVENE IN A CONTINUATION OF THE CLOSED MEETING ON THE CLOSED MEETING ITEMS NOTED ABOVE, IN ACCORDANCE WITH THE TEXAS OPEN MEETINGS ACT, INCLUDING, WITHOUT LIMITATION §551.071-551.086 OF THE TEXAS OPEN MEETINGS ACT. Regular Meeting of the City of Denton City Council at 6:30 p.m. in the Council Chambers at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be considered: 1. PLEDGE OF ALLEGIANCE A. U.S. Flag B. Texas Flag "Honor the Texas Flag — I pledge allegiance to thee, Texas, one state under God, one and indivisible." 2. PROCLAMATIONS/PRESENTATIONS 3. PRESENTATION FROM MEMBERS OF THE PUBLIC A. Review of procedures for addressing the City Council. B. Receive Scheduled Citizen Reports from Members of the Public. C. Additional Citizen Reports - This section of the agenda permits any person not registered for a citizen report to make comments regarding public business on items not listed on the agenda. This is limited to two speakers per meeting with each speaker allowed a maximum of four (4) minutes. Such person(s) shall have filed a 'Blue Card" requesting to speak during this period prior to the calling of this agenda item. 4. CONSENT AGENDA City ofDenton Page 2 Printed on 4/14/2017 City Council Meeting Agenda April 18, 2017 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 A — U). 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 A — U below will be approved with one motion. If items are pulled for separate discussion, they may be considered as the first items following approval of the Consent Agenda. A. ID 17-359 Consider adoption of an ordinance authorizing the City Manager to execute an agreement by and between the City of Denton, Texas and the Texas Municipal Power Agency (TMPA), that provides for terms and conditions under which The City of Denton and TMPA are electrically interconnected between each of their respective transmission assets located within Denton County, Texas, in substantial conformity with the attached exhibits; authorizing the expenditure of funds therefor; and providing an effective date. The Public Utilities Board recommends approval (6-0). Attachments: Exhibit 1 TMPA Interconnection Ordinance B. ID 17-407 Consider adoption of an ordinance abandoning and vacating 0.025 acre of Hickory Street, as dedicated by The Original Town of Denton Texas plat as recorded in Cabinet A Page 200, Plat Records, Denton County, Texas and as conveyed to the City of Denton as recorded in Volume 341, Page 527 of the Real Property Records of Denton County, Texas, and located in the H. Cisco survey, Abstract No. 1184, to resolve the building encroachment within Hickory Street; and declaring an effective date. [Partial abandonment of Hickory Street - adjacent to and the front of the Denton Record Chronicle Building located along Hickory Street] Attachments: Exhibit 1 - Location Map Exhibit 2 - Boundary Survey, 314 E. Hickory St. Exhibit 3 - Applicant project narrative letter Exhibit 4 - Real Estate Appraisal Exhibit 5 - Ordinance C. ID 17-416 Consider adoption of an ordinance of the City of Denton, Texas prohibiting parking on south side of Texas Street from one hundred and fifty (150) feet east of Vine Street to one hundred fifty (150) feet west of Frame Street; providing a repealer clause, providing a savings clause; providing for a penalty not to exceed $500 for violations of this ordinance, providing that violations of this ordinance shall be governed by Chapter 18 of the Code of Ordinances of the City of Denton, and providing for an effective date. The Traffic Safety Commission recommends Option 1 (6-0). City ofDenton Page 3 Printed on 4/14/2017 City Council Meeting Agenda April 18, 2017 Attachments: Exhibit 1 3-10-17 Letter Notice No Parking Texas St Exhibit 2 2-24-17 Door Hangers Notice No Parking Texas St Exhibit 3 Location map Exhibit 4 Ordinance - No Parking Texas.pdf D. ID 17-417 Attachments: E. ID 17-465 Attachments: F. ID 17-473 Attachments: Consider adoption of an ordinance of the City of Denton, Texas prohibiting parking on the east side of Denton Street from Oak Street to Hickory Street; providing a repealer clause, providing a savings clause; providing for a penalty not to exceed $500 for violations of this ordinance, providing that violations of this ordinance shall be governed by Chapter 18 of the Code of Ordinances of the City of Denton, and providing for an effective date. The Traffic Safety Commission recommends Option 1 (6-0). Exhibit 1 3-15-17 Letter Denton Street No Parking Mailing Exhibit 2 2-27-17 Door Hangers Notice No Parking Denton St Exhibit 3 Location Maps Exhibit 4 Ordinance - No Parking Denton.pdf Consider adoption of an ordinance approving a City sponsorship in an amount not to exceed $11,000 of in-kind services and resources for the Denton Juneteenth Celebration to be held in Fred Moore Park from June 16 through 17, 2017; and providing an effective date. Exhibit 1 Letter of request Exhibit In -Kind Services and Resources Exhibit 3 Running Total of In-kind Services Exhibit 5 Proposed Consider adoption of an ordinance accepting competitive proposals and awarding a contract for Police Motorcycles; providing for the expenditure of funds therefor; and providing an effective date (RFP 6364 -awarded to American Eagle Harley-Davidson in the three (3) year not -to -exceed amount of $222,690). Exhibit 1 -Staff Memo Exhibit 2 -Evaluation and Ranking Sheet Exhibit 3 -Ordinance Exhibit 4 -Contract G. ID 17-477 Consider adoption of an ordinance accepting competitive bids and awarding a public works contract for the construction of the Pecan Creek Interceptor IV Project for the City of Denton which consists of the installation of a new 30" PVC sanitary sewer line from Fulton Street to Newton Rayzor Elementary; providing for the expenditure of funds therefor; and providing an effective date (IFB 6375 -awarded to the lowest responsible bidder meeting specification, Dickerson Construction Company, Inc. in the amount of $1,038,187). The Public Utilities Board recommends approval (7-0). City ofDenton Page 4 Printed on 4/14/2017 City Council Meeting Agenda April 18, 2017 Attachments: H. ID 17-481 Attachments: L ID 17-482 Attachments: J. ID 17-483 Attachments: K. ID 17-484 Attachments: L. ID 17-485 Attachments: M. ID 17-486 Exhibit 1 -Map Exhibit 2 -Bid Tabulation Exhibit 3 -PUB Minutes Exhibit 4 -Ordinance Exhibit 5 -Contract Consider a request for an exception to the limitations imposed by Section 17-20 of the City of Denton Noise Ordinance for the purpose of the Fry Street Freedom Festival held on the corner of Mulberry and Avenue A on Sunday, May 21, 2017. The exception is specifically requested to increase sound levels from 70 to 75 decibels and to have amplified sound on Sunday, from noon to 9 p.m. Staff recommends approval from noon to 6 p.m. Exhibit 1 - Letter of Request Exhibit 2 - Proximity Map Consider a request for an exception to the limitations imposed by Section 17-20 of the City of Denton Noise Ordinance for the purpose of the Cinco de Mayo Festival held in Quakertown Park located at 321 E McKinney St. on Saturday, May 6, 2017, from 10 a.m. till 10 p.m. The exception is specifically requested to increase sound levels from 70 to 75 decibels. Exhibit 1- Letter of Request Consider a request for an exception to the limitations imposed by Section 17-20 of the City of Denton Code Of Ordinances the City of Denton, Texas, for the purpose of hosting the Denton Arts and Jazz Festival, located at Quakertown Park, from April 28 through April 30, 2017. The exception is specifically requested to increase hours of operation from 10 a.m. to midnight on Friday, April 28, and Saturday, April 29; and from 11 a.m. until 10 p.m. on Sunday, April 30, 2017. Letter of Request Consider a request for an exception to the limitations imposed by Section 17-20 of the City of Denton Noise Ordinance for the purpose of The Village Church service held in North Lakes Park located at 2001. N. Windsor Dr., on Sunday, April 23, 2017. The exception is specifically requested to have amplified sound on a Sunday from 10 a.m. to 4 p.m. Exhibit 1- Letter of Request Consider approval of a resolution allowing Pro -Fest, Inc., to sell alcoholic beverages for the Denton Arts and Jazz Festival from April 28 - 30, 2017, upon certain conditions; authorizing the City Manager or his designee to execute an agreement in conformity with this resolution; and providing for an effective date. Exhibit 1 - Letter of Request Exhibit 3 - Resolution and Contract.pdf Consider adoption of an ordinance approving a City sponsorship in an amount not to exceed $18,000 of in-kind services and resources for the Denton Cinco de Mayo City ofDenton Page 5 Printed on 4/14/2017 City Council Meeting Agenda April 18, 2017 Festival to be held in Quakertown Park on Saturday May 6, 2017; and providing an effective date. Attachments: Exhibit 1 Letter of Request Exhibit 2 In-kind Resources Exhibit 3 Running Total of In-kind Services Exhibit 4 Sponsorship Agreement Exhibit 5 Ordinance N. ID 17-487 Consider approval of a resolution allowing Mi Casita's Mexican Food to sell alcoholic beverages for the Cinco de Mayo Festival to be held in Quakertown Park beginning Saturday, May 6, 2017, upon certain conditions; authorizing the City Manager or his designee to execute an agreement in conformity with this resolution; and providing for an effective date. Attachments: Exhibit 1 - Letter of Request Exhibit 2 - Draft Minutes Excerpt, April 3, 2017 Exhibit 3 - Resolution and Contract O. ID 17-490 Consider a request for an exception to the limitations imposed by Section 17-20 of the City of Denton Noise Ordinance for the purpose of hosting the Denton Juneteenth Celebration in Fred Moore Park, located at 629 Lakey St., on Friday, June 16 and Saturday, June 17, 2017. The exception is specifically requested to increase sound levels from 70 to 75 decibels, and to extend the hours from 10 p.m. to 11:30 p.m. on Friday, and until midnight on Saturday. Attachments: Exhibit 1- Letter of request P. ID 17-492 Consider adoption of an ordinance of the City of Denton authorizing an agreement between the City of Denton, Texas and the Denton Black Chamber of Commerce for the purpose of Denton Black Chamber Entrepreneurs Weekend; providing for the expenditure of funds therefor; and providing for an effective date. ($100) Attachments: Exhibit 1 - Ordinance - Denton Black Chamber -2017 Entrepreneurs Weekend Exhibit 2 - Agreement - Denton Black Chamber Q. ID 17-493 Consider adoption of an ordinance of the City of Denton authorizing an agreement between the City of Denton, Texas and Calhoun Middle School for the purpose of the Calhoun Color Run; providing for the expenditure of funds therefor; and providing for an effective date. ($300) Attachments: Exhibit 1 - Ordinance - Calhoun Middle School Exhibit 2 - Agreement - Calhoun Middle School R. ID 17-494 Consider adoption of an ordinance of the City of Denton authorizing an agreement between the City of Denton, Texas and Denton Parks Foundation for the purpose of Cyclodia 2017; providing for the expenditure of funds therefor; and providing for an effective date. ($350) Attachments: Exhibit 1 - Ordinance - Denton Parks Foundation Exhibit 2 - Agreement - Denton Parks Foundation City ofDenton Page 6 Printed on 4/14/2017 City Council Meeting Agenda April 18, 2017 S. ID 17-511 Consider adoption of an ordinance of the City Council of the City of Denton, Texas, authorizing the City Manager to execute a Professional Services Agreement for architectural design services in support of the design of the new City of Denton Fire Station 3 to be located at 1210 IH35E; providing for the expenditure of funds therefor; and providing an effective date (File 6318 awarded to Kirkpatrick Architecture Studio in the not -to -exceed amount of $652,200). Attachments: Exhibit 1 -Ordinance Exhibit 2 -Contract T. ID 17-519 Consider approval of the minutes of April 4 and April 11, 2017. Attachments: Exhibit 1 -April 4_2017 minutes Exhibit 2 -April 11, 2017 minutes U. ID 17-533 Consider approval of a resolution of the City of Denton, Texas, amending Resolution No. 2017-007 by expanding the scope of review of the ad hoc City Council Committee to include all employee benefits and to advise the City Council with regard to these matters; and providing an effective date. Attachments: Exhibit 1- Resolution 5. ITEMS FOR INDIVIDUAL CONSIDERATION — CONSIDERATION OF THE USE OF EMINENT DOMAIN TO CONDEMN REAL PROPERTY INTERESTS 6. ITEMS FOR INDIVIDUAL CONSIDERATION A. ID 16-1591 Consider adoption of an ordinance of the City Council of the City of Denton, Texas, a home -rule municipal corporation, providing for, authorizing, and approving the execution by the City Manager, or his designee, of an interconnect agreement between the City of Denton and Enterprise Pipeline Texas, LLC, a Texas limited liability company, in the amount of $1,386,000.00 for the construction of gas supply and metering infrastructure in conjunction with the Denton Energy Center project; approving the execution of such other and further related documents deemed necessary to effectuate this agreement by the City Manager or his designee, which are incident or related thereto; authorizing the expenditure of funds therefore; and providing an effective date. The Public Utilities Board recommends approval (5-0). Attachments: Fuel Supply Interconnection Approval CC 20170418 FINAL2.pptx Enterprise Pipeine Ordinance.pdf Enterprise Pipeline Agreement.pdf B. ID 17-371 Consider adoption of an ordinance considering all matters incident and related to the issuance, sale and delivery of up to $102,000,000 in principal amount of "City of Denton Certificates of Obligation, Series 2017" (including up to $18,940,000 for General Government activities, up to $17,600,000 for Solid Waste Fund activities, and up to $65,460,000 for Electric Fund activities); authorizing the issuance of the Certificates; delegating the authority to certain City officials to execute certain documents relating to the sale of the Certificates; approving and authorizing instruments and procedures relating to said Certificates; enacting other provisions City ofDenton Page 7 Printed on 4/14/2017 City Council Meeting Agenda April 18, 2017 relating to the subject; and providing an effective date. Attachments: Exhibit 1 - Preliminary Official Statement Exhibit 2 - Ordinance C. ID 17-372 Consider adoption of an ordinance considering all matters incident and related to the issuance, sale and delivery of up to $30,700,000 in principal amount of "City of Denton General Obligation Refunding and Improvement Bonds, Series 2017"; authorizing the issuance of the Bonds; delegating the authority to certain City officials to execute certain documents relating to the sale of the Bonds; approving and authorizing instruments and procedures relating to said Bonds; and enacting other provisions relating to the subject; and providing an effective date. Attachments: Exhibit 1 - Preliminary Official Statement Exhibit 2 - Ordinance D. A17 -0002a Conduct the first of two readings of an ordinance to annex approximately 16 acres generally located on the north side of Barthold Road, approximately 340 feet west of the I-35 Southbound Service Road (A17-0002). Attachments: Exhibit 1 - Site Location Aerial Map Exhibit 2 - Annexation Petition Exhibit 3 - Presentation Exhibit 4 - Draft Ordinance 7. PUBLIC HEARINGS A. ID 17-435 Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, adopting Standards of Care for Youth/Teen Programs administered by Denton's Parks and Recreation Department pursuant to Texas Human Resources Code Section 42.041 (b) (14); and providing an effective date. The Parks, Recreation and Beautification Board recommends approval (5-0). Attachments: Exhibit 1 - Exerpt of Mintues March 6 2017 Exhibit 2 - Ordinance with 2017-18 Standards of Care incorporated 8. CONCLUDING ITEMS A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. B. Possible Continuation of Closed Meeting topics, above posted. City ofDenton Page 8 Printed on 4/14/2017 City Council Meeting Agenda April 18, 2017 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 , 2017 at o'clock (a.m.) (p.m.) CITY SECRETARY NOTE: THE CITY OF DENTON CITY COUNCIL WORK SESSION ROOM AND COUNCIL CHAMBERS ARE 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. City ofDenton Page 9 Printed on 4/14/2017 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-500, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: Economic Development DCM: Bryan Langley Date: April 18, 2017 SUBJECT Receive a report, hold a discussion, and give staff direction regarding Downtown Reinvestment Grants for 112 W. Oak and 421 E. Oak. BACKGROUND Under the FY 2016-17 budget, Council authorized $100,000 of expenditures from the fund balance of the Downtown Reinvestment Grant Fund. To date, $70,000 has been paid or approved for three grants, leaving expenditure authority of $30,000. In March, the Downtown Task Force reviewed and scored two grant applications. Before the review and scoring began, staff informed the Task Force about the funds already committed and the available balance of $30,000. Grants are scored with a 0 to 5 point range in each of the following categories: • Economic Impact (increases property value, sales tax, jobs) • Historic Accuracy or Design Quality • Upgrades to Utilities/Impact Fees (increases water, sewer or electrical capacity to the immediate area) • Increases Population (residents, day or night time users) • Location (Proximity to Courthouse -on -the -Square or Brock Transit Center) • Other (Shares parking/target business/promotes arts & entertainment district) Both projects scored in the 25-30 point range, making them each eligible for a grant of $25,000. The Task Force recommended a grant in the amount of $25,000 to each applicant and requested that a budget amendment be adopted by Council to accommodate that additional $20,000 needed. The Economic Development Partnership Board concurred with the Task Force's recommendation. Below are details about the two projects: • 112 W. Oak (formerly Carol's Custom Draperies) - On January 10, staff received an application from the new owner of 112 W. Oak. The building is on the face of the Square and in the National Register District. The owner wants to restore the building based on a photo of it from 1943. Work will include removing the aggregate rock slipcover, exposing the original brick facade, restoring the upper story and transom windows, rerouting electrical and plumbing throughout the building, and installing a fire City of Denton Page 1 of 3 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-500, Version: 1 suppression system. Preliminary tests have found the brick behind the slipcover to be in good shape; the owners will have to see if the slipcover can be safely removed without damaging the brick. The original tin ceiling also was found under the suspended acoustic tile ceiling. Plumbing and electrical for the upstairs apartment were run between the tin ceiling and the acoustic tiles. To expose the original ceiling, those will have to be rerouted. They do not have a tenant at this time, but have talked to several interested parties. • 421 E. Oak (Monroe -Pearson Building) - On February 28, staff received an application from the owner of 421 E. Oak, which is near the Euline Brock Transit Center. This building was most recently Fantasia Fans, and was originally a grocery warehouse in the early 1900s. The owner wants to restore it by building a dock on the west face of the building, replacing overhead doors and all original openings with windows, cleaning and preserving the original brick facade, and placing awnings in the original locations on the east and south sides. The new tenant, Walters Wedding Estates, will operate an event center that will accommodate approximately 1,200 occupants. It's expected that many of the events will be weekend wedding celebrations, which will require overnight stays for many of the guests. At the completion of the project, the event center will share 269 parking spaces with the owner's other adjacent buildings. RECOMMENDATION The Downtown Task Force and the Economic Development Partnership Board recommend a budget amendment of an additional $20,000 to accommodate the maximum grant amounts of $25,000 for each project. OPTIONS 1. Accept the recommendation of the Task Force and EDP Board and bring a budget amendment to Council. 2. Divide balance of authorized funds evenly between the projects. 3. Award the maximum amount to the higher -scoring project. 4. Award the maximum amount to the project with the application that was submitted first. PRIOR ACTION/REVIEW (Council, Boards, Commissions) March 9, 2017 - Downtown Task Force recommends approval (11-0) April 12, 2017 - Economic Development Partnership Board (8-0) FISCAL INFORMATION The Downtown Reinvestment Grant Fund was established by ordinance dedicating $100,000 of City mixed beverage tax annually. The fund balance as of Sept. 30, 2016, was $224,573. The Council approved an expenditure budget of $100,000 for FY 2016-17 and directed staff to delay any transfer of the $100,000 in mixed beverage tax until further Council direction. Commitments to date are: $20,000 JT Clothiers (paid) $25,000 Armadillo Ale (approved, waiting on completion of project) $25,000 Denton County Brewing (approved, waiting on completion of project) $30,000 Balance Since 2007, 40 projects have been funded for a total City expenditure of $317,785. The return on investment City of Denton Page 2 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, File M ID 17-500, Version: 1 (property improvements only) is $30 of private investment to $1 of City investment. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Economic Development Related Goal: 3.4 Encourage development, redevelopment, recruitment, and retention EXHIBITS Exhibit 1 - 112 W. Oak application Exhibit 2 - 421 E. Oak application Exhibit 3 - Presentation Respectfully submitted: Caroline Booth Director, Economic Development Prepared by: Julie Glover Economic Development Program Administrator City of Denton Page 3 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, Downtown Reinvestment Grant Program Application Please return completed with necessary attachments and signature to Economic Development offnie, 21S E. McKinney no later than 5 pm by the first Monday of each month. If you have any application questions, please contact the Economic Development Program Administrator at 940- 349-7732. A AL pplicaut Nm ae Date pp -iiwiiacss Name us Mailing Address Contact Phou� Email Address ,It4 0 K Lr7/—T Building Owner (if different from applicant) HistoricaL/Current Building Name CA V— Project Site/Address Type of Work. (check all that apply) Paint Only Fggade & Building Renovation Signage Awnings Utility Upgrades Impact Fees Details ofPbuned Improvements relating to Grant Request (attach additional information if Lm ng( 17, C- C4 P� Xk -,-4A I Lb ( NAA 0 Downtown Reinvestment Grant Program Policy'7 Project Expenditures FaVadvAluilding Rehab Awnings Impact Fees Utility Upgrades Tot &-h- Estimated Costs S—, JJ 0" c", 0 'V TOTAL GRANT REQUEST (May not exceed 50% of TOTAL COST up to $25,000) d W Grant Requested 2 Jdd Attach with all required color samples ofpaint, awningleanopy, sign design, eta, as oven as Photographs of bvildinlg!.T.,r-vteriorfacade, roof andfoundation. Date Downtown R�invastment Grant Program Policy 8 19� 0 ! 4 . WAD113161DWY S ! L Please complete and return with Downtown Reinvestment Grant Application to Economic Development office, 215 E. McWnney no later than 5 pm by the first Monday of each mouth. If you have any questions, Please contact the Economic Development Program Admin"itrator at 940- 349-7732. I have met with the Economic Development Program Administrator, and I have read and fully understand the Downtown Reinvestment Grant procedures established by the Denton City Council, I intend to use this grant program for the aforementioned renovation projects to advance the efforts of revitalization and historic preservation of Denton's historic downtown. I have not received, nor will I receive insurance monies for this revitalization project. I understand that if I am awarded a Downtown Reinvestment Grant by the City of Denton, any deviation from the approved project may result in the partial or total withdrawal of the grant. (If I am awarded a reinvestment grant for fhVade, awning or sign work and the facade, sign or awning is altered for any reason within one (1) year from construction, I may be required to reimburse the City of Denton immediately for the full amount of the grant.} .K�Sma_iI'_N— =1571171. = Printed Nante Budding 0 wn er Is Signature (ifdiffere ntftoin applicant) Printed Naine Tm V171 M-1 1;5--1 ----------------- - ------------------------- ---------- ------------------------------ --------------------- iis section is to be completed by Economic Development staff Date considered by DTTF Recommendation Moffftnat I i I tre , Date considered by aty Manager Recommendation City Manager Signature . . ............ . Date considered by EDPB Recommendation Staffsignature Domtown Roinvestinent Grant Program Policy 9 Estimate Date - Prepared For: Project: Estimated completion time: Project Square Footage: Notes: Asbestos abatement excluded Repal C ruction 2126.fanies St. 9 Deiiton,'UX 76205 10/10/2016 John Withers 112 W Oak Fire System 6 work weeks after permit 2400 Asbestos Inspection $1,700.00 Supervision $1,800.00 Demo $0.00 Masonry $0.00 Plumbing $0.00 Mechanical $0.00 Electrical $2,100.00 Framing, Drywall & Insulation $2,500.00 Tape, Bed, Texture and Paint $0.00 Doors, Glass Windows $650.00 Flooring $0.00 Restroom equipment $0,00 Ceiling Grid, Tiles & Insulation $1,500.00 Fire Sprinklers $33,150.00 Fire Alarm $12,000.00 Underground utltiy and site Estimate $19,000.00 Final Clean $2,400.00 Equipment $0.00 Insurance $1,152.00 Subtotal $77,952.00 10% Profit $7,795.20 Total $85,747.20 Sales Tax $7,074.14 Project Total $92,821.34 R e p a i r &A C,� 2126 James St. (94 0) 381-2222 istit tion, LLC Denton, TX 76205 Fax (214) 853-4323 Estimate Estimate# Descriptio Remove existing concrete facade and haul off Canopy matching 123 N Elm Terms: Half due up front and remainder due upon completion. Esti m ai e good for 30 days Rep I Project off 1111 111 11 X11 ill 111 11 111 11 i If 10 Subtotal Sales Tax (8.25%) 010910M Estimate approved: I Total $55,207.50 Tristar Repair & Construction Client: Carol Collins Property: 112 W Oak St. Denton, TX 76201 Operator: TROY Estimator: Troy Ballenger Company: TriStar Repair & Construction Business: 2126 James St Denton, TX 76205 Type of Estimate: Hail Date Entered: 11/15/2016 Date Assigned: Price List: TXDF8X—OCT16 Labor Efficiency: Restoration/ServiceRemodet Estimate: 112_W—OAK File Number: 705610610 Home: (940) 565-8337 Cellular: (940) 368-1900 E-mail: troy@',tristarrepair.corn Tristar Repair & Construction TR- A. I IF "A R il 112 -W -OAK Main Level 0 DESCRIPTION QTY REMOVE REPLACE TAX O&P TOTAL 26. Durripster load - Approx. 40 yards, 2.00 EA 566.89 0.00 112.25 226.76 1,472.79 7-8 tons of debris 1.00 M0 0J011 179.44 17.76 35.88 233,08 27. Debris chute mounting hardware 2.00 WK 25.00 0.00 4.96 10.00 64.96 per week 28. Debris chute hopper - per week - 2.00 WK 28.80 0.00 5.70 11.52 74.82 30" x 4' Section 29. Debris chute - per week - 30" x 4' 4.00 WK 15.60 0.00 6.18 1148 81.06 section 2 sections for 2 weeks, for upper and lower roof section debris removal 0,70 5.63 28.20 56,98 Totals: Demo 129.09 260.76 1,69163 General Conditions DESCRIPTION QTS' REMOVE REPLACE TAX O&P TOTAL 30. Temporary toilet (per month) 1.00 M0 0J011 179.44 17.76 35.88 233,08 31, Building PcrrnitCity Cif Denton 1.00 EA 0.00 15U0 14.86 30.00 194.86 Required 32. Insurance 1.00 EA (Wo 2,04152 202.,21 408.50 2,653.23 Calculated at 2.7% of gross sale of $75,649 33. Final cleaning - construction - 500.00 SF 0.00 0.16 7,92 16.00 103.92 Commercial 34, R& -R Temporary fencing 45.00 LF 0,70 5.63 28.20 56,98 370.03 37. Barricade and warning device - 4.00 HR 0.00 51,52 20.40 41.22 267.70 setup and Takedown 38. Traffic cones (per unit, per day) 140.00 DA 0.00 O, 70 9.71 19,60 127.31 10 cone0 barricades for 14 days 39. Telchandler/forklifl and operator 30,00 HR 0.00 103.13 306.30 618.78 4,018.98 Totals: General Conditions 60736 1,226.96 7,969,11 Lower Roof DESCRIPTION QTV REMOVE REPLACE TAX O&P TOTAL 11. Clean with pressure/chemical SF 0,00 0.29 0.00 0.00 0.00 spray 112 -W --OAK 1/10/2017 Page: 2 Y�� Tristar Repair & Construction CONTINUED - Lower Roof DESCRIPTION QTY REMOVE REPLACE TAX O&P TOTAL 13. Plastorneric roof primer SF 0.00 0,45 0.00 0.00 0.00 15. Elastorneric roof coating - Flat roof SF 0 00 2,32 0.00 0.00 0.00 16. Additional charge for high roof(2 1176 SQ 0,00 14.12 19.24 38.86 252.39 stories or greater) 62. Remove Modified bitumen roof 1176 SQ 40.95 0,00 55.79 112,70 731.96 63. Modified bitumen roof 15.82 SQ 0.00 376,51 5890 1,191,28 7,737.35 Includes 15%wastc 64. Remove Insulation - ISO board, 2" 13.76 SQ 31.16 0.00 42.44 85..76 556.96 65. Insulation - ISO board, 4" 15.82 SQ 0 00 415.55 650,83 1,314.80 8,539.63 Per IECC 2015- 820- required by City of Denton 66, Remove Insulation - perlite board, V 1176 SQ 31.16 0,00 42.44 85.76 556.96 67. Insulation - perlite board, P 15.82 SQ 0,00 187.89 294.26 594.48 3,861.16 Per IECC 2015- R20- required by City of Denton 68. R&R Roof scupper - aluminum 100 EA 9.64 159,05 33.401 67,48 43&26 69. Roofer - per hour 3.00 HR 0.00 98.00 29.11 58-80 381.91 allowance to work around roof ladder, 2unusM a/c curbs, gas lines, electrical circuits 70. Central air - condenser unit - 1,00 EA 0,00 494.68 48,97 98.94 642.59 Detach & reset 74, R&R Exhaust cap- through roof- 3.00 EA 6.91 67.55 22.11 44.68 290.17 611 to 81' 72. R&R Flashing - pipe jack - lead 1.1111 EA 5,42 5534 6,02 1114 78.92 73. R&R Pitch pan / pocket - up to 6" 2.00 EA 19.25 103.46 24.30 49.08 318.80 x 6" x 4" - galvanized Totals: Lower Roof 1.858.59 3,754.76 24387.06 Upper Roof DESCRIPTION QTY REMOVE REPLACE TAX O&P TOTAL IS, Clean with pressure/chemical sr 0,00 0.29 0,00 0.00 0,00 spray 19. Elastomeric roof primer SF 0,00 0.45 000 0.00 0.00 20. Elastorneric roof coating - Flat roof SF 0.00 2.32 0.00 0.00 0.00 21, Additional charge for high roof (2 23,03 SQ 0.00 14,17 32.211 65.04 422.42 stories or greater) 21 R&R Rain cap - 8" 1.00 EA 3.85 42.15 4.56 9.22 59-78 23. Central air condenser unit- 2.00 FA 0.00 4940 97.94 197„88 1.285,18 Detach & reset 112_W OAK 1/10/2017 Page; 3 Tristar Repair & Construction MARX" CONTINUED - Upper Roof DESCRIPTION QTY REMOVE REPLACE TAX O&P TOTAL 25. Corrib/straighten, a/c cond. fins - 1,00 EA 0.00 184.73 1829 36,94 239.96 w/trip charge - Large 2.17 Totals: Labor Minimums Applied 0.17 0.34 117 52. Remove Modified bitumen roof 2103 SQ 40.95 0.00 9336 18&62 1,225.06 53. Modified bitumen roof 26.48 SQ 0.00 376.51 987.02 1,994.00 12,951.00 Includes 15% waste 54, Remove Insulation - ISO board, 2" 23.03 SQ 31,16 0.00 71.04 143.52 932.17 55. Insulation - ISO board, 4" 26.48 SQ 0.00 415.55 1,089.37 2,200.76 14,29189 Per IECC 2015- R20- required by City of Denton 56. Remove Insulation - perlite board, 23.03 SQ I,, 31.16 (M)o 71.04 143.52 93117 57. Insulation - perlite board, V 26.48 SQ 0.00 187.89 492.55 995.06 6,462.94 Per IECC 2015- R20- required by City of Denton 58. R&R Roof scupper - aluminum 1,00 EA 9.64 159.05 16,70 33-74 219.13 59. Roofer - per hour 2.00 FIR 0.00 98.00 19.40 39.20 254.60 allowance to work around roof ladder, a/c curb, penthouse curb, gas lines, electrical circuits Totals- Upper Roof 2,993.47 6,047,50 39-17830 Total: Main Level 5,588-51 11,289.98 73,328.10 Labor Minimums Applied DESCRIPTION QTY REMOVE REPLACE TAX O&P TOTAL 12, Cleaning labor minimum 1.00 EA 0Y00 1.66 0.17 0.34 2.17 Totals: Labor Minimums Applied 0.17 0.34 117 Line litern'rotals: 112 -W -COAD 5,5118.68 11,290.32 73,330.27 112_W OAK 1/10/2017 Page: 4 Tristar Repair & Construction TR- IMMR Line Icon Total Overhead Profit Comm. Rpr/Remdl Tax Replacement Cost Value Net Claim Troy Ballenger Summary 56,451.27 5,645.16 5,645.16 5,588.68 $73,330.27 $73,330.27 112..OAK1/10/2017 Page: 5 2 MONROE PEARSON BUILDING City of Denton Department of Economic Development 215 E. McKinney Street Denton, TX 76201 940-349-7732 www.cityofdenton.com Julie.glover kcityofdenton.com Downtown Reinvestment Grant Program Policy 6 Please return completed with necessary attachments and signature to Economic Development office, 215 Fe MclCnney no later than 5 pm by the first Monday of each month. If you have ally application questions, please contact the Economic Development Program Administrator at 940- 349-7732, Applicant Name Date Tim Beat y 02.28.17 Business Name TNT Holdings Mailing Address Tim Beaty Builders, Inc P.O.Box 68 Denton, Texas 76202 Contact Phone 940.387.3275 Email Address tbeaty@tbbuilders.com Building Owner (if different from applicant) Historical/Current Building Name Monroe Pearson Building Project Site/Address 421 E. Oak Street Denton, Texas 6201 Type of Work: (check all that apply) Paint Only E] FaVade & Building Renovation Signage F-1 Awnings � Utility Upgrades impact Fees Details of Planned improvements relating to Grant Request (attach additional information if necessary) Reference attached sheet titled, "Details of Planned Improvement." DowntOwn Reinvestment Grant Program Policy 7 Details of Planned Improvement: Tim Beaty/ TNT Holdings is the owner and project manager for the renovation and rehabilitation of 421 E. Oak Street also known as the Monroe Pearson Building. The building was originally a grocery warehouse in the early 1900's. The project which is in the DTIP area proposes to completely renovate the structure into a Downtown Event Center. Plans have been drawn to rehabilitate the building facades and to replace and repair the docks per current building codes. The exterior renovation will include building a dock on the west face of the building, repairing and renovating the south dock enhanced with ADA ramp and Stair to front door, replacing overhead doors and all original openings with new windows, cleaning and preserving original brick veneer and placing awnings in original locations on the east and south sides. The interior of the building will preserve all brick walls and openings. New areas will be constructed for offices, chapel, banquet hall, catering kitchen, restroom facilities and foyer. The building will be upgraded with new fire suppression system, electrical, plumbing and mechanical systems. The entire building will be retro -fitted with a superstructure for structural support of a new roof system including sky -lights to mimic the original roof system. Impact fees have been paid as part of the permit package. A new fire hydrant will be installed on Oak Street. Upgrades to the transformer will be made as part of the permit agreement with DME. A fire lane turn around was provided in the parking lot to accommodate the city's fire department. Mr. Beaty intends to bring the vacant building and the lot it occupies back to life with a total building renovation, new landscape and pedestrian sidewalk on Oak Street. How will this Droiect benefit Downtown? Reference attached sheet titled, "Project Benefits." Project Expenditures Estimated Costs Grant Requested Finade/Building Rehab $ 17,000.00 Awnings $ 8,000.00 Signs $ 5,600.00 Impact Fees $ .00 Utility Upgrades $ 389,303.00 Totals 76 9) TOTAL COST OF PROPOSED PROJECT $ 1,215,673.00 TOTAL GRANT REQUEST Is $ 25,000.00 (May not exceed 50% of TOTAL COST up to $25,000) Attach with all required color samples ofpaint, awning/canopy, sign design, etc., as well as photographs of building's exteriorfacade, roof andfoundation. 02.28.14 Applicant's Signature Date Downtown Reinvestment Giant Program Policy 8 Project Benefit: The Event Center will accommodate approximately 1200 occupants including parking. It's expected many of the events will be weekend wedding celebrations which will necessitate overnight stays for some of the guests. Guests will create additional revenue for restaurants, hotels and businesses in Denton. Tim Beaty, owner of TNT Holdings, owns four buildings in close proximity along the railroad between McKinney Street and Hickory Street. The Old Mill Building was renovated as a historical building and Old Mill Village which contains three buildings were also renovated into downtown retail and restaurant sites. In total, the four buildings house 12 businesses and 2 apartments. The new Event Center will share the 269 parking spaces available at the completion of the project along with a few additional spaces on Oak Street created by the project. The owner of the building, Tim Beaty, worked closely with city staff during the design phases of the project and agreed to provide safe pedestrian access through his properties in a "sunset easement agreement" until a time the city can reroute it's pedestrian way in this area. This pedestrian way will connect DCTA to the Bell Avenue corridor in a safer route. The renovation of the vacant property will result in a significant increase in property and sales taxes. Tim Beaty, as owner of TNT Holdings, spent over 20 years renovating this area to accommodate growth in the downtown area benefiting many who own small local businesses, shop local businesses and enjoy the popular coffee shop Zera. Please complete and return with Downtown Reinvestment Grant Application to Economic Development office, 215 E. McKinney no later than 5 pin by the first Monday of each month. If you have any questions, please contact the Economic Development Program Administrator at 940- 349-7732. 1 have met with the Economic Development Program Administrator, and I have read and fully understand the Downtown Reinvestment Grant procedures established by the Denton City Council. I intend to use this grant program for the aforementioned renovation projects to advance the efforts of revitalization and historic preservation of Denton's historic downtown. I have not received, nor will I receive insurance monies for this revitalization project. I understand that if I am awarded a Downtown Reinvestment Grant by the City of Denton, any deviation from the approved project may result in the partial or total withdrawal of the grant, (If I am awarded a reinvestment grant for fayade, awning or sign work and the fagade, sign or awning is altered for any reason within one (1) year from construction, I may be required to reimburse the City of Denton immediately for the full amount of the grant.) Tim Beaiy Builders, Inc. Business/Organization Name Tim Beaty 02.28.17 Applicant's Signaledre Printed Name Date Tim Beaty 02.28.17 Building Owner's Signature (if differentftom applicant) Printed Nante Date ----------------------------------------------------------------------------------------------------------------------- 'his section is to be completed by Economic Development staff Date considered by DTTF Recommendation Staff Signature Date considered by City Manager Recommendation City Manager Signature Date considered by EDPB Recommendation Staff Signature Downtown Reinvestment Grant Program Policy 9 Existing Building Facade ® Clean brick & repair mortar as required ® Remove paint from brick excluding Lettering at top ® Repair Dock, add steps and ADA ramp Preserve all decorative brick trim at windows and doors ® Remove brick from old openings on East side —fill with store front 0 Replace all glass missing from small windows Clean and preserve brickwork Construct New Awnings over New Entrance doors 0 Replace overhead garage door with store front glass DNI S 3 lin nAIVI [I SNOEVAIS -: \ \\/ / 1 p � � \ pw m\ � �n�l !1 H� y %� }}|; LU/\ //\ § ( �m ) \ ) §\) ()� / ) ( } ) ( \ 0 h O m / Z 7 ¥: z §\) ()� 0 h C Z 2 4k c ....'term. ........ 'eoirr;a e5 xoe oa DNI `5�3UNIH A,Aqu WIl01 a NVId of as • oa ao a,is oo :3 ier ONDINVd d3 Is r i MIND INIA] 111W (110 L z -------------------- I 3nN3nt/ 1138 L u Z F De O 1_) V x un N \/ Fa O 3 DNI A Gling A1v38 Wil 1;)JUDD 4UDA3 11!W P10 73 HH 14 �A a w f1 rM. -w 0 r- 19 9T ----- -- - ------ Pl- �J Eg� B rNR A LN Lli a -w 4 Lf 85: ---11, L iii I Vj F Fi 1 < r- 19 Oast code Description of Work i TOTAL FAPADEJBUILDING REHAB i aL kation 20400 20,000 12,500 peri or� � ,iGr i -ood Installation B6c,� Restos",iun - 25,000 25,000 Window,7fan om, Em Doors - 62,653 62,653 Painting, E) er,or 25,890 25,890 SIGNS iiC3ctu,`a1 btu l 2951000 295,000 R 3 F"s"em 173,570 173,570 ounc atiun 202,657 202,657 TOTAL COST 804,770.00 423 E. Hickory St. Dent rt, TX 76201 940. 387,3275 AWNINGS i aL kation - 12,500 12,500 Installation 5,500 3,500 TOTAL COST 16,000.00 SIGNS Fr s rvat.cn of E tit Sign 5,640 5E600 TOTAL COST 5,500.00 UTILITY UPGRADES $ Piumbing 87,E 87,600 Electrical 293,160 293,160 F(e WutGr,'":ao FH 8,543 8,543 TOTAL COST 389,303,00 DRANO TOTAL COST 1,215,673.00 423 E. Hickory St. Dent rt, TX 76201 940. 387,3275 Water: Sewer: F.Tow.; Project Name: Old Mill Event Center Project Number: SP1 6-0023 Road Impact Fee Zone: E Water Tap Size(s): 6" Per Approved Site Plan Water Tap Fee(s): $3800 See Notes, if applicable Domestic Meter Size(s): n/a Per Approved Site Plan Irrigation Meter Size(s): n/a Per Approved Site Plan Water Meter Fee(s): n/a See Notes, ifapplicable Header Fee(s): n/a See Notes, ifapplicable Impact Fee: n/a See Notes, ifapplicable Impact Fee Credit: n/a See Notes, if applicable Net Impact Fee: n/a Notes: M70 CONFMM NIETER SIZE WITH PLONVIMNG PLANS UPON PERIVIFF Domestic Meter Size(s): n/a Per Approved Site Plan Sewer Tap Size(s): n/a See Notes, ifapplicable Sewer Tap Fee(s): n/a See Notes, ifapplicable Impact Fee: n/a See Notes, ifapplicable Impact Fee Credit: n/a See Notes, ifapplicable Net Impact Fee: n/a See Notes, ifapplicable Notes: M TO CONFIRM METER MZE WITH PLUIAMNG PLANS UPON PERN/Iff Impact Fee: n/a Notes: Parking Lot: Fee: $720 Notes: Standard Fee City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-503, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: Utility Administration CM/ ACM: Jon Fortune Date: April 18, 2017 SUBJECT Receive a report hold a discussion and give staff direction regarding fire sprinkler tap fees. BACKGROUND During February 14, 2017 Council session, a request was made for staff to prepare a work session item on fire sprinkler tap fees. Fire sprinkler taps are a type of water line tap fee, and are considered as a part of the water tap and meter fees used in the Water Utilities cost of service analyses. Tap fees are based on categories that include the size of the tap and whether the tap installation involves street work. The amount of each tap fee category is based on actual costs averages for installations, and are assessed as part of the Utility Fee Schedule each fiscal year. If fees deviate substantially from these averages due to specific site circumstances, the cost of service methodology indicates that the actual cost of the installation should be charged. Prior to 1991, the Water Department charged for the installation of fire sprinkler taps like other water tap fees. During the process of changing the Fire Department's Sprinkler System Ordinance in 1991, the City Water Utility agreed to install fire sprinkler taps at no charge to the customer requesting the tap for a brief time. The reason for subsidizing this connection fee was that the City of Denton Fire Sprinkler System Ordinance was perceived to be more stringent than other fire ordinances in the area since it exceeded the requirements of the Uniform Building Code (UBC) and Uniform Fire Code (UFC) when it was introduced in 1991. In April 1991 a modification to the Tap and Loop fees section was proposed and was approved by the City Council via Ordinance 91-063. This ordinance introduced language for Fire Sprinkler Tap Fees in Section 25-8, subsection e, which states "upon written request to the Superintendent, the Utility Department shall waive installation charges for water taps exclusively dedicated to fire sprinkler systems. The Superintendent shall have sole discretion in the application of this subsection". Similar language has been included in the Utility Rate Schedule since this time. By approximately 2000, communications between the Water Department and Denton Fire Department officials indicated that the City of Denton Fire Sprinkler System Ordinance had become generally consistent with requirements of other cities within the Dallas and Fort Worth area as regulations for other entities "caught up" with Denton's 1991 ordinance. In March 2001, the City of Denton Water Department provided a report and sought direction from the Public Utility Board regarding charging a tap fee for fire sprinkler taps. At the time, a survey of 41 cities was conducted to determine if free fire taps were provided. Twenty-one of these cities were in Texas (nine of these were in the Dallas -Fort Worth area), and the remaining 20 were distributed around City of Denton Page 1 of 3 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-503, Version: 1 the United States. The survey results indicated that either the developer or the owner of the building paid the cost associated with the connection for a fire sprinkler system tap for all surveyed utilities. The information presented to the Public Utility Board in March 2001 was informational only, but did seek direction from the Board. Staff was unable to locate information indicating that this information was presented to Council. Based on the recommendations of the Public Utility Board during the March 2001 meeting, staff began assessing fire tap fees for all taps in 2001, and have been collecting those fees since that time. Generally, staff charges the tap fees established in the Utility Rate Schedule each year. For circumstances involving unusual site conditions and / or Fire Department requirements related to extension of service, staff assesses a tap only fee and requests the applicant to pay the fee associated with extension of the service to the facility. Staff always attempts to minimize the fiscal impact to the applicant, but also adheres to the cost of service approach to ensure that the rest of the rate payers are not subsidizing the installation of a specific individual's fire tap and extension. Since the information from the prior survey was quite dated, staff recently (March 2017) surveyed 19 local municipalities to determine current policies associated with fire tap fees. The municipalities surveyed were Allen, Arlington, Azle, Carrollton, Corinth, Dallas, Euless, Fort Worth, Frisco, Garland, Grand Prairie, Highland Village, Keller, Lewisville, Mansfield, McKinney, Mesquite, New Braunfels, and Plano. Eighteen of these municipalities charge for fire tap fees as a part of their regular tap fees. The City of New Braunfels requires customers to pay for the installation of the connection box, pay a tap fee to cover the City's tap cost, and pay a one-time demand charge based on the size of the service line. Staff recommends continuing to collect Fire Tap fees as has been done since 2001. This recommendation is consistent with policies used by national and local Water service providers, and maintains the cost of service approach by ensuring the customer rate base does not subsidize individual fire sprinkler tap requests. For consistency, however, there are several components of the City of Denton's codes that need to be revised. This language was codified around the time when the 1991 Denton Fire Sprinkler System was adopted and contains references to waiving fees for fire sprinkler system taps. Although this language has remained unchanged since the early 1990s, it is important to note that the language of the Rate ordinance stating that the "installation charges may be waived by the Utility Department for a request to install taps exclusively dedicated to fire sprinkler systems" has been in place since 1992, and since the rate ordinance is adopted each year it is considered the controlling ordinance language regarding fire tap installations. For consistency and clarity, staff recommends removing the language regarding waiving fire tap fees from other sections of Denton code. Specifically, staff recommends revising Section 26-126.1 of the Denton Code of Ordinances (Utilities) to delete references to waiving of fees for fire sprinkler system taps. Staff also recommends removing the language in the Water Line Tap and Meter Fee section of the Utility Rate Schedule that states "the installation charges may be waived by the Utility Department for a request to install taps exclusively dedicated to fire sprinkler systems". OPTIONS 1. Direct staff to take actions to delete references to waiving fees for fire sprinkler system taps in Section 26-126.1 of the Denton Code of Ordinances and remove the language from the Water Line Tap and Meter Fee section of the Utility Rate Schedule stating "the installation charges may be waived by the Utility Department for a request to install taps exclusively dedicated to fire sprinkler systems". These revisions will be taken to the Public Utility Board for recommendation, and then brought forward for Council approval. City of Denton Page 2 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, File #: ID 17-503, Version: 1 2. Direct staff to take other action. FISCAL INFORMATION This is a variable cost related to development activity. In 2015, total fees collected were $35,500, and 2016 fees are estimated at approximately $40,800. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Public Infrastructure Related Goal: 2.3 Promote superior utility services and facilities FxHIRITC 1. Fire Sprinkler Tap presentation Respectfully submitted: Jon Fortune Assistant City Manager, Utilities Prepared by: Kenneth Banks Director of utilities City of Denton Page 3 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, U ctCt U U 0 O O ctct N ct � c,3 U �, N �, �' • � � O ct ct O ct ct ctt ct •� • U Ctct ct U.`..o v1 ct Nct ct ctct N N ' � ^ ct U �, ct �■I � ° c , � •~ ct'ct v1 ct ct c,3 Aj 9 Na ctct U O ct ct ct v a � ct Q ct � U U ct Ct ct N ct ct ct tb C4-.� ct ct ci E ct ct ct ct O O ct E a O ctlc� ct ►� o ►� N Gil ct ctct Ct ,0 ct ct ct ,� U -+"j U v1 p O ct ct 4� '+ ct v O ct U N 0 N U U OU '�CA ��C,3ct ° ct U ,ct � U U ,� U U ct ct ct �■I U c U � r--� ct ct �■■� v O C,3 ct ct O U U 0 ct ct $:� City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-514, Version: 1 DEPARTMENT: CM/ ACM: Date: Capital Projects Jon Fortune 4/18/2017 Legislation Text Agenda Information Sheet SUBJECT Receive a report and hold a discussion regarding an update from the Capital Projects department on the status of key projects and overall program update. BACKGROUND/DISCUSSION In late February 2017, the City reorganized and created a new Capital Projects Department, the sole focus of which would be the design, construction, project management, and successful completion of the City's capital improvement and bond programs. Galen Gillum, from Denton Municipal Electric, is serving as Interim Director of Capital Projects. The following report is a brief update and overview of major items and next steps. Update on Key Proiects The following project updates will be highlighted in a presentation on Tuesday: 1. Bell Avenue Resurfacing (through TWU campus) Project Schedule: Estimated to start June 1, 2017 and complete by Jul Project Cost: $370,126 ($134,327 from the 2012 Bond Progr Administration to College and $235,889 from O& Scope of Work: 5" mill and overlay project on Bell (from Texas St replacement of 4,200 ft. of damaged curb & gutter; replacement Site or Access Items: e Project schedule will be shortened by 10 days sin Avenue can be closed at the same time; • Construct p to address foot traffic safety concern. Due to TNA there should be less foot traffic at this time; • Utilit' the total redesign and reconstruct is done. 12. Bell Avenue Sidewalk (near Civic Center) I Schedule: Started on March 21, 2017 with a goal to complete deemed not feasible, construction will stop at a safe ill demobilize and resume following the Arts and City of Denton Page 1 of 6 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-514, Version: 1 Project Cost: Estimated final cost is 5150,000 (from Sidewalk Bo funds from Facilities and Parks) Scope of Work: • Add sidewalk from the existing sidewalk south o McKinney Street; • Add pedestrian rail across the Project Cost: Restripe parking spaces at the Civic Center eastern Scope of Work: • Add street lighting. Site or Access Items: Large mature trees at the Civic Center entrance to b work will be coordinated with event schedules - go Site or Access Items: the Arts and Jazz festival, but also out of the way o such as the Redbud Festival the previous weekend. 3. Hickory Street (wastewater, water, and street) Project Schedule: Installation of sanitary sewer began in January 201 to be completed by February 2019 Project Cost: $3.8MM Scope of Work: 4100 ft. of 8" and 10" Sanitary Sewer (1500 ft. is a to and connecting to Hickory St), 7400 ft. of 12" w St), and re -pave of the effected blocks, from Bonni Site or Access Items: • Traffic and pedestrian safety, and the narrow wor especially the area between Ave B and Welch in pa work done around the campus, staff expects to enc lines which can slow progress and staff is also awa is not reliable which could pose another issue when Installation of the sanitary sewer began in January estimated to be completed by June 2017. Installatio after that sanitary sewer is completed due to the co problems on Hickory St with both being done at th Bonnie Brae Road Widening and ovements Schedule: projected to be complete on all City of Denton Page 2 of 6 Printed on 4/14/2017 povveied by I_egist9i I;, File #: ID 17-514, Version: 1 Project Cost: $75.3MM total. Budget of $57,689,189 for section Construction projected to be completed January 20 Hwy 377 along Vintage east of Bonnie Brae and fo Total budget of $56,670,566. Eighty percent (80% Scripture. $9,500,000 for design and construction f from Denton County Pct. 1, 5% from Denton Count Scripture ($2.0 M in design underway) and $6,100 City. Source of City funding was from transferred/r construction and ROW for section from US Hwy 3 old or completed bond projects. the section south of IH35E and ROW north of IH35 • Conversion of an existing mostly two-lane road t ercent (80%) from RTR funding, 3% from Denton an eventual six -lane primary arterial from US Hwy from City (source of City funding was from transfer the north end to IH35E area on the south end; • Fir from old or completed bond projects). All remainin Hwy 380 south to past Quail Creek Road) bids on bond sales. Scope of Work: Conversion of an existing mostly two-lane road to Acquisition of land rights from 47 different propert secondary from US Hwy 377 on the south end to complex utility relocations from franchise and mun end. Site or Access Items: Acquisition of land rights from approximately 75 d' multiple tracts per property involving relocations a proceedings. Coordination of complex utility reloc municipal providers. FEMA permitting at multiple permitting and coordination with re-route at interse Coordination with UNT. Permitting crossings with companies. 5. Mayhill Road Widening and Improvements Project Schedule: Construction projected to be completed January 20 Project Cost: Total budget of $56,670,566. Eighty percent (80% from Denton County Pct. 1, 5% from Denton Count City. Source of City funding was from transferred/r old or completed bond projects. Scope of Work: • Conversion of an existing mostly two-lane road t an eventual six -lane primary arterial from US Hwy the north end to IH35E area on the south end; • Fir Hwy 380 south to past Quail Creek Road) bids on execution of second phase (south to IH35E) depend Site or Access Items: Acquisition of land rights from 47 different propert complex utility relocations from franchise and mun permitting at multiple stream crossings. TxDOT pe 6. McKinney St. City of Denton Page 3 of 6 Printed on 4/14/2017 povveied by I_egist9i I;, File M ID 17-514, Version: 1 Project Schedule: Construction projected to be completed June 2020 Project Cost: $18.6MM for roadway and $I.6MM for water relo Scope of Work: Widening existing 2 -lane rural section roadway to arterial between Woodrow Lane and Grissom Road section east of Loop 288 will be built with availabl Site or Access Items: Coordination with ongoing Mayhill Road widening Coordination with existing pedestrian and traffic us School. Relocation and construction of complicate lines as well as franchise utilities. The attached chart (Projects Update - completed (or near completion) and Ongoing) provides additional inforination on these and other major projects in progress or projects recently completed. Planned Improvements One of the iiuinediate goals for the new department is to analyze and increase capacity and support for capital project completion. Staff has released a Request for Qualifications to find a professional Orin to perforin an assessment of the processes and organization structure within the City for completion of capital projects. The work is proposed to be broken down into 2 phases: 1) assessment and process mapping of capital project implementation and 2) implementation of recommendations to improve capital project development and oversight. An outline of the review: 1. Document and assess current project execution process and oversight. 2. Evaluate workflows, processes, and practices for the following: a. Planning coordination among all utilities (except DME) and city departments i. Water ii. Wastewater iii. Streets/Traffic iv. Drainage V. Engineering/ROW/Inspections vi. Public Transportation vii. Legal viii. Purchasing ix. Planning b. Allocation of responsibilities among city staff and city departments C. Design development of capital projects i. Is the city leveraging the most productivity it can from the current approach to external vs. internal design of projects? ii. Staffing levels iii. Are the functions of the design staff efficiently structured? d. Right-of-way acquisitions e. Project planning, reporting and internal support: L Scheduling and establishment of project priorities ii. Budgeting and financial tracking iii. Resource identification and allocation iv. Contract development and oversight V. Procurement services vi. Project management tools for staff vii. Project reporting and dashboards viii. Availability of inforimation to the public f. Construction management and oversight i. Is the city leveraging the most productivity it can from the current approach to construction management? ii. Staffing levels 3. Evaluate effectiveness of existing design and construction contracts City of Denton Page 4 of 6 Printed on 4/14/2017 povveied by I_egivt9i IN File M ID 17-514, Version: 1 4. Evaluate coordination and communication among external franchise utilities 5. Evaluate current approach and process for citizen engagement in the design and construction of capital projects 6. Develop final report and recoimmendation for improvements and new processes as needed a. Development appropriate of perfonmance tracking goals, targets and benchmarking to assess the on-going effectiveness of the capital project program and implementation b. Recommend policies, ordinance changes, and etc. to improve efficiency C. Provide schedule and suggestions on the process to implement the identified improvements Phase 2 - Implementation of Recommendations to Improve Capital Works Project Development and oversight 1. Provide support and assistance to city in the implementation of process improvements and structure 2. Help ensure that project planning, reporting and internal support structure improvements are implemented and functioning 3. Evaluation and monitor the effectiveness of improvements following implementation Deliverables 1. Assessment report and process mapping of current processes 2. hmproveiment recommendations for changes to processes, coordination, and organizations structure 3. Identification of specific tools or products necessary to improve the efficiency and accountability 4. Schedule for implementation of recommendations 5. Perfonnance monitoring goals, targets and benchmarking to assess the on-going effectiveness of the capital project program and implementation 6. Present findings to senior staff, department, and city council Responses to the RFQ were submitted on or before April 4, 2017. Staff is evaluating those responses and plans to begin working with the consultant in late April. This step will be important to having an independent Finn with industry expertise analyze and make recoimmendations to improve the processes, coordination, and organizational structure to support successful project completion. Increased Communication Efforts Capital Projects, Coimnunity Affairs, and the Public Coimmunications Office have been working on making improvements to public outreach on upcoming and ongoing projects. The internal coimmunication processes between these departments are being refined to improve the sharing of information in a timely manner. The Community Affairs Department has developed a Public Works Information Sheet to obtain all pertinent information from Capital Projects on current projects. They are also developing guidelines that will help detennine the appropriate level of coimmunity outreach for each project. These guidelines give flexibility to provide information to the public by using various communication methods (e.g., emailed letters, press release, social media, neighborhood meeting, etc.). Coimmunity Affairs is also working on a Public Works Construction Report that will contain all current and recently completed public works projects. This report will be shared with the City Council in future Friday Reading files and will be placed on the City's website. The Public Coimmunications Office and Coimmunity Affairs are revising the Capital Improvement Projects webpage so that it is easier to find information about current projects. The Public Works Construction Report will be added to this page every Friday, so that the public has up-to-date information on projects. They are also researching other improvements, such as interactive maps, that could enhance the webpage. The goal of these efforts is to provide timely and accurate information to the public about our public works projects that often have an impact on our citizens' quality of life. OPTIONS n/a RECOMMENDATION n/a ESTIMATED SCHEDULE OF PROJECT Various PRIOR ACTION/REVIEW (Council, Boards, Commissions) n/a City of Denton Page 5 of 6 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-514, Version: 1 FISCAL INFORMATION Various sources of funding as described for each project BID INFORMATION n/a STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Public Infrastructure Related Goal: 2.1 Optimize resources to improve quality of City Roadways EXHIBITS 1. Maps of Key Projects - 6 pages 2. Projects Update - Completed (or near completion) and Ongoing 3. 20170418 CC Presentation on Capital Projects Respectfully submitted: Galen L. Gillum Interim Director of Capital Projects Prepared by: Galen L. 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McKinney St. - Denton, Texas 76201 www.cityofdenton.com DEN, ` ON Legislation Text File #: ID 17-457, Version: 1 Agenda Information Sheet SUBJECT Deliberations regarding Real Property - Under Texas Government Code Section 551.072; Consultation with Attorneys - Under Texas Government Code Section 551.071. Receive information from staff and discuss, deliberate, and provide staff with direction regarding real estate matters related to DME Hickory substation, and the potential acquisition of certain real property located at the intersection of W. Hickory St. and S. Bonnie Brae St.; where discussions had, deliberation, and direction given, by the Denton City Council in an open meeting would have a detrimental effect on the position of the City in negotiations with a third party. Consultation with the City's attorneys regarding legal issues associated with the potential condemnation or acquisition of the real property interests where a public discussion of these legal matters would conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or would jeopardize the City's legal position in any administrative proceeding or potential litigation. [Hickory Substation] City of Denton Page 1 of 1 Printed on 4/14/2017 povveied by I_egivt9i IN City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-359, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: Denton Municipal Electric CM: Todd Hileman, City Manager DATE: April 18, 2017 SUBJECT Consider adoption of an ordinance authorizing the City Manager to execute an agreement by and between the City of Denton, Texas and the Texas Municipal Power Agency (TMPA), that provides for terms and conditions under which The City of Denton and TMPA are electrically interconnected between each of their respective transmission assets located within Denton County, Texas, in substantial conformity with the attached exhibits; authorizing the expenditure of funds therefor; and providing an effective date. The Public Utilities Board recommends approval (6-0). BACKGROUND The City of Denton is a member of the TMPA who owns transmission assets that have been interconnected to deliver electric power to the City as part of a 1975 Power Purchase Agreement (PPA) between the member cities (Denton, Garland, Greenville, and Bryan) and TMPA. In the usual course of the electric transmission industry it is standard practice for physically connected transmission owners to sign independent interconnection agreements containing governing terms and conditions. Within the existing contractual regime between TMPA and its members, the interconnection and power supply terms are bundled together, instead of being governed by independent agreements. Relying solely on a bundled agreement will not adequately address all future contingencies. Due to agreed changes between TMPA's members affecting the governance of TMPA, there now exists the possibility that TMPA could one day no longer produce electric power from the generation resource it owns. TMPA's other main function, transmission of electric power, would continue to operate. The original PPA agreement was designed by combining both of these functions. This system functioned and served the members well for many years, but with the potential for changed circumstances in the future, having a transmission interconnection agreement independent of a power supply agreement will give TMPA, the City of Denton, and the other member cities greater flexibility to address those changes. Therefore, TMPA through its member cities, has approved a plan to put in place a standardized interconnection agreement that is centered upon the transmission function only, using the same existing transmission assets that have been operating for almost four decades. PRIOR ACTION On March 27, 2017 the Public Utilities Board recommended approval by a 6-0 vote. City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-359, Version: 1 OPTIONS 1. Approve an ordinance to enter into an Interconnection Agreement with TMPA. 2. Do not approve an ordinance to enter into an Interconnection Agreement with TMPA. RECOMMENDATION DME recommends that the City Council approve the Interconnection Agreement with TMPA. FISCAL INFORMATION This Interconnection Agreement does not mandate the appropriation of specific funding. If future contingencies arise requiring the purchase of goods or services, those cost will be sought and appropriated on a case by case basis. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Public Infrastructure Related Goal: 2.3 Promote superior utility services and facilities EXHIBITS 1. Ordinance (with exhibit) Respectfully submitted: Phil Williams General Manager Prepared by: Smith Day Compliance Manager City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, ORDINANCE NO. 2017 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, A TEXAS HOME - RULE MUNICIPAL CORPORATION, AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE AN INTERCONNECTION AGREEMENT WITH THE TEXAS MUNICIPAL POWER AGENCY, A JOINT POWERS AGENCY, REGARDING THE INTERCONNECTION OF THEIR RESPECTIVE TRANSMISSION FACILITIES; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Denton, a Texas home -rule municipal corporation, is a member city of Texas Municipal Power Agency ("TMPA"), a Texas joint powers agency; and TMPA consists of four member cities, being the Cities of Bryan, Texas, Denton, Texas, Garland, Texas, and Greenville, Texas ("Member Cities"); and WHEREAS, the transmission facilities of City and TMPA are interconnected and the parties desire to enter into an agreement which defines the rights, responsibilities and financial obligations of each party regarding the interconnection of these transmission facilities; and WHEREAS, the attached Interconnection Agreement addresses the rights, responsibilities and financial obligations of each party regarding these transmission facilities; and WHEREAS, each of the Member Cities have or will execute such agreements with TMPA; and WHEREAS, it is appropriate for the City to execute the Interconnection Agreement with the Texas Municipal Power Agency; NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON ORDAINS: SECTION 1. The recitals in the preamble are true and correct and are incorporated herewith by reference. SECTION 2. The City Manager, or his designee, is authorized to execute and deliver the "Interconnection Agreement Between the City of Denton, Texas and Texas Municipal Power Agency" ("Agreement"), a copy of which is attached as Exhibit "A" is incorporated by reference herein. SECTION 3. The City Manager, or his designee, is authorized to execute and deliver the Agreement and any other and further documents related to the said Agreement as are necessary to effectuate, finalize and deliver said Agreement. SECTION 4. This ordinance shall be and become effective immediately upon and after its adoption and approval; provided, however, that the Texas Municipal Power Agency has approved said Agreement. PASSED AND APPROVED this the day of , 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY m. APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY By: 2 600001 INTERCONNECTION AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND TEXAS MUNICIPAL POWER AGENCY This Interconnection Agreement ("Agreement") is made and entered into this day of , 2017, ("Effective Date") between the City of Denton, Texas, a home -rule municipal corporation which owns and operates a municipal electric utility known as "Denton Municipal Electric ", ("Member City") and the Texas Municipal Power Agency ("TMPA"), each hereinafter sometimes referred to individually as "Party" or both referred to collectively as the "Parties". Recitals The Parties have executed this Interconnection Agreement in order to provide for the interconnection of their transmission facilities and to define the rights and obligations of the Parties with respect thereto. NOW, THEREFORE, in consideration of the mutual obligations of the Parties, the Parties agree as follows: ARTICLE 1. DEFINITIONS Capitalized terms shall have the meanings as set forth below, except as otherwise specified in the Agreement: 1.1 "Agreement" means this Interconnection Agreement, including all attachments hereto, as the same may be amended, supplemented, or modified. 1.2 "Confidential Information" shall have the meaning set forth in Section 15.1 hereof. 1.3 "Distribution System" shall mean an electrical system operating below 60,000 volts (60kV) Steady -State Voltage, when measured phase -to -phase. Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 1 of 52 Exhibit A 1.4 "Distribution System Control Center" shall mean the electric Distribution System Control Center(s) that is/are responsible for monitoring and controlling the Distribution System in real time. 1.5 "Emergency" means a condition or situation that in the reasonable good faith determination of the affected Party in accordance with Good Utility Practice contributes to an existing or imminent physical threat of danger to life or a significant threat to health, property or the environment. 1.6 "ERGOT" shall mean the Electric Reliability Council of Texas or its successor in function. 1.7 "ERGOT Nodal Operating Guides" shall mean those operating and metering guides promulgated by ERCOT relating to practices to be followed in the operation of the interconnected systems of the member utilities of ERCOT, in effect and as amended from time to time, and any successor guides or rules of ERCOT applicable to the same subject matter. 1.8 "ERGOT Protocols" shall mean the documents adopted by ERCOT, including any attachments or referenced exhibits, in effect and as amended from time to time that contain the scheduling, operating, planning, reliability, settlement policies, rules, guidelines, procedures, standards, and criteria of ERCOT, and any successor rules of ERCOT applicable to the same subject matter. 1.9 "Facility Schedule" shall specify for each Point of Interconnection the facilities to be provided by the Parties, the ownership thereof, the nominal voltage at the interconnection, the method of metering, the operating and maintenance responsibilities of each Party with respect to each Point of Interconnection, and such other terms and conditions as are deemed mutually agreeable by the Parties. 1.10 "FERC" shall mean the Federal Energy Regulatory Commission or its successor federal agency. 1.11 "Good Utility Practice" shall mean any of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method, or act to the exclusion of all others, but rather to be acceptable practices, methods, or acts generally accepted in the region. Good Utility Practice shall include, but not be limited to, conformance with the applicable and consistently applied reliability criteria, standards and operating guides of ERCOT and the North American Electric Reliability Corporation, or successor organization(s). Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 2 of 52 Exhibit A 1.12 "Governmental Authority" shall mean any foreign, federal, state, local or other governmental regulatory or administrative agency, court, commission, department, board, or other governmental subdivision, legislature, rulemaking board, tribunal, arbitrating body, or other governmental authority; provided such entity possesses valid jurisdictional authority to regulate the Parties and the terms and conditions of this Agreement. 1.13 "Interconnection Equipment" shall mean all the equipment that is necessary for the interconnection of the Distribution System to the Transmission System which is located at the substations listed in Exhibit hereto as it may be revised from time to time. 1.14 "NERC" shall mean the North American Electric Reliability Corporation or its successor. 1.15 "Party or Parties" shall have the meaning set forth in the introductory paragraph of this Agreement. 1.16 "Person" shall mean any individual, governmental legal entity, or private legal entity. 1.17 "Planned Outage" shall mean action by a Party to take its equipment, facilities or systems out of service, partially or completely, to perform work on specific components that is scheduled in advance and has a predetermined start date and duration. Planned Outage shall not include the construction of new facilities or system elements, the modification of existing facilities or system elements addressed in Article 5, which includes, but is not limited to, activities associated with the construction of third party facilities or with the modifications required to accommodate third party facilities. 1.18 "Point(s) of Interconnection" shall mean the interconnection location(s) specified on Exhibit A hereto and the attached Facility Schedules where the Parties interconnect their facilities. 1.19 "Protective Relay" is a device which detects abnormal power system conditions and, in response, initiates automatic control action. 1.20 "Protective Relay System" is a group of Protective Relays and associated sensing devices and communications equipment that detects system abnormalities and performs automatic control action to mitigate or reduce adverse effects of such abnormalities. 1.21 "PUCT" shall mean the Public Utility Commission of Texas or its successor in function. 1.22 "PUCT Substantive Rule(s)" shall mean Substantive Rules as promulgated by the Public Utility Commission of Texas ("PUCT"), in effect and as amended from time to time, and any successor rules of the PUCT applicable to this Agreement. Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 3 of 52 Exhibit A 1.23 "Qualified Personnel" shall mean individuals trained for their positions in accordance with Good Utility Practice. 1.24 "Release" shall mean, spill, leak, discharge, dispose of, pump, pour, emit, empty, inject, leach, dump, or allow to escape into or through the environment. 1.25 "RTU — Remote Terminal Units" shall mean a device connected by a communication system to one or more master computers with appropriate software placed at various locations to collect data and perform remote control. It may also perform intelligent autonomous control of electrical systems and report the results back to the master computer(s). 1.26 "Steady -State Voltage" shall mean the value of a voltage after all transients have decayed to a negligible value. The root -mean -square value in the steady-state does not vary with time. 1.27 "SCADA" shall mean a supervisory control and data acquisition system that provides data acquisition, supervisory control and alarm display and control from remote field locations to control centers. 1.28 "TCOS" Transmission Cost of Service, as defined by the Public Utility Commission of Texas ("PUCT"), in effect and as amended from time to time, and any successor rules of the PUCT applicable to this Agreement, are costs incurred by an electric utility, a municipally -owned utility, or an electric cooperative to own, operate, and maintain facilities for the transmission of electric energy at or above 60,000 (60 KV) volts when measured phase -to -phase. 1.29 "Telemetry" shall have the meaning set forth in the ERCOT Nodal Operating Guides. 1.30 "Transmission System" shall mean an electrical system operating at 60,000 volts (60kV) or above Steady -State Voltage, when measured phase -to -phase. 1.31 "Transmission System Operations Center(s)" shall mean the electric Transmission System control center(s) that is/are responsible for monitoring and controlling the transmission System in real time. ARTICLE 2. ESTABLISHMENT, MODIFICATION AND TERMINATION OF POINTS OF INTERCONNECTION 2.1 The Parties agree to interconnect their facilities at the locations and in accordance with the terms and conditions, specified on Exhibit A hereto and the attached Facility Schedules (the "Points of Interconnection"). 2.2 The Parties agree to comply with NERC Reliability Standards as they relate to the Points of Interconnection and to operate and maintain all Points of Interconnection of their facilities at the locations identified and described on Exhibit A and the Facility Schedules attached hereto and incorporated herein. Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 4 of 52 Exhibit A 2.3 Upon termination of this Agreement, each Party shall discontinue the use of the facilities of the other and shall disconnect the Point(s) of Interconnection. The Parties agree to use reasonable efforts to coordinate the termination of a Point of Interconnection to minimize any disruption in service to either Party. Any TCOS recovery obligations in this Agreement shall survive termination of this Agreement until such obligations are fulfilled in accordance to the provisions in the applicable Facility Schedule. 2.4 Subject to regulatory approval, if required, unless mutually agreed, neither party shall have the right to disconnect from the other Party at any Point of Interconnection specified on Exhibit A and a Facility Schedule, originally attached to this Agreement or added subsequent to the execution of this Agreement, except as set forth in Section 4.9 herein, or for reason of a material violation of the terms of this Agreement, for which opportuity to correct such violation was given under Paragraph 14.2 of this Agreement and such violation was not corrected in accordance with said Paragraph 14.2. 2.5 This Agreement may be amended only upon mutual agreement by the Parties, which amendment will not be effective until reduced to writing and executed by both Parties. From time to time, a Point of Interconnection may be added, changed, modified, or deleted from this Agreement as mutually agreed to in writing by the Parties and/or as ordered by a regulatory authority having jurisdiction thereof. Any such change, addition, or deletion shall be recorded in an amenment to this Agreement incorporating Exhibit A and a Facility Schedule in such a way that the numbering of the other Facility Schedules is not changed. Prior to such addition, deletion, or change of a Point of Interconnection, the Parties shall engage in coordinated joint planning studies to evaluate the impact of such addition, deletion, or change and identify any mitigation measures (including but not limited to new or upgraded facilities) that might be needed in conjunction therwith. Such Point of Interconnection will not be connected, disconnected, or changed until the valuation process described in the preceding sentence has been completed, all required mitigating measures have been implemented, any required regulatory approval has been obtained, and the appropriate Facility Schedule has been added, terminated, or amended, as the case may be. 2.6 Either Party may request the other Party to upgrade or modify its terminal facilities at a Point of Interconnection in accordance with the other Party's standard design of equipment and practice, provided that the upgrade or modification is consistent with Good Utility Practice and, if applicable, approved by the ERCOT Regional Planning Group or its successor in function. The requesting Party shall provide the responsive Party a minimum of at least three (3) years notice of the upgrade or modification of its terminal facilities at a Point of Interconnection. A shorter notice term is acceptable but only by mutual acceptance of both Parties. Such request shall not be unreasonably denied. 2.7 The responsibilities of the Parties for the costs associated with the establishment of each Point of Interconnection shall be as specified in the applicable Facility Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 5 of 52 Exhibit A Schedule. Both Parties agree that each Point of Interconnection will be established, constructed and maintained in conformance with the ERCOT Nodal Operating Guides and ERCOT Protocols. 2.8 Unless otherwise provided in a Facility Schedule, each Party shall, at each Point of Interconnection, at its own risk and expense, design, install, or cause the design and installation of the transmission or distribution facilities (including all apparatus and necessary protective devices) on its side of the Point of Interconnection, so as to reasonably minimize the likelihood of voltage and frequency abnormalities, originating in the system of one Party, from affecting or impairing the system of the other Party, or other systems to which the system of such Party is interconnected. The Parties agree to cause their systems to be constructed in accordance with specifications at least equal to those provided by the National Electrical Safety Code, as approved by the American National Standards Institute, in effect at the time of construction. 2.9 Unidirectional or bi-directional operation for each Point of Interconnection shall be specified on the applicable Facility Schedule. 2.10 This Agreement, including all attached Exhibits and Facility Schedules, which are expressly made a part hereof for all purposes, constitutes the entire agreement and understanding between the Parties with regard to the interconnection of the facilities of the Parties at the Points of Interconnection expressly provided for in this Agreement. This Agreement replaces all other agreements and undertakings, oral and written, between the Parties with regard to the subject matter hereof. It is expressly acknowledged that the Parties may have other agreements covering other services not expressly provided for herein, which agreements are unaffected by this Agreement. HOWEVER, because of continuing changes in the design and configuration of the TMPA Denton Area Transmission System as set forth in the Transmission Operator, Maintenance, and Construction Services Agreement executed between the parties on April 1, 2016, due to operational considerations, the Parties may, by mutual agreement through their staffs, without obtaining governing board approval from either Party, revise the interconnection facilities described in Exhibit A from time to time as circumstances may warrant, by adding, modifying, or deleting facilities to the same. ARTICLE 3. SYSTEM OPERATION AND MAINTENANCE 3.1 Each Party will, at its own cost and expense, operate, maintain, repair, and inspect the transmission and distribution lines and related facilities which it now or hereafter may own located at or connected to each Point of Interconnection, unless otherwise specified on the applicable Facility Schedule. 3.2 All operation and maintenance activities will be the financial responsibility of the owning Party except as otherwise expressly agreed. Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 6 of 52 Exhibit A 3.3 Operational responsibility for facilities owned by one Party, but installed in another Party's substation or transmission line will be identified in the Facility Schedule for that particular Point of Interconnection. 3.4 Maintenance by either Party that will cause a deviation from normal power and energy flow at a Point of Interconnection will be scheduled at a mutually agreeable time. Emergency operations shall be in accordance with the applicable provisions in the ERCOT Nodal Operating Guides. No changes will be made in the normal operation of a Point of Interconnection without the mutual agreement of the Parties. 3.5 The Parties will review, coordinate, and exchange equipment specifications, operating limits, protective relaying information and settings, and other information necessary affecting the establishment of, and interconnected operations of, the Points of Interconnections. Each Party will coordinate the protective devices of the lines and facilities it owns and operates at each Point of Interconnection. 3.6 Each Party shall operate any equipment that might reasonably be expected to have impact on the operations of the other Parry in a safe and efficient manner and in accordance with all applicable federal, state, and local laws, NERC and ERCOT Nodal Operating Guides, and Good Utility Practice, and otherwise in accordance with the terms of this Agreement. Each Party shall comply with the reasonable requests, orders, directives and requirements of the other Party, which are authorized under this Agreement. 3.7 Each Party covenants and agrees to, consistent with Good Utility Practice, design, install, maintain, and operate, or cause the design, installation, maintenance, and operation of its Transmission System and Distribution System and related facilities so as to maintain continuity of service to their respective customers and to minimize the likelihood of a disturbance originating in the system of one Party affecting or impairing the system of the other Party, or other systems with which the Party is interconnected. 3.8 The Parties shall design, install, test, calibrate, set, and maintain their respective Protective Relay equipment in accordance with Good Utility Practice and applicable federal, state or local laws and this Agreement. In the case of jointly owned relaying equipment, the Party having direction and control thereof shall design, install, calibrate, set, and maintain Protective Relay equipment in accordance with Good Utility Practice. 3.9 The Parties shall design, install, test, calibrate, program, and maintain their respective Metering equipment in accordance with Good Utility Practice and applicable federal, state or local laws and this Agreement. 3.10 Each Parry will provide the reactive requirements for its own system as required by the PUCT or by the ERCOT Nodal Operating Guides and ERCOT Protocols. Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 7 of 52 Exhibit A 3.11 The operation of either Party's facilities shall not cause a synchronous interconnection between ERCOT and any other transmission facilities operated outside of ERCOT. Any such interconnection will give either Party the right to immediately disconnect the affected Point(s) of Interconnection until such interconnection is removed. 3.12 In accordance with Good Utility Practice, each Party may, in close cooperation with the other, remove from service its system elements that may impact the other Party's system as necessary to perform maintenance or testing or to replace installed equipment. Absent the existence of an Emergency, the Party scheduling a removal of a system element from service will schedule such removal on a date mutually acceptable to both Parties, in accordance with Good Utility Practice. 3.13 The Parties shall use best efforts in accordance with Good Utility Practice to coordinate operations in the event of any Forced or Planned Outage that affects the other Party's system. ARTICLE 4. PROTECTIVE RELAYING AND CONTROL 4.1 The Parties shall, in accordance with Good Utility Practice, coordinate, review and approve all new Protective Relaying equipment, including equipment settings, Protective Relaying schemes, drawings, and functionality associated with each Interconnection Point. When existing equipment or schemes are replaced or when new equipment or schemes are installed per this Article 4 or in association with new Interconnection Points, then the terms and conditions of Article 4 shall apply. Each Party shall incur the expense for the work on its system. 4.2 TMPA (itself or via a contracted party) shall own, operate, maintain and test those Protective Relay Systems that control its breakers or equivalent protective devices. Member City shall own, operate, maintain, and test those Protective Relay Systems that control its breakers or equivalent protective devices governed by this Article 4. The Parties shall maintain, and, as necessary, upgrade their respective Protective Relay Systems and shall provide the other Parry with access to available copies of operation and maintenance manuals and test records for all relay equipment upon request. TMPA will provide protective relay settings for the relays that control breakers or equivalent protective devices owned by Member City that also protect TMPA's equipment. Member City will review and apply the settings. 4.3 The owner of the line will provide the relay communication channel necessary for line protection at its expense. 4.4 The Parties shall test their respective relays associated with the Interconnection Points for correct calibration and operation. Parties shall coordinate design, installation, operation, and testing of Protective Relaying schemes to insure that Interconnect Document TMPA—Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 8 of 52 Exhibit A such relays operate in a coordinated manner so as to not cause adverse operating conditions on the other Party's system. 4.5 Each Party shall be responsible for Protective Relay maintenance, calibration and functional testing of relay systems that protect its equipment associated with the Interconnection Points and that protect the other Party from the Party's Interconnection Equipment to the extent such calibration and testing are in accordance with Good Utility Practice. All such maintenance and testing must be performed by Qualified Personnel selected by each Parry. In addition, each Party shall allow the other Party to conduct visual inspection of all Protective Relays and associated maintenance records directly related to the interconnection. Related maintenance and operational records shall be maintained by each Parry in accordance with Good Utility Practice. Upon completion of Protective Relay calibration testing and relay functional testing, each Parry shall make available copies of test reports and related records for review by the other Party upon request. 4.6 (a) As TMPA's system protection requirements change, TMPA will upgrade its Protective Relaying System in accordance with Good Utility Practice. If these upgrades affect the serviceability and acceptability of the Protective Relaying Systems on the Interconnection Equipment which may be installed, owned, and operated by the Member City, then the Member City must upgrade its Protective Relaying Systems at its expense as necessary to bring them into compatibility with that installed by TMPA. TMPA shall give the Member City notice of such upgrade as soon as practicable prior to the anticipated date of such upgrade. (b) As the Member City's system protection requirements change, the Member City will upgrade its Protective Relaying System in accordance with Good Utility Practice. If these upgrades affect the serviceability and acceptability of the Protective Relaying Systems on the Interconnection Equipment which may be installed, owned, and operated by TMPA, then TMPA must upgrade its Protective Relaying Systems at its expense as necessary to bring them into compatibility with that installed by the Member City. The Member City shall give TMPA notice of such upgrade as soon as practicable prior to the anticipated date of such upgrade. 4.7 Each Party shall permit duly authorized representatives and employees of the other Party to enter upon its premises for the purpose of inspecting, testing, repairing, renewing or exchanging any or all of the equipment owned by such other Party that is located on such premises or for the purpose of performing any work necessary in the performance of this Agreement. 4.8 During periods of emergency conditions declared by ERCOT or as necessary to restore customer service, either Party may operate equipment that is normally operated by the other Parry, provided that authorization to do so must first be received from the Party that normally operates the equipment, such authorization not to be unreasonably withheld or delayed. It shall be considered reasonable for Interconnect Document TMPA—Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 9 of 52 Exhibit A the Party that normally operates such equipment to deny such a request by the other Party if the withholding Party will provide such operation within the time frame called for in the circumstances. Such operations by the other Party will be at no cost to the owner or normal operator of the equipment. 4.9 Any and all equipment placed on the premises of a Party shall be and remain the property of the Parry providing such equipment regardless of the mode and manner of annexation or attachment to real property, unless otherwise mutually agreed to in writing by the Parties. ARTICLE 5. NEW CONSTRUCTION AND MODIFICATION 5.1 Subject to this Article 5, TMPA may construct additional Transmission System elements or modify the existing Transmission System and Member City may construct additional Transmission System elements or Distribution System elements or modify the existing Transmission System or Distribution System. All such modifications and construction provided for herein shall be conducted in accordance with Good Utility Practice and all applicable NERC and ERCOT standards. The Parry that modifies the system elements or constructs new system elements is obligated to maintain the transmission, distribution and communications capabilities of the other Party in accordance with Good Utility Practice to avoid or minimize any adverse impact on the other Party. 5.2 Notwithstanding the foregoing, no modifications to or new construction of facilities or access thereto, including but not limited to rights-of-way, fences, and gates, shall be made by either Party which might reasonably be expected to have a material effect upon the other Party with respect to operations or performance under this Agreement, without providing the other Party with sufficient information regarding the work prior to commencement to enable such Parry to evaluate the impact of the proposed work on its operations. The information provided must be of sufficient detail to satisfy reasonable TMPA or Member City review and operational requirements. Each Party shall use reasonable efforts to minimize any adverse impact on the other Party. 5.3 If any Parry intends to install any new facilities, equipment, systems, or circuits or any modifications to existing or future facilities, equipment, systems or circuits that could reasonably be expected to have a material effect upon the operation of the other Parry, the Party desiring to perform said work shall, in addition to the requirements of Section 5.2, provide the other Party with drawings, plans, specifications and other necessary documentation for review at least 60 days prior to the start of the construction of any such installation. This notice period shall not apply to modifications or new installations made to resolve or prevent pending Emergency Conditions. 5.4 The Party reviewing any drawings, plans, specifications, or other necessary documentation for review shall promptly review the same and provide any Interconnect Document TMPA—Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 10 of 52 Exhibit A comments to the performing Parry no later than 30 days prior to the start of the construction of any installation. All such reviews shall be performed at no cost to either Party. The performing Party shall incorporate all requested modifications to the extent required in accordance with Good Utility Practice and compliance with this Agreement. 5.5 Within 180 days following placing in-service of any modification or construction subject to this Article 5, the Party initiating the work shall provide "as built" drawings, plans and related technical data to the other Party. Approval or review of any document referenced herein shall not relieve the initiating Party of its responsibility for the design or construction of any proposed facility. 5.6 Each Party shall, at its own expense, have the right to inspect or observe all maintenance activities, equipment tests, installation work, construction work, and modification work to the facilities of the other Party that could have a material effect upon the facilities or operations of the first Party. 5.7 If any test or inspection of metering equipment shows that it does not meet the accuracy requirements established by the ERCOT Protocols and ERCOT Operating Guides, the meter or other equipment found to be inaccurate or defective shall be promptly repaired, adjusted, or replaced by the owner. Should metering equimment fail to register, the power and energy delivered and received shall be determined in accordance with the ERCOT Protocols and ERCOT Operating Guides. 5.8 Each Party shall provide, at its own expense, the necessary communication and telemetering facilities needed for the control and operation of its transmission and/or distribution system. 5.9 All communication and telemetering facilities required herein shall be selected, installed, tested, operated, and maintained by the Party owning such equipment in accordance with Good Utility Practice and ERCOT Protocols and ERCOT Guides. 5.10 Construction and installation of any facility shall meet all or exceed all environmental permitting requirements, reviews or approvals as required by Federal, State or local law prior to the installation of such facilities. The Parties agree to coordinate environmental permitting related activities such as site review for regulated resources, permit application and project oversight (e.g. monitoring as applicable). 5.11 Any and all equipment, apparatus, and devices placed or installed, or caused to be placed or installed by one Party on, or in, the premises of the other Party, shall be and remain the property of the Party owning and installing such equipment, apparatus, devices, or facilities, regardless of the mode and manner of annexation or attachment to real property. Upon the termination of any Point of Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 11 of 52 Exhibit A Interconnection under this Agreement, the Party owning and installing such equipment, apparatus, devices, or facilities on the property of the other Party, shall 1) have the right to sell such equipment, apparatus, devices, or facilities to the other Party if the other Party wishes to purchase such equipment, apparatus, devices, or facilities or 2) to enter the premises of the other Parry and, within a reasonable time, remove such equipment, apparatus, devices, or facilities, at no cost to the owner of the premises. If, upon the termination of any Point of Interconnection uner this Agreement, equipment of a Parry that is installed on the premises of the other Party is neither sold to the other Party nor removed by the owning Party within a reasonable time, it shall be considered abandoned by the owning Party and may be disposed of by the other Party in the manner it shall determine appropriate; provided, however, that any net cost incurred by the disposing Party shall be reimbursed by the abandoning Parry. ARTICLE 6. ACCESS TO FACILITIES 6.1 The Parties hereby agree to provide each other reasonable access to their respective property as may be necessary and appropriate to enable each Parry to install, operate and maintain its respective facilities and equipment required for the performance of the Agreement. Such right of access shall be provided in a manner so as not to unreasonably interfere with either Party's ongoing business operations, rights and obligations. 6.2 Each Party shall provide the other Party keys, access codes or other access methods necessary to enter the other Party's facilities to exercise rights under this Agreement. Access shall only be granted to Qualified Personnel. ARTICLE 7. NOTIFICATIONS AND REPORTING 7.1 Notice to TMPA shall be to TMPA's Representative, at the addresses identified in Article 19. Notice to the Member City shall be to the Member City's Representative, at the addresses identified in Article 19. 7.2 Each Party shall provide prompt notice describing the nature and extent of the condition, the impact on operations, and all corrective action, to the other Party of any Emergency Condition which may be reasonably anticipated to affect the other Party's equipment, facilities or operations. Either Party may take reasonable and necessary action, both on its own and the other Party's system, equipment, and facilities, to prevent, avoid or mitigate injury, danger, damage or loss to its own equipment and facilities, or to expedite restoration of service; provided however, that the Parry taking such action shall give the other Party prior notice, if at all possible, before taking any action on the other Party's system, equipment, or facilities. Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 12 of 52 Exhibit A 7.3 In the event of an Emergency Condition contemplated by Section 7.2, each Party shall provide the other with such information, documents, and data necessary for operation of the Transmission System and Distribution System, including, without limitation, such information which is to be supplied to any Governmental Authority, NERC, ERCOT, or Transmission System Operations Center or Distribution System Control Center. 7.4 In order to continue interconnection of the Distribution System and Transmission System, each Parry shall promptly provide the other Party with all relevant information, documents, or data regarding the Distribution System and the Transmission System that would be expected to affect the Distribution System or Transmission System, and which is reasonably requested by NERC, ERCOT, or any Governmental Authority having jurisdiction. 7.5 For routine maintenance and inspection activities on either Party's system that will require major equipment or system outages, and could impact the other Party's system, the Party performing the same shall provide the other Parry with not less than seventy-two (72) hours prior notice, if practicable. 7.6 TMPA shall notify Member City prior to entering Member City's facilities for routine measurements, inspections and meter reads in accordance with the requirements of Section 7.5. Member City shall notify TMPA prior to entering TMPA's facilities, including switchyards, for routine maintenance, operations, measurements, inspections and meter reads, in accordance with the requirements of Section 7.5. 7.7 Each Party shall provide prompt verbal notice to the other Parry of any system alarm that applies to the other Party's equipment, unless the system alarm is automatically sent to the other Party. 7.8 Each Party shall provide a report or a copy of the available data from a system events recorder, voice recordings, SCADA system sequence of events or digital fault recorder that applies to the other Party's equipment or system operation. ARTICLE 8. SAFETY 8.1 Each Party agrees that all work performed by either Parry that may reasonably be expected to affect the other Party shall be performed in accordance with Good Utility Practice and all applicable laws, regulations, safety standards, practices and procedures and other requirements pertaining to the safety of Persons or property, (including, but only to the extent applicable, those of the Occupational Safety and Health Administration, the National Electrical Safety Code and those developed or accepted by TMPA and Member City for use on their respective systems) when entering or working in the other Party's property or facilities or switching area. A Parry performing work within the boundaries of the other Party's facilities must abide by the safety rules applicable to the site. Interconnect Document TMPA—Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 13 of 52 Exhibit A 8.2 Each Party shall be solely responsible for the safety and supervision of its own employees, agents, representatives, and subcontractors. 8.3 TMPA shall immediately report any injuries that occur while working on Member City's property or facilities or switching area to appropriate agencies and Member City's site representative. Member City shall immediately report any injuries that occur while working on TMPA's property or facilities or switching area to appropriate agencies and TMPA's Site Representative. 8.4 Each Party will provide the other with its clearing/tagging/lockout procedures. For clearances requested or initiated by Member City on Member City's equipment that utilizes TMPA's equipment as an isolation device, Member City procedures shall govern. For clearances requested or initiated by TMPA on TMPA's equipment that utilizes Member City's equipment as an isolation device, TMPA procedures shall govern. Under no circumstances shall either Parry remove the other Party's protective tags without proper authorization. ARTICLE 9. ENVIRONMENTAL COMPLIANCE AND PROCEDURES 9.1 Release Prevention and Response. Each Party shall notify the other Party, verbally within 24 hours upon discovery of any Release of any Regulated Substance caused by the Party's operations or equipment that impacts the property or facilities of the other Parry, or which may migrate to, or adversely impact the property, facilities or operations of the other Party and shall promptly furnish to the other Parry copies of any reports filed with any governmental agencies addressing such events. Such verbal notification shall be followed by written notification within five (5) days. The Party responsible for the Release of any Regulated Substance on the property or facilities of the other Party, or which may migrate to, or adversely impact the property, facilities or operations of the other Party shall be responsible for: (1) the cost and completion of reasonable remediation or abatement activity for that Release, and; (2) required notifications to governmental agencies and submitting of all reports or filings required by environmental laws for that Release. Advance written notification (except in Emergency situations, in which verbal, followed by written notification, shall be provided as soon as practicable) shall be provided to the other Party by the Party responsible for any remediation or abatement activity on the property or facilities of the other Party, or which may adversely impact the property, facilities, or operations of the other Party. Except in Emergency situations such remediation or abatement activity shall be performed only with the consent of the Party owning the affected property or facilities. 9.2 The Parties agree to coordinate, to the extent necessary, the preparation of site plans, reports, environmental permits, clearances and notifications required by federal and state law or regulation, including but not limited to Spill Prevention, Control and Countermeasures (SPCC), Storm Water Pollution Prevention Plans Interconnect Document TMPA—Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 14 of 52 Exhibit A (SWPP), CERCLA, EPCRA, TSCA, soil erosion and sedimentation control plans (SESC) or activities, wetland or other water -related permits, threatened or endangered species reviews or management and archeological clearances or notifications required by any regulatory agency or competent jurisdiction. Notification of permits applied for and/or received will occur in a timeframe manner suitable to the interests of both Parties. ARTICLE 10. OTHER SERVICES 10.1 This Agreement is applicable only to the interconnection of the facilities of the Parties at the Points of Interconnection as defined by the Facility Schedules and does not obligate the Parties to provide, or entitle the Parties to receive, any service not expressly provided for herein. Each Party is responsible for making the arrangements necessary for it to receive any other service that it may desire from the other Party or any third party. 10.2 Each Facility Schedule shall indicate whether any other tariffs, services or rates apply at each Point of Interconnection. 10.3 All transmission, transformation, distribution, metering, operations, and maintenance, engineering, billing or other miscellanious services will be provided and charged under agreements separate from this Agreement. ARTICLE 11. INDEMNIFICATION 11.1 Except as prohibited by the Constitution and/or statutes of the State of Texas, the provisions of PUCT Substantive Rule 25.202, or its successor in function, in effect and as amended from time to time throughout the term of this Agreement, shall govern the liabilities of each Party, including any liabilities for damages in the event of any act beyond such Party's control, and the obligation of each Party to indemnify the other in the event of losses resulting from negligence or other fault in the design, construction or operation of their respective facilities. 11.2 Any and all implied warranties are disclaimed by the Parties, including, without limitation, the implied warranties of MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE. ARTICLE 12. SUCCESSORS AND ASSIGNS 12.1 This Agreement is not intended to and does not create any rights, remedies, or benefits whatsoever in favor of any persons or entities other than the Parties to this Agreement. A Party's rights under this Agreement may not be assigned without the written consent of the other Party. The rights and obligations of this Agreement are solely for the use and benefit of, and shall be binding upon, the Parties, their successors -in -interest and, where permitted, their assigns. Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 15 of 52 Exhibit A 12.2 This Agreement shall not be interpreted or construed to create an association, joint venture or partnership between the Parties, nor to impose any partnership obligations or liability on either Party. Furthermore, neither Party shall have any right, power, or authority to enter into any agreement or undertaking for or on behalf of, to act as or be an agent or representative of, or to otherwise bind the other Party. ARTICLE 13. GOVERNING LAW AND REGULATION 13.1 This Agreement was executed in the State of Texas and must in all respects be governed by, interpreted, construed, and enforced in accordance with the laws thereof, without regard to conflicts of law principles, except as to matters exclusively controlled by the Constitution and statutes of the United States of America. This Agreement is subject to all valid, applicable federal, state, and local laws, ordinances, and rules and regulations of duly constituted regulatory authorities having jurisdiction. 13.2 This Agreement and all obligations hereunder are expressly conditioned upon obtaining approval or authorization or acceptance for filing by any regulatory body whose approval, authorization or acceptance for filing is required by law. Both Parties hereby agree to support the approval of the Agreement before such regulatory authority and to provide such documents, information, and opinions as may be reasonably required or requested by either Party in the course of approval proceedings. 13.3 In the event a Court of competent jurisdiction declares any part of this Agreement invalid, the remainder of said Agreement shall remain in full force and effect and shall constitute a binding agreement between the Parties. ARTICLE 14. DEFAULT AND FORCE MAJEURE 14.1 Neither Party shall be considered in default with respect to any obligation hereunder, other than the payment of money, if prevented from fulfilling such obligation by reason of any cause beyond its reasonable control including, but not limited to, outages or interruptions due to weather, accidents, equipment failures or threat of failure, strikes, civil unrest, injunctions or order of governmental authority having jurisdiction. If performance by either Party has been prevented by such event, the affected Party shall promptly and diligently attempt to remove the cause of its failure to perform, except that neither TMPA nor Member City shall be obligated to agree to any quick settlement of any strike or labor disturbance, which, in the affected Party's opinion, may be inadvisable or detrimental, or to appeal from any administrative or judicial ruling. 14.2 Should either of the Parties hereto violate any material provisions of this Agreement, the other Party shall give written notice to the violating Party specifying the violation. Upon actual receipt of the Notice of Violation, such Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 16 of 52 Exhibit A Party shall have one hundred eighty (180) days to correct such violation. In the event such violation of this Agreement is not corrected by the expiration of said one hundred eighty (180) days, this Agreement, subject to the applicable regulations of any jurisdictional regulatory authority, may be terminated by giving no less than sixty (60) days written notice of the Intention To Terminate, but no other remedy or remedies, available under the law, for such violation shall be limited in any way because of this provision or the exercise of the right conferred hereunder. 14.3 The failure of a Party to this Agreement to insist, on any occasion, upon strict performance of any provision of this Agreement will not be considered to waive the obligations, rights, or duties imposed upon the Parties. ARTICLE 15. CONFIDENTIALITY 15.1 (a) "Confidential Information" shall mean any confidential, proprietary or trade secret information of a plan, specification, pattern, procedure, design, device, list concept, policy or compilation relating to the present or planned business of a Party, which is designated in good faith as Confidential by the Party supplying the information, whether conveyed orally, electronically, in writing, through inspection or otherwise. Confidential Information shall include, without limitation, all information relating to a Party's technology, research and development, business affairs, and pricing, customer -specific load data that constitutes a trade secret, and any information supplied by either of the Parties to the other prior to the execution of this Agreement. (b) General. Each Party will hold in confidence any and all Confidential Information unless (1) compelled to disclose such information by judicial or administrative process or other provisions of law or as otherwise provided for in this Agreement, or (2) to meet obligations imposed by FERC or by a state or other federal entity or by membership in NERC or ERCOT (including other Transmission Providers). To the extent it is necessary for either Party to release or disclose such information to a third party in order to perform that Party's obligations herein, such Party shall advise said third party of the confidentiality provisions of this Agreement and use its best efforts to require said third party to agree in writing to comply with such provisions. (c) Term: During the term of this Agreement, and for a period of three (3) years after the expiration or termination of this Agreement, except as otherwise provided in this Article 15, each Party shall hold in confidence and shall not disclose to any Person Confidential Information. (d) Standard of Care: Each Party shall use at least the same standard of care to protect Confidential Information it receives as that it uses to protect its own Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 17 of 52 Exhibit A Confidential Information from unauthorized disclosure, publication or dissemination. 15.2 Scope: Confidential Information shall not include information that the receiving Party can demonstrate: (1) is generally available to the public other than as a result of disclosure by the receiving Party (2) was in the lawful possession of the receiving Party on a non -confidential basis prior to receiving it from the disclosing Party; or (3) was supplied to the receiving Party without restriction by a third party, who, to the knowledge of the receiving Party, after due inquiry was under no obligation to the disclosing Parry to keep such information confidential; (4) was independently developed by the receiving Party without reference to Confidential Information of the disclosing Party; (5) is, or becomes, publicly known, through no wrongful act or omission of the receiving Party or breach of this Agreement; or (6) is required to be disclosed by any federal or state government or agency or is otherwise required to be disclosed by law or subpoena, or is necessary in any legal proceeding establishing rights and obligations under this Agreement. Information designated as Confidential Information will no longer be deemed confidential if the Party that designated the information as confidential notifies the other Party that it no longer is confidential. 15.3 Order of Disclosure. If a court or a government agency or entity with the right power, and apparent authority to do so requests or requires either Party, by subpoena, oral deposition, interrogatories, requests for production of documents, administrative order, or otherwise, to disclose Confidential Information, that Party shall provide the other Party with prompt notice of such request(s) or requirement(s) so that the other Parry may seek an appropriate protective order or waive compliance with the terms of this Agreement. The notifying Party shall have no obligation to oppose or object to any attempt to obtain such production except to the extent requested to do so by the disclosing Parry and at the disclosing Party's expense. If either Party desires to object or oppose such production, it must do so at its own expense. The disclosing Party may request a protective order to prevent any Confidential Information from being made public. Notwithstanding the absence of a protective order or waiver, the Party may disclose such Confidential Information which, in the opinion of its counsel, the Party is legally compelled to disclose. Each Parry will use reasonable effort to obtain reliable assurance that confidential treatment will be accorded any Confidential Information so furnished. 15.4 Notwithstanding anything to the contrary in this Article 15, in the event a receiving Parry is requested pursuant to applicable law to disclose Confidential Information, such receiving Party shall, to the extent permitted by applicable law, give the disclosing Party prompt written notice of such request so that the disclosing Party may seek an appropriate protective order. If, in the absence of a protective order, the receiving Party is nonetheless advised by counsel that disclosure of the Confidential Information is finally required (after, if advance notice to the disclosing Party is permitted by applicable law, exhausting any Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 18 of 52 Exhibit A appeal requested by the disclosing Party at the disclosing Party's expense), the receiving Party may disclose such Confidential Information. 15.5 Use of Information or Documentation. Each Party may utilize information or documentation furnished by the disclosing Party and subject to Section 15.1 in any proceeding under Article 20 or in an administrative agency or court of competent jurisdiction addressing any dispute arising under this Agreement, subject to a confidentiality agreement with all participants (including, if applicable, any arbitrator) or a protective order. 15.6 Remedies Regarding Confidentiality. The Parties agree that monetary damages by themselves will be inadequate to compensate a Party for the other Party's breach of its obligations under this article. Each Party accordingly agrees that the other Party is entitled to equitable relief, by way of injunction or otherwise, if it breaches or threatens to breach its obligations under this article. ARTICLE 16. TERM 16.1 Term. This Agreement shall become effective as of the Effective Date and shall continue in full force and effect so long as any Interconnection Point exists between the Parties, except that it may be terminated by mutual agreement of the Parties. 16.2 Material Adverse Change. (a) In the event of a material change in law or regulation that adversely affects, or may reasonably be expected to adversely affect, either Party's performance under this Agreement, including but not limited to the following: (i) NERC or ERCOT prevents, in whole or in part, either Party from performing any provision of this Agreement in accordance with its terms; or (ii) The FERC, the United States Congress, any state, or any federal or state regulatory agency or commission implements any change in any law, regulation, rule or practice which materially affects or is reasonably expected to materially affect either Party's ability to perform under this Agreement. The Parties will negotiate in good faith any amendment or amendments to the Agreement necessary to adapt the terms of this Agreement to such change in law or regulation. (b) If the Parties are unable to reach agreement on any such amendments, then the Parties shall continue to perform under this Agreement to the extent Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 19 of 52 Exhibit A permitted by applicable law, taking all reasonable steps to mitigate any adverse effect on each other resulting from the Event. 16.3 Survival. The applicable provisions of this Agreement shall continue in effect after expiration, cancellation or termination hereof to the extent necessary to provide for final billings, billing adjustments and the determination and enforcement of liability and indemnification obligations arising from acts or events that occurred while this Agreement was in effect. ARTICLE 17. ASSIGNMENT/CHANGE IN CORPORATE IDENTITY 17.1 TMPA Assignment Rights. TMPA may not assign this Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of Member City, which consent shall not be unreasonably withheld. 17.2 Member City Assignment Rights. Member City may not assign this Agreement or any of its rights, interests or obligations hereunder without the prior written consent of TMPA, which consent shall not be unreasonably withheld. 17.3 This Agreement and all of the provisions hereof are binding upon, and inure to the benefit of, the Parties and their respective successors and permitted assigns. ARTICLE 18. CONTRACTORS 18.1 Nothing in this Agreement shall prevent the Parties from utilizing the services of contractors as they deem appropriate; provided, however, the Parties agree that, where applicable, all said contractors shall comply with the terms and conditions of this Agreement. 18.2 Except as provided herein, the creation of any contractor relationship shall not relieve the hiring Parry of any of its obligations under this Agreement. Each Party shall be fully responsible to the other Party for the acts and/or omissions of any contractor it hires as if no subcontract had been made. 18.3 No contractor is intended to be or shall be deemed a third -parry beneficiary of this Agreement. 18.4 Each Party shall require its contractors to comply with all federal, state and local laws and ordinances regarding insurance requirements and shall maintain standard and ordinary insurance coverage. Interconnect Document TMPA—Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 20 of 52 Exhibit A ARTICLE 19. NOTICES 19.1 Notices of an administrative nature, including but not limited to a notice of termination, a request for amendment, a change to a Point of Interconnection, or a request for a new Point of Interconnection shall be forwarded to the designees listed below for each Party and shall be deemed to have been duly delivered if hand delivered, delivered by nationally recognized courier service, or sent by United States certified mail, return receipt requested, postage prepaid. Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 21 of 52 Exhibit A If to City of Denton: Denton Municipal Electric Attn: General Manager 1659 Spencer Road Denton, Texas 76205 With a copy to: Denton Municipal Electric Attn: Executive Mananger of Energy Delivery 1659 Spencer Road Denton, Texas 76205 If to TMPA: Texas Municipal Power Agency Attn: Compliance and Ethics Officer or Regulatory and Compliance Manager P.O. Box 7000 Bryan, Texas 77805-7000 or Texas Municipal Power Agency Attn: Compliance and Ethics Officer or Regulatory and Compliance Manager 12824 FM 244 Anderson, Texas 77830 The above listed names, titles, and addresses of either Party may be changed upon written notification to the other Parry. 19.2 Invoices for sums due hereunder will be rendered by City of Denton to TMPA or by TMPA to City of Denton as follows: If by City of Denton to TMPA: Texas Municipal Power Agency Attn: Accounts Payable P.O. Box 7000 Denton, Texas 77805-7000 If by TMPA to City of Denton: Denton Municipal Electric Attn: Accounts Payable 1659 Spencer Road Denton, Texas 76205 Interconnect Document TMPA—Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 22 of 52 Exhibit A Billing and payments will be in accordance with PUCT Substantive Rule 25.202 or its successor in function. ARTICLE 20. MISCELLANEOUS PROVISIONS 20.1 The descriptive headings of the various articles and sections of this Agreement have been inserted for convenience of reference only and are to be afforded no significance in the interpretation or construction of this Agreement. 20.2 Facsimile copies of operational correspondence, other than notices required hereunder, including signatures thereon shall constitute original copies thereof and shall be as binding on the Parties hereto as the original. 20.3 No failure or delay on the part of TMPA or Member City in exercising any of its rights under this Agreement, no partial exercise by either Party of any of its rights under this Agreement, and no course of dealing between the Parties shall constitute a waiver of the rights of either Party under this Agreement. Any waiver shall be effective only by a written instrument signed by the Party granting such waiver, and such shall not operate as a waiver of, or estoppel with respect to, any subsequent failure to comply therewith. 20.4 Nothing in this Agreement, express or implied, is intended to confer on any other Person except the Parties hereto any rights, interests, obligations or remedies hereunder. 20.5 In the event that any clause or provision of this Agreement or any part hereof shall be held to be invalid, void, or unenforceable by any court or Governmental Authority of competent jurisdiction, said holding or action shall be strictly construed and shall not affect the validity or effect of any other provision hereof, and the Parties shall endeavor in good faith to replace such invalid or unenforceable provisions with a valid and enforceable provision which achieves the purposes intended by the Parties to the greatest extent permitted by law. 20.6 In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" in this Agreement shall mean including without limitation. 20.7 To the extent this Agreement would obligate the Member City to make a payment or an expenditure, such payment or expenditure obligation shall be payable solely from electric utility system revenues. Without limiting the foregoing, no such payment or expenditure obligation shall be payable from moneys to be raised by Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 23 of 52 Exhibit A taxation, and no debt is created by this Agreement within the contemplation of Article 11, sections 5 or 7 of the Texas Constitution. 20.8 This Agreement may be executed in two or more counterparts, each of which is deemed an original but all constitute one and the same instrument. Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 24 of 52 Exhibit A IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their respective duly authorized representatives. TEXAS MUNICIPAL POWER AGENCY Name: Bob Kahn Title: General Manager CITY OF DENTON, TEXAS in Todd Hileman, City Manager, under the authority of the Ordinance No. 2017 - Attest: Jennifer Walters, City Secretary Approved as to legal form: Aaron Leal, Interim City Attorney Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 25 of 52 Exhibit A City of Denton / TMPA Interconnection Agreement Exhibit A Facility Schedule Summary Facility Schedule Number Point of Interconnection Voltage KV Effective Service Date Minimum Monthly Demand Service to be Provided Service Provider 1 Arco Switch Substation 138 Existing N/A N/A N/A 2 Denton North Substation 138 Existing N/A N/A N/A 3 Denton West Substation 138 Existing N/A N/A N/A 4 Spencer Interchange Substation 138 Existing N/A N/A N/A 5 Jim Christal Substation 138 Existing N/A N/A N/A 6 Pockrus Substation 138 Existing N/A N/A N/A 7 Teasley Substation 138 Existing N/A N/A N/A 8 Industrial Substation 138 Existing N/A N/A N/A 9 Fort Worth Substation 138 Existing N/A N/A N/A 10 Cooper Creek Substation 138 Existing N/A N/A N/A 11 Arco Substation 138 Existing N/A N/A N/A Interconnect Document TMPA_Denton 2-2-17 W City Revisions 04032017 DG 04042017 LC 04042017 DATE: 4/12/2017 Page 26 of 52 Exi bit A The facility schedule attachments to this document are not displayed due to the fact that they contain: Critical Energy Infrastructure Information (CEII) As defined by the Federal Energy Regulatory Commission, which definition has been adopted by the Electric Reliability Council of Texas through its Protocols as enforced by the Public Utility Commission of Texas. City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-407, Version: 1 DEPARTMENT: ACM: Date: Capital Projects Jon Fortune April 18, 2017 Legislation Text SUBJECT Consider adoption of an ordinance abandoning and vacating 0.025 acre of Hickory Street, as dedicated by The Original Town of Denton Texas plat as recorded in Cabinet A Page 200, Plat Records, Denton County, Texas and as conveyed to the City of Denton as recorded in Volume 341, Page 527 of the Real Property Records of Denton County, Texas, and located in the H. Cisco survey, Abstract No. 1184, to resolve the building encroachment within Hickory Street; and declaring an effective date. [Partial abandonment of Hickory Street - adjacent to and the front of the Denton Record Chronicle Building located along Hickory Street] BACKGROUND Headliner Investments, Ltd., property owner of 314 E. Hickory Street, has made a formal request for the City of Denton to abandon a portion of Hickory Street as it affects its building that encroaches into said Street. The property owner purchased the property in May of 2016 from Denton Publishing Company. During the transaction it was discovered that a portion of the existing building encroached into the right-of-way Hickory Street. The property owner then contacted City Staff to discuss the encroachment issue. At that time Staff recommended they define the abandonment tract and request an abandonment by way of the formal City Right - of -Way Abandonment process. In order to resolve and cure the encumbrance, the property owner is requesting a portion of Hickory Street be abandoned. In 1947 the main parent building on the property was erected. An addition to the facade of the main building was made in 1971 which created the Hickory Street encroachment. It was discovered in May of 2016 that the front portion of building has been in its current configuration and has encroached into the right-of-way of Hickory Street since 1971. The building site is also known as the Denton Record Chronicle building, which was previously owned by Denton Publishing Company. The current property owner, Headliner Investments desires to retain the building frontage without demolition to the building. In order to resolve the encroachment issue without demolition, the property owner is inclined to purchasing the subject abandonment tract from the City of Denton. The abandonment tract is a combination of a 1947 conveyance and a portion of the original 80 foot Hickory Street 1857-1858 right-of-way dedication. The 1947 conveyance was from Mrs. Etta Johnson Barnhart and husband H. Daniel Barnhart, and J. Holford Russell and H.B. Newman to the City of Denton as recorded in Volume 341 Page 527, Deed Records, Denton County, Texas. The portion of the 80 foot right-of-way dedication was by the Original Town of Denton Texas plat as recorded in Cabinet A Page 200, Plat Records, Denton County, Texas. Both areas are encroached upon by the existing building as shown by the attached City of Denton Page 1 of 3 Printed on 4/14/2017 povveied by I_egivt9i IN File M ID 17-407, Version: 1 boundary survey exhibit 2. The total area of the abandonment tract is 0.025 acres and is approximately 5.75 feet wide by 187.90 feet long. The Hickory Street area was recently enhanced with public improvements by the Hickory Street Grand project and the subject abandonment tract was not required for the project. The abandonment tract is not planned for any future public projects. No public or franchised utilities exist within the subject right-of-way abandonment tract. The abandonment tract will have no impact regarding traffic and pedestrian mobility for the area. The abandonment tract was appraised by certified real estate appraiser which staff and petitioner mutually agreed upon to utilize. The Appraiser valued the abandonment tract at $21,600.00. Staff recommends the approval of the abandonment upon the condition that the applicant pay the City of Denton the appraised amount of $21,600.00. Staff performs an analysis on the request for abandonments as follows: ■ Is the right-of-way tract requested for abandonment considered "excess right-of-way?" ■ Does the right-of-way tract that is requested for abandonment have a continued public use? ■ Is it in the best interest of the general public to abandon the government's rights in the subject abandonment tract? ■ Would the granting of this request establish a precedent for right-of-way abandonment for future requests? Staff findings on this analysis are as follows: 1. The requested right-of-way abandonment tract fits the criteria of "excess right-of-way." Typically, excess right-of-way is defined as: Property acquired or used by the City for right-of-way subsequently declared excess (not needed for any public project, the continuation of operation and maintenance of public facilities, and/or no foreseeable utility application in the future). In this situation with the property owner is resolving an encumbrance that has affected its property since 1971. Also the abandonment tract has not been utilized by the public for general public use, i.e., vehicular / pedestrian travel or placement of franchise utilities. 2. The right-of-way abandonment has not been utilized and has no future general public use, i.e., vehicular / pedestrian travel or placement of franchise utilities. 3. The right-of-way abandonment is in the public interest, because the area for the subject abandonment is not needed by the general public or franchise utilities. 4. This abandonment will not set precedent, because the above three standards have been met. OPTIONS 1. Approve the proposed ordinance. 2. Not approve the proposed ordinance. 3. Table for future consideration. RECOMMENDATION The Development Review Committee recommends approval of this request. ESTIMATED SCHEDULE OF PROJECT Spring of 2017. PRIOR ACTION/REVIEW (Council, Boards, Commissions) City of Denton Page 2 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, File #: ID 17-407, Version: 1 Development Review Committee recommended approval on January 26, 2017. FISCAL INFORMATION Staff recommends the sale of the abandonment tract to the property owner for the appraised value of $21,600.00. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Public Infrastructure Related Goal: 1.1 Manage financial resources in a responsible manner EXHIBITS 1. Location Map 2. Boundary Survey, 314 E. Hickory Street 3. Applicant project narrative letter 4. Real Estate Appraisal 5. Ordinance Respectfully submitted: Paul Williamson Real Estate Manager Prepared by: Mark A. Laird Real Estate Analyst City of Denton Page 3 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, LOCATION MAP Exhibit 1 to AIS Hickory Street Abandonment 314 E. Hickory Street 325 162.5 325 650 975 m Feet EXHIBIT 2 to AIS CAP/IRF = CAPPED IRON ROD FOHND CAP/IRS CAPPED IRON ROD SET ® _' STORM DRAIN MANHOLE @= ELECTRIC RISER 1,'' TELEPI ZONE (RISER O = ELECTRIC METER (]= GAS METER WATER METER -16 FIRE HYDRANT L1 - BURIED ELECTRIC BOX a © = BURIED UNKNOWN VAULT ID - ELECTRIC TRANSFORMER 1" 50' 0 FIGHT POLE !FL15— H WATER VALVE 9 25 50 O CLEAN OUT s IfE�lNxLI INFER ..s �,..; m 5 �2 -Q� R RJ <' BOUNDARY SURVEY, -314E. HICKORY ST. f`C y,ifREi-_I f��(_fit All that certain lot, tract or parcel of land F) -. 'CO and being situated in Denton County, Texas and being a part of Block )i' n Iffy, Nd 89o 45'42" E 187 9Q' 3 21, Original Town of Denton and also _ e. being art of First and Second tract as POINT POINT'_ G described in deed to Denton Publishing I I € Company recorded in Volume 696, ,; Page 206, Real Property Records, Denton County, Texas and also being a - _- part of the First tract, including the Save & Except tract described in deed to f ' Denton Publishing Company recorded in Volume 1482, Page 205, Real Property Records, Denton County, Texas and u) being more fully described by metes and bounds as follows; C9 BEGINNING at the intersection of the South line of East Hickory Street with o m the East line of Russell Street; � Ri r 7 THENCE along said South line, North rn y 89 degrees 45 minutes 42 seconds cn East, 187.90 feet to a point; w r � THENCE South 00 degrees 16 minutes v 38 seconds East, 295.73 feet to point in the North line of Mulberry Street; C12 1.28 ACRES i �> THENCE along said North line, South 89 degrees 19 minutes 26 seconds West, 187.90 feet to point in the East line of the aforementioned Russell I L C Street, THENCE along said East line, North 00 degrees 16 minutes 36 seconds West, 297.16 feet to the PLACE OF BEGINNING and containing 1.28 acres I,i la of land more or less; -.r' FLOOD STATEMENT: I have reviewed the FI `, ` war F.E.M.A. Flood Insurance Rate Map for the City of Denton, Community Number 480194 effective date 4-18-2011 and that map indicates as scaled, that this property is a within "Non -Shaded Zone X" defined as POINT S 89'1926" i%W 187.90' POINT "Areas determined to be outside the 0.2 annual chance flood (500 -year)" as shown on " N ZR RI F - - Panel 360 G of said map. NOTE: This survey is certified to Title Resources (GF#156604), Orison Holdings LLC, and Denton Publishing Company. NOTE: This survey correctly represents the results of an on -the -ground survey made '.. under my direction and supervision on 5-2-2016. There are no visible or apparent '.. intrusions or protrusions except as shown hereon. CAP/IRF = CAPPED IRON ROD FOHND CAP/IRS CAPPED IRON ROD SET ® _' STORM DRAIN MANHOLE @= ELECTRIC RISER 1,'' TELEPI ZONE (RISER O = ELECTRIC METER (]= GAS METER WATER METER -16 FIRE HYDRANT L1 - BURIED ELECTRIC BOX a © = BURIED UNKNOWN VAULT ID - ELECTRIC TRANSFORMER 1" 50' 0 FIGHT POLE !FL15— H WATER VALVE 9 25 50 O CLEAN OUT s IfE�lNxLI INFER ..s �,..; m 5 �2 -Q� R RJ <' EXHIBIT 3 to AIS Z/,vORIbo"ON I-IOLDINGS June 16, 2016 City of Denton 212 North Elm Denton, Texas 76201 Project Narrative for Right of Way Abandonment This proposed right of way abandonment pertainsto a portion of property located at 314 East Hickory Street, currently the Denton Record Chronicle. It appears that a portion of the subject tract was sold by Russell and Newman Mfg. Co. to the City of Denton on July 19th, 1947 in Volume 341, Page 527 for the amount of $10.00. The portion of the tract that was purchased by the City of Denton was a 4.3' piece of land located on Hickory Street. Our records indicate this portion of the building was built between 1942 and 1951. To date, no claim has arised related to the said piece of land being located within the current building footprint. Please find attached an exhibit showing the area that we are requesting be abandoned by the City. Please also find herein answers to a few of the questions requested on the City checklist. 1.) What are the reasons for the proposed abandonment? a. We are requesting the abandonment due to a portion of the building being constructed in the right of way between 1942 and 1951. 2.) Is the subject abandonment tract vacant or improved? a. Improved, it appears that this portion of the building was built between 1942 and 1951 over the transferred right of way. The current building footprint closely matches the original lot lines before the right of way was transferred. 3.) What are the future development plans for the subject area proposed for abandonment? rr,� :: r r r , . r •fr rr , Z/,vORISON I-IOLDINGS a. At this time plans are to remodel the current building for a mixed use project. No final plans have been decided on at this time. 4.) Are there alternatives other than abandonment of the subject tract, and if so, what are they? a. We do not feel there are any other alternatives at this time. 5.) If there is a proposed project, what is the anticipated start date? a. March 1, 2018 or sooner. The current tenant has use of the property for up to two years. 6.) Are there related pending development actions such as platting, zoning or permitting with City departments, and if so, what are they? a. No pending actions at the city on this project 7.) How does the subject land rights abandonment initiative affect the public's interests in the context of promoting the health, safety and welfare of the citizens of Denton? a. The citizens will not be affected by this abandonment due to our records showing this building has been built in this right of way since sometime between 1942 and 1951. The expansion of Hickory, and the new sidewalks allow for plenty of pedestrian movement and access. Please see picture below. rr,� :: r r r , . r •fr rr , Z/,vORISON I-wOLDINGS Thank you in advance for your consideration and please contact me if you have questions or require further information. Thank you, Aaron Cole Director of Development Orison Holdings LLC 525 S. Loop 288 #105 Denton TX, 76205 Office 1940-382-5003 Fax 1866-498-1697 www.orisonholdings.com EXHIBIT 4 to AIS TOMMY MARSHALL & ASSOCIATES Real Estate Appraisers & Consultants 101 S. Locust, Ste. 600 P.O. Box 158 Denton, Texas 76202 Phone: (940) 243-2387 Fax: (940) 243-5352 tommy@tma-appraisal.com www.tma-appraisal.com TMA File #: A-3179 This is an Appraisal Report intended to comply with the reporting requirements set forth under Standards Rule 2-2 of the USPAP. The report presents practical explanations of the data, reasoning, and analysis incorporated in the appraisal process to develop the opinion of value, and includes descriptions of the subject property, the regional and local property market, and the opinion of highest and best use. The firm is not responsible for unauthorized use of this report. Specific%xtraordinary assumptions and/or hypothetical conditions utilized in the value opinion: ♦ It is a specific assumption of this report that the subject has no environmental or structural conditions which could adversely affect its marketability or market value. ♦ It is a specific assumption of this report that the subject is not adversely affected by a flood hazard area or drainage area other than is indicated in this report. ♦ It is a specific assumption of this report that the land and/or building size reported for the subject are sufficiently correct as to not adversely affect the value opinion. ♦ It is a specific assumption of this report that the subject is not adversely affected by encroachment, easement, or restriction other than is indicated in this report. ♦ It is a specific assumption of this report that the intended usage meets or exceeds the specifications set forth by any applicable zoning ordinance. SUBJECT PROPERTY: 1,080 SF of Land "As Vacant' 314 E. Hickory Street Denton, Texas 76201 DATE OF REPORT: October 13th, 2016 DATE OF VALUE: October 11th, 2016 INTENDED USE: Right -of -Way Abandonment Decision Making INTENDED USERS: City of Denton & Orison Holdings c/o Orison Holdings Mr. Aaron Cole 525 S. Loop 288, Suite 105 Denton, Texas 76205 DEFINITION OF MARKET VALUE The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: a. buyer and seller are typically motivated; b. both parties are well informed or well advised C. a reasonable time is allowed for exposure in the open market d. payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and e. the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. PURPOSE OF APPRAISAL Estimate the market value of the fee simple interest of the subject property in "as vacant" condition as of the date(s) of value subject to the Assumptions and Limiting Conditions set forth herein. SCOPE OF WORK Conduct a visual survey of the subject, regional area and market area. Analyze secondary data sources to assist in assessing market conditions, zoning and tax information in the market area. Estimate the highest and best use of the property. Research market data of comparable properties confirmed by participants in the regional market area. Develop a credible opinion of the defined value for the subject property utilizing the applicable approaches to value. Present the opinion in the appropriate format. COMPETENCY OF APPRAISERS Tracy Runnels has been active in real estate appraisal in North Texas since 2005. She obtained her Texas Certified General Real Estate Appraiser's license in 2008. She has 11 years of experience with Tommy Marshall & Associates and has appraised properties throughout North Central Texas. Her expertise and competency encompass 11+ years of appraisal in churches, manufacturing, single and multi -family residential, hotel/motel, farm/ranch, industrial, retail, and office buildings. Tommy Marshall has been in real estate appraisal since 1984, and has experience with a variety of property types in Texas and Oklahoma including golf courses, resorts, churches, manufacturing plants and rural water Co -Ops. Other property types include multi -family residential, commercial and residential subdivisions, hotel/motel, farm/ranch, industrial, retail, and office buildings. SECTION A SUBJECT PROPERTY OVERVIEW EXECUTIVE SUMMARY TMA File #: A-3179 Property Type: 1,080 SF of Land "As { " 4 Vacant" Address: 314 E. Hickory Street Denton, Texas 76201 County/State: Denton County/Texas Date of Value: October 11th, 2016 Estimated Marketing Time: 12 Months Appraisers: Tommy Marshall, Principal Tracy Runnels, Associate SITE DATA Land Area (SF): 1,080 +/- Zoning: "DC -G", Downtown Commercial General Shape: Generally Rectangular Road Frontage: South side E. Hickory Street Topography: Generally level Soil Conditions: Assumed adequate; rely on geo-technical report Utilities: All available Flood Plain: Not adversely affected, FEMA Map 48121C0360G, April 18, 2011 Highest and Best Use: "As Vacant" hold for development II VALUE CONCLUSION II Total Value Estimate "As Vacant" $21,600 TOMMYMARSHALL & ASSOCIATES Section A - Page 1 PHOTOGRAPHS OF SUBJECT PROPERTY SUBJECT SITE VIEW 1 TOMMYMARSHALL & ASSOCIATES Section A - Page 2 HISTORY OF THE SUBJECT PROPERTY As required by the Code of Professional Ethics and Standards of Professional Appraisal Practice established by the Appraisal Institute, the appraisal report must consider and analyze any current agreement of sale, options, listings, and any prior sales within the past three years. This analysis should reasonably disclose and verify: a. Grantor(s) - Grantee(s) b. Sale Date(s) c. Sale Price(s) and terms of financing, discounting the sale to a cash equivalent, when necessary. d. Any interrelated parties to each transaction. The subject history is reported in compliance with USPAP and no other pertinent information is known other than is reported below. The history should not be used in lieu of a title search and is not a guarantee to the chain of title. A title policy which should detail any easement and/or deed restriction was not provided. It is a specific assumption of this report that the subject is not adversely affected by encroachment, easement, or restriction other than is indicated in this report. According to the Denton Central Appraisal District, the subject property is owned by Headliner Investments Ltd., who has owned the subject since 5/9/2016 when it was purchased as part of a larger portfolio of land/buildings reportedly purchased for $2,875,000, from the previous ownership of Denton Publishing Company, where ownership had been held for a period exceeding three years. No other sales or transfers of the subject property are recorded with the Denton CAD within the previous three year period. The subject property is 100% tenant occupied by long term tenants. No other listings for sale or lease are known to exist for the subject property at this time. No contract for sale is known to exist. TOMMYMARSHALL & ASSOCIATES Section A - Page 3 SECTION B SUBJECT PROPERTY ANALYSIS REGIONAL OVERVIEW The 2008-2010 recession was one of the most severe economic downturns that the U.S. has experienced. However, the Dallas -Fort Worth economy exhibits above average performance with an Unemployment Rate of 4.2% for the Dallas/Fort Worth MSA, lower than the overall state of Texas' unemployment rate as of July 2016 of 5.1% which is in line with the national average of 5.1% for that period. As the rate of job gains accelerates in 2016, the Dallas/Fort Worth area will build on the recovery of office operations that began in 2010. Employment growth is among the highest in the nation, with nearly one-third of the hires falling in office -using sectors. The Metroplex's business friendly culture continues to draw major financial services firms to lease space in the area. JPMorgan Chase & Co, American Home Mortgage, and Merrill Lynch & Co. have leased a collective 630,000 square feet in the last 12 months, and the growth outlook of the market will likely influence other firms to follow suit. The Fort Worth area will outperform the area as a whole, as vacancy levels in some submarkets fall below 12 percent. The surge in demand throughout Fort Worth is partially rooted in the growing local healthcare presence. US Health Group, AHC Management Co., and HCA Patient Account Services are just a few of the companies that have leased in Fort Worth to support the expanding healthcare industry. Economic conditions in the Dallas/Fort Worth market strengthened during the 3rd quarter of 2014 and look to remain strong for the remainder of the year and into 2016. DFW's booming oil and healthcare industries along with a growing presence of technology companies are part of a diverse economy that likely will continue to develop in the near future. For example, Mon- ster.com recently ranked DFW as the top job market in the nation. This is due in part to the metro area's ability to retain many of its jobs during the worst of the recession compared to the rest of the country. With a healthy job market and demand for diverse types of jobs, DFW should perform well in the near term and weather any potential national economic slowdowns. Payroll job growth totaled 83,800 in 2012, and we expect job creation to average approximately 105,400 in 2013 before decelerating to the 93,000 range in 2014 and the 79,000 range in 2015. These projections exceed the peak of the previous cycle, in 2005-07, and are quite strong by current national standards. TOMMYMARSHALL & ASSOCIATES Section B - Page 1 REGIONAL OVERVIEW MAP a la mode,inc: ma S wnalcate r t � 'Cerss'y 4dens�sawn a, Davis -5u[ph ur Alma fi firr. k'e' Mill C¢eet Caaaarae€ e� � Vra L;anucka gsuA'Fi oc , I'loalr3im Tr fiomiryG fid a.nka x.o>nisle, Vkilsu�i_.:.. A�y ivzare ;;5+ i see r�-arf �rs t� P.iadhll ' G9 ,r S �I,ia Rsar3 Grady. L9§,ehitu IV Y.r.r ci,n. ............ TOMMYMARSHALL & ASSOCIATES Section B - Page 2 R.b.ttG Pd aiie'tla ;` Calora Terra; Mi fl, r pp Ledar �� rsr�ieitalU u D ilcrcr soi i:7�nfsan tr-or-sac��s C Muoriisdea ax i. 44hrtcsE;aro 1 _ 6�Etecue _1�` Gadnesville Serrnaro swd� I`U sells 18 Jay 5 Bonhan @rv4ic� �Y � Calll n5villea rGi`?�i{'11llPCJ Hove 4W hdcv rryhT 4;, Paserr,air SUBJECT . 314 E Hickory S1 Var, Ahlync iot At:rCvrd d 4^Grey l' G..,eemW.nad Sway I� L4ale". '.fir^rea :..Celina Chico 'Aiubiny, � felestc melt ssa 1110 1,x'.ks6rara Bridgeport Cuecalm Ston ProspLi, C7n "n Gr,, McKinney 281 ,. .l daaninas�+iu i CrSi^rrrtEi Friscn r,ai reenvilk Drano6ayd Ja4tir ?C The Colony Allen ., Caddo h't [lsr Penrill 112WISOle >, z,' :., Piano Wyd c pools lle Briar �) Truphy.Cl h r.' '' Carrollton y ttd I= �f, Ca le i`� ural ht Kellog Cirapevin:b� �HP97}eP5,, t"iLSXYJd�6 � Garland aG� 1Sra ch � y„ L7ns4v: AL e:. ry orth k ichland HI 5�i l �t ppiveIsitg Padk�1 �� wekc Mirsc rad tialelts ll Lok si.3c If79'edford Irving , YYIIII tf M25"�tll'C2 Weatherford r Vworth Grar�c3Fralrle ' } nb , t Tcrmll wil n>LTeai rllI ^ ala k, ,,, r} �ru, i lain ; sc4g�U� lc in to D uIII Is ; I]eSOLJ F S Karr �3CCI' I rsu l" ltu Ghon fv9an5field [echo Hill inixase CU3'rsLar12 Midlb hiallr i Cranbul`y - ,. 40 t„ Pal �'ht Kemp 144 o,gar Mill 4a.vadsa i„, 7 ,... '•, tiTtaxahae hie - 4, ."pecan plantat3mrCleburneS`r r f} nu �` Ennis G.ti Barjd City @'drU llcz Glen Ruse 5, Cl a4i end, rr`. .l Byrd Gl ,S ly M ' Y=aSCaKemms atF t 281. J.ilrru t, BI rz�i<n Cnre,eCZ]YSlf� oa ej . ' SI'sr3n:a:s Hamm . Hico Aillsb �rb A r<cdus �redel4 ill s,9oridiar; Parsley n 6 miles hd>�h6aaS Sn iths 6.,d f jx TOMMYMARSHALL & ASSOCIATES Section B - Page 2 MARKET AREA ANALYSIS The subject market area is considered to be the City of Denton in the central portion of Denton County. The market area is part of the Dallas Consolidated Metropolitan Statistical Area (CMSA). Major arterial routes, two major universities, and proximity to the CMSA are the primary economic generators for the area. Population 2000 2010 % Chan2e City 80,537 113,383 40.8% County 432,976 662,614 53.0% United States 281,421,906 309,349,689 9.9% Median Household Income 2000 2010 % Change City $35,422 $44,376 25.3% County $58,216 $67,892 16.6% United States $41,994 $50,046 19.2% Median Home Value 2000 2010 % Change City $103,800 $147,400 42.0% County $133,200 $179,800 35.0% United States S119,600 S185,400 55.0% The market area is 90% developed and in the re -development stage of the real estate cycle. Limited development is occurring and land uses consist primarily of commercial properties, residential, retail, and light industrial uses in the immediate market area. No external adverse conditions were noted in the market area. MARKET AREA MAP t Nli I a _ u7 r � 'r. w=,,sear SGJ6dECf �a.s 3a4 E.. H i ,tK(;-u . , CMA zo,.$t W oa,, St I.A 1 a, I kuFy St. � IVYJsrerf rt ,. 1i+k v1,e Kr}'s1. E _„ L:iu tit.? t) .-j ar gc) F U IN .h Idu, X16 1 ,k t- - dC31e i5r '_. f+tll St loth SI "' "I i In 'd "I.s n a t'rfyy n TOMMYMARSHALL & ASSOCIATES Section B - Page 3 SITE ANALYSIS The subject site located at 314 E. Hickory Street consists of 0.02479 acres (1,080 SF+/-) of gross land area located on the northeast corner of E. Hickory Street and Russell Street east of the downtown square in the City of Denton. The subject site is legally described as Parts of Lots 1, 2, 3, 5, 6, Block 21, OT Denton, Denton County, Texas. The subject site is situated in a developed commercial area with scattered residential uses considered to be of average development intensity. The location offers visibility and access from Russell Street, a two-way interior street, and E. Hickory Street, a one-way primary neighborhood thoroughfare for the area. Due to the subject's location on the corner of two streets, traffic levels are considered average to above average at the subject site. The site frontage and access provides average to good visibility and exposure for commercial usage. The site is generally rectangular in shape and generally level. The frontage -to -depth ratio and ingress/egress are considered average -good for commercial usage. The site is considered to offer adequate utility availability in sufficient quantities for commercial development. The provided survey is the source of the land size. It is a specific assumption of this report that the land and/or building size reported for the subject are sufficiently correct as to not adversely affect the value opinion. The site does not appear to have any adverse easements or encroachments. It is a specific assumption of this report that the subject is not adversely affected by encroachment, easement, or restriction other than is indicated in this report. The surrounding land uses are primarily professional office, commercial, retail and municipal in nature. No adverse external influences were observed in close proximity. 11 PLAT MAP/AERIAL PHOTO 11 17� TOMMYMARSHALL & ASSOCIATES Section B - Page 4 SUBJECT SITE SURVEY 2016 HICKORY STREET All that da WL aaa parr J oNaM 5PFU�L7^lyng and beino stuatetl onion A---» �qCo my T nd benp a part a Bio F89-45-42- 90' C�tl _ �� z1 Orglnel T— of Panton am alsoumbeeeadentmI r fp1 H n deed [o Denten ir® Comps s ERS, Peg 2()yrRemdetlinVdRasmft:Page 296,Rea,PfopadyRal-bPent on County,First:Texasandalsoti F4rsl tract, Irtclu so.pad the Save' Oapt $ '� 8 Evicepl tract described in deed b da Osman Publishing Company recorded in Volume 1482, Page 208, Rail Pmpart1 REOORW, Denton County, T—and (n N b0ingmers(u llydescribedbynrel—nu > N M asfObwa; o nm�I2 OEGI NING at the dlpn Cp,e SJhine Of East N!,keryStmee with B0¢Do O y O~n the East it. oRusseStreet; G IIS g T i m z THENCE al0ng sucl Soup, line, Norih N O O 4 pt B9 d"Imes 45 mill 42 eseend, e East 1E79D met to a po I: in THENCE SmM 00 degrees 18 minutes I� m 38 aewR East 29579 feel m Miro to NrMJ , N n ` THENCEMrg5sadNQrmiina,Souffi 89 degrees 19 mmules 26 —1& Wes, 187.90fae110pointmthe Easy z+s li,l0 of Ne. aforementioned Fuss J Street; THENCE Ing saidEast l Hmdr Co degrow 18 minutes 38 rd WeL _ 297-16 feet M the PLACE OF BEGINNING and wmaning 1.28 acres aflow ourr—Iss, FL000 STATEMENT. I h weaved die F-EMAfl dl mRota M ptor Me 1 y Cilyef❑ 1,COmmundyN W480194 CCCNCRETE effuft d N4-18-2011 ardmot map Indinaau as 4p104 me11hIII.1lmpelb/i6 — WithinNon-Shaded 2a.. N7 dafimv as PMM $89°i9'26"W 8 ,9O POIM 'Areas delemined u, u.aa6lde the p.2% annual dtende 8cad (6-,Oar"ab shpwn on MULBERRY STREET Pane, 36110 assid, map. 46 /y-HALT NOTE Theaurvaym oomfiedieTitle Resourcas(OFk1E86041.06- HONngs LLC. -0 Dentin I.Whing Co.,,. I NOTE This survey wrrec0y represents me msulrs f -Ih" d Suryey :de under y d dm d 1 S2-2816 Tb ble oropparent tN6Mns Or P—sons—pl as shown hereon. 0 P 9p, LEGEND CAPII—DAM' DIRCHROOrMne SURA F cavaRs=uraEprRONRoo sEr Qm•BTORM ORAINMANHOLE �.=ELECTRIC LASER Q. TELERHONERI6ER O=ME METER =0A5GM METER '_� 1720 WESTMINSTER 0T; tvAT£RQ n DENTON; TX 76205 =FmE HrDaaNr (940)382-3446 j ®BURIEpe.r�rarc aox o 180186•B fl=EUalEOONtNptNNVA1Ai J08 NBY, ® �Et£CiR1CTRANSFCRMBI P 50' F PRAWN BY, MMF w+ t—POL6 " `. F '. OATS 64-7016 M=\PATER n 15 RPLS-' j VN.VE. SURVEYING O `SLEAN OUT KENNETH A. ZOLLINGER T%PIflM REGISfRaTgxa,planlUtl f I The subject's parent site area appears to be affected by a right of way easement on the south side of E. Hickory Street running along the entire northern boundary of the existing building. A recent survey indicates that a varying portion of the building area actually lies within the right of way easement's land area likely due to variations in accuracy of mapping technology over the decades that passed between the date that the right of way easement was granted to the City of Denton, the time the building was constructed and the date of the most recent survey in 2016. As illustrated in the following enlargement showing reported building encroachment into area of designated right of way in the amount of 1,080 SF of underlying land area which is the subject of this report. TOMMYMARSHALL & ASSOCIATES Section B - Page 5 11 RIGHT-OF-WAY/REPORTED BUILDING ENCROACHMENT 11 LINE BEARING DISTANCE As OW COW Jet rktbrpaw cet olN Li N 00`16'x" w 5,75' I I MI1it and bsirq aAwlw 6t ala Curd 11.2 S fl0`1b'�8' E 5.75' OaYon, ew bNnpa pelt aEem kNdwry SOON as atroawl on the plot of R.R. SPIKE - 17Yt ale oripNatl T0a11oIi7MaonanAdalnp fmp. ¢- aforerusyd.waprediryarsNsand _ IT ® � �r 6olpMa ore fapowa; BEGINNINGlatowmahimm nwof Tran t ead"Obw bl dew to >, EAST HICKORY w Hs~kwaWwr4s,tTDmWdad in STREET N -' Walrrngrdwmbw2016444M.Rom ASPHALT Property Rellards' Calydy' .Tanis sao batrlD#are NMOtsaCti0n 0f - ® .the East line of RUN" 4110e6t WM the INT e w �. South line of EON Itdc nest <sv sa a' 2,s._ THENCE pDesin®adpEast History Ell PC 02 33 S 89 45'42" W 187.90' POINT Street, 1400 00 dagws 16 mNwNs 36 wecpldaWost; 6-75feattuppoadfa 2s' THENCE North 29 depress 45 Mnuga _ g 42 seconds East 181.60 Nat to a point for crnar, 3Ssa¢orde East 6.75 Nm to the - y Naltleast s011rer of saidTrax 1; ss mr THENCE male to common line of saw Tract om aid this aad aid along the �s z z o oxisgnp South Ian of East His" mos BVaet SOU1409 degrees 46 miiwtes 42 Doo cosonds Wast 167.00 Nat to dna z. PLACE OF BEGINNING and mritsti p F-Lij 1 STORY O 1080 square Net of NINJ mors orbits; W... - BRICK fr ti _ BUILDING 7 =. - FLOOD STATEMENT. I have mviewed the J ¢ - F.E.MA. Fi-d kwwwwr Rale Map fior me U.1 CsyOf penton, Camu* Numhar480194 ataesve dale 4145-201 and Brat map U) - kldkst-as waled, that Ww property is - wthin'NorFShaded Rory X• defined as ' <s.a r.o• z,.s.. - - 'Areas detsrrmned N be outside the 02% rs.o. H annual dfanre fwatl:(W&yparr as sh—on. T. Paw 360 G of said map. NOTE: This survey iscardBsdto Trte . ReOWnc 8 (CF#156(B04).Odsm Holdings ASPHALT I.I.C. and Denton Publishing Company. NOTE: This survey sarecty repreeents the results of an orFth0 pround purvey mads undarmy diredbn and supervision on 7.22-2016. There are no vW* or apparent Intrusions or protrusions except as shovm_ /qj vei W IIerCOn. �K,GOFa� *Ep1� RO'yrP - ........................ - IfENNETHAEDLI,ING@R.-.. LEGEND r .''1312 CAPARF= CAPPED IRON ROD FOUND �y� •Fe..o yQ - CAPARS = CAPPED IRON ROD SET - ®=STORM OR AIN MANHOLE ©= ELECTRIC RISER.. - Q*=TELEPHONE RISER ©=GASMETER ER 1720 WESTMINSTER ©=GAS METER 6= WATER METER DENTON, TX 76205 4'=FIRE HYDRANT (940)382-3446 @- BURIED ELECTRIC BOXKA 1 JOB NUMBER: 16016802 ©-BURIED UNKNOWN VAULT z ®= ELECTRIC TRANSFORMER 7"=SO' DRAWN BY: MBC aJ =LIGHT POLE P V DATE: 8-2-2016. HWATER VALVE ° 50 SURVEY -I -N G R.P.L.S. _ ®=CLEAN OUT - KENNETH A. ZOLLINGER -TX FIRM REGISTRATION#10002100 - TOMMYMARSHALL & ASSOCIATES Section B - Page 6 The site does not appear to be adversely affected by flood hazard area. It is a specific assumption of this report that the subject is not adversely affected by a flood hazard area or drainage area other than is indicated in this report. The applicable map number is FEMA Map 48121C0360G, April 18, 2011. The subject flood map is presented below. MAP ]DATA FEMA Special FIGiod Ht1zanj Area o Map Nurnhasr 48121Cl 36O Zonri. X Map Da:W April 18, 2011 RP 411121 Summary of Site Analysis FLOOD PLAIN MAP MAPLEGEND.... Areas ineandatwi by 5e0 -y rar tloc unq Areas mandated by 100 -year flooding Vrsincity Hazard Protocwd Areas Floudwa^y t .' Sndjecl Arr3ra The subject site is situated in a developed commercial area with scattered residential uses considered to be of average development intensity. The location offers visibility and access from Russell Street, a two-way interior street, and E. Hickory Street, a one-way primary neighborhood thoroughfare for the area. Due to the subject's location on the corner of two streets, traffic levels are considered average to above average at the subject site. The site frontage and access provides average to good visibility and exposure for commercial usage. TOMMYMARSHALL & ASSOCIATES Section B - Page 7 The subject's parent site area appears to be affected by a right of way easement on the south side of E. Hickory Street running along the entire northern boundary of the existing building. A recent survey indicates that a varying portion of the building area actually lies within the right of way easement's land area likely due to variations in accuracy of mapping technology over the decades that passed between the date that the right of way easement was granted to the City of Denton, the time the building was constructed and the date of the most recent survey in 2016. As illustrated in the survey enlargement showing reported building encroachment into area of designated right of way in the amount of 1,080 SF of underlying land area which is the subject of this report. The surrounding land uses are primarily professional office, commercial, retail and municipal in nature. The site is generally rectangular in shape and generally level. The frontage -to -depth ratio and ingress/egress are considered average -good for commercial usage. The site is considered to offer adequate utility availability in sufficient quantities for commercial development. The provided survey is the source of the land size. Considering these influences, the site is considered to offer average characteristics for commercial usage. TOMMYMARSHALL & ASSOCIATES Section B - Page 8 ZONING The City of Denton regulates land use within its municipal jurisdiction by the implementation and enforcement of zoning ordinances. Zoning ordinances purportedly screen and control urban development, promote consistency, compatibility and contribution to the community, and define the quality and character of the neighborhood area. The subject site is situated within an incorporated area and is reported to be zoned "DC -G", Downtown Commercial General. This zoning designation allows for a multitude of uses. The existing subject improvements are considered a conforming usage of the site. It is a specific assumption of this report that the intended usage meets or exceeds the specifications set forth by any applicable zoning ordinance. TOMMYMARSHALL & ASSOCIATES Section B - Page 9 TAX AND ASSESSMENT DATA The subject property is within the tax jurisdictions of the City of Denton, Denton Independent School District, and Denton County. According to the Denton Central Appraisal District, the subject is assessed under account numbers 32906 and 32848. Segment Size Assessed Value AV/unit Land Improvements 56,354 59,851 5563,540 5704,124 510.00 / SF 511.76 / SF Total Assessed Value S1,267,664 521.18 / SF Tax Jurisdiction Tax Rate Assessed Value Tax Liability City School County 51.54000000 50.26200000 S1,267,664 51,267,664 51,267,664 58,744 519,522 53,321 Total Tax Liability 52.49175000 S1,267,664 531 587 The estimated ad valorem taxes for the subject's 1,080 SF of land "as vacant" based on the current assessed value per SF are approximately $269 annually. TOMMYMARSHALL & ASSOCIATES Section B - Page 10 HIGHEST AND BEST USE ANALYSIS The concept of Highest and Best Use can be defined as being: "The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value."' The subject site is situated in a developed commercial zoned area with scattered residential uses considered to be of average development intensity. Due to the subject's location on the corner of a major neighborhood thoroughfare and a secondary street, traffic levels are considered average to above average at the subject. The site frontage and access provides average to good visibility and exposure for commercial usage. Considering these influences, the site is considered to offer average utility characteristics for commercial usage. Demand for commercial sites in the subject neighborhood is strong and gutting of existing improvements for redevelopment with new construction is occurring throughout the downtown area. Therefore, the highest and best use of the subject site in "as vacant" condition is considered to be hold for commercial development, as demand warrants. 'The Appraisal of Real Estate, Thirteenth Edition, Appraisal Institute, 2008, Pages 277-278 TOMMYMARSHALL & ASSOCIATES Section B - Page 11 SECTION C VAL UATIONANALYSIS APPROACHES TO VALUE The estimation of value involves a systematic process in which the problem is defined; the work necessary to solve the problem is planned; and the data required is acquired, classified, analyzed and interpreted into an estimate of value. In this process, three basic approaches: the Cost Approach, the Income Approach, and the Sales Comparison Approach. When one or more of these approaches is not applicable in the appraisal process, justification is warranted. A brief explanation of each approach follows: In the Cost Approach, the value of the subject site is estimated by comparing it to similar sites that have recently sold or are currently offered for sale. The replacement cost new of the improvements, as determined by comparison to similarly constructed properties, is then estimated. Depreciation from all sources is determined and subtracted from the replacement cost new of the improvements, to arrive at their present worth. The present worth of all improvements is added to the estimated site value with the result being the indicated value by this approach. The age/condition and/or design may render this approach in applicable due to the subjectivity of the estimation of depreciation. The Income Approach is a process in which the anticipated flow of future benefits (actual dollar income or amenities) is discounted to a present worth figure through the capitalization of the net income. Net income is the remainder after deduction of expenses of operation from effective gross income. The steps in this approach include estimating potential gross income by comparison with competing properties and estimating expenses (derived from historical and/or market experience) to determine a projected net income stream. The income stream is then capitalized into an indication of value by using capitalization rates extracted from competitive properties in the market or by using other techniques when applicable. The Sales Comparison Approach involves the comparison of similar properties that have recently sold or similar properties that are currently offered for sale, with the subject property. These properties are compared to the subject with regard to differences or similarities in market conditions, location, size, physical characteristics, and any conditions influencing the sale. The notable differences in the comparable properties are then adjusted from the subject property to indicate a value range for the property being appraised. When sufficient sales data is available, these adjustments are best determined by the actions of typical buyers and sellers in the subject's market. This value range, as indicated by the adjusted comparable properties, is then correlated into a final indicated value for the subject property by this approach. The Cost Approach is not applicable due to the subject being appraised as vacant land and is not utilized in the analysis. The Sales Comparison Approach is applicable since this property type is typically traded and utilized in this analysis. The Income Approach is considered not applicable since the property is being appraised as vacant land and is not utilized in this analysis. The value estimates as indicated by the applicable approaches are reconciled into a final value estimate of market value. TOMMYMARSHALL & ASSOCIATES Section C - Page 1 SALES COMPARISON APPROACH This approach to value is also termed the Market Approach and requires the comparison of recent comparable sales to the subject property. The typical unit of comparison used in the market area is utilized in this analysis. The unit of comparison is obtained by dividing the property's sale price by the unit primarily utilized in the market area. Since this approach involves a comparison of physical attributes, adjustments are applied to the comparables for differences that are considered to have an influence on price in the market area. The differences may include financing conditions, market conditions at date of sale, location, size, age/condition, and various other utility attributes. This method is considered highly reliable where there exists an adequate degree of comparability of the sales available. The subject is being appraised "as vacant" due to the use of the subject appraisal report being evaluation of value, if any, of a right of way easement abandonment for the portion of land underlying the reported encroachment of the existing building into the southern boundary of the existing sidewalk on the south side of E. Hickory Street at Russell Street. Recent sales of this downtown property type in the regional area are analyzed. The recent sales which are considered the most comparable are analyzed as a basis for valuation of the subject property are presented, analyzed, and adjusted on the following pages, where adjustments are considered appropriate. The majority of recent sales in proximity to the downtown Denton square are sold for redevelopment purposes; therefore, the price per square foot of underlying land is the most indicative of value of sites in this particular market area. TOMMYMARSHALL & ASSOCIATES Section C - Page 2 IMPROVED CONVERTED RESIDENCE SALE NUMBER 1 Address: 1411 N. Elm St. City: Denton' County/State: Denton/Texas Location: West side N. Elm Street north of 3rd " Street �n Legal Description: Lot 2A, Block 2, Northside Addition }r DESCRIPTIVE DATA SALES DATA Construction: One-story, dual -tenant, wood Grantor: Jonathan Littmann frame with siding, pitched composition roof Grantee: Elm Tree Investments, LLC Interior Finish: Average Professional Office Sale Date: 08/25/14 Year Built: 1943/Renovated 2007 Sale Price: $210,000 Condition: Average -Good SP/SF Building Area: $123.82 SP/SF Land Area: $22.22 Gross Building Area (SF): 1,696 Terms of Sale: Market terms Zoning: DR -2- Downtown Residential Occupancy at DOS: 100% Land Area (SF): 9,453 Ownership Conveyed: Leased Fee LTB Ratio: 5.57:1 Document: 2014-87440 Verified By: MLS# 12045397; Appraisal District 9287798 TOMMYMARSHALL & ASSOCIATES Section C - Page 3 IMPROVED CONVERTED RESIDENCE SALE NUMBER 2 Address: 1100 N. Elm Street Denton, Texas 76201 County/State: Denton/Texas Location: East side of N. Elm Street, north of lgt Street e, Legal Description: Lot 16, Block 5, Northside_' Addition DESCRIPTIVE DATA SALES DATA Construction: One-story, single-tenant, wood Sale Date: 01/30/15 frame with siding, pitched composition roof Sale Price: $143,000 Gross Building Area (SF): 1,428 SP/SF Building Area: $100.14 Year Built: 1948 SP/SF Land Area: $18.76 Condition: Average Terms of Sale: Market terms Interior Finish: Private School/Commercial Occupancy at DOS: 100% Zoning: DR-2- Downtown Residential Ownership Conveyed: Leased Fee Land Area (Acres): 0.175 (7,623 SF) Grantor: Julie Winnette LTB Ratio: 5.34:1.0 Grantee: John Thorngren Document: 2015-12706 Verified: MLS# 13046056; Appraisal District 26697 TOMMYMARSHALL & ASSOCIATES Section C - Page 4 IMPROVED SALE NUMBER 3 Address: 602 N. Elm Street Denton, Texas 76201 County/State: Denton/Texas Location: NEC N. Elm Street & W. Congress Street M, Legal Description: 0.253 Acres BBB & CRR Survey, Abstract 185 DESCRIPTIVE DATA MAM MWO Construction: One-story, single -tenant, Steel Sale Date: 04/22/15 Frame with glass and masonry exterior, flat built-up/mansard roof Sale Price: $150,000 Gross Building Area (SF): 1,184 SP/SF Building Area: $126.69 Year Built: 1970 Condition: Average SP/SF Land Area: $13.61 Interior Finish: Average Retail/Restaurant Terms of Sale: Market terms Zoning: DC -G- Downtown Commercial Ownership Conveyed: Fee simple General Land Area (Acres): 0.253 (11,021 SF) Land -to -Building Ratio: 9.31:1.0 Grantor: Roy & Joyce Harris Grantee: Saratan Corporation II Document: 2015-42752 A" Verified: Buyer; Appraisal District 33841 TOMMYMARSHALL & ASSOCIATES Section C - Page 5 IMPROVED CONVERTED RESIDENCE SALE NUMBER 4 Address: 503 Bolivar Street Denton, Texas 76201 County/State: Denton/Texas Location: NWC Bolivar Street & W. Parkway Street Legal Description: 0.2582 Acres Wm. Neill Survey, Abstract 971 DESCRIPTIVE DATA SALES DATA Construction: One-story, single -tenant, wood Sale Date: 09/30/15 frame with siding exterior Gross Building Area (SF): 1,966 I Year Built: 1948/Addition 1963 Condition: Average Interior Finish: Average Commercial/ Professional Zoning: DC -N- Downtown Commercial Neighborhood Land Area (Acres): 0.2582 (11,250 SF) Land -to -Building Ratio: 5.72:1.0 Sale Price: $240,000 SP/SF Building Area: $122.08 SP/SF Land Area: $21.33 Terms of Sale: Market terms Ownership Conveyed: Fee Simple Grantor: Christina Moon Grantee: United Through HOPE Inc. Document: 2015-114949 Verified: Buyer; Appraisal District 27234 TOMMYMARSHALL & ASSOCIATES Section C - Page 6 TOMMYMARSHALL & ASSOCIATES Section C - Page 7 IMPROVED SALE NUMBER 6 Address: 510-514 N. Elm Street Denton, Texas 7620113 County/State: Denton/Texas Location: East side of N. Elm Street north of W. Parkway Street Legal Description: Lot 8, Block 2, Lacy Addition DESCRIPTIVE DATA SALES DATA Construction: One-story, multi -tenant, masonry, Sale Date: 10/30/13 flat roof Parking: Dedicated on-site; above average Sale Price: $430,000 Square Location: Interior; off -square SP/SF Building Area: $73.40 Year Built: 1950s; retail minimal renovation 2000 SP/SF Land Area: $23.72 Condition/Finish out: Fair to Average Retail & Storefront church Terms of Sale: Cash to seller FF&E: No Gross Building Area (SF): 5,858 Occupancy at DOS: 100% Land Area (Acres): 0.4161 (18,125 SF) Ownership Conveyed: Leased Fee Land -to -Building Ratio: 3.09:1.0 Deed Record: 2013-146648 Grantor: Friday's Business Machines COMMENTS The property was offered for sale for approximately a year and sold to the tenant of both suites who had previously leased the full property for $3,700 gross Grantee: Redeemed Christian Church of per month. God Voice of Jesus, Inc. Verified: Office Files; Appraisal District 26827 TOMMYMARSHALL & ASSOCIATES Section C - Page 8 IMPROVED SALE NUMBER 7 Address: 331 E. Hickory Street Denton, Texas 76201 County/State: Denton/Texas <<� Location: North side E. Hickory Street, West of Bell Avenue Legal Description: 0.2875 Acres H. Sisco Survey, Abstract 1184 DESCRIPTIVE DATA SALES DATA Construction: One-story, single -tenant, Sale Date: 01/21/14 masonry construction, flat roof Gross Building Area (SF): 1,435 Sale Price: $265,000 Year Built/Condition: 1936/Poor SP/SF Building Area: $184.67 Interior Finish: Auto parts/repair SP/SF Land Area: $21.16 Zoning: DC -G- Downtown Commercial General Terms of Sale: Market terms Land Area (Acres): 0.2875 (12,524 SF) Ownership Conveyed: Fee Simple Land -to -Building Ratio: 8.73:1.0 Grantor: Orison Holdings, LLC Grantee: Chident Holdings, LLC Document: 2014-5991 Verified: Seller; Appraisal District 32761 TOMMYMARSHALL & ASSOCIATES Section C - Page 9 Location Site Size SF Sale Price Sale Date Sale Price per SF of Land 1411 N. Elm Street 9,453 $210,000 8/25/2014 $22.22 1100 N. Elm Street 7,623 $143,000 1/30/2015 $18.76 602 N. Elm Street 11,021 $150,000 4/22/2015 $13.61 503 Bolivar Street 11,250 $240,000 9/30/2015 $21.33 124 Eagle Drive 14,375 $315,000 7/21/2014 $21.91 510-514 N. Elm Street 18,125 $430,000 10/30/2013 $23.72 331 E. Hickory Street 12,524 $265,000 1/21/2014 $21.16 The majority of recent sales in proximity to the downtown Denton square are sold for redevelopment purposes; therefore, the price per square foot of underlying land is the most indicative of value of sites in this particular market area. With a site size range of 7,623 SF to 18,125 SF, the comparable sales have a range of price per square foot of underlying land area of $13.61 to $23.72 with an average of $20.39/SF and a median of $21.33/SF. All of the recent comparable sales are felt to be good indications of value for the subject site; therefore, the price per square foot of land indicated is $20.00/SF, rounded. VALUE INDICATION BY UNIT OF COMPARISON Site Area SF SP/SF Value Indication 1,080 x $20.00 = $21,600 Value Estimate $21,600 Value Conclusions by the Sales Comparison Approach The estimated market value of the fee simple interest in the subject property in "as vacant" condition as indicated by the price per square foot of land area is $21,600. TOMMYMARSHALL & ASSOCIATES Section C - Page 10 Location May - Comparable Improved Sales z COMPARABLE No. I sun -4 St 1411 N Elm St 0.86 miles NW dvesu"ay St P11"2IY D, COMPARABLE No. 2 N W r3R 1100 N Elm St 41, 0,68 miles NW Z_, 603 B-ollvar St S -111V Awc 0.50 miles NW 916 May St P :yell H Egan SL i� w7 COMPARABLE No 3 z 602 N Elm St C014PARABLE No. E. 0.42 miles NW 510 N Elm St 0,36 miles NVt7Y e Davi� S� E M K In n ev G, 0 21 DCTA McKhv,w-1is SO 131)[1" CI TI C014PARABLE No. 7 Hhckwy St 314 E Hickory St --M" 331 E Hickory St 1 0.05 miles NE w �t 0 m Tioy F1 L�umvu Di W $,,,i:amcwe S1 F syca"'due St 411 C".—tary COMPARABLE No. 5 ,=PA,RABLEN0. 7 C H _ kory St L_�.05- M lies N E W r� ,jjj-j�, S@ 124 Eagle Dr I ilyaix�e Sk j 0,53 miles SW r, NN E M 7 U, N7 E.aq]W, I- < Pam in Ruth Nit Pwk jj� < c, o I I r"N .5 t 0, ;'mitt St Wayne Daw 0 -,herky St 603 B-ollvar St S -111V Awc 0.50 miles NW 916 May St P :yell H Egan SL i� w7 COMPARABLE No 3 z 602 N Elm St C014PARABLE No. E. 0.42 miles NW 510 N Elm St 0,36 miles NVt7Y e Davi� S� E M K In n ev G, 0 21 DCTA McKhv,w-1is SO 131)[1" CI TI C014PARABLE No. 7 Hhckwy St 314 E Hickory St --M" 331 E Hickory St 1 0.05 miles NE w �t 0 m Tioy F1 L�umvu Di W $,,,i:amcwe S1 F syca"'due St 411 C".—tary COMPARABLE No. 5 ,=PA,RABLEN0. 7 C H _ kory St L_�.05- M lies N E W r� ,jjj-j�, S@ 124 Eagle Dr I ilyaix�e Sk j 0,53 miles SW r, NN E M 7 U, N7 E.aq]W, I- < Pam in Ruth Nit Pwk jj� < c, o I I r"N .5 t 0, ;'mitt St TOMMYMARSHALL & ASSOCIATES Section C - Page II Daw 0 -,herky St (466k "Mch"lly U 7 7 Id, SWaa Fe St st uk rafli {,or*,,- El 4.1 ov, 3 7i1s1 tut ,. Wi 10-AMOd M 1Z t If Z, SA 5 F c", 600 YCIS C, TOMMYMARSHALL & ASSOCIATES Section C - Page II RECONCILIATION AND FINAL OPINION OF VALUE Cost Approach N/A Sales Comparison Approach $21,600 Income Approach N/A The Cost Approach utilizes replacement cost estimated by using actual costs for comparable facilities and/or Marshall and Swift Valuation Services. Indirect costs associated with property are also determined. The land value is estimated by analyzing current land sales within the area. The estimated land value is added to indicate the value estimate by this approach. The Sales Comparison Approach is considered a generally reliable method because the units of comparison are market based. The units of comparison are direct, which renders the comparison highly indicative of market behavior and the primary approach utilized by market participants. The Income Approach is generally considered to be an appropriate valuation method when the property has rental income-producing potential. The potential gross income, stabilized vacancy rate and operating expenses are estimated from market data. The Cost Approach is not applicable due to the age of the subject improvements and lack of vacant land to determine vacant site value, and is not utilized in the analysis. The Sales Comparison Approach is applicable since this property type is typically traded and utilized in this analysis. The Income Approach is considered not applicable since the property type is not typically traded for rental income potential and is not utilized in this analysis. Utilizing the Sales Comparison approach to value, the estimated market value of the fee simple interest for the subject property in "as vacant" condition subject to the Basic Assumptions and Limiting Conditions as of October 11th, 2016 is: FINAL OPINION OF VALUE OF THE SUBJECT PROPERTY "AS VACANT" - - TWENTY-ONE THOUSAND SIX HUNDRED DOLLARS - - - -$21,600 - - We appreciate the opportunity to provide this appraisal for you. Should you have any questions regarding the appraisal, contact the firm at (940) 243-2387. Respectfully submitted, TOMMY MARSHALL & ASSOCIATES Tracy Runnels, Associate Appraiser TX 1337774-G Tommy Marshall, Principal TX 1322676-G TOMMYMARSHALL & ASSOCIATES Section C - Page 12 MARKETING PERIOD/EXPOSURE TIME Per USPAP the exposure period for the subject property must be analyzed. Five factors must be considered in the exposure period, the ability of those marketing the property, the type of property, the listing price, the size and location of the market and the comparability of available market data. An adept marketer will tend to move the property in a shorter period than will an average one and an inept marketer may require twice as much. Exposure period must be assessed in terms of whether the property was originally listed reasonably close to its true value as perceived by the market. Any property listed significantly above its true value will tend to attract no interested parties due to the perception that it is a waste of time pursuing its purchase. Further, a property listed noticeably below the market's perception of the value will tend to sell in a shorter period than may otherwise be required and therefore distort the concept of "reasonable marketing period". A study by M/PF, a real estate market research firm in Dallas, polled real estate brokers as to the "reasonable marketing period" for various types of real estate. The response was 9 - 12 months. Implicit in this response is that the property is listed reasonably close to the market's perception of its true value. Historically, purchasers of any property which is considered by the market to have value, are available regardless of product oversupply, availability of financing or lack thereof. The definition of market value specifically requires that there exists a potential buyer and potential seller, each acting prudently and knowledgeably and implies a consummation of a sale. Therefore, an additional factor to be considered in analyzing the marketing period is the size and location of the market. For very large industrial properties or for very specialized properties such as petrochemical refining, large granaries, etc., the market may be relatively small, specialized and national or international rather than local or regional. More typical real estate such as apartments, shopping centers, office buildings and vacant land has a market that is local, regional national or international implying a shorter marketing period and exposure time. The date of the comparable sales must be considered. If no data is available to indicate current expectations of current market conditions and is only available for market conditions unlike current conditions, the value indicated by the data may not necessarily reflect current expectations and the analysis must include these circumstances. Properties similar to the subject in the market area are marketable to a wide group of potential purchasers in the local region, state, and nation. Exposure time is considered to be twelve months. Without exception, all real estate offices contacted expressed, if offered at or near market value and had the property been correctly exposed to the market for the past twelve months, the property should sell for a reasonable price. After development of the preceding pages of market data, it is our opinion that had the property been offered at or slightly above the market value conclusion an exposure period from 9 - 12 months is considered necessary for the property to potentially consummate a sale closer to the appraised market value. An exposure period of twelve months or less is considered applicable for the subject property. TOMMYMARSHALL & ASSOCIATES Section C - Page 13 ASSUMPTIONS AND LIMITING CONDITIONS 1. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated in this report. 2. The property is appraised free and clear of any or all liens and encumbrances unless otherwise stated in this report. 3. Responsible ownership and competent property management are assumed unless otherwise stated in this report. 4. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. 5. All engineering is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. 6. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 7. It is assumed that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated in this report. 8. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless a non -conformity has been reported, stated, defined, and/or considered in this appraisal report. 9. It is assumed that all required license, certificates of occupancy or other legislative or administrative authority from any local, state, or national governmental or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based. 10. Any sketch in this report may show approximate dimensions and is included to assist the reader in visualizing the property. Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee as to accuracy is expressed or implied unless otherwise stated in this report. No survey has been made for the purpose of this report. 11. It is assumed that the utilization of the land and improvements is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless otherwise stated in this report. TOMMYMARSHALL & ASSOCIATES Section C - Page 14 12. The firm is not qualified to detect hazardous waste and/or toxic materials. Any comment by the firm that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The presence of substances such as asbestos, urea - formaldehyde foam insulation or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The descriptions and comments are the result of the routine observations made during the appraisal process. 13. Unless otherwise stated in this report, the subject property is appraised without a specific compliance survey having been conducted to determine if the property is or is not in conformance with the requirements of the Americans with disabilities act. The presence of architectural and communications barriers that are structural in nature that would restrict access by disabled individuals may adversely affect the property's value, marketability, or utility. 14. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications. 15. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. 16. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the firm, and in any event, only with proper written qualification and only in its entirety. Specific%xtraordinary assumptions and/or hypothetical conditions utilized in the value opinion: ♦ It is a specific assumption of this report that the subject has no environmental or structural conditions which could adversely affect its marketability or market value. ♦ It is a specific assumption of this report that the subject is not adversely affected by a flood hazard area or drainage area other than is indicated in this report. ♦ It is a specific assumption of this report that the land and/or building size reported for the subject are sufficiently correct as to not adversely affect the value opinion. ♦ It is a specific assumption of this report that the subject is not adversely affected by encroachment, easement, or restriction other than is indicated in this report. ♦ It is a specific assumption of this report that the intended usage meets or exceeds the specifications set forth by any applicable zoning ordinance. TOMMYMARSHALL & ASSOCIATES Section C - Page 15 CERTIFICATION OF THE APPRAISERS We certify that, to the best of our knowledge and belief- 1. elief1. The statements of fact contained in this report are true and correct. 2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are personal, unbiased professional analyses, opinions, and conclusions. 3. We have no present or prospective interest in the property that is the subject of this report and we have no personal interest or bias with respect to the parties involved. 4. The compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a subsequent event. 5. The appraisal is not based on a requested minimum valuation, a specific valuation, or the approval of a loan. 6. The analyses, opinions, and conclusions are developed and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. 7. We have made a personal inspection of the property that is the subject of this report. 8. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute. 9. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. 10. As of the date of report, I, Tommy Marshall, am a State Certified General Real Estate Appraiser. 11. As of the date of report, I, Tracy Runnels, am a State Certified General Real Estate Appraiser. 12. Tommy Marshall & Associates has not appraised or provided other valuation services for the subject property in the preceding three year period. 13. The value estimate is not valid unless this certification is included in the appraisal. TOMMY MARSHALL & ASSOCIATES Tracy Runnels, Associate Appraiser TX 1337774-G Tommy Marshall, Principal TX 1322676-G TOMMYMARSHALL & ASSOCIATES Section C - Page 16 SECTION D ADDENDA APPRAISER QUALIFICATIONS QtA1,11"'ICATIO'N', or''IrmnaN, N1ARSHA1,1,,, Expe ne"Ce'. 108 1 [o pw.st"t IT, l"II of M�ardr I I� 'I r" I -ven c I I t' I Iged BSS rid c I c,'- a I P" .I,ld I cd I I um, -I 0""'-wr od- Nhrshal I X.' o11 u" patorn[I,,cl W,, Kawa�" piprais;.l k". j1w, c "Iko lit,win S'in'UL' I'Vj- 11!o"t "A'I')rk h' -a, bct:'�m ilo, Ox \Iorll- ('cmla'§ 'otW'vfll 01<�ahovn,1 ""alied i"d l "'d proper"t" lmve rurm nrld l,"un'I" loiden"I'61 sull"fivi'Jow", li-Lixed U -101I 1pkcxcs' hotd"," lvjolvk'bhmk 'A"['Lj ck coll amomm KA Dorvc, S'[Lott': xu - dicN-,,-L'Jmwi a-'soviawm fildude: Mvilibo', Mi6ovl il! 411, %'i" nthor' N11knolka, I knnlc Hmtl is~l to v'W Cohm!"v Bolud "d Cl Ien I I lvtwr APPRAISER LICENSES Zeno apprafar littitsing aub Ctrfifiration j1oa Pi.O. Box 12188 Austin, Texas 787114188 Certified General Real Estate Appraiser Number- TX 1322676 G Issued: 0410112016 Expires: 03131/2018 Appraiser: TOMMY L MARSHALL Having provided satisfactory evidence of the qualifications required by the Texas Appraiser Licensing and Certification Act, Texas Occupations Code, Chapter 1103, is authorized to use this title, Certified General Real Estate Appraiser. q9uglas E. 01dinixon I Comm "�Ioner 19tus apprafar Iftensing aub Certiffitation j5oa P.O. Box 12188 Austin, Texas 78711-2188 Certified General Real Estate Appraiser Number; TX 1337774 G Issued: 01/14/2016, Expires: 0212812018 Appraiser: TRACY ZANE RUNNELS Having provided satisfactory evidence of the qualifications required by the Texas Appraiser Licensing and Certification Act, Texas Occupations Code, Chapter 1103, is authorized to use this title, Certified General Real Estate Appraiser. j `oa E. OldinixoQOII n � I — I Commissioner EXHIBIT 5 to AIS S:ALegal\Our Documents\Ordinances\] N-lickory Street Partial Abandonment Ordinance - Pinal.docx ORDINANCE NO. AN ORDINANCE ABANDONING AND VACATING 0.025ACRE TRACT OF HICKORY STREET RIGHT-OF-WAY, BEING A PORTION AS DEDICATED BY THE ORIGINAL TOWN OF DENTON TEXAS PLAT, RECORDED IN CABINET A, PAGE 200, PLAT RECORDS, DENTON COUNTY, TEXAS AND ALSO A TRACT CONVEYED TO THE CITY OF DENTON AS THE SECOND DESCRIBED TRACT IN A DEED RECORDED IN VOLUME 341, PAGE 527, DEED RECORDS, DENTON COUNTY, TEXAS, ALL LOCATED IN THE H. CISCO SURVEY, ABSTRACT NO. 1184; AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City of Denton is the holder of the right-of-way of Hickory Street; and WHEREAS, the City of Denton ("City") has received a request for the abandonment and vacation of a portion of Hickory Street right-of-way from Headliner Investments, Ltd., a Texas limited partnership, the abutting landowner ("Landowner"); and WHEREAS, the 0.025 acre right-of-way tract to be abandoned and vacated is located in the 1-1. Cisco Survey, Abstract No. 1184, and is made up of a portion of the hickory Street right- of-way ight- ofway shown on the Original Town of Denton Texas plat as recorded in Cabinet A, Page 200, of the Plat Records of Denton County, Texas and also contains all of the 807.97 square feet of property described in the second tract of a deed to the City of Denton recorded in Volume 341, Page 527, Deed Records, Denton County, Texas and being more specifically described and depicted in Exhibit A, attached hereto, all being incorporated by reference and description and made a part hereof (the "Abandonment Tract"); and WHEREAS, the City reviewed the requested abandonment and vacation of the Abandonment 'Tract and determined that the 0.025 acre right-of-way tract of Hickory Street is fully encumbered by an existing building and no longer needed for public use. Staff recommends approval of the request; and WHEREAS, the consideration to be paid to the City by Landowner for the Abandonment Tract is Twenty -One Thousand Six Hundred and no/100 Dollars ($21,600.00), that amount being equal to or greater than the fair market value of the Abandonment Tract, as established by a third party appraisal; and WHEREAS, the City Council of the City of Denton, Texas, has determined that the Abandonment Tract is no longer needed for public use and finds it is in the public interest to abandon and vacate the Abandonment Tract; and WIIEREAS, Section 272.001 (b)(2) of the Texas Local Government Code provides an applicable exception of Notice and Bidding requirements where the tract to be abandoned is designated as street right-of-way, fair market value has been determined, and the transaction is with an adjacent landowner; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON ORDAINS: SECTION 1. The recitations and finding set forth above are incorporated by reference. SECTION 2. Upon the City's receipt of the compensation contemplated above, the City Manager is hereby authorized to execute a Deed Without Warranty, on behalf of the City to Landowner, of the Abandonment Tract, in a form suitable to be filed in the Real Property Records of Denton County, Texas. SECTION 3. This ordinance constitutes an offer to abandon and convey the Abandonment Tract in favor of Landowner. Should Landowner not tender the above - contemplated compensation to the City within sixty (60) days of the effective date defined herein, this offer is rescinded without further action of the City. SECTION 4. The provisions of this ordinance are severable, and the invalidity of any phrase, clause or part of this ordinance shall not affect the validity or effectiveness of the remainder of the ordinance. SECTION 5. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2017. ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: AARON LEAL,, INTERIM CITY ATTORNEY n� BY: Page 2 CHRIS WATTS, MAYOR EXHIBIT A All that certain lot, tact, or parcel of land lying and being situated in the City of Denton, and being a portion of East Hickory Street as shown on the plat of the Original Town of Denton, as recorded in Cabinet A, Page 200, Plat Records, Denton County, Texas, and being all of the 807.97 Square feet tract described in Volume 341, Page 527, Deed Records, Denton County, Texas, and being more fully described by metes and bounds as follows, - Beginning at the Northwest corner of Tract 1 as described in deed to Headliner Investments, LTD recorded in Instrument number 2016-55200, Real Property Records, Denton County, Texas, also being at the intersection of the East line of Russell Street with the South line of East Hickory Street; THENCE North 00 degrees 16 minutes 36 seconds West, across a portion of said East Hickory Street, a distance of 5.75 feet to a point for corner; THENCE North 89 degrees 45 minutes 42 seconds East, a distance of 187.90 feet to a point for corner; THENCE South 00 degrees 16 minutes 38 seconds West, a distance of 5,.75 feet to the Northeast corner of said Tract 1; THENCE South 89 degrees 45 minutes 42 seconds West, along the north line of said Tract 1 and along the South line of East Hickory Street, a distance of 187.90 feet to the PLACE OF BEGINNING and containing 1,080,425 square feet of land more or less; PAGE 1 OF 2 v eOF0 F co )"N A K. E. N r 5 2 12 0A �Ssto. C) U TX FIRM REGISTRATION 1 10002100 1720 WESTMINSTER DENTON, TX 76205 (940)382-3446 JOB NUMBER: 160168-04 DRAWN BY: MMF DATE: 3-30-2017 R,P.L.S. KENNETH A. ZOLLINGER Cl M EXHIBIT A N-1 F r s- - 4, C14 0*jj o. y 4, m z SOUTH 145.70' SOUTH, 150.00' 11 Q� Lo F -I. CORNER TO SE:, C0F,!,j',J,FR) LLJ CD z z — , 0 0 L3 SOUTH 14570' S OOl 638" E 295.73' SOUTH 150.0U A) z �x C� u- co S OO'16 36 0 N co ui=J < a: '71 coI 0) m U,2< U) I -- cN LLJ u� z z w Lu 0 < CL 0 0 C_y C, z z z 0 Di t, ui 1�2 :D ZD w Co uj ir ED 4 'T f w w — — — — < C) ro C, < <z Cl U) CD Y') Lu Lu 3: O z C'J 00 Lo V LLJ 0) 0 M FJI� o CD 0 00 Z Z W U) w z el I Lo LLJ CN C?a. c) < m z SOUTH 145.70' SOUTH, 150.00' 11 Q� Lo cr- LLJ CD Ui A) z �x C� u- co S OO'16 36 0 N 52, C) o LU < a: '71 coI 0) m LU cN LLJ u� z z -j Lu 0 < CL 0 0 C_y C, z z 0 ui 1�2 LL ZD w Co t1i z 2 z Z --b LU 0 Lij (D u m Lij U- LL 0 0 00 0 0 n CL z S OO'16 36 E 297,16 0 (NVV, COR�14ERI TO S -',A! it,F-'R CL z LL w ED w C) < Cl City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-416, Version: 1 DEPARTMENT: CM/ ACM: Date: Engineering Jon Fortune, ACM April 18, 2017 Legislation Text Agenda Information Sheet SUBJECT Consider adoption of an ordinance of the City of Denton, Texas prohibiting parking on south side of Texas Street from one hundred and fifty (150) feet east of Vine Street to one hundred fifty (150) feet west of Frame Street; providing a repealer clause, providing a savings clause; providing for a penalty not to exceed $500 for violations of this ordinance, providing that violations of this ordinance shall be governed by Chapter 18 of the Code of Ordinances of the City of Denton, and providing for an effective date. The Traffic Safety Commission recommends Option 1 (6-0). BACKGROUND On April 20, 2016, the Lonestar Apartments located at 600 Texas St. experienced a fire caused by a lightning strike. Several units were destroyed and all residents were displaced due to the damage. Continued weather events delayed repairs causing further damage to the structure. This resulted in a rebuild of the structure at a level of construction that required the building to meet current code standards. The apartment complex was constructed in 2002 and consists of three apartment buildings with a total of 34 living units used exclusively by Texas Women's University for student housing. The construction of the apartment building is 34 feet in height. Current fire code requires an aerial fire apparatus access road be provided where the vertical distance between the grade and the highest roof surface exceeds 30 feet. The aerial fire apparatus access road must have a minimum unobstructed width of 26 feet. The complex has an existing fire lane on the south side of the complex that runs the length of its parking lot. The width of the fire lane is 24 feet and the length is 245 feet. The width of the existing lane does not meet the requirements for an aerial access road and exceeds the maximum length requirement of 150 feet. The fire lane dead ends into private property on the east side. The current site layout prevents the developer from making improvements on the property. Widening the existing fire lane at the east entrance off Vine St. is restricted due to utilities. The extended dead end of the fire lane does not support widening at the west end due to lack of a turn around. The code allows for the use of a public street as a fire lane if the street remains unobstructed. Texas Street, between Vine Street and Frame Street, runs the length of the apartment complex on the north side. Measuring at a 30 foot width, Texas Street meets the width requirement of 26 feet to serve as the development's aerial access road. To achieve the un -obstruction requirement, staffs initial recommendation was to prohibit parking City of Denton Page 1 of 3 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-416, Version: 1 on both sides of the street from Vine Street to Frame Street. Based on reviewing all potential options, and a detailed discussion at the April 11' City Council Work Session, restricting parking on a portion of Texas Street which is 150 feet east of Vine Street and 150 feet west of Frame Street is a viable option to meet fire code access requirements, reduce parking impacts and advance the development project. The attached ordinance would implement these restrictions. OPTIONS 1. Recommend approval of an ordinance to restrict parking on both sides of Texas Street 2. Recommend approval of an ordinance to restricting parking on a portion of Texas Street which is 150 feet east of Vine Street and 150 feet west of Frame Street 3. Decline recommendation of a no parking zone and provide staff with additional direction RECOMMENDATION The Traffic Safety Commission considered this item at the March meeting and recommends Option 1 (6-0) for restricting parking on both sides of Texas Street from Vine Street to Frame Street. ESTIMATED SCHEDULE OF PROJECT It is anticipated the work could be scheduled for completion within a month of Council approval. PRIOR ACTION/REVIEW (Council, Boards, Commissions) Traffic Safety Commission considered this proposal at the March 20, 2017 meeting and recommended Council consideration 6-0. FISCAL INFORMATION Approximately $500 is labor and material cost for signage. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Safe, Liveable & Family -Friendly Community Related Goal: 4.1 Enhance public safety in the community EXHIBITS 1. Letter Notices to property owners and residents dated March 10, 2017 2. Door Hanger Notices, March 16, 2017 3. Site Map - Option 1 4. Ordinance Respectfully submitted: City of Denton Page 2 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, File M ID 17-416, Version: 1 Galen Gillum Prepared by: Pritam Deshmukh Traffic Engineer City of Denton Page 3 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, Engineering Services 901-A Texas Street Denton, Texas 76209 (940) 349-8910 fax (940) 349-8951 March 10, 2017 Dear Resident or Property Owner, RE: Texas Street Parking The Traffic Safety Commission has been advised of safety concerns related to the level of on - street parking on Texas Street between Vine Street and Frame Street. On -street parking on the north and south side of Texas Street impairs the mobility of public safety vehicles needing to access Texas Street. As a property owner or resident on or adjacent to Texas Street, City of Denton officials want to ensure you have the opportunity to participate in the discussion regarding on -street parking on Texas Street. The Denton Traffic Safety Commission encourages your participation in the consideration of this issue as part of their March meeting. City of Denton Traffic Safety Commission Meeting Monday, March 20, 2017 5:30 pm City Council Work Session Room, Main City Hall 215 E. McKinney Street Denton, Texas 76201 Should you have any questions regarding this proposal, please feel free to contact Pritam Deshmukh, Senior Engineer at 940-349-7710. Exhibit 2 No Parking Proposed for Texas Street The Traffic Safety Commission has been advised of safety concerns related to the level of on - street parking on Texas Street between Vine Street and Frame Street. On -street parking on the north and south side of Texas Street impairs the mobility of public safety vehicles needing to access Texas Street. As a property owner or resident on or adjacent to Texas Street, City of Denton officials want to ensure you have the opportunity to participate in the discussion regarding on -street parking on Texas Street. The Denton Traffic Safety Commission encourages your participation in the consideration of this issue as part of their March meeting. City of Denton Traffic Safety Commission Meeting Monday, March 20, 2017 5:30 pm City Council Work Session Room, Main City Hall 215 E. McKinney Street Denton, Texas 76201 Should you have any questions regarding this proposal, please feel free to contact Pritam Deshmukh, Senior Engineer at 940-349-7710. s:Alegal\our documents\ordinances\17\no parking texas st.docx ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON, TEXAS PROHIBITING PARKING ON THE SOUTH SIDE OF TEXAS STREET FROM ONE HUNDRED FIFTY (150) FEET EAST OF VINE STREET TO ONE HUNDRED FIFTY (150) FEET WEST FRAME STREET; PROVIDING A REPEALER CLAUSE; PROVIDING A SAVINGS CLAUSE; PROVIDING FOR A PENALTY NOT TO EXCEED $500 FOR VIOLATIONS OF THIS ORDINANCE; PROVIDING THAT VIOLATIONS OF THIS ORDINANCE SHALL BE GOVERNED BY CHAPTER 18 OF THE CODE OF ORDINANCES OF THE CITY OF DENTON; AND PROVIDING FOR AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. When signs and/or marking or any combination thereof are in place giving notice thereof, no person shall park a vehicle on the south side of Texas Street from 150 feet east of Vine Street to 150 feet west of Frame Street. SECTION 2. The provisions of Section 1 prohibiting the parking of vehicles shall apply on the designated portion of the above named street or streets, except when it is necessary to stop a vehicle to avoid conflict with other traffic, or in compliance with the direction of a police officer, or official traffic control device. SECTION 3. All provisions of the ordinances of the City of Denton in conflict with the provisions of this ordinance are hereby repealed, and all other provisions of the ordinances of the City of Denton, not in conflict with the provisions of this ordinance, shall remain in full force and effect. SECTION 4. If any section, subsection, paragraph, sentence, clause, phrase, or word in this ordinance, or application thereof to any person or circumstances is held invalid by any court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this ordinance, and the City Council of the City of Denton, Texas hereby declares it would have enacted such remaining portions despite any invalidity. SECTION 5. Save and except as amended hereby, all the provisions, sections, subsections, paragraphs, sentences, clauses, and phrases of the Code of Ordinances shall remain in full force and effect. SECTION 6. Any person found liable of violating this Ordinance by a court of competent jurisdiction shall be fined a sum not to exceed five hundred dollars ($500). Each day that a provision of this ordinance is violated shall constitute a separate offense. The disposition of parking citations issued pursuant to this Ordinance shall be governed by Division 3 titled "Parking Violations Division" of Chapter 18 of the Code of Ordinances. SECTION 7. This Ordinance providing for a penalty shall become effective 14 days from the date of its passage, and the City Secretary is hereby directed to cause the caption of this PASSED AND APPROVED this the day of , 2017. ATTEST: JENNIFER WALTERS, CITY SECRETARY um APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY: Page 2 CHRIS WATTS, MAYOR City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-417, Version: 1 DEPARTMENT: CM/ ACM: Date: Engineering Jon Fortune, ACM April 18, 2017 Legislation Text Agenda Information Sheet SUBJECT Consider adoption of an ordinance of the City of Denton, Texas prohibiting parking on the east side of Denton Street from Oak Street to Hickory Street; providing a repealer clause, providing a savings clause; providing for a penalty not to exceed $500 for violations of this ordinance, providing that violations of this ordinance shall be governed by Chapter 18 of the Code of Ordinances of the City of Denton, and providing for an effective date. The Traffic Safety Commission recommends Option 1 (6-0). BACKGROUND In the recent past, City staff has received several requests from concerned residents regarding the segment of Denton Street between Oak Street and Hickory Street. The primary issue was the narrow street width and the heavy use of on -street parking (both side) along this section of the roadway. The segment of Denton Street between Oak Street and Hickory Street is approximately 24 feet in width and experiences heavy on -street parking on both sides due to the proximity of the University of North Texas (UNT) campus and multi -family residential units on both sites of the street. Given the location and surrounding land use, on -street parking demand in this area is high. As such, staff investigated the possibility of reducing the impact on parking supply by restricting parking on east side only while allowing on -street parking on the west side. The Fire Code requires a street to be a minimum of 26 feet for allowing on -street parking on one side. This requirement provides the necessary space essential for access and deployment of fire equipment. The current street width does not provide sufficient capacity to legally permit on -street parking on both sides of Denton Street between Oak Street and Hickory Street as it does not satisfy the requirement included in the fire code. Staff had notified the property owners and residents on and adjacent to Denton Street about the proposed discussion item regarding parking on Denton Street to ensure residents and property owners have an opportunity to voice any concerns they may have. Letters were mailed on February 24th and door hangers were placed on March 2nd on residential addresses on both sides of Denton Street. Based on review of existing parking conditions and the available street width for two-way traffic along Denton Street between Oak Street and Hickory Street and further discussion of this issue in the April 11' City Council Work Session, staff recommends restricting parking on east side of the street. This will allow better accessibility for emergency and other vehicles while reducing impacts on the overall parking supply in this area. While considering the recommendation, it should be noted that typically restricting on street parking City of Denton Page 1 of 3 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-417, Version: 1 reduces the side friction resulting in the possibility of increase in average speeds along this segment of Denton Street. Staff is aware there are other street segments throughout the community that experience heavy on -street parking and may be in conflict of the Fire Code minimum street width of 26 feet. Staff is in the process of identifying these street segments and reviewing options with the intent of developing a comprehensive plan to balance public safety requirements and on -street parking needs. OPTIONS 1. Recommend approval of an ordinance to restrict parking on both sides of Denton Street 2. Recommend approval of an ordinance to restrict parking on the east side of Denton Street seeking a variance to the Fire Code 3. Decline recommendation of a no parking zone and provide staff with additional direction RECOMMENDATION The Traffic Safety Commission considered this item at the March meeting and recommends Option 1 (6-0) for restricting parking on both sides of Denton Street. ESTIMATED SCHEDULE OF PROJECT It is anticipated the work could be scheduled for completion within a month of Council approval. PRIOR ACTION/REVIEW (Council, Boards, Commissions) Traffic Safety Commission considered this proposal at the March 20, 2017 meeting and recommended Council consideration 6-0. FISCAL INFORMATION Approximately $500 in labor and material cost for signage. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Safe, Liveable & Family -Friendly Community Related Goal: 4.1 Enhance public safety in the community EXHIBITS 1. Letter Notices to property owners and residents dated March 15, 2017 2. Door Hanger Notices March 16, 2017 3. Site Map - Option 1 4. Ordinance City of Denton Page 2 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, File M ID 17-417, Version: 1 Respectfully submitted: Galen Gillum Director of CIP Prepared by: Pritam Deshmukh Traffic Engineer City of Denton Page 3 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, Exhibit 1 Engineering Services 901-A Texas Street Denton, Texas 76209 (940) 349-8910 fax (940) 349-8951 March 15, 2017 Dear Resident or Property Owner, RE: Denton Street Parking The Traffic Safety Commission has been advised of safety concerns related to the level of on - street parking on Denton Street between Oak Street and Hickory Street. On -street parking on the east and west side of Denton Street impairs the mobility of public safety vehicles needing to access Denton Street. As a property owner or resident on or adjacent to Denton Street, City of Denton officials want to ensure you have the opportunity to participate in the discussion regarding on -street parking on Denton Street. The Denton Traffic Safety Commission encourages your participation in the consideration of this issue as part of their March meeting. City of Denton Traffic Safety Commission Meeting Monday, March 20, 2017 5:30 pm City Council Work Session Room, Main City Hall 215 E. McKinney Street Denton, Texas 76201 Should you have any questions regarding this proposal, please feel free to contact Pritam Deshmukh, Senior Engineer at 940-349-7710. Exhibit 2 No Parking Proposed for Denton Street The Traffic Safety Commission has been advised of safety concerns related to the level of on - street parking on Denton Street between Oak Street and Hickory Street. On -street parking on the east and west side of Denton Street impairs the mobility of public safety vehicles needing to access Denton Street. As a property owner or resident on or adjacent to Denton Street, City of Denton officials want to ensure you have the opportunity to participate in the discussion regarding on -street parking on Denton Street. The Denton Traffic Safety Commission encourages your participation in the consideration of this issue as part of their March meeting. City of Denton Traffic Safety Commission Meeting Monday, March 20, 2017 5:30 pm City Council Work Session Room, Main City Hall 215 E. McKinney Street Denton, Texas 76201 Should you have any questions regarding this proposal, please feel free to contact Pritam Deshmukh, Senior Engineer at 940-349-7710. W, X W a! 0, 0 0 C7 0 N a a ai 0 0 0 0 NN a N N E sllegal\our d0cuments\ordinances\17\no parking denton st.doex ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON, TEXAS PROHIBITING PARKING ON THE EAST SIDE OF DENTON STREET FROM OAK STREET TO HICKORY STREET; PROVIDING A REPEALER CLAUSE; PROVIDING A SAVINGS CLAUSE; PROVIDING FOR A PENALTY NOT TO EXCEED $500 FOR VIOLATIONS OF THIS ORDINANCE; PROVIDING THAT VIOLATIONS OF THIS ORDINANCE SHALL BE GOVERNED BY CHAPTER 18 OF THE CODE OF ORDINANCES OF THE CITY OF DENTON; AND PROVIDING FOR AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. When signs and/or marking or any combination thereof are in place giving notice thereof, no person shall park a vehicle on the east side of Denton Street from Oak Street to Hickory Street. SECTION 2. The provisions of Section 1 prohibiting the parking of vehicles shall apply on the designated portion of the above named street or streets, except when it is necessary to stop a vehicle to avoid conflict with other traffic, or in compliance with the direction of a police officer, or official traffic control device. SECTION 3. All provisions of the ordinances of the City of Denton in conflict with the provisions of this ordinance are hereby repealed, and all other provisions of the ordinances of the City of Denton, not in conflict with the provisions of this ordinance, shall remain in full force and effect. SECTION 4. If any section, subsection, paragraph, sentence, clause, phrase, or word in this ordinance, or application thereof to any person or circumstances is held invalid by any court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this ordinance, and the City Council of the City of Denton, Texas hereby declares it would have enacted such remaining portions despite any invalidity. SECTION 5. Save and except as amended hereby, all the provisions, sections, subsections, paragraphs, sentences, clauses, and phrases of the Code of Ordinances shall remain in full force and effect. SECTION 6. Any person found liable of violating this Ordinance by a court of competent jurisdiction shall be fined a sum not to exceed five hundred dollars ($500). Each day that a provision of this ordinance is violated shall constitute a separate offense. The disposition of parking citations issued pursuant to this Ordinance shall be governed by Division 3 titled "Parking Violations Division" of Chapter 18 of the Code of Ordinances. SECTION 7. This Ordinance providing for a penalty shall become effective 14 days from the date of its passage, and the City Secretary is hereby directed to cause the caption of this ordinance to be published twice in the Denton Record -Chronicle, the official newspaper of the City of Denton, Texas, within 10 days of the date of its passage. PASSED AND APPROVED this the day of , 2017. ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY .7 BY:_ Page 2 CHRIS WATTS, MAYOR City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-465, Version: 1 Legislation Text AGENDA INFORMATION SHEET AGENDA DATE: April 18, 2017 DEPARTMENT: Parks and Recreation Department DCM: Bryan Langley SUBJECT Consider adoption of an ordinance approving a City sponsorship in an amount not to exceed $11,000 of in-kind services and resources for the Denton Juneteenth Celebration to be held in Fred Moore Park from June 16 through 17, 2017; and providing an effective date. BACKGROUND The 45' Annual Denton Juneteenth Celebration is organized by community volunteers. In 2016, City Council authorized spending up to $19,000 of in-kind services and resources for staff time, equipment, supplies, facilities, park maintenance support; and the use of the Fred Moore Park, Martin Luther King Jr. Rec Center and American Legion Hall. In addition to the City sponsorship, the Denton Juneteenth Celebration received $13,205 in FY 2015-16 Hotel/Motel Occupancy Tax (HOT) funds. This year, the Denton Juneteenth Celebration expects to host approximately 40 vendors and estimates 4,000 people throughout the two-day event. A recent provision added to the Sponsorship Agreement alerts event organizers of their responsibility for damages caused to City property, beyond normal wear and tear, during the hosting of their events. This necessity results from the significant damages caused to Quakertown Park in 2015 and the substantial costs associated with remediation. The Parks Department has noticed special event organizers of the liability provision, and it is now included in all sponsorship agreements. RECOMMENDATION Staff recommends approval. PRIOR ACTION/REVIEW April 5, 2016, City Council authorized an agreement for the City's sponsorship in an amount of $19,000, Ordinance No. 2016-111. February 17, 2015, City Council authorized an amount of $18,000, Ordinance No. 2015-034. May 6, 2014, in an amount of $13,500, Ordinance No. 2014-131. FISCAL INFORMATION In 2017, the Denton Juneteenth Celebration will receive $17,205 in HOT funds. The estimated cost to the City to provide the requested in-kind services and facilities at the same level in 2016 is expected to be $11,000. This cost estimate is based upon clear weather; in the event of inclement weather, staff and supply costs increase. The City is recognized as a sponsor at the appropriate level. Including this event, the City Council will have City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-465, Version: 1 authorized a total of $197,850 of in-kind City support to eight of the nine previously -sponsored events. The Legal Department has advised Parks and Recreation that only the City Council has authority to gift city resources. All sponsorships where city facilities or services are requested for free or at a reduced rate require City Council approval STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Liveable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Safe, Liveable & Family -Friendly Community Related Goal: Provide and support outstanding leisure, cultural, and educational opportunities. EXHIBITS 1. Letter of Request 2. Actual Costs for Fiscal Years 2014-16 3. Running Total of In -Kind Support 4. Sponsorship Agreement 5. Proposed Ordinance Respectfully submitted: Emerson Vorel, Director Prepared by: Janie McLeod Community Events Coordinator City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, Executive Committee Cheylon Brown Chairperson Willie Hudspeth Vice -Chairperson Sharetta Lee Secretary Edward Patterson Treasurer Tammy Riggs Asst. Treasurer Sub -Committees: Entertainment/Gospel Constance Pullam Nagaris Johnson Parade Beatrice Clay Athletics Johnathan Smith Bobby Givens Vendors Bobby Givens Clark Coleman Promotions/ Photography Anthony Caraway Advertising Design Marcus Godbolt Children's Games Michael Herron Pageant Sharetta Lee Constance Pullam Volunteer Coordinator Edward Patterson Exhibit 1 P.O. Box 51291 Denton, TX 76206 940-349-8575 Dear Denton City Council: The 46th Annual Juneteenth Celebration will be held June 16 - 17, 2017, and we are requesting sponsorship from the City of Denton. The Denton Juneteenth Celebration Committee (DJCC) serves as a non-profit volunteer group whose mission is to actively preserve and promote the broad spectrum of African American heritage through educational and cultural activities that benefits the Denton community. We are requesting that you will continue your support of the DJCC as you have in past years through sponsorship. The scheduled events for the 2017 includes the 7`h Annual Leadership Conference, 51h Annual "A Better Way Enterprises" Denton Hometown Heroes Reception, a Miss Juneteenth Pageant, flag football tournament, 3 -on -3 basketball tournament, softball tournament, Home Run Derby, the Annual Friday Night Gospel Extravaganza, a parade, and the Annual Hip Hop Explosion. The assistance we have received in the past through the Parks & Recreation Department has been vital to our continued success. The staff of the Martin Luther King Jr. Recreation Center, the American Legion Hall, and the Parks staff has helped to shape this celebration into one of the best Juneteenth celebrations in this region. We are excited to continue this partnership. Thank you in advance for your support the Juneteenth Celebration. If you have any questions, please contact our secretary, Sharetta Lee, at (940) 597-8639 for more information. We appreciate you for helping us create "Unity in the Community." Always promoting "Unity in the Community" Cheylon Brown Chair Denton Juneteenth Celebration Committee "A reflection of our past, a celebration of our FREEDOM!" www,juneteenthdentontx.org Juneteenth Celebration Costs of In -Kind Resources and Services Fiscal Years 2014-2016 City 2014 2015 2016 In -Kind Actual Actual Actual Contribution Expenditures Expenditures Expenditures Parks and Recreation $12,151 $11,735 $4,938 Police $5,536 $6,185 $5,304 Total In -Kind $17,687 $17,920 $10,242 20,000 15,000 10,000 5,000 Costs of In -Kind Services and Resources 2014 2015 2016 aPARD Um Police Exhibit 2 Exhibit 3 _4j CITYOF DENTON Exhibit 4 CITY OF DENTON TEXAS PARKS & RECREATION DEPARTMENT 601 E. Hickory, Suite B • DENTON, TEXAS 76205 (940) 349 -PARK • FAX (940) 349-8166 March 31, 2017 Ms. Cheylon Brown, Chair Denton Juneteenth Celebration P.O. Box 51291 Denton, TX 76202 Dear Ms. Brown: Congratulations, your sponsorship has been approved by the City Council in an amount not to exceed $11,000 of in-kind services and resources provided by the City of Denton for the Denton Juneteenth Celebration to be held in Fred Moore Park on June 16-17, 2017. The City of Denton is proud to be a sponsor of this event and will provide basic and critical support to the event as outlined below. As part of the approval process, the City Council has requested to see the report of revenues and expenses for the 2016 Denton Juneteenth Celebration included in the committee's request for future sponsorship. The following is a summary of the sponsorship role assumed by the City of Denton and the Denton Juneteenth Celebration organizing committee. 1. The Parks and Recreation Department will provide the rental of Fred Moore Park, the American Legion Hall, and a meeting room at the MLK Recreation Center at no charge. The in-kind value of the facilities is $2,137. The cost actuals from last year's event will be used to calculate Park Maintenance staff's in-kind services. The Parks staff regular and over -time support totaled $2,475. Equipment and supplies provided totaled $326. The total value of Parks and Recreation in-kind services were $4,938. 2. The 2016 cost actuals will be used to calculate the Police in-kind services. Police provided in regular and over -time hours support that totaled $5,304. 3. Administrative staff support will be provided in the form of a liaison, providing expertise and advice to the organizing committee. The liaison should attend any general meetings of the organizing committee, when information is related to the Parks and Recreation Department's role in the event. The liaison participation is as an ex -officio, non-voting representative of the Department. 4. The Park Maintenance Division will work with committee volunteers to prepare the park prior to the event, work at the event to assist with limited logistics, handle litter and recycling, and return equipment to original locations after the event. 5. The Department will provide limited promotional advertising for the event. www.cityofdenton.com Exhibit 4 Denton Juneteenth Celebration Event Organizers 1. As part of the approval process, a report of revenues and expenses for the 2017 Denton Juneteenth Celebration should be included in committee's request for future co- sponsorship. 2. The Denton Juneteenth Celebration committee will provide all planning, management, and organization for the event. 3. The organizing committee will provide a layout of the vendor locations, complete a Special Events Agreement, Public Safety Plan, event map, and an event schedule to the City liaison no later than five working days prior to the event. 4. Event organizers are responsible for securing all permits, licenses and approvals necessary to stage the event as stated on the permit applications. The City liaison will provide information to help facilitate these processes, if needed. 5. Event organizer assumes all liability for damages done to City property whatever the case, while hosting this event, and agrees to reimburse the City for reparations within 30 days of notice/invoice. 6. Prior to publication, all advertising, including any use of a City logo, must be submitted to the City liaison for approval from the Parks and Recreation Department. 7. The committee will charge and collect the Park Vendor Permit fees consistent with the City of Denton ordinance and remit these fees within five working days after the event. 8. The committee will host Denton Juneteenth Celebration as a "Litter Free Event" as defined by Keep Denton Beautiful (KDB). Recycling is required at all events held on City property and recycling containers are provided in City parks. 9. Within five working days following the event, the event organizers will provide a program evaluation and full payment of all fees to the City of Denton. 10. Vendors are responsible for their own set-up, including tents and lighting, prior to the event. The Department will not provide tents for vendors. 11. The City of Denton is recognized as a sponsor at the appropriate level in promotional materials. The Parks and Recreation Department is excited about the future of Denton Juneteenth Celebration and its continued success. Sincerely, Emerson Vorel, Director I hereby agree to the following conditions of the City of Denton sponsorship agreement. Denton Juneteenth Celebration www.cityofdenton.com Date: S:ALegal\Our Documents\Ordinances\17\.luneteenth Celebration Sponsorship.doex Exhibit 5 ORDINANCE NO. AN ORDINANCE APPROVING A CITY SPONSORSHIP IN AN AMOUNT NOT TO EXCEED $11,000 OF IN-KIND SERVICES AND RESOURCES FOR THE DENTON JUNETEENTH CELEBRATION TO BE HELD IN FRED MOORE PARK ON JUNE 16-17, 2017; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Denton Juneteenth Celebration is requesting the City of Denton to participate as a sponsor, at the same level as in previous years, for the event to be held in Fred Moore Park on June 16-17, 2017; and WHEREAS, the City of Denton has sponsored up to $19,000 of in-kind services and supplies for the 2016 event which included police, park staff, equipment, supplies, and facilities; and WHEREAS, in exchange for the said support the City of Denton was considered to be an event sponsor of the said event at a sponsorship level equal to the value of the in-kind service tendered; and WHEREAS, the City Council finds that it is in the public interest and benefit to the citizens of the City of Denton to participate as a sponsor at a level not to exceed $11,000 of in-kind services for the event to be held in Fred Moore Park on June 16-17, 2017; NOW, THEREFORE, "THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Council finds that it is in the public interest and benefit to the citizens of the City of Denton to participate as a sponsor at a level not to exceed $11,000 of in- kind services and supplies, including but not limited to police, park staff, equipment, supplies and facilities, and the said participation is hereby approved. SECTION 2. This ordinance shall be effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY S:ALegal\Our Documents\Ordinances\l Nuneteenth Celebration Sponsorship.docx Exhibit 5 APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY: City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-473, Version: 1 Legislation Text AGENDA INFORMATION SHEET DEPARTMENT: Materials Management DCM: Bryan Langley AGENDA DATE: April 18, 2017 SUBJECT Consider adoption of an ordinance accepting competitive proposals and awarding a contract for Police Motorcycles; providing for the expenditure of funds therefor; and providing an effective date (RFP 6364 - awarded to American Eagle Harley-Davidson in the three (3) year not -to -exceed amount of $222,690). FILE INFORMATION RFP 6364 was issued to obtain pricing for six (6) police motorcycles. Two (2) motorcycles are fleet additions approved in the Fiscal Year 2016-2017 budget. Four (4) replacement motorcycles have been requested in the in the Fiscal Year 2017-2018 budget. The City of Denton previously had a contract with Victory motorcycles that was set to expire in February of 2018, but Victory has discontinued production of the motorcycles. There are currently four (4) Victory motorcycles in the police motorcycle fleet that are proposed to be replaced in the Fiscal Year 2017-2018 budget. Two of the motorcycles are 2013 models and two are 2014 models. These motorcycles have met the Fleet department's replacement criteria based on the early termination of the Victory motorcycle contract. Therefore pricing for the trade-in of the motorcycles was requested as part of RFP 6364. This will give the City the option to either trade in these units or auction them after the replacement motorcycles arrive. Requests for Proposals were sent to forty four (44) prospective suppliers of this item. In addition, specifications were placed on the Materials Management website for prospective suppliers to download and advertised in the local newspaper. Harley-Davidson motorcycles were specified directly in the RFP due to the production of the cruiser style police motorcycle that is favored by the officers for comfort, performance, and maneuverability (Exhibit 1). Two (2) proposals were received, evaluated and ranked (Exhibit 2). American Eagle Harley- Davidson, Corinth, Texas, was ranked the highest and determined to be the best value. RECOMMENDATION Award the purchase of police motorcycles to American Eagle Harley-Davidson in the amount not- to -exceed $222,690. PRINCIPAL PLACE OF BUSINESS City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-473, Version: 1 American Eagle Harley-Davidson Corinth, Texas ESTIMATED SCHEDULE OF PROJECT The purchase and delivery the motorcycles will occur within 90 days of purchase order issuance. FISCAL INFORMATION The motorcycles will be funded from department operating accounts using Certificate of Obligation bond funding. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Organizational Excellence Related Goal: 1.1 Manage financial resources in a responsible manner FXUIRITC Exhibit l: Harley-Davidson Standardization Exhibit 2: Evaluation and Ranking Sheet Exhibit 3: Ordinance Exhibit 4: Contract Respectfully submitted: Ethan Cox, 349-7421 Customer Service Manager For information concerning this acquisition, contact: Terry Kader at 349-8729. City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, O� DENTON EXHIBIT I DATE: February 13, 2017 UROM: Terry Kader Fleet Services Superintendent Antonio PuenM SUBJECT: SINGLE SO(JRCE OEM - I-JARLEY DAVIDSON 141151 I'm I Him Wif close proximity to the City of Denton. The City of Denton Police Department has utilized a number of different motorcycle manufacturers over the past 10 years including Harley Davidson, BMW and Victory. Most recently, the City had a contract with Victory Police Motorcycles to supply patro . I units. the motor operators for a balance of comfort, performance and maneuverability. Unfortunately in early 2017, Victory made the decision to stop producing Police motorcycles. Harley Davidson currently produces two models of cruiser style machines for Police use. To minimize the training, comfort and safety concerns associated with the sport/touring style of European motorcycles, the City of Denton Fleet Services is recommending the purchase of Harley Davidson motorcycles exclusively. F.'re re 11 161 value to the City of Denton. Ip,irds, Wy T'erry Kader Fleet Services Superintendent EXHIBIT 2 RFP 6364 - Pricing Sheet for POLICE MOTORCYCLES - BAFO 10 iECTION B - OPTIONS Respondent's Business Name: American Eagle Harley Davidson Maverick Harley-Davidson Extended Total Motorcycle Warrantyup to 5 years Principal Place of Business (City and State) Corinth, TX Carrollton Texas Total for Motorcycles/Equipment/Options for $ 37,115.00 1 Unit SECTION A - POLICE MOTORCYCLES 0 PRI 11, Chale— 11.@F0f'Ts` An" 6 $ 222,690.00 * $ 269,279.87 SECTION -REQUIRED ADDITIONAL SERVICES IECTION B -REQUIRED ADDITIONAL SERVICES List Tsrenaed Tout QT TM T, ,. M i ..., I h, I ! Additional Included in Unit .4:d i.i i.e7 MNt 1 T1 NO, ,, .....i --.i. ,-�dzd , Price for Cost/Insert- ,.,. 0, t!, < �m ., ,,, „ Service Yes or No Additional Price for Service Included in Unit Cost/Insert- Yes or No Line $ - 2017 Base Standard md�am Bare s x.� oraay, 2017 Base List Standard Tsrenaed Tout mduamg Bare Co DESCRIPTION QTY Motorcpde eo.rana vont aeu.e�y Motorcpde Engine Size waaamnaI day, vont Item SECTION C - REPAIR & PARTS DISCOUNTS Price Engine Aaaamnat ARO Price below ana ae— ARc y IECTION D - TRADE IN 10 2013 Victory Commands' 1(24,356 miles SVPDW36N6D302500 $6,000 $5,500 Size below se«;�e. 11 2013 Victory Commands1(20,719milmvTDE36N3D302499 $6.000 se«;�e. 1 Police Motorcycle as specified in Exhibit 2 6 $ 35,615.00 107 cu $213,690.00 60-90 $ 38289.41 107cu $229,736.46 60 Miles Total for Motorcycles/Equipment for $213,690.00 $229,736.46 Quantity of 6 10 iECTION B - OPTIONS 20 Additional Induaea m Line Item DESCRIPTION Price for UnitC./ m.e r -Ye. Service -No Additional Included in Unit Price for Cost/ Insert- Service Yes or No Extended Total Motorcycle Warrantyup to 5 years 100 2 $ 1.500.00 No or 50,000 miles $ 1254.00 No Total for Motorcycles/Equipment/Options for $ 37,115.00 1 Unit $ 39,543.41 "Total of Motorcycles/Equip. + Options for Quantity of 6 $ 222,690.00 * $ 269,279.87 SECTION -REQUIRED ADDITIONAL SERVICES IECTION B -REQUIRED ADDITIONAL SERVICES QT TM T, ,. M i ..., I h, I ! Additional Included in Unit .4:d i.i i.e7 MNt 1 T1 NO, ,, .....i --.i. ,-�dzd , Price for Cost/Insert- ,.,. 0, t!, < �m ., ,,, „ Service Yes or No Additional Price for Service Included in Unit Cost/Insert- Yes or No 3 Courtesy Exterior Car Wash Every Visit of Purchased Mot $ _ Yes $ - Yes 4 Scheduled Maintenance for 5 Years $ _ Yes $ - Yes $ - Yes 5 Pickup and Delivery for repairs from Denton, Texas $ _ Yes 6 Multi Point Inspection and Condition Report with Every Vi $ _ Yes $ - Yes $ - Yes 7 Delivery charge on New Motorcycle Purchased $ _ Yes Total Additional Services Pricing for Each Motorcycle $ - $ - SECTION C - REPAIR & PARTS DISCOUNTS IECTION C - REPAIR & PARTS DISCOUNTS 8 Service labor rate for non -warranty repairs (per $80 hour $80 10.00% 9 Parts (% off list) 20.00% SECTION D - TRADE IN IECTION D - TRADE IN 10 2013 Victory Commands' 1(24,356 miles SVPDW36N6D302500 $6,000 $5,500 $5,500 11 2013 Victory Commands1(20,719milmvTDE36N3D302499 $6.000 10 2014 Victory Commands1(17,798,5VPDW36N9E3036717) $7.000 $6,500 11 2014 Victory Commands 1(15,962 miles SVPDW36N4E303672 $7.000 $6,500 SECTION E - GUARANTEED BUYBACK SECTION E - GUARANTEED BUYBACK Y" Miles Miles 1 1 $11000 1 $11000 1 1 1 1 $21086 1 $18,017 1 1 1 1 60 Price 10 Performance 20 Compliance with Specifications 10 Delivery 100 TOTAL 60 56 10 10 20 20 10 10 100 96 Page 1 of 1 EXHIBIT 3 ORDINANCE NO. 2017 - AN ORDINANCE ACCEPTING COMPETITIVE PROPOSALS AND AWARDING A CONTRACT FOR POLICE MOTORCYCLES; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (RFP 6364 -AWARDED TO AMERICAN EAGLE HARLEY-DAVIDSON IN THE THREE (3) YEAR NOT -TO -EXCEED AMOUNT OF $222,690). WHEREAS, the City has solicited, received and evaluated competitive sealed proposals for the supply of police motorcycles in accordance with the procedures of State law and City ordinances; and WHEREAS, the City Manager or a designated employee has received and reviewed and recommended that the herein described proposals are the most advantageous to the City considering the relative importance of price and the other evaluation factors included in the request for proposals; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies or services approved and accepted herein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The items in the following numbered request for proposal for materials, equipment, supplies or services, shown in the "Request for Proposals" on file in the office of the Purchasing Agent, are hereby accepted and approved as being the most advantageous to the City considering the relative importance of price and the other evaluation factors included in the request for proposals. RFP NUMBER CONTRACTOR AMOUNT 6364 American Eagle -Harley Davidson $222,690 SECTION 2. By the acceptance and approval of the above numbered items of the submitted proposals, the City accepts the offer of the persons submitting the proposals 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 Proposal Invitations, Proposals, and related documents. EXHIBIT 3 SECTION 3. Should the City and person submitting approved and accepted items and of the submitted proposals wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the proposals, the City Manager or his designated representative is hereby authorized to execute the written contract; provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Proposal and related documents herein approved and accepted. This will be an initial one (1) year contract with options to extend the contract for two (2) additional one (1) year periods with all terms and conditions remaining the same. SECTION 4. The City Council of the City of Denton, Texas hereby expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under RFP 6364 to the City Manager of the City of Denton, Texas, or his designee. SECTION 5. By the acceptance and approval of the above enumerated bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved proposals. SECTION 6. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY: EXHIBIT 4 CONTRACT BY AND BETWEEN CITY OF DENTON, TEXAS AND AMERICAN EAGLE HARLEY-DAVIDSON, LLC (RFP 6364) THIS CONTRACT is made and entered into this date , by and between American Eagle Harley-Davidson, LLC a corporation, whose address is 5920 S. I35E Corinth, TX 76210, hereinafter referred to as "Supplier," and the CITY OF DENTON, TEXAS, a home rule municipal corporation, hereinafter referred to as "City," to be effective upon approval of the Denton City Council and subsequent execution of this Contract by the Denton City Manager or his duly authorized designee. For and in consideration of the covenants and agreements contained herein, and for the mutual benefits to be obtained hereby, the parties agree as follows: SCOPE OF SERVICES Supplier shall provide products in accordance with the City's RFP# 6364 -POLICE MOTORCYCLES, a copy of which is on file at the office of Purchasing Agent and incorporated herein for all purposes. The Contract consists of this written agreement and the following items which are attached hereto, or on file, and incorporated herein by reference: (a) Special Terms and Conditions (Exhibit "A"); (b) City of Denton's RFP 96364 (Exhibit `B" on file at the office of the Purchasing Agent); (c) City of Denton Standard Terms and Conditions (Exhibit "C"); (d) Certificate of Interested Parties Electronic Filing (Exhibit "D"); (e) Supplier's Proposal. (Exhibit "E"); (f) Form CIQ — Conflict of Interest Questionnaire (Exhibit "F") These documents make up the Contract documents and what is called for by one shall be as binding as if called for by all. In the event of an inconsistency or conflict in any of the provisions of the Contract documents, the inconsistency or conflict shall be resolved by giving precedence first to the written agreement then to the contract documents in the order in which they are listed above. These documents shall be referred to collectively as "Contract Documents." Page 1 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 IN WITNESS WHEREOF, the parties of these presents have executed this agreement in the year and day first above written. SUPPLIER BY: DocuSigned by, x�— - 76F2fiF3EE1 CC44d... AUTHORIZED SIGNATURE 4/6/2017 Date: Name: Bryan Tynes Title: General Manager 940-498-5000 PHONE NUMBER bobby.c@aeharley.com EMAIL ADDRESS Bryan.t@aehsrley.com TEXAS ETHICS COMMISSION CERTIFICATE NUMBER CITY OF DENTON, TEXAS ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: :• APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY. EDocuSigned by: 66A, 0 C82199OC2AM439 . Page 2 of 36 TODD HILEMAN CITY MANAGER Date: DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 Exhibit A Special Terms and Conditions 1. The Quantities The quantities indicated on Exhibit E are estimates based upon the best available information. The City reserves the right to increase or decrease the quantities to meet its actual needs without any adjustments in the bid price. Individual purchase orders will be issued on an as needed basis. 2. Product Changes During Contract Term The supplier shall not change specifications during the contract term without prior approval. Any deviation in the specifications or change in the product must be approved in advance by the City of Denton. Notice of a change shall be submitted in writing to dentonpurchasing(i cityofdenton.com, with the above file number in the subject line, for review. Products found to have changed specifications without notification, and acceptance, will be returned at the supplier's expense. Products that have been installed will be replaced at the supplier's expense. 3. Authorized Distributor The supplier shall be the manufacturer or authorized distributor of the proposed products. The distributor shall be authorized to sell to the City of Denton, and make available the manufacturer's representative as needed by the City. 4. Contract Terms The contract term will be one (1) year, effective from date of award. The City and the Supplier shall have the option to renew this contract for an additional two (2) one-year periods. The contract shall commence upon the issuance of a Notice of Award by the City of Denton and shall automatically renew each year, from the date of award by City Council, unless either party notifies the other prior to the scheduled renewal date. At the sole option of the City of Denton, the contract may be further extended as needed, not to exceed a total of six (6) months. 5. Price Escalation and De-escalation The City will implement an escalation/de-escalation price adjustment annually. The escalation/de- escalation will be based upon manufacturer published pricing sheets to the vendor. The price will be increased or decreased based upon the annually percentage change in the manufacturer's price list. The price adjustment will be determined quarterly from the award date. Should the change exceed or decrease a minimum threshold value of +/-1%, then the stated eligible bid prices shall be adjusted in accordance with the published price change. It is the supplier or the Cities responsibility to request a price adjustment annually in writing. If no request is made, then it will be assumed that the bid price will be in effect. The supplier must submit or make available the manufacturers pricing sheet used to calculate the bid proposal, to participate in the escalation/de-escalation clause. Page 3 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 6. Total Contract Amount The contract total shall not exceed $222,690. Pricing shall be per Exhibit E attached. 7. Delivery Lead Time Product or services shall be delivered to the City per the days/weeks noted in Exhibit E after receipt of the order. Page 4 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 Exhibit C City of Denton Standard Purchase Terms and Conditions These standard Terms and Conditions and the Terms and Conditions, Specifications, Drawings and other requirements included in the City of Denton's contract are applicable to contracts/purchase orders issued by the City of Denton hereinafter referred to as the City or Buyer and the Seller or respondent herein after referred to as Contractor or Supplier. Any deviations must be in writing and signed by a representative of the City's Procurement Department and the Supplier. No Terms and Conditions contained in the seller's proposal response, invoice or statement shall serve to modify the terms set forth herein. If there is a conflict between the provisions on the face of the contract/purchase order these written provisions will take precedence. The Contractor agrees that the contract shall be governed by the following terms and conditions, unless exceptions are duly noted and fully negotiated. Unless otherwise specified in the contract, Sections 3, 4, 5, 6, 7, 8, 20, 21, and 36 shall apply only to a solicitation to purchase goods, and sections 9, 10, 11, 22 and 32 shall apply only to a solicitation to purchase services to be performed principally at the City's premises or on public rights-of-way. 1. CONTRACTOR'S OBLIGATIONS. The Contractor shall fully and timely provide all deliverables described in the Solicitation and in the Contractor's Offer in strict accordance with the terms, covenants, and conditions of the Contract and all applicable Federal, State, and local laws, rules, and regulations. 2. EFFECTIVE DATE/TERM. Unless otherwise specified in the Solicitation, this Contract shall be effective as of the date the contract is signed by the City, and shall continue in effect until all obligations are performed in accordance with the Contract. 3. CONTRACTOR TO PACKAGE DELIVERABLES: The Contractor will package deliverables in accordance with good commercial practice and shall include a packing list showing the description of each item, the quantity and unit price unless otherwise provided in the Specifications or Supplemental Terms and Conditions, each shipping container shall be clearly and permanently marked as follows: (a) The Contractor's name and address, (b) the City's name, address and purchase order or purchase release number and the price agreement number if applicable, (c) Container number and total number of containers, e.g. box 1 of 4 boxes, and (d) the number of the container bearing the packing list. The Contractor shall bear cost of packaging. Deliverables shall be suitably packed to secure lowest transportation costs and to conform to all the requirements of common carriers and any applicable specification. The City's count or weight shall be final and conclusive on shipments not accompanied by packing lists. 4. SHIPMENT UNDER RESERVATION PROHIBITED: The Contractor is not authorized to ship the deliverables under reservation and no tender of a bill of lading will operate as a tender of deliverables. 5. TITLE & RISK OF LOSS: Title to and risk of loss of the deliverables shall pass to the City only when the City actually receives and accepts the deliverables. Page 5 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 6. DELIVERY TERMS AND TRANSPORTATION CHARGES: Deliverables shall be shipped F.O.B. point of delivery unless otherwise specified in the Supplemental Terms and Conditions. Unless otherwise stated in the Offer, the Contractor's price shall be deemed to include all delivery and transportation charges. The City shall have the right to designate what method of transportation shall be used to ship the deliverables. The place of delivery shall be that set forth the purchase order. 7. RIGHT OF INSPECTION AND REJECTION: The City expressly reserves all rights under law, including, but not limited to the Uniform Commercial Code, to inspect the deliverables at delivery before accepting them, and to reject defective or non -conforming deliverables. If the City has the right to inspect the Contractor's, or the Contractor's Subcontractor's, facilities, or the deliverables at the Contractor's, or the Contractor's Subcontractor's, premises, the Contractor shall furnish, or cause to be furnished, without additional charge, all reasonable facilities and assistance to the City to facilitate such inspection. 8. NO REPLACEMENT OF DEFECTIVE TENDER: Every tender or delivery of deliverables must fully comply with all provisions of the Contract as to time of delivery, quality, and quantity. Any non -complying tender shall constitute a breach and the Contractor shall not have the right to substitute a conforming tender; provided, where the time for performance has not yet expired, the Contractor may notify the City of the intention to cure and may then make a conforming tender within the time allotted in the contract. 9. PLACE AND CONDITION OF WORK: The City shall provide the Contractor access to the sites where the Contractor is to perform the services as required in order for the Contractor to perform the services in a timely and efficient manner, in accordance with and subject to the applicable security laws, rules, and regulations. The Contractor acknowledges that it has satisfied itself as to the nature of the City's service requirements and specifications, the location and essential characteristics of the work sites, the quality and quantity of materials, equipment, labor and facilities necessary to perform the services, and any other condition or state of fact which could in any way affect performance of the Contractor's obligations under the contract. The Contractor hereby releases and holds the City harmless from and against any liability or claim for damages of any kind or nature if the actual site or service conditions differ from expected conditions. The contractor shall, at all times, exercise reasonable precautions for the safety of their employees, City Staff, participants and others on or near the City's facilities. 10. WORKFORCE A. The Contractor shall employ only orderly and competent workers, skilled in the performance of the services which they will perform under the Contract. B. The Contractor, its employees, subcontractors, and subcontractor's employees may not while engaged in participating or responding to a solicitation or while in the course and scope of delivering goods or services under a City of Denton contract or on the City's property . i. use or possess a firearm, including a concealed handgun that is licensed under state law, except as required by the terms of the contract; or ii. use or possess alcoholic or other intoxicating beverages, illegal drugs or controlled substances, nor may such workers be intoxicated, or under the influence of alcohol or drugs, on the job. Page 6 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 C. If the City or the City's representative notifies the Contractor that any worker is incompetent, disorderly or disobedient, has knowingly or repeatedly violated safety regulations, has possessed any firearms, or has possessed or was under the influence of alcohol or drugs on the job, the Contractor shall immediately remove such worker from Contract services, and may not employ such worker again on Contract services without the City's prior written consent. Immigration: The Contractor represents and warrants that it shall comply with the requirements of the Immigration Reform and Control Act of 1986 and 1990 regarding employment verification and retention of verification forms for any individuals hired on or after November 6, 1986, who will perform any labor or services under the Contract and the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 ("IIRIRA) enacted on September 30, 1996. 11. COMPLIANCE WITH HEALTH, SAFETY, AND ENVIRONMENTAL REGULATIONS: The Contractor, it's Subcontractors, and their respective employees, shall comply fully with all applicable federal, state, and local health, safety, and environmental laws, ordinances, rules and regulations in the performance of the services, including but not limited to those promulgated by the City and by the Occupational Safety and Health Administration (OSHA). In case of conflict, the most stringent safety requirement shall govern. The Contractor shall indemnify and hold the City harmless from and against all claims, demands, suits, actions, judgments, fines, penalties and liability of every kind arising from the breach of the Contractor's obligations under this paragraph. Environmental Protection: The Respondent shall be in compliance with all applicable standards, orders, or regulations issued pursuant to the mandates of the Clean Air Act (42 U.S.C. §7401 et seq.) and the Federal Water Pollution Control Act, as amended, (33 U.S.C. §1251 et seq.). 12. INVOICES: A. The Contractor shall submit separate invoices in duplicate on each purchase order or purchase release after each delivery. If partial shipments or deliveries are authorized by the City, a separate invoice must be sent for each shipment or delivery made. B. Proper Invoices must include a unique invoice number, the purchase order or delivery order number and the master agreement number if applicable, the Department's Name, and the name of the point of contact for the Department. Invoices shall be itemized and transportation charges, if any, shall be listed separately. A copy of the bill of lading and the freight waybill, when applicable, shall be attached to the invoice. The Contractor's name, remittance address and, if applicable, the tax identification number on the invoice must exactly match the information in the Vendor's registration with the City. Unless otherwise instructed in writing, the City may rely on the remittance address specified on the Contractor's invoice. C. Invoices for labor shall include a copy of all time -sheets with trade labor rate and deliverables order number clearly identified. Invoices shall also include a tabulation of work -hours at the appropriate rates and grouped by work order number. Time billed for labor shall be limited to hours actually worked at the work site. D. Unless otherwise expressly authorized in the Contract, the Contractor shall pass through all Subcontract and other authorized expenses at actual cost without markup. E. Federal excise taxes, State taxes, or City sales taxes must not be included in the invoiced amount. The City will furnish a tax exemption certificate upon request. Page 7 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 13. PAYMENT: A. All proper invoices need to be sent to Accounts Payable. Approved invoices will be paid within thirty (30) calendar days of the City's receipt of the deliverables or of the invoice being received in Accounts Payable, whichever is later. B. If payment is not timely made, (per paragraph A); interest shall accrue on the unpaid balance at the lesser of the rate specified in Texas Government Code Section 2251.025 or the maximum lawful rate; except, if payment is not timely made for a reason for which the City may withhold payment hereunder, interest shall not accrue until ten (10) calendar days after the grounds for withholding payment have been resolved. C. If partial shipments or deliveries are authorized by the City, the Contractor will be paid for the partial shipment or delivery, as stated above, provided that the invoice matches the shipment or delivery. D. The City may withhold or set off the entire payment or part of any payment otherwise due the Contractor to such extent as may be necessary on account of: i. delivery of defective or non -conforming deliverables by the Contractor; ii. third party claims, which are not covered by the insurance which the Contractor is required to provide, are filed or reasonable evidence indicating probable filing of such claims; iii. failure of the Contractor to pay Subcontractors, or for labor, materials or equipment; iv. damage to the property of the City or the City's agents, employees or contractors, which is not covered by insurance required to be provided by the Contractor; v. reasonable evidence that the Contractor's obligations will not be completed within the time specified in the Contract, and that the unpaid balance would not be adequate to cover actual or damages for the anticipated delay; vi. failure of the Contractor to submit proper invoices with purchase order number, with all required attachments and supporting documentation; or vii. failure of the Contractor to comply with any material provision of the Contract Documents. E. Notice is hereby given that any awarded firm who is in arrears to the City of Denton for delinquent taxes, the City may offset indebtedness owed the City through payment withholding. F. Payment will be made by check unless the parties mutually agree to payment by credit card or electronic transfer of funds. The Contractor agrees that there shall be no additional charges, surcharges, or penalties to the City for payments made by credit card or electronic funds transfer. G. The awarding or continuation of this contract is dependent upon the availability of funding. The City's payment obligations are payable only and solely from funds Appropriated and available for this contract. The absence of Appropriated or other lawfully available funds shall render the Contract null and void to the extent funds are not Appropriated or available and any deliverables delivered but unpaid shall be returned to the Contractor. The City shall provide the Contractor written notice of the failure of the City to make an adequate Appropriation for any fiscal year to pay the amounts due under the Contract, or the reduction of any Appropriation to an amount insufficient to permit the City to pay its obligations under the Contract. In the event of none or inadequate appropriation of funds, there will be no penalty nor removal fees charged to the City. 14. TRAVEL EXPENSES: All travel, lodging and per diem expenses in connection with the Contract shall be paid by the Contractor, unless otherwise stated in the contract terms. During the term of this contract, the contractor shall bill and the City shall reimburse contractor for all reasonable and approved out of pocket expenses which are incurred in the connection with the performance of duties hereunder. Notwithstanding the foregoing, expenses for the time spent by the contractor in traveling to and from City facilities shall not be reimbursed, unless otherwise negotiated. Page 8 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 15. FINAL PAYMENT AND CLOSE-OUT: A. If a DBE/MBE/WBE Program Plan is agreed to and the Contractor has identified Subcontractors, the Contractor is required to submit a Contract Close -Out MBE/WBE Compliance Report to the Purchasing Manager no later than the 15th calendar day after completion of all work under the contract. Final payment, retainage, or both may be withheld if the Contractor is not in compliance with the requirements as accepted by the City. B. The making and acceptance of final payment will constitute: i. a waiver of all claims by the City against the Contractor, except claims (1) which have been previously asserted in writing and not yet settled, (2) arising from defective work appearing after final inspection, (3) arising from failure of the Contractor to comply with the Contract or the terms of any warranty specified herein, (4) arising from the Contractor's continuing obligations under the Contract, including but not limited to indemnity and warranty obligations, or (5) arising under the City's right to audit; and ii. a waiver of all claims by the Contractor against the City other than those previously asserted in writing and not yet settled. 16. SPECIAL TOOLS & TEST EQUIPMENT: If the price stated on the Offer includes the cost of any special tooling or special test equipment fabricated or required by the Contractor for the purpose of filling this order, such special tooling equipment and any process sheets related thereto shall become the property of the City and shall be identified by the Contractor as such. 17. RIGHT TO AUDIT: A. The City shall have the right to audit and make copies of the books, records and computations pertaining to the Contract. The Contractor shall retain such books, records, documents and other evidence pertaining to the Contract period and five years thereafter, except if an audit is in progress or audit findings are yet unresolved, in which case records shall be kept until all audit tasks are completed and resolved. These books, records, documents and other evidence shall be available, within ten (10) business days of written request. Further, the Contractor shall also require all Subcontractors, material suppliers, and other payees to retain all books, records, documents and other evidence pertaining to the Contract, and to allow the City similar access to those documents. All books and records will be made available within a 50 mile radius of the City of Denton. The cost of the audit will be bore by the City unless the audit reveals an overpayment of I% or greater. If an overpayment of 1% or greater occurs, the reasonable cost of the audit, including any travel costs, must be bore by the Contractor which must be payable within five (5) business days of receipt of an invoice. B. Failure to comply with the provisions of this section shall be a material breach of the Contract and shall constitute, in the City's sole discretion, grounds for termination thereof. Each of the terms "books", "records", "documents" and "other evidence", as used above, shall be construed to include drafts and electronic files, even if such drafts or electronic files are subsequently used to generate or prepare a final printed document. 18. SUBCONTRACTORS: A. If the Contractor identified Subcontractors in a DBE/MBE/WBE agreed to Plan, the Contractor shall comply with all requirements approved by the City. The Contractor shall not initially employ any Subcontractor except as provided in the Contractor's Plan. The Contractor shall not substitute any Subcontractor identified in the Plan, unless the substitute has been accepted by the City in writing. No acceptance by the City of any Subcontractor shall constitute a waiver of any rights or remedies of the City with respect to defective deliverables provided by a Subcontractor. If a Plan has been approved, the Contractor is additionally required to submit a monthly Subcontract Awards and Expenditures Report to the Procurement Manager, no later than the tenth calendar day of each month. Page 9 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 B. Work performed for the Contractor by a Subcontractor shall be pursuant to a written contract between the Contractor and Subcontractor. The terms of the subcontract may not conflict with the terms of the Contract, and shall contain provisions that: i. require that all deliverables to be provided by the Subcontractor be provided in strict accordance with the provisions, specifications and terms of the Contract; ii. prohibit the Subcontractor from further subcontracting any portion of the Contract without the prior written consent of the City and the Contractor. The City may require, as a condition to such further subcontracting, that the Subcontractor post a payment bond in form, substance and amount acceptable to the City; iii. require Subcontractors to submit all invoices and applications for payments, including any claims for additional payments, damages or otherwise, to the Contractor in sufficient time to enable the Contractor to include same with its invoice or application for payment to the City in accordance with the terms of the Contract; iv. require that all Subcontractors obtain and maintain, throughout the term of their contract, insurance in the type and amounts specified for the Contractor, with the City being a named insured as its interest shall appear; and v. require that the Subcontractor indemnify and hold the City harmless to the same extent as the Contractor is required to indemnify the City. C. The Contractor shall be fully responsible to the City for all acts and omissions of the Subcontractors just as the Contractor is responsible for the Contractor's own acts and omissions. Nothing in the Contract shall create for the benefit of any such Subcontractor any contractual relationship between the City and any such Subcontractor, nor shall it create any obligation on the part of the City to pay or to see to the payment of any moneys due any such Subcontractor except as may otherwise be required by law. D. The Contractor shall pay each Subcontractor its appropriate share of payments made to the Contractor not later than ten (10) calendar days after receipt of payment from the City. 19. WARRANTY -PRICE: A. The Contractor warrants the prices quoted in the Offer are no higher than the Contractor's current prices on orders by others for like deliverables under similar terms of purchase. B. The Contractor certifies that the prices in the Offer have been arrived at independently without consultation, communication, or agreement for the purpose of restricting competition, as to any matter relating to such fees with any other firm or with any competitor. C. In addition to any other remedy available, the City may deduct from any amounts owed to the Contractor, or otherwise recover, any amounts paid for items in excess of the Contractor's current prices on orders by others for like deliverables under similar terms of purchase. 20. WARRANTY — TITLE: The Contractor warrants that it has good and indefeasible title to all deliverables furnished under the Contract, and that the deliverables are free and clear of all liens, claims, security interests and encumbrances. The Contractor shall indemnify and hold the City harmless from and against all adverse title claims to the deliverables. 21. WARRANTY — DELIVERABLES: The Contractor warrants and represents that all deliverables sold the City under the Contract shall be free from defects in design, workmanship or manufacture, and conform in all material respects to the specifications, drawings, and descriptions in the Solicitation, to any samples furnished by the Contractor, to the terms, covenants and conditions of the Contract, and to all applicable State, Federal or local laws, rules, and regulations, and industry codes and standards. Unless otherwise stated in the Solicitation, the deliverables shall be new or recycled merchandise, and not used or reconditioned. Page 10 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 A. Recycled deliverables shall be clearly identified as such. B. The Contractor may not limit, exclude or disclaim the foregoing warranty or any warranty implied by law; and any attempt to do so shall be without force or effect. C. Unless otherwise specified in the Contract, the warranty period shall be at least one year from the date of acceptance of the deliverables or from the date of acceptance of any replacement deliverables. If during the warranty period, one or more of the above warranties are breached, the Contractor shall promptly upon receipt of demand either repair the non -conforming deliverables, or replace the non -conforming deliverables with fully conforming deliverables, at the City's option and at no additional cost to the City. All costs incidental to such repair or replacement, including but not limited to, any packaging and shipping costs shall be bore exclusively by the Contractor. The City shall endeavor to give the Contractor written notice of the breach of warranty within thirty (30) calendar days of discovery of the breach of warranty, but failure to give timely notice shall not impair the City's rights under this section. D. If the Contractor is unable or unwilling to repair or replace defective or non -conforming deliverables as required by the City, then in addition to any other available remedy, the City may reduce the quantity of deliverables it may be required to purchase under the Contract from the Contractor, and purchase conforming deliverables from other sources. In such event, the Contractor shall pay to the City upon demand the increased cost, if any, incurred by the City to procure such deliverables from another source. E. If the Contractor is not the manufacturer, and the deliverables are covered by a separate manufacturer's warranty, the Contractor shall transfer and assign such manufacturer's warranty to the City. If for any reason the manufacturer's warranty cannot be fully transferred to the City, the Contractor shall assist and cooperate with the City to the fullest extent to enforce such manufacturer's warranty for the benefit of the City. 22. WARRANTY — SERVICES: The Contractor warrants and represents that all services to be provided the City under the Contract will be fully and timely performed in a good and workmanlike manner in accordance with generally accepted industry standards and practices, the terms, conditions, and covenants of the Contract, and all applicable Federal, State and local laws, rules or regulations. A. The Contractor may not limit, exclude or disclaim the foregoing warranty or any warranty implied by law, and any attempt to do so shall be without force or effect. B. Unless otherwise specified in the Contract, the warranty period shall be at least one year from the Acceptance Date. If during the warranty period, one or more of the above warranties are breached, the Contractor shall promptly upon receipt of demand perform the services again in accordance with above standard at no additional cost to the City. All costs incidental to such additional performance shall be bore by the Contractor. The City shall endeavor to give the Contractor written notice of the breach of warranty within thirty (30) calendar days of discovery of the breach warranty, but failure to give timely notice shall not impair the City's rights under this section. C. If the Contractor is unable or unwilling to perform its services in accordance with the above standard as required by the City, then in addition to any other available remedy, the City may reduce the amount of services it may be required to purchase under the Contract from the Contractor, and purchase conforming services from other sources. In such event, the Contractor shall pay to the City upon demand the increased cost, if any, incurred by the City to procure such services from another source. Page 11 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 23. ACCEPTANCE OF INCOMPLETE OR NON -CONFORMING DELIVERABLES: If, instead of requiring immediate correction or removal and replacement of defective or non- conforming deliverables, the City prefers to accept it, the City may do so. The Contractor shall pay all claims, costs, losses and damages attributable to the City's evaluation of and determination to accept such defective or non -conforming deliverables. If any such acceptance occurs prior to final payment, the City may deduct such amounts as are necessary to compensate the City for the diminished value of the defective or non -conforming deliverables. If the acceptance occurs after final payment, such amount will be refunded to the City by the Contractor. 24. RIGHT TO ASSURANCE: Whenever one party to the Contract in good faith has reason to question the other party's intent to perform, demand may be made to the other party for written assurance of the intent to perform. In the event that no assurance is given within the time specified after demand is made, the demanding party may treat this failure as an anticipatory repudiation of the Contract. 25. STOP WORK NOTICE: The City may issue an immediate Stop Work Notice in the event the Contractor is observed performing in a manner that is in violation of Federal, State, or local guidelines, or in a manner that is determined by the City to be unsafe to either life or property. Upon notification, the Contractor will cease all work until notified by the City that the violation or unsafe condition has been corrected. The Contractor shall be liable for all costs incurred by the City as a result of the issuance of such Stop Work Notice. 26. DEFAULT: The Contractor shall be in default under the Contract if the Contractor (a) fails to fully, timely and faithfully perform any of its material obligations under the Contract, (b) fails to provide adequate assurance of performance under Paragraph 24, (c) becomes insolvent or seeks relief under the bankruptcy laws of the United States or (d) makes a material misrepresentation in Contractor's Offer, or in any report or deliverable required to be submitted by the Contractor to the City. 27. TERMINATION FOR CAUSE: In the event of a default by the Contractor, the City shall have the right to terminate the Contract for cause, by written notice effective ten (10) calendar days, unless otherwise specified, after the date of such notice, unless the Contractor, within such ten (10) day period, cures such default, or provides evidence sufficient to prove to the City's reasonable satisfaction that such default does not, in fact, exist. In addition to any other remedy available under law or in equity, the City shall be entitled to recover all actual damages, costs, losses and expenses, incurred by the City as a result of the Contractor's default, including, without limitation, cost of cover, reasonable attorneys' fees, court costs, and prejudgment and post- judgment interest at the maximum lawful rate. Additionally, in the event of a default by the Contractor, the City may remove the Contractor from the City's vendor list for three (3) years and any Offer submitted by the Contractor may be disqualified for up to three (3) years. All rights and remedies under the Contract are cumulative and are not exclusive of any other right or remedy provided by law. 28. TERMINATION WITHOUT CAUSE: The City shall have the right to terminate the Contract, in whole or in part, without cause any time upon thirty (30) calendar days' prior written notice. Upon receipt of a notice of termination, the Contractor shall promptly cease all further work pursuant to the Contract, with such exceptions, if any, specified in the notice of termination. The City shall pay the Contractor, to the extent of funds Appropriated or otherwise legally available for such purposes, for all goods delivered and services performed and obligations incurred prior to the date of termination in accordance with the terms hereof. Page 12 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 29. FRAUD: Fraudulent statements by the Contractor on any Offer or in any report or deliverable required to be submitted by the Contractor to the City shall be grounds for the termination of the Contract for cause by the City and may result in legal action. 30. DELAYS: A. The City may delay scheduled delivery or other due dates by written notice to the Contractor if the City deems it is in its best interest. If such delay causes an increase in the cost of the work under the Contract, the City and the Contractor shall negotiate an equitable adjustment for costs incurred by the Contractor in the Contract price and execute an amendment to the Contract. The Contractor must assert its right to an adjustment within thirty (30) calendar days from the date of receipt of the notice of delay. Failure to agree on any adjusted price shall be handled under the Dispute Resolution process specified in paragraph 49. However, nothing in this provision shall excuse the Contractor from delaying the delivery as notified. B. Neither party shall be liable for any default or delay in the performance of its obligations under this Contract if, while and to the extent such default or delay is caused by acts of God, fire, riots, civil commotion, labor disruptions, sabotage, sovereign conduct, or any other cause beyond the reasonable control of such Party. In the event of default or delay in contract performance due to any of the foregoing causes, then the time for completion of the services will be extended; provided, however, in such an event, a conference will be held within three (3) business days to establish a mutually agreeable period of time reasonably necessary to overcome the effect of such failure to perform. 31. INDEMNITY: A. Definitions: i. "Indemnified Claims" shall include any and all claims, demands, suits, causes of action, judgments and liability of every character, type or description, including all reasonable costs and expenses of litigation, mediation or other alternate dispute resolution mechanism, including attorney and other professional fees for: (1) damage to or loss of the property of any person (including, but not limited to the City, the Contractor, their respective agents, officers, employees and subcontractors; the officers, agents, and employees of such subcontractors; and third parties); and/or (2) death, bodily injury, illness, disease, worker's compensation, loss of services, or loss of income or wages to any person (including but not limited to the agents, officers and employees of the City, the Contractor, the Contractor's subcontractors, and third parties), ii. "Fault" shall include the sale of defective or non- conforming deliverables, negligence, willful misconduct or a breach of any legally imposed strict liability standard. B. THE CONTRACTOR SHALL DEFEND (AT THE OPTION OF THE CITY), INDEMNIFY, AND HOLD THE CITY, ITS SUCCESSORS, ASSIGNS, OFFICERS, EMPLOYEES AND ELECTED OFFICIALS HARMLESS FROM AND AGAINST ALL INDEMNIFIED CLAIMS DIRECTLY ARISING OUT OF, INCIDENT TO, CONCERNING OR RESULTING FROM THE FAULT OF THE CONTRACTOR, OR THE CONTRACTOR'S AGENTS, EMPLOYEES OR SUBCONTRACTORS, IN THE PERFORMANCE OF THE CONTRACTOR'S OBLIGATIONS UNDER THE CONTRACT. NOTHING HEREIN SHALL BE DEEMED TO LIMIT THE RIGHTS OF THE CITY OR THE CONTRACTOR (INCLUDING, BUT NOT LIMITED TO, THE RIGHT TO SEEK CONTRIBUTION) AGAINST ANY THIRD PARTY WHO MAY BE LIABLE FOR AN INDEMNIFIED CLAIM. Page 13 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 32. INSURANCE: The following insurance requirements are applicable, in addition to the specific insurance requirements detailed in Appendix A for services only. The successful firm shall procure and maintain insurance of the types and in the minimum amounts acceptable to the City of Denton. The insurance shall be written by a company licensed to do business in the State of Texas and satisfactory to the City of Denton. A. General Requirements: i. The Contractor shall at a minimum carry insurance in the types and amounts indicated and agreed to, as submitted to the City and approved by the City within the procurement process, for the duration of the Contract, including extension options and hold over periods, and during any warranty period. ii. The Contractor shall provide Certificates of Insurance with the coverage's and endorsements required to the City as verification of coverage prior to contract execution and within fourteen (14) calendar days after written request from the City. Failure to provide the required Certificate of Insurance may subject the Offer to disqualification from consideration for award. The Contractor must also forward a Certificate of Insurance to the City whenever a previously identified policy period has expired, or an extension option or hold over period is exercised, as verification of continuing coverage. iii. The Contractor shall not commence work until the required insurance is obtained and until such insurance has been reviewed by the City. Approval of insurance by the City shall not relieve or decrease the liability of the Contractor hereunder and shall not be construed to be a limitation of liability on the part of the Contractor. iv. The Contractor must submit certificates of insurance to the City for all subcontractors prior to the subcontractors commencing work on the project. v. The Contractor's and all subcontractors' insurance coverage shall be written by companies licensed to do business in the State of Texas at the time the policies are issued and shall be written by companies with A.M. Best ratings of A- VII or better. The City will accept workers' compensation coverage written by the Texas Workers' Compensation Insurance Fund. vi. All endorsements naming the City as additional insured, waivers, and notices of cancellation endorsements as well as the Certificate of Insurance shall contain the solicitation number and the following information: City of Denton Materials Management Department 901B Texas Street Denton, Texas 76209 vii. The "other" insurance clause shall not apply to the City where the City is an additional insured shown on any policy. It is intended that policies required in the Contract, covering both the City and the Contractor, shall be considered primary coverage as applicable. viii. If insurance policies are not written for amounts agreed to with the City, the Contractor shall carry Umbrella or Excess Liability Insurance for any differences in amounts specified. If Excess Liability Insurance is provided, it shall follow the form of the primary coverage. ix. The City shall be entitled, upon request, at an agreed upon location, and without expense, to review certified copies of policies and endorsements thereto and may make any reasonable requests for deletion or revision or modification of particular policy terms, conditions, limitations, or exclusions except where policy provisions are established by law or regulations binding upon either of the parties hereto or the underwriter on any such policies. Page 14 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 x. The City reserves the right to review the insurance requirements set forth during the effective period of the Contract and to make reasonable adjustments to insurance coverage, limits, and exclusions when deemed necessary and prudent by the City based upon changes in statutory law, court decisions, the claims history of the industry or financial condition of the insurance company as well as the Contractor. xi. The Contractor shall not cause any insurance to be canceled nor permit any insurance to lapse during the term of the Contract or as required in the Contract. xii. The Contractor shall be responsible for premiums, deductibles and self-insured retentions, if any, stated in policies. All deductibles or self-insured retentions shall be disclosed on the Certificate of Insurance. xiii. The Contractor shall endeavor to provide the City thirty (30) calendar days' written notice of erosion of the aggregate limits below occurrence limits for all applicable coverage's indicated within the Contract. xiv. The insurance coverage's specified in within the solicitation and requirements are required minimums and are not intended to limit the responsibility or liability of the Contractor. B. Specific Coverage Requirements: Specific insurance requirements are contained in the solicitation instrument. 33. CLAIMS: If any claim, demand, suit, or other action is asserted against the Contractor which arises under or concerns the Contract, or which could have a material adverse effect on the Contractor's ability to perform thereunder, the Contractor shall give written notice thereof to the City within ten (10) calendar days after receipt of notice by the Contractor. Such notice to the City shall state the date of notification of any such claim, demand, suit, or other action; the names and addresses of the claimant(s); the basis thereof, and the name of each person against whom such claim is being asserted. Such notice shall be delivered personally or by mail and shall be sent to the City and to the Denton City Attorney. Personal delivery to the City Attorney shall be to City Hall, 215 East McKinney Street, Denton, Texas 76201. 34. NOTICES: Unless otherwise specified, all notices, requests, or other communications required or appropriate to be given under the Contract shall be in writing and shall be deemed delivered three (3) business days after postmarked if sent by U.S. Postal Service Certified or Registered Mail, Return Receipt Requested. Notices delivered by other means shall be deemed delivered upon receipt by the addressee. Routine communications may be made by first class mail, telefax, or other commercially accepted means. Notices to the Contractor shall be sent to the address specified in the Contractor's Offer, or at such other address as a party may notify the other in writing. Notices to the City shall be addressed to the City at 901B Texas Street, Denton, Texas 76209 and marked to the attention of the Purchasing Manager. 35. RIGHTS TO BID, PROPOSAL AND CONTRACTUAL MATERIAL: All material submitted by the Contractor to the City shall become property of the City upon receipt. Any portions of such material claimed by the Contractor to be proprietary must be clearly marked as such. Determination of the public nature of the material is subject to the Texas Public Information Act, Chapter 552, and Texas Government Code. 36. NO WARRANTY BY CITY AGAINST INFRINGEMENTS: The Contractor represents and warrants to the City that: (i) the Contractor shall provide the City good and indefeasible title to the deliverables and (ii) the deliverables supplied by the Contractor in accordance with the specifications in the Contract will not infringe, directly or contributorily, any patent, trademark, copyright, trade secret, or any other intellectual property right of any kind of any third party; that no claims have been made by any person or entity with respect to the ownership or operation of Page 15 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 the deliverables and the Contractor does not know of any valid basis for any such claims. The Contractor shall, at its sole expense, defend, indemnify, and hold the City harmless from and against all liability, damages, and costs (including court costs and reasonable fees of attorneys and other professionals) arising out of or resulting from: (i) any claim that the City's exercise anywhere in the world of the rights associated with the City's' ownership, and if applicable, license rights, and its use of the deliverables infringes the intellectual property rights of any third party; or (ii) the Contractor's breach of any of Contractor's representations or warranties stated in this Contract. In the event of any such claim, the City shall have the right to monitor such claim or at its option engage its own separate counsel to act as co -counsel on the City's behalf. Further, Contractor agrees that the City's specifications regarding the deliverables shall in no way diminish Contractor's warranties or obligations under this paragraph and the City makes no warranty that the production, development, or delivery of such deliverables will not impact such warranties of Contractor. 37. CONFIDENTIALITY: In order to provide the deliverables to the City, Contractor may require access to certain of the City's and/or its licensors' confidential information (including inventions, employee information, trade secrets, confidential know-how, confidential business information, and other information which the City or its licensors consider confidential) (collectively, "Confidential Information"). Contractor acknowledges and agrees that the Confidential Information is the valuable property of the City and/or its licensors and any unauthorized use, disclosure, dissemination, or other release of the Confidential Information will substantially injure the City and/or its licensors. The Contractor (including its employees, subcontractors, agents, or representatives) agrees that it will maintain the Confidential Information in strict confidence and shall not disclose, disseminate, copy, divulge, recreate, or otherwise use the Confidential Information without the prior written consent of the City or in a manner not expressly permitted under this Agreement, unless the Confidential Information is required to be disclosed by law or an order of any court or other governmental authority with proper jurisdiction, provided the Contractor promptly notifies the City before disclosing such information so as to permit the City reasonable time to seek an appropriate protective order. The Contractor agrees to use protective measures no less stringent than the Contractor uses within its own business to protect its own most valuable information, which protective measures shall under all circumstances be at least reasonable measures to ensure the continued confidentiality of the Confidential Information. 38. OWNERSHIP AND USE OF DELIVERABLES: The City shall own all rights, titles, and interests throughout the world in and to the deliverables. A. Patents. As to any patentable subject matter contained in the deliverables, the Contractor agrees to disclose such patentable subject matter to the City. Further, if requested by the City, the Contractor agrees to assign and, if necessary, cause each of its employees to assign the entire right, title, and interest to specific inventions under such patentable subject matter to the City and to execute, acknowledge, and deliver and, if necessary, cause each of its employees to execute, acknowledge, and deliver an assignment of letters patent, in a form to be reasonably approved by the City, to the City upon request by the City. B. Copyrights. As to any deliverables containing copyrightable subject matter, the Contractor agrees that upon their creation, such deliverables shall be considered as work made -for -hire by the Contractor for the City and the City shall own all copyrights in and to such deliverables, provided however, that nothing in this Paragraph 38 shall negate the City's sole or joint ownership of any such deliverables arising by virtue of the City's sole or joint authorship of such deliverables. Page 16 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 Should by operation of law, such deliverables not be considered works made -for -hire, the Contractor hereby assigns to the City (and agrees to cause each of its employees providing services to the City hereunder to execute, acknowledge, and deliver an assignment to the City of) all worldwide right, title, and interest in and to such deliverables. With respect to such work made - for -hire, the Contractor agrees to execute, acknowledge, and deliver and cause each of its employees providing services to the City hereunder to execute, acknowledge, and deliver a work - made -for -hire agreement, in a form to be reasonably approved by the City, to the City upon delivery of such deliverables to the City or at such other time as the City may request. C. Additional Assignments. The Contractor further agrees to, and if applicable, cause each of its employees to, execute, acknowledge, and deliver all applications, specifications, oaths, assignments, and all other instruments which the City might reasonably deem necessary in order to apply for and obtain copyright protection, mask work registration, trademark registration and/or protection, letters patent, or any similar rights in any and all countries and in order to assign and convey to the City, its successors, assigns and nominees, the sole and exclusive right, title, and interest in and to the deliverables. The Contractor's obligations to execute, acknowledge, and deliver (or cause to be executed, acknowledged, and delivered) instruments or papers such as those described in this Paragraph 38 a., b., and c. shall continue after the termination of this Contract with respect to such deliverables. In the event the City should not seek to obtain copyright protection, mask work registration or patent protection for any of the deliverables, but should desire to keep the same secret, the Contractor agrees to treat the same as Confidential Information under the terms of Paragraph 37 above. 39. PUBLICATIONS: All published material and written reports submitted under the Contract must be originally developed material unless otherwise specifically provided in the Contract. When material not originally developed is included in a report in any form, the source shall be identified. 40. ADVERTISING: The Contractor shall not advertise or publish, without the City's prior consent, the fact that the City has entered into the Contract, except to the extent required by law. 41. NO CONTINGENT FEES: The Contractor warrants that no person or selling agency has been employed or retained to solicit or secure the Contract upon any agreement or understanding for commission, percentage, brokerage, or contingent fee, excepting bona fide employees of bona fide established commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty, the City shall have the right, in addition to any other remedy available, to cancel the Contract without liability and to deduct from any amounts owed to the Contractor, or otherwise recover, the full amount of such commission, percentage, brokerage or contingent fee. 42. GRATUITIES: The City may, by written notice to the Contractor, cancel the Contract without liability if it is determined by the City that gratuities were offered or given by the Contractor or any agent or representative of the Contractor to any officer or employee of the City of Denton with a view toward securing the Contract or securing favorable treatment with respect to the awarding or amending or the making of any determinations with respect to the performing of such contract. In the event the Contract is canceled by the City pursuant to this provision, the City shall be entitled, in addition to any other rights and remedies, to recover or withhold the amount of the cost incurred by the Contractor in providing such gratuities. 43. PROHIBITION AGAINST PERSONAL INTEREST IN CONTRACTS: No officer, employee, independent consultant, or elected official of the City who is involved in the development, evaluation, or decision-making process of the performance of any solicitation shall have a financial interest, direct or indirect, in the Contract resulting from that solicitation. Any willful violation of this section shall constitute impropriety in office, and any officer or employee Page 17 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 guilty thereof shall be subject to disciplinary action up to and including dismissal. Any violation of this provision, with the knowledge, expressed or implied, of the Contractor shall render the Contract voidable by the City. The Contractor shall complete and submit the City's Conflict of Interest Questionnaire. 44. INDEPENDENT CONTRACTOR: The Contract shall not be construed as creating an employer/employee relationship, a partnership, or a joint venture. The Contractor's services shall be those of an independent contractor. The Contractor agrees and understands that the Contract does not grant any rights or privileges established for employees of the City of Denton, Texas for the purposes of income tax, withholding, social security taxes, vacation or sick leave benefits, worker's compensation, or any other City employee benefit. The City shall not have supervision and control of the Contractor or any employee of the Contractor, and it is expressly understood that Contractor shall perform the services hereunder according to the attached specifications at the general direction of the City Manager of the City of Denton, Texas, or his designee under this agreement. The contractor is expressly free to advertise and perform services for other parties while performing services for the City. 45. ASSIGNMENT -DELEGATION: The Contract shall be binding upon and ensure to the benefit of the City and the Contractor and their respective successors and assigns, provided however, that no right or interest in the Contract shall be assigned and no obligation shall be delegated by the Contractor without the prior written consent of the City. Any attempted assignment or delegation by the Contractor shall be void unless made in conformity with this paragraph. The Contract is not intended to confer rights or benefits on any person, firm or entity not a party hereto; it being the intention of the parties that there are no third party beneficiaries to the Contract. 46. WAIVER: No claim or right arising out of a breach of the Contract can be discharged in whole or in part by a waiver or renunciation of the claim or right unless the waiver or renunciation is supported by consideration and is in writing signed by the aggrieved party. No waiver by either the Contractor or the City of any one or more events of default by the other party shall operate as, or be construed to be, a permanent waiver of any rights or obligations under the Contract, or an express or implied acceptance of any other existing or future default or defaults, whether of a similar or different character. 47. MODIFICATIONS: The Contract can be modified or amended only by a writing signed by both parties. No pre-printed or similar terms on any the Contractor invoice, order or other document shall have any force or effect to change the terms, covenants, and conditions of the Contract. 48. INTERPRETATION: The Contract is intended by the parties as a final, complete and exclusive statement of the terms of their agreement. No course of prior dealing between the parties or course of performance or usage of the trade shall be relevant to supplement or explain any term used in the Contract. Although the Contract may have been substantially drafted by one party, it is the intent of the parties that all provisions be construed in a manner to be fair to both parties, reading no provisions more strictly against one party or the other. Whenever a term defined by the Uniform Commercial Code, as enacted by the State of Texas, is used in the Contract, the UCC definition shall control, unless otherwise defined in the Contract. Page 18 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 49. DISPUTE RESOLUTION: A. If a dispute arises out of or relates to the Contract, or the breach thereof, the parties agree to negotiate prior to prosecuting a suit for damages. However, this section does not prohibit the filing of a lawsuit to toll the running of a statute of limitations or to seek injunctive relief. Either party may make a written request for a meeting between representatives of each party within fourteen (14) calendar days after receipt of the request or such later period as agreed by the parties. Each party shall include, at a minimum, one (1) senior level individual with decision-making authority regarding the dispute. The purpose of this and any subsequent meeting is to attempt in good faith to negotiate a resolution of the dispute. If, within thirty (30) calendar days after such meeting, the parties have not succeeded in negotiating a resolution of the dispute, they will proceed directly to mediation as described below. Negotiation may be waived by a written agreement signed by both parties, in which event the parties may proceed directly to mediation as described below. B. If the efforts to resolve the dispute through negotiation fail, or the parties waive the negotiation process, the parties may select, within thirty (30) calendar days, a mediator trained in mediation skills to assist with resolution of the dispute. Should they choose this option; the City and the Contractor agree to act in good faith in the selection of the mediator and to give consideration to qualified individuals nominated to act as mediator. Nothing in the Contract prevents the parties from relying on the skills of a person who is trained in the subject matter of the dispute or a contract interpretation expert. If the parties fail to agree on a mediator within thirty (30) calendar days of initiation of the mediation process, the mediator shall be selected by the Denton County Alternative Dispute Resolution Program (DCAP). The parties agree to participate in mediation in good faith for up to thirty (30) calendar days from the date of the first mediation session. The City and the Contractor will share the mediator's fees equally and the parties will bear their own costs of participation such as fees for any consultants or attorneys they may utilize to represent them or otherwise assist them in the mediation. 50. JURISDICTION AND VENUE: The Contract is made under and shall be governed by the laws of the State of Texas, including, when applicable, the Uniform Commercial Code as adopted in Texas, V.T.C.A., Bus. & Comm. Code, Chapter 1, excluding any rule or principle that would refer to and apply the substantive law of another state or jurisdiction. All issues arising from this Contract shall be resolved in the courts of Denton County, Texas and the parties agree to submit to the exclusive personal jurisdiction of such courts. The foregoing, however, shall not be construed or interpreted to limit or restrict the right or ability of the City to seek and secure injunctive relief from any competent authority as contemplated herein. 51. INVALIDITY: The invalidity, illegality, or unenforceability of any provision of the Contract shall in no way affect the validity or enforceability of any other portion or provision of the Contract. Any void provision shall be deemed severed from the Contract and the balance of the Contract shall be construed and enforced as if the Contract did not contain the particular portion or provision held to be void. The parties further agree to reform the Contract to replace any stricken provision with a valid provision that comes as close as possible to the intent of the stricken provision. The provisions of this section shall not prevent this entire Contract from being void should a provision which is the essence of the Contract be determined to be void. Page 19 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 52. HOLIDAYS: The following holidays are observed by the City: New Year's Day (observed) MLK Day Memorial Day 4th of July Labor Day Thanksgiving Day Day After Thanksgiving Christmas Eve (observed) Christmas Day (observed) New Year's Day (observed) If a Legal Holiday falls on Saturday, it will be observed on the preceding Friday. If a Legal Holiday falls on Sunday, it will be observed on the following Monday. Normal hours of operation shall be between 8:00 am and 4:00 pm, Monday through Friday, excluding City of Denton Holidays. Any scheduled deliveries or work performance not within the normal hours of operation must be approved by the City Manager of Denton, Texas or his authorized designee. 53. SURVIVABILITY OF OBLIGATIONS: All provisions of the Contract that impose continuing obligations on the parties, including but not limited to the warranty, indemnity, and confidentiality obligations of the parties, shall survive the expiration or termination of the Contract. 54. NON -SUSPENSION OR DEBARMENT CERTIFICATION: The City of Denton is prohibited from contracting with or making prime or sub -awards to parties that are suspended or debarred or whose principals are suspended or debarred from Federal, State, or City of Denton Contracts. By accepting a Contract with the City, the Vendor certifies that its firm and its principals are not currently suspended or debarred from doing business with the Federal Government, as indicated by the General Services Administration List of Parties Excluded from Federal Procurement and Non -Procurement Programs, the State of Texas, or the City of Denton. 55. EQUAL OPPORTUNITY A. Equal Employment Opportunity: No Offeror, or Offeror's agent, shall engage in any discriminatory employment practice. No person shall, on the grounds of race, sex, age, disability, creed, color, genetic testing, or national origin, be refused the benefits of, or be otherwise subjected to discrimination under any activities resulting from this RFQ. B. Americans with Disabilities Act (ADA) Compliance: No Offeror, or Offeror's agent, shall engage in any discriminatory employment practice against individuals with disabilities as defined in the ADA. 56. BUY AMERICAN ACT -SUPPLIES (Applicable to certain federally funded requirements) The following federally funded requirements are applicable. A. Definitions. As used in this paragraph — i. "Component" means an article, material, or supply incorporated directly into an end product. ii. "Cost of components" means - (1) For components purchased by the Contractor, the acquisition cost, including transportation costs to the place of incorporation into the end product (whether or not such costs are paid to a domestic firm), and any applicable duty (whether or not a duty-free entry certificate is issued); or Page 20 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 (2) For components manufactured by the Contractor, all costs associated with the manufacture of the component, including transportation costs as described in paragraph (1) of this definition, plus allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the end product. iii. "Domestic end product" means - (1) An unmanufactured end product mined or produced in the United States; or (2) An end product manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind as those that the agency determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Scrap generated, collected, and prepared for processing in the United States is considered domestic. iv. "End product" means those articles, materials, and supplies to be acquired under the contract for public use. v. "Foreign end product" means an end product other than a domestic end product. vi. "United States" means the 50 States, the District of Columbia, and outlying areas. B. The Buy American Act (41 U.S.C. 10a - 10d) provides a preference for domestic end products for supplies acquired for use in the United States. C. The City does not maintain a list of foreign articles that will be treated as domestic for this Contract; but will consider for approval foreign articles as domestic for this product if the articles are on a list approved by another Governmental Agency. The Offeror shall submit documentation with their Offer demonstrating that the article is on an approved Governmental list. D. The Contractor shall deliver only domestic end products except to the extent that it specified delivery of foreign end products in the provision of the Solicitation entitled "Buy American Act Certificate". 57. RIGHT TO INFORMATION: The City of Denton reserves the right to use any and all information presented in any response to this contract, whether amended or not, except as prohibited by law. Selection of rejection of the submittal does not affect this right. 58. LICENSE FEES OR TAXES: Provided the solicitation requires an awarded contractor or supplier to be licensed by the State of Texas, any and all fees and taxes are the responsibility of the respondent. 59. PREVAILING WAGE RATES: The contractor shall comply with prevailing wage rates as defined by the United States Department of Labor Davis -Bacon Wage Determination at http://www.dol.!,2�ov/whd/contracts/dbra.htm and at the Wage Determinations website www.wdol.ov for Denton County, Texas (WD -2509). 60. COMPLIANCE WITH ALL STATE, FEDERAL, AND LOCAL LAWS: The contractor or supplier shall comply with all State, Federal, and Local laws and requirements. The Respondent must comply with all applicable laws at all times, including, without limitation, the following: (i) §36.02 of the Texas Penal Code, which prohibits bribery; (ii) §36.09 of the Texas Penal Code, which prohibits the offering or conferring of benefits to public servants. The Respondent shall give all notices and comply with all laws and regulations applicable to furnishing and performance of the Contract. Page 21 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 61. FEDERAL, STATE, AND LOCAL REQUIREMENTS: Respondent shall demonstrate on- site compliance with the Federal Tax Reform Act of 1986, Section 1706, amending Section 530 of the Revenue Act of 1978, dealing with issuance of Form W -2's to common law employees. Respondent is responsible for both federal and State unemployment insurance coverage and standard Workers' Compensation insurance coverage. Respondent shall ensure compliance with all federal and State tax laws and withholding requirements. The City of Denton shall not be liable to Respondent or its employees for any Unemployment or Workers' Compensation coverage, or federal or State withholding requirements. Contractor shall indemnify the City of Denton and shall pay all costs, penalties, or losses resulting from Respondent's omission or breach of this Section. 62. DRUG FREE WORKPLACE: The contractor shall comply with the applicable provisions of the Drug -Free Work Place Act of 1988 (Public Law 100-690, Title V, Subtitle D; 41 U.S.C. 701 ET SEQ.) and maintain a drug-free work environment; and the final rule, goverment -wide requirements for drug-free work place (grants), issued by the Office of Management and Budget and the Department of Defense (32 CFR Part 280, Subpart F) to implement the provisions of the Drug -Free Work Place Act of 1988 is incorporated by reference and the contractor shall comply with the relevant provisions thereof, including any amendments to the final rule that may hereafter be issued. 63. RESPONDENT LIABILITY FOR DAMAGE TO GOVERNMENT PROPERTY: The Respondent shall be liable for all damages to goverment -owned, leased, or occupied property and equipment caused by the Respondent and its employees, agents, subcontractors, and suppliers, including any delivery or cartage company, in connection with any performance pursuant to the Contract. The Respondent shall notify the City of Denton Procurement Manager in writing of any such damage within one (1) calendar day. 64. FORCE MAJEURE: The City of Denton, any Customer, and the Respondent shall not be responsible for performance under the Contract should it be prevented from performance by an act of war, order of legal authority, act of God, or other unavoidable cause not attributable to the fault or negligence of the City of Denton. In the event of an occurrence under this Section, the Respondent will be excused from any further performance or observance of the requirements so affected for as long as such circumstances prevail and the Respondent continues to use commercially reasonable efforts to recommence performance or observance whenever and to whatever extent possible without delay. The Respondent shall immediately notify the City of Denton Procurement Manager by telephone (to be confirmed in writing within five (5) calendar days of the inception of such occurrence) and describe at a reasonable level of detail the circumstances causing the non-perfolmance or delay in performance. 65. NON -WAIVER OF RIGHTS: Failure of a Party to require performance by another Party under the Contract will not affect the right of such Party to require performance in the future. No delay, failure, or waiver of either Party's exercise or partial exercise of any right or remedy under the Contract shall operate to limit, impair, preclude, cancel, waive or otherwise affect such right or remedy. A waiver by a Party of any breach of any term of the Contract will not be construed as a waiver of any continuing or succeeding breach. 66. NO WAIVER OF SOVEREIGN IMMUNITY: The Parties expressly agree that no provision of the Contract is in any way intended to constitute a waiver by the City of Denton of any immunities from suit or from liability that the City of Denton may have by operation of law. Page 22 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 67. RECORDS RETENTION: The Respondent shall retain all financial records, supporting documents, statistical records, and any other records or books relating to the performances called for in the Contract. The Respondent shall retain all such records for a period of four (4) years after the expiration of the Contract, or until the CPA or State Auditor's Office is satisfied that all audit and litigation matters are resolved, whichever period is longer. The Respondent shall grant access to all books, records and documents pertinent to the Contract to the CPA, the State Auditor of Texas, and any federal governmental entity that has authority to review records due to federal funds being spent under the Contract. Should a conflict arise between any of the contract documents, it shall be resolved with the following order of precedence (if applicable). In any event, the final negotiated contract shall take precedence over any and all contract documents to the extent of such conflict. 1. Final negotiated contract 2. RFP/Bid documents 3. City's standard terms and conditions 4. Purchase order 5. Supplier terms and conditions Page 23 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 Exhibit D Certificate of Interested Parties Electronic Filing In 2015, the Texas Legislature adopted House Bill 1295, which added section 2252.908 of the Goverment Code. The law states that the City may not enter into this contract unless the Contractor submits a disclosure of interested parties (Form 1295) to the City at the time the Contractor submits the signed contract. The Texas Ethics Commission has adopted rules requiring the business entity to file Form 1295 electronically with the Commission. Contractor will be required to furnish an original notarized Certificate of Interest Parties before the contract is awarded, in accordance with Government Code 2252.908. The contractor shall: 1. Log onto the State Ethics Commission Website at : https://www.ethics.state.tx.us/whatsnew/elf info fox-m1295.htrn 2. Register utilizing the tutorial provided by the State 3. Print a copy of the completed Form 1295 4. Enter the Certificate Number on page 2 of this contract. 5. Sign and notarize the Form 1295 6. Email the notarized form to purchasin!.2�(i cityofdenton.com with the contract number in the subject line. (EX: Contract 1234 — Form 1295) The City must acknowledge the receipt of the filed Form 1295 not later than the 30th day after Council award. Once a Form 1295 is acknowledged, it will be posted to the Texas Ethics Commission's website within seven business days. Page 24 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 iimlalmilft mej The City of Denton w"M"109 bobby,cf.a.ehade��cqrn Page 25 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 AMERICAN EAGLE HARLEY-DAVIDSON ....... . ... Principlit tel i, I liu,in'." (Ciu% and StaleCO RI NTH, TX 76210 . . . ... ... .......... .. . YFU0W ,..h, r.I F- -Ti C T�tTici TO COMPLETE ovrioNs PRILCING TAB BEL.0'Vid SECTION A - POLICE MOTORCYCLES Line III ,t Iten) I wal for 1lotorcicles4lquipment SECTION B OPTIONS . ........... 1 1 om\ lowl i.dc \,,;I; i mm up io 5 N c;ii , m V ti ide, I'mal for ql') lnd:id"t in t ni PriCe for Service jf)o lio 1 NO SEC HON B -REQUIRED ADDITIONAL SERVICES ?Y)1" thkw I I, I I a I I d IN Vq I I 1',ur,ih-d k"A', , i I 11 f Ni otorc, Cie me I" ii, i -bidli;l( " iClI w and Nddiii—A (hil, until ( S,etii I. Ilig Cost ------- — ------ —7o"moo Scri. ice, ql') lnd:id"t in t ni PriCe for Service jf)o lio 1 NO SEC HON B -REQUIRED ADDITIONAL SERVICES ...... Ira, 1) 11 R\ ;I I Il.,.I 1, 1. 1 1 l,,W. Iran Willed in ( Prieiv fbe I. Ilig Cost I nwrl - e, Scri. ice, Colllle, I \wNlol Um WaNh hc�n IN11 iiS '1 �t:154YIk1141.I Mamiownc,` lur G 'wk,61i and I )A, ors "'i v qmwhlm Do)loo. I YEN ...... 1 l 7ti lL a. ,19, m'd Coil d'I"I" Rqoil "'ch I '0" V . . .... . ......... . . )TS Ilc]Yx vIY J,o I J'I" "l t oloc h I t3I iN, V for Lach Motili S SECTION C` -REPAIR & PARTS DISCOUNTS HiQ ^Mill 8 kihm fmc 1,', noli—jV,mil, I-,.pmI,IpcI I'mr, Pitige 26 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 Cily cit' Denton Rl-T I'OFSUPPI� ofl-ohce Motorcycles, SOLACITAT[ON C Aff'CKLIS Submit response, with tabs marking each section, in the following order: t" L"Y RI 1' 6364 - Main Document Page I I ol'20 Page 27 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 CIyofl)cnlon UP for 1+upply ol'11ohee Motoi-cydes AITA CI-IMENTA-13U)SINESS OVERVIEW QUESTIONNAIRI`�-, AND FORMS 1. Contract Information (1`61. formal Contracting Purposes): htfin-malion 11111 be uve(] to iiv-iie a coraraci, sho i.i1fl.l'o III-. fil-ni he sejecletljor (111W),(t 0 F 1 ri-n's Leo a I Name: W I I � 11 W R R I D 1-l", S . 1, 1 k,' 0 Addrcss: 5920 S 1351-- Corinth A'X 76210 * Agent ALIthorized to sign contract (Name). Bobby Callahan A -em's email address: hobh\.c o 2. Subsidiary ol- American I.Haole 1-larley-Davidsoll 3. Organization C.lass (circle): Parti-ici-ship Individual Associatioll 4. Tax Payer ]D": 3-20517-8732-6 Date Estabi 1 shed: I I / 1020 16 6 f I I storl ca I I y U nderut I I I zed B u si ness: Yes or N, o; 7. Does your company have an established l"Alysical Presence III the State 0111'cxas� or the City of' Demon�' Yes or No. in which" Yes State of'Tcxas 8. Please provide a detailed listing ol'all products and/or services, that yourcornpally provides, Sales and Service ol'New and 1-1sed I tar le I y 1.1widson Motorcycles [as your company filed or been named In lits u, tio nvo vi am and the Owner on 11 1 mo your comp y a contract within the last I-1ve years under VOUr CLII-I-ellt company name or any other conipany name? It' so provide details of the issues and resolution ll'avallable. 111CIUde lawsuits where Owner was involved, (Notice: FailUre to disclose this Information during proposal SLIbIl-IISSA011. and later discovered, may result in contract lennination at the Owner's option.) NO 10. 1 lave vou ever del'aulted, on or f'alled to complete a contract under VOLII' current company name or any other -company name? I f'so., \.vhere and vvhy? Give name and te`leph(.-)ne number o I'Owncr. No tit P 6364 - Main Document Page 28 of 36 Pa- ge f2 M'20 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 City of Denton IIT f , or Supply of'11(flice Nloiorcydes I lay \OLI ever had a contract terminated by the Owner'?lf'so, wherc and whN" Give nanic and telephone number (s) of'Owncr (s). No 11 1 hS VOUr company implemented an F'Implo)ee I lealth and Salety 11rogain con'ipllant �Nith 29 CFR 1910 -(.icneral Industry Standards -gar d/or 29 (AIR 1926 -General Construction Standa rds" as tile), ayour ply to Conij,.)any .s custoillaryactivitics - w w I -)IS osh'mch duc 1\ pc S'I A\DAI' I )' &I) .............. IM i '), Resident/Non-Residem Bidder Determination: Texas Govemment Code Section 2252.002: Non-resident bidders. Texas law prohibits cities and other wxernmental units barn awarding conti-cicts to at non-resident ill -ill L1llICSS the anIOUnt Ol'SLICII a bid is lower than the lowest bid by a le as resident by the aniount the'l-exas resident would he required to Underbid in the non-resident bidders' state. In order to make this determination, please provide [lie name, address and plione number of a, Responding firms principle place ol"busilless: Z - Cori nth, Te\as b. Company's majority owner principle place ol'business: ("Orinth, 1'exas c. Ultimate Parent Company's principle place of" business: ('orinth 'Fexas Rill 6364 - Main Documew Fla -e 113 of 20 zD Page 29 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 0( ' ', Ot'Dentoll RFP tcw Supply ol'Tolice MORx-cycles 1.1. Provide details- to sup L -)ort the evaluation criteria, including_ experienceanddeliverv. _ 15, Provide details on how firm meetsthe1nimmum qualifications stated in this Main doculment Section 3. a. The details must be completed on this lon-n. and shall not point to another document in the respondent's pi-oposal. Sign below aTId return Corm with final submission. I cc[-,tll',v that OL11- III -In meets the n1illinlLlm qualifications as stated in this Main document, Section 3. Y. .... . S i g I I a rclFc (.'ompan I N, Date RIA", 6364 - Main Document Page 30 of 36 Page 14 ol'20 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 (-"itN (A'L)enton RFAI 161- SuppIt o('Po I ice Motorcycles ATTACHMENT B -SUBMISSION EXCEPTIONS/CLARIFICATIONS .,knv exceptiolls m. clanficatloiis taken to this solicitatim (including terins and conditions in f"xhibit 2, the ("general Provisions and Terms and ('011ditiO11S) 111US1 be i(CMIMI 011 the lilies below, Additional pa,,,es mav be added as needed. lftllel-C aNCCj l -C 110 e)tiOl`lS oi- claril'icatIOTIS'. '7 l please sigh \vhere li-idicatcd at the bottom oftlic page. Iter)) '4 DLScriptioll The above exceptions and clarifications (and any, idditional pages identified) are the ONLY excel)tloiis'llciaii-ilicatioiis to the specifications. General Provisions and Terms and Conditions in L"Olbit 2. mid sample comi-act to this solicitation. I Understand that the City may not accept additiomal exceptions produced after Final sL111111ISS1011 01'1111S 1)11-01)OSaIL Company Datc" No Exceptions are taken to this solicitation or the General Provisions and Terms and Conditions in Exhibit 2. f"'T77� s I (_Yn at u re C 0 1 T1 fm Date RF'11 6364 - Main Document Page t5 cat 20 Page 31 of 36 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 Citx, o[I)C11ton RFP I'm- Supply ofPolice Motorcycles ATTACHMEAT C -SAFETY RECORD QUESTIONNAIRE 'File City of Denton desires to avail jisell'of the benefit,.), of' Section 252.(1,135 of the Imcal CiCayerrirlternt Code, and consider the sat'ct\, records ol'potentlal contractors prior to award ol'City C01111-aCIS. PUrStiant to Section 252.0415 of the Local Government Code. the 01N of Denton has adopted the follokN ing wrillell definition and criteria for accurately deternumm-, the sal IN 1'ecol'd ofa respondent pricir to awarding Contracts. Ille definition and crilerla lor deternilmi-m-) flare~ safety record ofa respondent leer this consideration shall be: The City of Denton shall consider the safety record of the respondent in detern-fining the responsibility thereof. 'Fhe City may consider any incidence involving worker safety or safety of the citizens of" the Ci1v of Denton, he it related or caused by environmental, mechanical, operational, supervision or any other cause or factor. Specifically, the City may consider, arnong other things: Complaints to, or final orders entered by- tile Occupational Safety and I leallh Review Commission (OSIARC), against tile respondent for` violations of OSHA regulations wiffilil the past three k31 years, Citations (as defined below) from an F"nvironmental Protection Agenc), (as def-med below) Jor violations within the past five (5) years. Ftivironmental Protection ALencles include, bit[ are not necessarily limited to. tile U.S. Army of Fn(Oneers (USACOF-1), tile U.S. Fish and Wildfifc Service (USFWS). the Fi-Tvironmental Protection Agency (EPA), the 1'exas Commission oil Envirollillental Quality (RA",Q). tile 1'exas Natural resource Conservation Commission ('[-NRC(-') (predecessor to the I('E'Q), the Texas Tillie lit oi- 1 lealth (I'D[l), theTexas Parks and Wild1l6c Department (TPWD), the Structural Pest Conlrol 13oard (SK"13), agencies of' local governments responsible for enforcing clivirolilliental protection or worker safely related 1aVVS M 1-CUU11alions, and similar regulatory agencies of other states of the L"'nited States. Citations' include notices, of violation., notices ofenrorcement, sLISPC11st'C,11)/I`eVOC,'ItioIIS 01' state or federal licenses or registrations, 1-mes assessed, pending, criminal complaints, indictments- or convictions, administrative orders, draft orders. final orders. andjudicial final ud- ments, C. Convictions ofa Criminal offense vNltllin tine Past tell (l(1) ye.,,lrs, which resulted in bodily harm or death. cf. Any other safel), related matter deemed by the City Counell to be material in dem-mining the responsibility cal` the respondent and his or` her abliltv To pert-orm the services 1'ces 01- 000ds i 17 -equired by the solicitation dotin clents in a safe environment, both for the .N-orkers and other employees of resi-.)ondent and file citizens of the City of Denton, , Ili order to obtain proper information from respondents So that City It), of Denton may, consider the safiety records ot'potential contractors prior to awarding bids on City contracts, 01", of'Denton requires that respondent,', answer the ft)110NVill� three (3) CiLICS11011S and stibilm them with their submissioll-S: QUESTION ONE RIT 6364 - Main DocLlment Page 32 of 36 Pa -e 16 of 2t1 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 City ol'Demoll RFP for suppIv of Police Moiorcvcfes I [LIS the respondent, or the f -fl -111. Corporation- pi,11-111ership, or institution represented ba- the respondent. or alivolle actill" 1,6r such fltrm, Corporation, partnership or instffiltioll, received cilations lor violations of' OSI ]A tvithlil the past 1hree (33) )cars:' YES ?"tie) If the respondent has indicated YES fim, question number one above, the respondent 111u,"I provide to CItN of' Denton, with its submission. the kflkmln�, Information with respect to each such citation: �rl Date of off'ense, location of' establishment inspected, category M' ollense. filial disposition of' offense. If' alIV, 811d pell'ah, assessc(L QUESTION TWO I la" the respondent_ or the firm, Corporation. partnership, or instaution represented by the respondent, or anyone acting 1�or such firm, corporation, partnership or institution - received citations for violations of ef1\11,011111ental prosection laws, or reoulatims, of aw, kind or tvpc, within the past five year C.'itations include notice of violation. notice ofenforcement, suspension/revocations of' state ()I, fedcral licellses, (V registratlow.-,', fines assessed. pending criminal complaints. indicliTicilts, or cotivicti,ons, administrative orders, dralt orders. Final orders, and_ finial jarcf4�taaerats. NO V if the respondent has Indicated YFS For question nun,iber two above. the respondent must provide to City of Denton, With its SUbmissioil, the following information with respect to each such convict,1011: L)ate 01'01'lellSe 01-OCCUITC11cc. location where offense occurred, type ofoffensc, final disposition ofoll'ense, itfany. ,,,md penalty assessed. QL[L.STION THREE f las the respondent. or the lirm, corporation. partnership, or ITISI ItUl i011 represented by respondeat. 01' 811volle, actino for such 111-111, Corporation, partilership, or institution. ever been convicted. withill the past tell (i 0) years, ofa criminal ofi'ense which resulted M wrlous bodily injury or death" YLS 'N, 0 I fthe respondent has indicated YES for question number three above. the respondent must l'-wovide to CItv of'Denton, with it,, submission. the following informatioll W1111 I-CSI)eCt tO eaCh SLICII C011VICH01): Dale ol'offense, location where oflense occurred, type of offense. final disposition of'offeiise. if ani, and penalty assessed. RFT 6364 -Main DOCUMC111 ATTACHMLN-r D-REFEREA,ES Page 33 of 36 Page 17 of 20 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 Cit,, ole Dewon RYT I'm- Supply ail' P olice MMOrcycles Please list three (3) Government references, other Man the City of Denton, who call veril'y The quality of see. yo It r collip"ally providcs. 'I'll c City prel'crs customers of similar size and ,,co lie tat' work to dli s so I ici tat iol I. REFERENCE ONE, REFERENCE TWO CON VRACT PFRIOD: I W 'It 1 REFERENCE T1JREE R P 6364 - Main Doctimeni Page 34 of 36 Page t8 01,20 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA EXHIBIT 4 Citt of Denton RV' f0rSLlJ)P1y of]"ol ice Motorcvc I es ATTACI-1 M ENTF-ACKNOWLEDCA EM ENT '['lie U11CIM-Si,.4ned aurecs this 'SUbmission becomes tile propelly ofthe Cil y alt Denton aPter the official opellin') The undersi-ned affirms lie has f'amiliarized himselfwall the specif[calion, drawings. exhibits and other documents. tile local condiliOlIS Under which the work k to be performecL smisficd hiniselt ot'dic conditions of delivery, handlingand stora.�fie of materials and equipment, ancil at] other manors (flat will be required for ihe work before submililM."a response. Tile Undcrsi,,!Ined agrees, if this submission is accepted, to furnish all\, and all ilclns`services upoll which prices are offered, at [Ile J)T-iCOS) and Up011 the teT-nls and conditions conlaincd ill the specification- The period for acceptance of this sublilission wil I hC Q 20 calendar da\s uiiless a different period is noted. The undersi-ned affirms that they are (JUIN authorized to eXCCUte this COMMCt, that this submission has not been prepared ill collusion with any other respondent. nor an) emplocc ofthe City of Denton, and t hat i lie contents elf this submission Irate not beet) communicated to any othcr respondent or to any employce cif the Cm, of Demon Prior to tile acceptance of this submission. Respondent liereby assigns tel the City any and all claims f6r overchar-cs associated with this contract Mlich arise under the antiti-LIS1 IaWS Ofthe United States, I USCA Section t c-i—seq.. and which arkC Under the antitrust laws of the State of Texas- Tex. Bus, & Coill. Code, section I i,o 1, cl-si The undersi-ned affirms that diev have read and do undersIzind the specifications. all exhibits and attachments contained in this solicitation Packa-e. I'll( undersigned agrees that the solicitation package posted oil the website are the official specifications and shall not alter (lie electronic copy of tile specifications an&or pricing sheet (I- xhibit 1), WithOUt clearly identifying clialiges. ']'Ile undersiOned understands they will be responsible for monitoring the City of' Denton Purchasin- Website at: Imp to ensure they have downloaded and skaned all addendum(s) I-CCILdred fcir submission with their response. I certify that I have made no willf"kil misrepresentations ill this SUbmission, norhave I withheld information in ni), statements and an s4ters to questions. I and aware that the intormatioll given by Tile in this submission will be investi,nited, with im, Pull permission. and that any misrepresentations or omi."ionS play CaLlSe my submission tel be rejected. Acknovvled-e receipt of 161 loui n- addenda tel the A ic Itation: Addendum No I Dated Addendum No I Dated AddClIdLim No 3 Dated NAM E AND ADDRESS OF COMPANY: .. . . . . ....... Tel. No,. L, RFP 6364 - Maill DOCLIMC111 Received Received Received Page 35 of 36 Aurril-lioRIZED REPRESENTATIVE: Signature f )Fitt` Name .... ....... Fax No, PaLw 20 cif 20 DocuSign Envelope ID: AB3BB496-849C-4A1A-8FA3-992808D02DEA IM T x J I lt�F4 City, oI, Demon KFI, l'or Supply of Polices Motorcycles ATTACI-IMENT E—C ONFLICT OF INTEREST QUESTIONNAIRE I CONFLICT OF INTEREST QUESTIONNAIRE FORM CIQ F Jl- 11 r A-endor or otlier person cert ng Imsiness wim local entity I "I'his questionnaire reflects ellianoes made to lite Law by H.B. 23, 84th Leo- Regular Session, questionnaire is being filed in accordance with Chapter 176. local Government Code. bv a vendor who has a business relationship as !defined by Section 176 00 1 ( I -a) wilh to local governnient.al emity and the vendot, Meets reqUiremcmS Mider Section 176.006(a't, B% law this questionnaire must be filed with the records administralor oi'thc local government elitilk, neat later thail the 70) bLlSilleSS da\ al'terl the date the vendor becomes aware of, facts that require the slatement to be filed. o,.ce Scction'176.006(a-l). Local Government Codc-i A vendor commits an offiense ifthe vendor knoktimfly violates Section 176.006, Local Government Code, An oflense under this sectiom is a misdemeanor, o verldol-Idlo has a 1)[Isitiessi-cl.itioiisiiii)rNitli local governmentalentil.%. 21 1_ Check this bo-, if You are filing,,m uptlate to a previousIN filed questimmaire. Hie km requirc.,, that you hh2 f UI)&IICd complewd quem4MMIJIV V001 d1C itl;)T'0[7dEjje fifi11g, ft[Ufj()I-lto ll()t Iatel- fti[I [[1 7111 hU, iIICN, &l� date ml vou becMIW ,MJTV 01W the ori,,6nafly..... —(c t Name oaf local gmernment officerahout ishom the information in this section is being dise osed. N�ulwof,Wficer 'I his .�Ccfioll- iitem 3 illwluofim.� subparts A, B- C & D)- 111LISt be compicied kweach offic,�rm[h Whom tl'W %Cmlor Ims all cuiplimiwnt or Mier bumcs.,, I-cl.i(i()tIship defincd hi lection t76,001( ka). Local Government Code. Aliach ,iddjnonA pagcs lo thl', Forin CIQ as necessary. A- k the local I)mcniment ol'l-iccr nomed in thi,, section rcccikine or likely to ITUkC LtV1111C income, odlerth.111 inccillic- firom the %endor", y C.,; Is II)c vendor I ecen inv or I ikck to recek C faia b I C itxomc, ot I I Cr Illa I I invcIn le nt iE ICO [I) C. fi'Orn oal talc' c directio I I ori 01C I ocal aw, n I In C nt 4111 kL:r IWIllcd ill this scetion AND thu'tax:iblc Income iS not fi-oln the Ioc�ll go\el,-fIll)cIua:I cmiW., Yes No k lhe lilerOrt olis tliae rld1i7Y3alre, elllpkncd h) a Corpol-alion or other busincss erltitS trio, respect to 4\[iicii tI)c 1154: -ill gmcmilicul oklcQrsci-Yes oll or directol-, or hokk ml m\ nel-ship ort orle Percent or N'4 DC."Cribe each elllplo% 11lerit or hu"incs,"', olld jllhmfl}relmiomhip with the tod goi crnllwrlt officer It. ill llws "imioll, — ------------ -- — -------- -- - - - 4 ],.I% C no onfliel of Interest lo disclose. I )ale --- - -------- -- -------- I RFP 6364 - is DOCUIlleffl 1-1 a ge 19 o1'210 Page 36 of 36 Certificate Of Completion Envelope Id: AB3BB496849C4AlA8FA3992808DO2DEA Subject: City Council Docusign Item - 6364 -Police Motorcycles Source Envelope: Document Pages: 37 Signatures: 2 Supplemental Document Pages: 0 Initials: 0 Certificate Pages: 6 AutoNav: Enabled Payments: 0 Envelopeld Stamping: Enabled Time Zone: (UTC -08:00) Pacific Time (US & Canada) Record Tracking Status: Original 4/3/2017 3:52:57 PM Signer Events Jody Word jody.word@cityofdenton.com Buyer City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Bobby Callahan bobby.c@aeharley.com General Manager Bryan Tynes Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Accepted: 4/3/2017 4:36:30 PM ID:2ecc5520-8181-42e9-afld-27ad3b822dc7 John Knight john.knight@cityofdenton.com Deputy City Attorney City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Julia Winkley julia.winkley@cityofdenton.com Contracts Administration Supervisor City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: EXHIBIT 4 Holder: Jody Word jody.word@cityofdenton.com Signature Using IP Address: 129.120.6.150 ED -,Signed by' f 78.F26F3E�i C+:644.. Using IP Address: 107.77.201.39 Signed using mobile Caacusigned by: 6,0 Using IP Address: 129.120.6.150 Status: Sent Envelope Originator: Jody Word jody.word@cityofdenton.com IP Address: 129.120.6.150 Location: DocuSign Timestamp Sent: 4/3/2017 4:07:47 PM Viewed: 4/3/2017 4:07:55 PM Signed: 4/3/2017 4:10:18 PM Sent: 4/3/2017 4:10:20 PM Resent: 4/5/2017 1:40:32 PM Viewed: 4/3/2017 4:36:30 PM Signed: 4/6/2017 7:32:29 AM Sent: 4/6/2017 7:32:32 AM Viewed: 4/6/2017 9:19:26 AM Signed: 4/6/2017 9:19:37 AM Sent: 4/6/2017 9:19:40 AM Viewed: 4/6/2017 11:07:04 AM S e C U R t D EXHIBIT 4 Signer Events Signature Timestamp Todd Hileman todd.hileman@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Accepted: 2/8/2017 4:52:51 PM ID:8154723a-9757-4d53-a4b5-794656233671 Jennifer Walters jennifer.walters@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: in ❑erson Signer Events Signature Timestamp Editor ❑eliver❑ Events Status Timestamp ❑gent ❑eliver❑ Events Status Timestamp rntermediar❑ ❑eliver❑ Events Status Timestamp Certified ❑eliver❑ Events Status Timestamp Caron Cop[] Events Status Timestamp Julia Winkley Sent: 4/6/2017 7:32:31 AM julia.winkley@cityofdenton.com ON Viewed: 4/6/2017 7:44:33 AM Contracts Administration Supervisor City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Sherri Thurman sherri.thurman@cityofdenton.com [::::C: 0 P Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Jane Richardson jane.richardson@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Robin Fox Robin.fox@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Accepted: 10/9/2015 11:39:51 AM ID:04463961-03db-4c4d-9228-d660d6146ed6 Sent: 4/6/2017 7:32:31 AM EXHIBIT 4 Caron Cop[] Events Status Timestamp Jennifer Bridges jennifer.bridges@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Jane Richardson jane.richardson@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Charlie Rosendahl charlie.rosendahl@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Terry Kader Terry. Kader@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: ❑otar❑ Events Timestamp Envelope Summar❑ Events Status Timestamps Envelope Sent Hashed/Encrypted 4/6/2017 9:19:40 AM ❑allnent Events Status Timestamps Electronic Record and Signature Disclosure Electronic Record and Signature Disclosure created on: 4/20/2015 7:25:38 AM Parties agreed to: Bobby Callahan, Todd Hileman, Robin Fox EXHIBIT 4 ELECTRONIC RECORD AND SIGNATURE DISCLOSURE From time to time, City of Denton (we, us or Company) may be required by law to provide to you certain written notices or disclosures. Described below are the terms and conditions for providing to you such notices and disclosures electronically through your DocuSign, Inc. (DocuSign) Express user account. 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McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-477, Version: 1 Legislation Text AGENDA INFORMATION SHEET DEPARTMENT: Materials Management DCM: Bryan Langley AGENDA DATE: April 18, 2017 SUBJECT Consider adoption of an ordinance accepting competitive bids and awarding a public works contract for the construction of the Pecan Creek Interceptor IV Project for the City of Denton which consists of the installation of a new 30" PVC sanitary sewer line from Fulton Street to Newton Rayzor Elementary; providing for the expenditure of funds therefor; and providing an effective date (IFB 6375 -awarded to the lowest responsible bidder meeting specification, Dickerson Construction Company, Inc. in the amount of $1,038,187). The Public Utilities Board recommends approval (7-0). BID INFORMATION The Pecan Creek Interceptor IV project consists of the replacement of approximately 2,000 feet of existing 15" clay sanitary sewer with new 30" PVC sanitary sewer. The project is located just north of Denton High School (see Exhibit 1). The project is required due to inadequate carrying capacity in the existing sanitary sewer which creates recurring sanitary sewer overflows during large rain events. Standard City of Denton purchasing procedures were utilized. Bid notices were advertised in the local newspaper, posted on the internet, and emailed to 758 prospective bidders. Bids for the construction phase of this project were received on March 30, 2017. There were five (5) bidders with a low bid of $788,131.00 and a high bid of $1,166,022.20 for the base bid. An additive bid alternate was included for sanitary sewer and water work on Fulton St. just north of Denton High School. The low bid for the base plus alternate was $1,038,187.00 and the high bid was $1,565,340.20. The engineer's opinion of probable construction cost (OPCC) for the base bid was $811,000.00 and for the base plus alternate bid was $1,049,000.00. The bid summary is enclosed as Exhibit 2. The low bidder for this project, Dickerson Construction Company, Inc. appears to meet all of the necessary qualifications and requirements for this project. The City has chosen to accept the alternate bid as part of the bid award. Dickerson's base plus alternate bid of $1,038,187.00 is approximately 1% lower than the engineer's OPCC for the base plus alternate bid. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On April 10, 2017, the Public Utilities Board recommended approval to forward this item to the City Council for consideration. City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-477, Version: 1 RECOMMENDATION Award to the lowest responsible bidder meeting specification, Dickerson Construction Company, Inc. in the not -to-exceed amount of $1,038,187. PRINCIPAL PLACE OF BUSINESS Dickerson Construction Company, Inc. Celina, TX ESTIMATED SCHEDULE OF PROJECT The project is estimated to be completed within 330 calendar days from Notice to Proceed. FISCAL INFORMATION This project will be funded from existing bond funds through the Wastewater Utilities department and existing revenue funds through the Water Utilities department. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Public Infrastructure Related Goal: 2.3 Promote superior utility services and facilities EXHIBITS Exhibit l: Map Exhibit 2: Bid Tabulation Exhibit 3: Public Utilities Board Draft Minutes Exhibit 4: Ordinance Exhibit 5: Contract Respectfully submitted: Ethan Cox, 349-7421 Customer Service Manager For information concerning this acquisition, contact: PS Arora at 349-7189. 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C > > wA a+ ' E m mo = a a PE Ln M l0 00 LL C O Y b X f O O O m O O O O O 0 O O N O V1 N N O O N N N O N N V m C (0 E m C W 3 J C O_ 0 u 0 1 7 N 0 O o O N 0 O v N N 0 o o W N 0 0 0 N 0 0 o N 0 0 m N N N Y�1 N O U C o U X w ~ U O - O Q T - H o000.oO o 001 N VT o o VT o W N VT m O VT o o VT o o m VT m V m +n O N V o o +n O O M m m +n C O � u = U N - a 7 - O O O m N o o O O m i o o O O O o o o O V 0 o o o O O O C o o O O m C m o o o 0 n 0 voi o V m O C O U C Od` X C O C w o - Y 0 Q `o U T O lfl ON d = N O O O m N O O O N O O O M N O O O O N O O O O N O O O O N N ~ N oc� M O Lr a O 0 v - T U C o O O o O O oo O O O O o O O o O O 0 o 0 0 0 0 O Q UE w - vl N O lD O N O vl vl N O V O 00 O o CC U - H O w o Y O -5.y Y 0 n > O mo m ✓i N N N N N N N N s` to Y 2i o U m w o O o O o O o O o O o O C E o O - d` C o o N o o o o U 7 O O O O O o C o O C () o o o o o 60 C o o� o v a0 H N o i F C O M O N V Cc R c o oa O O O V V O O O O O O 0 y 2 O O O O O O O O O O O O y Y d m oc N o o o O ti o V1 N o lD m V Q C 7 .ti •� 7 a a a a a a T v a 0 W C � O O u U O u U oO 2 o uv = (7 v v m a v p v � � 0 m 0 aC+ v o o -w O aw+ 2 Q - u u v J > 3 - .0 v E O .X O ' w O - v rv. ^ Z Z w - aw+ O E z - aw+ a o v v v 3 Q m 3 w w m O. O w w C C N D M C O OD C .1 O H Y I Y oN O N w l0 .V a+ l0 2 -O aw+ > > Y -C w- m 'C C '� E -o O -o " d m C o DD - O _ a - ry w- w a+ O CO u 2 > LL yo y0 Y H 2 O O O .- U U -u a > > v v m m fl- -moo a> -p w a s -p Y m m O d C V j v O E O E C C v v K 2 K C K CO H vii H O. « 3 D w lD u K K N lD a CO CO - _ - >> > - 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 EXHIBIT 3 DRAFT MINUTES PUBLIC UTILITIES BOARD Monday, April 10, 2017 9:00a.m. City Council Work Session Room After determining that a quorum of the Public Utilities Board of the City of Denton, Texas is present, the Chair of the Public Utilities Board will thereafter convene into an open meeting on Monday, April 10, 2017 at 9:00a.m. in the Council Work Session Room at City Hall, 215 E. McKinney Street, Denton, Texas. Present: Chair Randy Robinson, Vice Chair Susan Parker, Barbara Russell, Charles Jackson, Allen Bishop, Lilia Bynum and Brendan Carroll Ex Officio Members: Todd Hileman, CM and Jon Fortune, ACM REGULAR MEETING ITEMS FOR INDIVIDUAL CONSIDERATION B. PUB17-087 - Consider recommending approval of I1713 6375 to Dickerson Construction Company in the amount of $1,038,187.00 for the construction of the Pecan Creek Interceptor IV project. Jim Wilder talked about the item showing a map. There isn't enough capacity in the current interceptor, it has been past capacity for about ten years. There were five bids. Board Member Russell asked what an interceptor is. Wilder answered it is a large line (30 inches). This is a wastewater line that will be built during June and July while school is out. Board Member Carroll asked if this is joining lines. Wilder agreed. Board Member Russell motioned to approve item B (17-087), with a second by Board Member Bynum. Vote 7-0 approved. Adjournment 10:13 a.m. EXHIBIT 4 ORDINANCE NO. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A PUBLIC WORKS CONTRACT FOR THE CONSTRUCTION OF THE PECAN CREEK INTERCEPTOR IV PROJECT FOR THE CITY OF DENTON WHICH CONSISTS OF THE INSTALLATION OF A NEW 30" PVC SANITARY SEWER LINE FROM FULTON STREET TO NEWTON RAYZOR ELEMENTARY; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (IFB 6375 -AWARDED TO THE LOWEST RESPONSIBLE BIDDER MEETING SPECIFICATION, DICKERSON CONSTRUCTION COMPANY, INC. IN THE AMOUNT OF $1,038,187). 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 6375 Dickerson Construction Company, Inc. $1,038,187 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. EXHIBIT 4 SECTION 4. The City Council of the City of Denton, Texas hereby expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under Bid 6375 to the City Manager of the City of Denton, Texas, or his designee. SECTION 5. 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 6. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY: EXHIBIT 5 CONTRACT BY AND BETWEEN CITY OF DENTON, TEXAS AND DICKERSON CONSTRUCTION CO, INC (IFB 6375) STATE OF TEXAS § COUNTY OF DENTON § THIS AGREEMENT, made and entered into this date , by and between City of Denton of the County of Denton and State of Texas, acting through Todd Hileman thereunto duly authorized so to do, hereinafter termed "OWNER," and Dickerson Construction Co, Inc., 1130 N. Louisiana, Celina, TX 75009 of the City of Celina, County of Collin, and State of Texas , hereinafter termed "CONTRACTOR." WITNESSETH: That for and in consideration of the payments and agreements hereinafter mentioned, to be made and performed by OWNER, and under the conditions expressed in the bonds attached hereto, CONTRACTOR hereby agrees with OWNER to commence and complete performance of the work specified below: IFB #6375 — PECAN CREEK INTERCEPTOR IV in the amount of $1,038,187.00 and all extra work in connection therewith, under the terms as stated in the General Conditions of the agreement; and at his (or their) own proper cost and expense to furnish all materials, supplies, machinery, equipment, tools, superintendence, labor, insurance, and other accessories and services necessary to complete the work specified above, in accordance with the conditions and prices stated in the Proposal and the Performance and Payment Bonds, attached hereto, and in accordance with all the General Conditions of the Agreement, the Special Conditions, the Notice to Bidders (Advertisement for Bids), and Instructions to Bidders, as referenced herein and on file in the office of the Purchasing Agent, and in accordance with the plans, which includes all maps, plats, blueprints, and other drawings and printed or written explanatory matter thereof, and the Specifications therefore, as prepared by: City of Denton Engineering Services all of which are referenced herein and made a part hereof and collectively evidence and constitute the entire contract. Independent Status It is mutually understood and agreed by and between City and Contractor that Contractor is an independent contractor and shall not be deemed to be or considered an employee of the City of Denton, Texas, for the purposes of income tax, withholding, social security taxes, vacation or sick leave benefits, worker's compensation, or any other City employee benefit. City shall not have supervision and control of Contractor or any employee of Contractor, and it is expressly understood that Contractor shall perform the services hereunder according to the attached specifications at the general direction of the City Manager of the City of Denton, Texas, or his DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 designee under this agreement. Indemnification CONTRACTOR COVENANTS AND AGREES TO AND DOES HEREBY INDEMNIFY, HOLD HARMLESS AND DEFEND, AT ITS OWN EXPENSE, OWNER, ITS OFFICERS, SERVANTS AND EMPLOYEES, FROM AND AGAINST ANY AND ALL CLAIMS OR SUITS FOR PROPERTY LOSS OR DAMAGE AND/OR PERSONAL INJURY, INCLUDING DEATH, TO ANY AND ALL PERSONS, OF WHATSOEVER KIND OR CHARACTER, WHETHER REAL OR ASSERTED, ARISING OUT OF THE WORK AND SERVICES TO BE PERFORMED HEREUNDER BY CONTRACTOR, ITS OFFICERS, AGENTS, EMPLOYEES, SUBCONTRACTORS, LICENSEES OR INVITEES, WHETHER OR NOT CAUSED, IN WHOLE OR IN PART, BY THE ALLEGED NEGLIGENCE OF THE OFFICERS, SERVANTS, OR EMPLOYEES OF THE OWNER. CONTRACTOR LIKEWISE COVENANTS AND AGREES TO, AND DOES HEREBY INDEMNIFY AND HOLD HARMLESS OWNER DURING THE PERFORMANCE OF ANY OF THE TERMS AND CONDITIONS OF THIS CONTRACT, WHETHER ARISING OUT OF IN WHOLE OR IN PART, ANY AND ALL ALLEGED ACTS OR OMISSIONS OF OFFICERS, SERVANTS, OR EMPLOYEES OF THE OWNER. THE PROVISIONS OF THIS PARAGRAPH ARE SOLELY FOR THE BENEFIT OF THE PARTIES HERETO AND NOT INTENDED TO CREATE OR GRANT ANY RIGHTS, CONTRACTUAL OR OTHERWISE, TO ANY OTHER PERSON OR ENTITY. Choice of Law and Venue This agreement shall be governed by the law of the State of Texas and venue for its construction and enforcement shall lie in the courts of Denton County, Texas. The CONTRACTOR hereby agrees to commence work on or after the date established for the start of work as set forth in written notice to commence work and complete all work within the time stated in the Proposal, subject to such extensions of time as are provided by the General and Special Conditions. The OWNER agrees to pay the CONTRACTOR in current funds the price or prices shown in the Proposal, which forms a part of this contract, such payments to be subject to the General and Special Conditions of the Contract. Right to Audit The OWNER shall have the right to audit and make copies of the books, records and computations pertaining to this agreement. The CONTRACTOR shall retain such books, records, documents and other evidence pertaining to this agreement during the contract period and five years thereafter, except if an audit is in progress or audit findings are yet unresolved, in which case records shall be kept until all audit tasks are completed and resolved. These books, records, documents and other evidence shall be available, within 10 business days of written DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 request. Further, the CONTRACTOR shall also require all Subcontractors, material suppliers, and other payees to retain all books, records, documents and other evidence pertaining to this agreement, and to allow the OWNER similar access to those documents. All books and records will be made available within a 50 mile radius of the City of Denton. The cost of the audit will be borne by the OWNER unless the audit reveals an overpayment of 1% or greater. If an overpayment of 1% or greater occurs, the reasonable cost of the audit, including any travel costs, must be borne by the CONTRACTOR which must be payable within five business days of receipt of an invoice. Failure to comply with the provisions of this section shall be a material breach of this contract and shall constitute, in the OWNER'S sole discretion, grounds for termination thereof. Each of the terms "books", "records", "documents" and "other evidence", as used above, shall be construed to include drafts and electronic files, even if such drafts or electronic files are subsequently used to generate or prepare a final printed document. Payment and Performance Bonds Contractor will be required to furnish original performance and payment bonds for one hundred (100%) percent of the total submission price before work is to commence. The Contractor shall assume all costs in increasing the bond limits if change orders are formally approved. Bonds shall be in accordance with the V.T.C.A Government Code Section 2253.021, as amended, from a surety licensed to do business in the State of Texas. The City, at its option, may waive the payment and performance bond requirements for projects of less than $50,000. Bond forms are attached and shall be returned upon notice of contract award by the City. Bonds should be forwarded to the City of Denton within fourteen (14) calendar days from contract award. This contract is not fully executed until payment and performance bonds are received and accepted by the City. Upon approval, a purchase order will be issued. DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 IN WITNESS WHEREOF, the parties of these presents have executed this agreement in the year and day first above written. OWNER CITY OF DENTON BY: TODD HILEMAN CITY MANAGER CONTRACTOR DICKERSON CONSTRUCTION CO, INC BY: FDocuSigned by: je�,) Q;c.Ae.�o.. A IsH©R��ED AGENT Lewis Dickerson NAME PRESIDENT TITLE 972-382-2123 PHONE NUMBER dcc.jld@sbcglobal.net EMAIL ADDRESS ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY FDocuSigned by: 6�u' iu C821996C2A213439... DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 Certificate of Interested Parties Electronic Filing In 2015, the Texas Legislature adopted House Bill 1295, which added section 2252.908 of the Government Code. The law states that the City may not enter into this contract unless the Contractor submits a disclosure of interested parties (Form 1295) to the City at the time the Contractor submits the signed contract. The Texas Ethics Commission has adopted rules requiring the business entity to file Form 1295 electronically with the Commission. Contractor will be required to furnish an original notarized Certificate of Interest Parties before the contract is awarded, in accordance with Government Code 2252.908. The contractor shall: 1. Log onto the State Ethics Commission Website at: htlps://www.ethics.state.tx.us/whatsnew/elf info forml295.htm 2. Register utilizing the tutorial provided by the State 3. Print a copy of the completed Form 1295 4. Enter the Certificate Number on page 2 of this contract. 5. Sign and notarize the Form 1295 6. Email the notarized form to purchasing,cityofdenton.com with the contract number in the subject line. (EX: Contract 1234 — Form 1295) The City must acknowledge the receipt of the filed Form 1295 not later than the 30th day after Council award. Once a Form 1295 is acknowledged, it will be posted to the Texas Ethics Commission's website within seven business days. DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 INSURANCE REQUIREMENTS AND WORKERS' COMPENSENTATION REQUIREMENTS Upon contract execution, all insurance requirements shall become contractual obligations, which the successful contractor shall have a duty to maintain throughout the course of this contract. STANDARD PROVISIONS: Without limiting any of the other obligations or liabilities of the Contractor, the Contractor shall provide and maintain until the contracted work has been completed and accepted by the City of Denton, Owner, the minimum insurance coverage as indicated hereinafter. Contractor shall file with the Purchasing Department satisfactory certificates of insurance including any applicable addendum or endorsements, containing the contract number and title of the project. Contractor may, upon written request to the Purchasing Department, ask for clarification of any insurance requirements at any time; however, Contractor shall not commence any work or deliver any material until he or she receives notification that the contract has been accepted, approved, and signed by the City of Denton. All insurance policies proposed or obtained in satisfaction of these requirements shall comply with the following general specifications, and shall be maintained in compliance with these general specifications throughout the duration of the Contract, or longer, if so noted: • Each policy shall be issued by a company authorized to do business in the State of Texas with an A.M. Best Company rating of at least A or better. Any deductibles or self-insured retentions shall be declared in the proposal. If requested by the City, the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its officials, agents, employees and volunteers; or, the contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. • Liability policies shall be endorsed to provide the following: Name as Additional Insured the City of Denton, its Officials, Agents, Employees and volunteers. ■ That such insurance is primary to any other insurance available to the Additional Insured with respect to claims covered under the policy and that this insurance applies separately to each insured against whom claim is made or suit is brought. The inclusion of more than one insured shall not operate to increase the insurer's limit of liability. • Cancellation: City requires 30 day written notice should any of the policies described on the certificate be cancelled or materially changed before the expiration date. Should any of the required insurance be provided under a claims made form, Contractor shall maintain such coverage continuously throughout the term of this contract and, without lapse, for a period of three years beyond the contract expiration, such that occurrences arising during the contract term which give rise to claims made after expiration of the contract shall be covered. DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 • Should any of the required insurance be provided under a form of coverage that includes a general annual aggregate limit providing for claims investigation or legal defense costs to be included in the general annual aggregate limit, the Contractor shall either double the occurrence limits or obtain Owners and Contractors Protective Liability Insurance. • Should any required insurance lapse during the contract term, requests for payments originating after such lapse shall not be processed until the City receives satisfactory evidence of reinstated coverage as required by this contract, effective as of the lapse date. If insurance is not reinstated, City may, at its sole option, terminate this agreement effective on the date of the lapse. SPECIFIC ADDITIONAL INSURANCE REQUIREMENTS: All insurance policies proposed or obtained in satisfaction of this Contract shall additionally comply with the following marked specifications, and shall be maintained in compliance with these additional specifications throughout the duration of the Contract, or longer, if so noted: [X] A. General Liability Insurance: General Liability insurance with combined single limits of not less than $1,000,000.00 shall be provided and maintained by the Contractor. The policy shall be written on an occurrence basis either in a single policy or in a combination of underlying and umbrella or excess policies. If the Commercial General Liability form (ISO Form CG 0001 current edition) is used: • Coverage A shall include premises, operations, products, and completed operations, independent contractors, contractual liability covering this contract and broad form property damage coverage. • Coverage B shall include personal injury. • Coverage C, medical payments, is not required. If the Comprehensive General Liability form (ISO Form GL 0002 Current Edition and ISO Form GL 0404) is used, it shall include at least: Bodily injury and Property Damage Liability for premises, operations, products and completed operations, independent contractors and property damage resulting from explosion, collapse or underground (XCU) exposures. • Broad form contractual liability (preferably by endorsement) covering this contract, personal injury liability and broad form property damage liability. [X] Automobile Liability Insurance: Contractor shall provide Commercial Automobile Liability insurance with Combined Single Limits (CSL) of not less than $500,000 either in a single policy or in a combination of basic and umbrella or excess policies. The policy will include bodily injury and property damage liability arising out of the operation, maintenance and use of all automobiles and mobile equipment used DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 in conjunction with this contract. Satisfaction of the above requirement shall be in the form of a policy endorsement for: • any auto, or • all owned hired and non -owned autos. [X] Workers' Compensation Insurance Contractor shall purchase and maintain Workers' Compensation insurance which, in addition to meeting the minimum statutory requirements for issuance of such insurance, has Employer's Liability limits of at least $100,000 for each accident, $100,000 per each employee, and a $500,000 policy limit for occupational disease. The City need not be named as an "Additional Insured" but the insurer shall agree to waive all rights of subrogation against the City, its officials, agents, employees and volunteers for any work performed for the City by the Named Insured. For building or construction projects, the Contractor shall comply with the provisions of Attachment 1 in accordance with §406.096 of the Texas Labor Code and rule 28TAC 110.110 of the Texas Workers' Compensation Commission (TWCC). [ ] Owner's and Contractor's Protective Liability Insurance The Contractor shall obtain, pay for and maintain at all times during the prosecution of the work under this contract, an Owner's and Contractor's Protective Liability insurance policy naming the City as insured for property damage and bodily injury which may arise in the prosecution of the work or Contractor's operations under this contract. Coverage shall be on an "occurrence" basis and the policy shall be issued by the same insurance company that carries the Contractor's liability insurance. Policy limits will be at least $500,000.00 combined bodily injury and property damage per occurrence with a $1,000,000.00 aggregate. [ ] Fire Damage Legal Liability Insurance Coverage is required if Broad form General Liability is not provided or is unavailable to the contractor or if a contractor leases or rents a portion of a City building. Limits of not less than each occurrence are required. [ ] Professional Liability Insurance Professional liability insurance with limits not less than $1,000,000.00 per claim with respect to negligent acts, errors or omissions in connection with professional services is required under this Agreement. [ ] Builders' Risk Insurance Builders' Risk Insurance, on an All -Risk form for 100% of the completed value shall be provided. Such policy shall include as "Named Insured" the City of Denton and all subcontractors as their interests may appear. DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 ATTACHMENT 1 [X] Workers' Compensation Coverage for Building or Construction Projects for Governmental Entities A. Definitions: Certificate of coverage ("certificate") -A copy of a certificate of insurance, a certificate of authority to self -insure issued by the commission, or a coverage agreement (TWCC-81, TWCC-82, TWCC-83, or TWCC-84), showing statutory workers' compensation insurance coverage for the person's or entity's employees providing services on a project, for the duration of the project. Duration of the project - includes the time from the beginning of the work on the project until the contractor's/person's work on the project has been completed and accepted by the governmental entity. Persons providing services on the project ("subcontractor" in §406.096) - includes all persons or entities performing all or part of the services the contractor has undertaken to perform on the project, regardless of whether that person contracted directly with the contractor and regardless of whether that person has employees. This includes, without limitation, independent contractors, subcontractors, leasing companies, motor carriers, owner -operators, employees of any such entity, or employees of any entity which furnishes persons to provide services on the project. "Services" include, without limitation, providing, hauling, or delivering equipment or materials, or providing labor, transportation, or other service related to a project. "Services" does not include activities unrelated to the project, such as food/beverage vendors, office supply deliveries, and delivery of portable toilets. B. The contractor shall provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any overage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all employees of the Contractor providing services on the project, for the duration of the project. C. The Contractor must provide a certificate of coverage to the governmental entity prior to being awarded the contract. D. If the coverage period shown on the contractor's current certificate of coverage ends during the duration of the project, the contractor must, prior to the end of the coverage period, file a new certificate of coverage with the governmental entity showing that coverage has been extended. E. The contractor shall obtain from each person providing services on a project, and provide to the governmental entity: 1. a certificate of coverage, prior to that person beginning work on the project, so DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 the governmental entity will have on file certificates of coverage showing coverage for all persons providing services on the project; and 2. no later than seven days after receipt by the contractor, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project. F. The contractor shall retain all required certificates of coverage for the duration of the project and for one year thereafter. G. The contractor shall notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the contractor knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project. H. The contractor shall post on each project site a notice, in the text, form and manner prescribed by the Texas Workers' Compensation Commission, informing all persons providing services on the project that they are required to be covered, and stating how a person may verify coverage and report lack of coverage. L The contractor shall contractually require each person with whom it contracts to provide services on aproject, to: 1. provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all of its employees providing services on the project, for the duration of the project; 2. provide to the contractor, prior to that person beginning work on the project, a certificate of coverage showing that coverage is being provided for all employees of the person providing services on the project, for the duration of the project; 3. provide the contractor, prior to the end of the coverage period, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project; 4. obtain from each other person with whom it contracts, and provide to the contractor: a. a certificate of coverage, prior to the other person beginning work on the project; and b. a new certificate of coverage showing extension of coverage, prior to the end of the coverage period, if the coverage period shown on the current certificate of coverage ends during the duration of the project; DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 5. retain all required certificates of coverage on file for the duration of the project and for one year thereafter; 6. notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the person knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project; and 7. Contractually require each person with whom it contracts, to perform as required by paragraphs (1) - (7), with the certificates of coverage to be provided to the person for whom they are providing services. J. By signing this contract or providing or causing to be provided a certificate of coverage, the contractor is representing to the governmental entity that all employees of the contractor who will provide services on the project will be covered by workers' compensation coverage for the duration of the project, that the coverage will be based on proper reporting of classification codes and payroll amounts, and that all coverage agreements will be filed with the appropriate insurance carrier or, in the case of a self-insured, with the commission's Division of Self -Insurance Regulation. Providing false or misleading information may subject the contractor to administrative penalties, criminal penalties, civil penalties, or other civil actions. K. The contractor's failure to comply with any of these provisions is a breach of contract by the contractor which entitles the governmental entity to declare the contract void if the contractor does not remedy the breach within ten days after receipt of notice of breach from the governmental entity. DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 IFB 6375 - Pricing Sheet for Construction of Pecan Creek Interceptor IV I Respondent's Name: Dickerson Construction Co, Inc II Principal Place of Business (City and State) Celina, TX III Respondent is a Corporation, Partnership, sole Proprietorship, Indvidual? Corporation IV Respondent can meet time requirement of Qualification #4 under Bidder Qualifications (Y/N)? Y V Total calendar days after Notice to Proceed is issued by City for substatial completion (Maximum of 330): 330 VI Total calendar days after Notice to Proceed is issued by City for project start: 30 Wastewater Proposal Pricing: Item Description Quantity Unit Unit Price Total 1 Surety Bonds 1 LS $ 30,000.00 $ 30,000.00 2 Project Signs 2 EA $ 1,000.00 $ 2,000.00 3 General Site Preparation 1 LS $ 5,000.00 $ 5,000.00 4 Barricades, Warning Signs and Detours 1 LS $ 10,000.00 $ 10,000.00 5 Excavation Protection 2278 LF $ 7.00 $ 15,946.00 6 Temporary Erosion Control 1 LS $ 7,500.00 $ 7,500.00 7 4' I.D. Concrete Manhole (0-6 ft deep) 1 EA $ 3,000.00 $ 3,000.00 8 5' I.D. Concrete Manhole (0-6 ft deep) 1 EA $ 4,500.00 $ 4,500.00 10 5' I.D. Concrete Drop Manhole (0-6 ft deep) 3 EA $ 4,500.00 $ 13,500.00 11 6' I.D. Concrete Drop Manhole (0-6 ft deep) 2 EA $ 7,000.00 $ 14,000.00 12 Additional Concrete Manhole Depth (>6 ft deep) 38 VF $ 250.00 $ 9,500.00 13 Core into Existing Manhole 1 EA $ 2,000.00 $ 2,000.00 14 4" Sanitary Sewer Service 17 EA $ 1,300.00 $ 22,100.00 15 6" Sanitary Sewer Service 9 EA $ 2,500.00 $ 22,500.00 16 8" Sanitary Sewer with Pavement Repair 273 LF $ 150.00 $ 40,950.00 17 8" Sanitary Sewer Unpaved 20 LF $ 100.00 $ 2,000.00 18 24" Sanitary Sewer Unpaved 28 LF $ 140.00 $ 3,920.00 19 27" Sanitary Sewer Unpaved 0 LF $ - $ - 20 30" Sanitary Sewer Unpaved 1379 LF $ 165.00 $ 227,535.00 21 30" Sanitary Sewer with Pavement Repair 578 LF $ 280.00 $ 161,840.00 23 30" Sanitary Sewer in Casing 40 LF $ 325.00 $ 13,000.00 25 42" Steel Casing/ Tunnel Liner Plate by Tunnel 40 LF $ 800.00 $ 32,000.00 26 Cut and Plug Existing Sanitary Sewer Line 8 EA $ 1,000.00 $ 8,000.00 27 Abandon Existing Manhole 11 EA $ 1,000.00 $ 11,000.00 28 Remove Existing Manhole 3 EA $ 2,500.00 $ 7,500.00 29 Bypass Pumping 1 LS $ 30,000.00 $ 30,000.00 DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D460B9 EXHIBIT 5 IFB 6375 - Pricing Sheet for Construction of Pecan Creek Interceptor IV I Respondent's Name: Dickerson Construction Co, Inc II Principal Place of Business (City and State) Celina, TX III Respondent is a Corporation, Partnership, sole Proprietorship, Indvidual? Corporation IV Respondent can meet time requirement of Qualification #4 under Bidder Qualifications (Y/N)? Y V Total calendar days after Notice to Proceed is issued by City for substatial completion (Maximum of 330): 330 VI Total calendar days after Notice to Proceed is issued by City for project start: 30 Wastewater Proposal Pricing: Item Description Quantity Unit Unit Price Total 31 Water Main Lowering 1 EA $ 5,000.00 $ 5,000.00 Wastewater Total $ 704,291.00 Water Proposal Pricing: Item Description Quantity Unit Unit Price Total 50 Excavation Protection 348 LF $ 5.00 $ 1,740.00 51 6" PVC C900 Water with Pavement Repair 38 LF $ 125.00 $ 4,750.00 53 12" PVC C900 Water with Pavement Repair 310 LF $ 145.00 $ 44,950.00 56 6" Gate Valve 2 EA $ 1,000.00 $ 2,000.00 58 12" Gate Valve 2 EA $ 2,000.00 $ 4,000.00 59 Fire Hydrant Assembly 1 EA $ 4,400.00 $ 4,400.00 61 12" Tapping Sleeve Connection 1 EA $ 5,700.00 $ 5,700.00 63 6" Cut -in Connection 2 EA $ 2,850.00 $ 5,700.00 64 Cut and Plug Existing Water Line 2 EA $ 1,100.00 $ 2,200.00 65 Remove Valve Stack 2 EA $ 100.00 $ 200.00 66 Remove Fire Hydrant Assembly 1 EA $ 1,000.00 $ 1,000.00 68 6" Line Stop 2 EA $ 3,600.00 $ 7,200.00 Water Total $ 83,840.00 Alternate A Wastewater Proposal Pricing: Item Description Quantity Unit Unit Price Total 5 Excavation Protection 506 LF $ 5.00 $ 2,530.00 7 4' I.D. Concrete Manhole (0-6 ft deep) 2 EA $ 3,000.00 $ 6,000.00 9 4' I.D. Concrete Drop Manhole (0-6 ft deep) 1 EA $ 3,500.00 $ 3,500.00 12 Additional Concrete Manhole Depth (>6 ft deep) 3 VF $ 250.00 $ 750.00 14 4" Sanitary Sewer Service 1 EA $ 2,000.00 $ 2,000.00 16 8" Sanitary Sewer with Pavement Repair 506 LF $ 146.00 $ 73,876.00 22 8" Sanitary Sewer in Casing 35 LF $ 50.00 $ 1,750.00 24 12" Steel Casing by Bore 35 LF $ 250.00 $ 8,750.00 DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 IFB 6375 - Pricing Sheet for Construction of Pecan Creek Interceptor IV I Respondent's Name: Dickerson Construction Co, Inc II Principal Place of Business (City and State) Celina, TX III Respondent is a Corporation, Partnership, sole Proprietorship, Indvidual? Corporation IV Respondent can meet time requirement of Qualification #4 under Bidder Qualifications (Y/N)? Y V Total calendar days after Notice to Proceed is issued by City for substatial completion (Maximum of 330): 330 VI Total calendar days after Notice to Proceed is issued by City for project start: 30 Wastewater Proposal Pricing: Item Description Quantity Unit Unit Price Total 26 Cut and Plug Existing Sanitary Sewer Line 1 EA $ 750.00 $ 750.00 30 Aerial Crossing Removal 1 EA $ 2,750.00 $ 2,750.00 Alternate A Wastewater Total $ 102,656.00 Alternate A Water Proposal Pricing: Item Description Quantity Unit Unit Price Total 50 Excavation Protection 650 LF $ 5.00 $ 3,250.00 51 6" PVC C900 Water with Pavement Repair 75 LF $ 125.00 $ 9,375.00 52 8" PVC C900 Water with Pavement Repair 40 LF $ 135.00 $ 5,400.00 53 12" PVC C900 Water with Pavement Repair 535 LF $ 145.00 $ 77,575.00 54 12" PVC C900 Water in Casing 35 LF $ 70.00 $ 2,450.00 55 24" Steel Casing by Bore 35 LF $ 400.00 $ 14,000.00 56 6" Gate Valve 1 EA $ 1,000.00 $ 1,000.00 57 8" Gate Valve 2 EA $ 1,300.00 $ 2,600.00 58 12" Gate Valve 2 EA $ 2,000.00 $ 4,000.00 59 Fire Hydrant Assembly 1 EA $ 4,400.00 $ 4,400.00 60 1" Water Service Connection 1 EA $ 2,200.00 $ 2,200.00 61 12" Tapping Sleeve Connection 1 EA $ 5,700.00 $ 5,700.00 62 2" Cut -in Connection 1 EA $ 700.00 $ 700.00 63 6" Cut -in Connection 1 EA $ 2,850.00 $ 2,850.00 64 Cut and Plug Existing Water Line 4 EA $ 1,100.00 $ 4,400.00 65 Remove Valve Stack 4 EA $ 100.00 $ 400.00 66 Remove Fire Hydrant Assembly 1 EA $ 1,000.00 $ 1,000.00 67 2" Line Stop 1 EA $ 2,500.00 $ 2,500.00 68 6" Line Stop 1 EA $ 3,600.00 $ 3,600.00 Alternate A Water Total $ 147,400.00 DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 IFB 6375 - Pricing Sheet for Construction of Pecan Creek Interceptor IV I Respondent's Name: Dickerson Construction Co, Inc II Principal Place of Business (City and State) Celina, TX III Respondent is a Corporation, Partnership, sole Proprietorship, Indvidual? Corporation IV Respondent can meet time requirement of Qualification #4 under Bidder Qualifications (Y/N)? Y V Total calendar days after Notice to Proceed is issued by City for substatial completion (Maximum of 330): 330 VI Total calendar days after Notice to Proceed is issued by City for project start: 30 Wastewater Proposal Pricing: Item IlDescription Quantity Unit I Unit Price Total Base Bid Total (Wastewater + Water) $ 788,131.00 Base Bid Plus Alternate A Total I $ 1,038,187.00 DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 _.pi ka ---._.. .. W ��— - � — y �. –- �(- z" 1 b. € l .- P) Alternate A represents an additive alternate which the City may elect to add to the scope of this project. The decision to add Alternate A to the project will be made solely at the discretion of the City. If the City does not include Alternate A in the bid award, then the award of the contract will be based on the Total Base Bid alone with the lowest responsive proposal for purposes of award being the conforming responsible bidder offering the lowest cost for the base bid. The award of the contract will be based on the Total Base Bid. If the City includes Alternate A in the bid award, then the award of the contract will be based on the Total Base Bid plus the Alternate A Bid with the lowest responsive proposal for purposes of award being the conforming responsible bidder offering the lowest cost for both the base bid and alternate bid. The base bid work and the alternate bid work shall not be split for purposes of award. In the event of the award of a contract to the undersigned, the undersigned will furnish a performance bond and a payment bond for the full amount of the contract, to secure proper compliance with the terms and provisions of the contract, to insure and guarantee the work until final completion and acceptance, and to guarantee payment for all lawful claims for labor performed and materials furnished in the fulfillment of the contract. It is understood that the work proposed to be done shall be accepted, when fully completed and finished in accordance with the plans and specifications, to the satisfaction of the Engineer. The undersigned certifies that the bid prices contained in this proposal have been carefully checked and are submitted as correct and final. Unit and lump sum prices as shown for each item listed in this proposal, shall control over extensions. The undersigned agrees this bid becomes the property of the City of Denton after the official opening. R • DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 iff -ftmct Vendor hereby assigns to purchaser any and all claims for overcharges associated with this Wr1♦15 USCA Section 1 gLseq., and which arise under the antitrust laws of the State of Texas, Tex. Bus. & Com. Code, Section 15.01, et seq. Addend No. I dated 3 -;il-1 Received Addendum No. 2 dated Received . . .... Addendum No. 3 dated Received Addendum No. 4 dated Received . .... . Addendum No. 5 dated Received--___,-,, . . . .......... . —/ "-) 14 5 1 CONTCTO BY Uu3Z5 1) i c a 5 0 &� t2i i 4 " A . . . ..... - Aa fb Q'X' L & I -ve., r, it -, '-15 0 cri City and State Seal & Authorization (If a Corporation) Telephone 6'.1q �J"/ 4j-,L�h 1 E-mail QWA DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 The 1985 Session of the Texas Legislature passed House Bill 620 relative to the award of contracts to non-resident bidders. This law provides that, in order to be awarded a contract as low bidder, non-resident bidders (out-of-state contractors whose corporate offices or principal place of business are outside of the State of Texas) bid projects for construction, improvements, supplies or services in Texas at an amount lower than the lowest Texas resident bidder by the same amount that a Texas it to do so will autornat cally squalify a i er. es- e rs mu c ec B. A. Non-resident bidders in (give state), our principal place of business, are required to be _percent lower than resident bidders by state law. A copy of the statute is attached. Non-resident bidders in (give state), our principal place of business, are not required to underbid resident bidders. B. Our principal place of business or corporate offices are in the State of Texas: --A U1 Z,01(441 zP /JVC PANY BY L c V Ts a P tD- W is A ad Street Address � �/ts City and State THIS FORM MUST BE RETU RN ED )Lr-FJIVQ-LJR- -BID. W DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 Comply with all requirements of the Texas Sales Tax Code. The Contractor hereby certifies that the Contract Amount is divided as follows: Materials incorporated into the Project (resold to the Owner as defted. in Tax Code) Total $ 13 -1 ----------- 11 FIR-STORRM C - COMPANY By L Street Address City and State THIS FO 111M S FIA1, 1, BE EXE CUTED AT TfIF, TI_ E OF EXECU TI '_T - E CONTRACT AND SHALL BE MADE A PART OF THE CONT R -ACT. W DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 :, a �,16" • we, Dickerson Construction Company, Inc. LLv .Inw tal Casualty m y Surety, are held and firmly bound unto City of Denton , Obligee, in the sum of Five Percent of the Greatest Amount Bid---- !oof for the payment of which we bind ourselves, our legal representatives, successors and assigns, jointly and severally, firmly by these presents. WHEREAS, Principal has submitted or is about to submit a proposal to Obligee on a contract for Pecan Creek Interceptor IV NOW, THEREFORE, if the said contract be awarded to Principal and Principal shall, within such time as may be specified, enter into the contract in writing and give such bond or bonds as may be specified in the bidding or contract documents with surety acceptable to Obligee; or if Principal shall fail to do so, pay to Obligee the damages which Obligee may suffer by reason of such failure not exceeding the penalty of this bond, then this obligation shall be null and void; otherwise to remain in full force and effect. Signed, sealed and dated March 30, 2017. Dick Construction Company, Inc. (Principal) By: 77 ntinentl Csualty Company (Surty) By; A Roxanne G Brune, A r)ney-in-Fact CNA larAN PM Caamimmurou Maka° DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 Know All Men ByThese Presents, That Continental Casualty Company, an Illinois insurance company, National Fire Insurance Company of Hartford, an Illinois insurance company, and American Casualty Company of Reading, Pennsylvania, a Pennsylvania insurance company (herein called "the CNA Companies"), are duly organized and existing insurance companies having their principal offices in the City of Chicago, and State of Illinois, and that they do by virtue of the signatures and seals herein affixed hereby make, constitute and appoint Sue Kohler, David R Groppell, Beverly A Ireland, Sharen Groppell, Roxanne G Brune, Sharon Cavanaugh, Kurt A Risk, Francine Hay, Gloria Villa, Individually of Houston, TX, their true and lawful Attomey(s)-in-Fact with full power and authority hereby conferred to sign, seal and execute for and on their behalf bonds, undertakings and other obligatory instruments of similar nature - In Unlimited Amounts - and to bind them thereby as fully and to the same extent as if such instruments were signed by a duly authorized officer of their insurance companies and all the acts of said Attorney, pursuant to the authority hereby given is hereby ratified and confirmed. This Power of Attorney is made and executed pursuant to and by authority of the By -Law and Resolutions, printed on the reverse hereof, duly adopted, as indicated, by the Boards of Directors of the insurance companies, In Witness Whereof, the CNA Companies have caused these presents to be signed by their Vice President and their corporate seals to be hereto affixed on this 1st day of August, 2016. 0ASOA, r, otmora ry "Y A# Continental Casualty Company 009PORAre "4010qp National Fire Insurance Company of Hartford American Cas Ity Company of Reading, Pennsylvania iJ my n, SEAL 1897 HA1� Datil T, Bruflat Vice President State of South Dakota, County of Minnehaha, ss: On this I st day of August, 2016, before me personally came Paul T. Braflat to me known, who, being by me duly sworn, did depose and say: that he resides in the City of Sioux Falls, State of South Dakota; that he is a Vice President of Continental Casualty Company, an Illinois insurance company, National Fire Insurance Company of Hartford, an Illinois insurance company, and American Casualty Company of Reading, Pennsylvania, a Pennsylvania insurance company described in and which executed the above instrument, that he knows the seals of said insurance companies; that the seals affixed to the said instrument are such corporate seals; that they were so affixed pursuant to authority given by the Boards of Directors of said insurance companies and that he signed his name thereto pursuant to like authority, and acknowledges same to be the act and deed of said insurance companies. J. =MOHR My Commission Expires June 23, 2021 JF_Mohr Notary Public [4) D11 till 91 1, D. Bult, Assistant Secretary of Continental Casualty Company, an Illinois insurance company, National Fire Insurance Company of Hartford, an Illinois insurance company, and American Casualty Company of Reading, Pennsylvania, a Pennsylvania insurance company do hereby certify that the Power of Attorney herein above set forth is still in force, and further certify that the By -Law and Resolution of the Board of Directors of the insurance companies printed on the reverse hereof is still in force. In testimony whereof I have hereunto subscribed my name and affixed the seel of the said insurance companies this 30th - day of March 2017 0)%s U,4 00UP4 my jj. EAL Form F6853-4/2012 0 6 ; National Fire Insurance Company of Hartford American Casualty Company of Reading, Pennsylvania D. Bult Assistant Secretary DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 7 EXHIBIT 5 This Power of Attorney is made and executed pursuant to and by authority of the following resolution duly adopted by the Board of Directors of the Company at a meeting held on May 12, 1995: "RESOLVED: That any Senior or Group Vice President may authorize an officer to sign specific documents, agreements and instruments on behalf of the Company provided that the name of such authorized officer and a description of the documents, agreements or instruments that such officer may sign will be provided in writing by the Senior or Group Vice President to the Secretary of the Company prior to such execution becoming effective." This Power of Attorney is signed by Paul T. Bruflat, Vice President, who has been authorized pursuant to the above resolution to execute power of attorneys on behalf of Continental Casualty Company. This Powor ofAttortivy is t,,igned and in led by racsim0c underand by the authority of the following Resolution adopted by the Board of Directors of the Compaoy by unanonou5 written consent (Ued the 25"' day of'April„ 2012: "Whereas; the bylaws of the Company or specific resolution of the Board of Directors has authorized various officers (the "Authorized Officers") to execute various policies, bonds, undertakings and other obligatory instruments of like nature; and Whereas, from time to time, the signature of the Authorized Officers, in addition to being provided in original, hard copy format, may be provided via facsimile or otherwise in an electronic format (collectively, "Electronic Signatures"); Now therefore be it resolved: that the Electronic Signature of any Authorized Officer shall be valid and binding on the Company." This Power of Attorney is made and executed pursuant to and by authority of the following resolution duly adopted by the Board of Directors of the Company by unanimous written consent dated May 10, 1995: "RESOLVED: That any Senior or Group Vice President may authorize an officer to sign specific documents, agreements and instruments on behalf of the Company provided that the name of such authorized officer and a description of the documents, agreements or instruments that such officer may sign will be provided in writing by the Senior or Group Vice President to the Secretary of the Company prior to such execution becoming effective." This Power of Attorney is signed by Paul T. Bruflat, Vice President, who has been authorized pursuant to the above resolution to execute power of attorneys on behalf of National fire Insurance Company of Hartford. This Power of Ailorney is signed and seLded by facsimile under and by the authority of the following Resolution adopted by the Board of Directors of the C0111p011y by M)8161110Us written consent dated the 25'I"day of April, 2012: "Whereas, the bylaws of the Company or specific resolution of the Board of Directors has authorized various officers (the "Authorized Officers") to execute various policies, bonds, undertakings and other obligatory instruments of like nature; and Whereas, from time to time, the signature of the Authorized Officers, in addition to being provided in original, hard copy format, may be provided via facsimile or otherwise in an electronic format (collectively, "Electronic Signatures"); Now therefore be it resolved: that the Electronic Signature of any Authorized Officer shall be valid and binding on the Company." This Power of Attorney is made and executed pursuant to and by authority of the following resolution duly adopted by the Board of Directors of the Company by unanimous written consent dated May 10, 1995: "RESOLVED, That any Senior or Group Vice President may authorize an officer to sign specific documents, agreements and instruments on behalf of the Company provided that the name of such authorized officer and a description of the documents, agreements or instruments that such officer may sign will be provided in writing by the Senior or Group Vice President to the Secretary of the Company prior to such execution becoming effective." This Power of Attorney is signed by Paul T. Bruflat, Vice President, who has been authorized pursuant to the above resolution to execute power of attorneys on behalf of American Casualty Company of Reading, Pennsylvania. This Power k r If .%I to r-ney is signed and sealed by l'acsind le under and by the authority of the following Resolution adopted by the Board of Directors of the Company by unaollnous wrilwn consent dded the 25'[' day of April, 2012: "Whereas, the bylaws of the Company or specific resolution of the Board of Directors has authorized various officers (the "Authorized Officers") to execute various policies, bonds, undertakings and other obligatory instruments of like nature; and Whereas, from time to time, the signature of the Authorized Officers, in addition to being provided in original, hard copy format, may be provided via facsimile or otherwise in an electronic format (collectively, "Electronic Signatures'); Now therefore be it resolved: that the Electronic Signature of any Authorized Officer shall be valid and binding on the Company." DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 Figure: 28 TAC §1.601(a)(3) flffgz* r To obtain information or make a complaint: 2 You may contact Continental Casualty Company, National Fire Insurance Company, American Casualty Company or Continental Insurance Company at 312-822-5000. 3 You may call Continental Casualty Company, National Fire Insurance Company, American Casualty Company or Continental Insurance Company's toll-free telephone number for Information or to make a complaint at: 4 You may also write to Continental Casualty Company, National Fire Insurance Company, American Casualty Company or Continental Insurance Company at: CNA Surety 333 South Wabash Chicago, IL 60604 5 You may contact the Texas Department of Insurance to obtain information on companies, coverages, rights or complaints at: 6 You may write the Texas Department of Insurance: P.O. Box 149104 Austin, TX 78714-9104 Fax: (512) 475-1771 Web: http://www.tdi.state.tx.us E -Mail: ConsumerProtection@tdi.state.tx.us 7 PREMIUM OR CLAIM DISPUTES: Should you have a dispute concerning your premium or about a claim you should contact Continental Casualty Company, National Fire Insurance Company, American Casualty Company or Continental Insurance Company first. If the dispute is not resolved, you may contact the Texas Department of Insurance. 8 ATTACH THIS NOTICE TO YOUR POLICY: This notice is for information only and does not become a part or condition of the attached document. Form F8277 -- Puede comunicarse con Continental Casualty Company, National Fire Insurance Company, American Casualty Company or Continental Insurance Company al 312-822-5000. Usted puede Ilamar al numero de telefono gratis de Continental Casualty Company, National Fire Insurance Company, American Casualty Company or Continental Insurance Company's para informacion o para someter una queja al: Usted tambien puede escribir a Continental Casualty Company, National Fire Insurance Company, American Casualty Company or Continental Insurance Company: CNA Surety 333 South Wabash Chicago, IL 60604 de Texas pare obtener informacion acerca .- companies,- r Puede escribir M Departamento de Seguros de Texas: P.O. Box 149104 Austin, TX 78714-9104 Fax: (512) 475-1771 Web: http://www.tdi.state.tx.us E -Mail: Con sumerProtection@tdi.state.tx.us DIPUTS SOBRE PRIMAS 0 ECLAOS: Si tiene una disputa concerniente a su prima o a un reclamo, debe comunicarse con el Continental Casualty Company, National Fire Insurance Company, American Casualty Company or Continental Insurance Company primero. Si no se resuelve la disputa, puede entonces comunicarse con el departamento (TDI), UNA ESTE • A SU POLIZA: solo pare proposito._ informacion y no se convierte en parte o condlcion deldocumento DocuSign Envelope ID: FC8EFC37-79E7-4134-BDC4-OA1A29D46OB9 EXHIBIT 5 CONFLICTOF INTEREST QUESTIONNAIRE governmentalFor vendor doing business with local This questionnaire reflects changes made to the law by H.B. 23, 84th Leg., Regular Session. OFFICE USE ONLY This questionnaire is being filed in accordance with Chapter 176, Local Government Code, We Received by a vendorwho has a business relationship as defined by Section 176.001(1-a) with a local governmental entity and the vendor meets requirements under Section 176.006(a). By law this questionnaire must be filed with the records administrator of the local governmental entity not later than the 7th business day after the date the vendor becomes aware of facts that require the statement to be filed. See Section 176.006(a-1), Local Government Code. A vendor commits an offense if the vendor knowingly violates Section 176.006, Local Government Code. An offense under this section is a misdemeanor. Name of vendor who has a business relationship with local governmental entity. I are flung an update to a previously filed questionnaire. (The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7th business day after the date on which you became aware that the originally filed questionnaire was incomplete or inaccurate.) Name of local government officer about whom the Information In this section Is being disclosed. C Nam.,..w of Officer This section (item 3 including subparts A, B, C, & D) must be completed for each officer with whom the vendor has an employment or other business relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary. A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the vendor? Yes El No B. Is the vendor receiving or likely to receive taxable income, other than investment income, from or at the direction of the local government officer named in this section AND the taxable income is not received from the local governmental entity? Yes El No C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer serves as an officer or director, or holds an ownership interest of one percent or more? El Yes No D. Describe each employment or business and family relationship with the local government officer named in this section. m Signature of vendor doing business with the governmental entity Date Adopted 8/7/2015 Certificate Of Completion Envelope Id: FC8EFC3779E74134BDC4OAlA29D46OB9 Subject: City Council Docusign Item - 6375 Source Envelope: Document Pages: 25 Signatures: 2 Supplemental Document Pages: 0 Initials: 0 Certificate Pages: 6 AutoNav: Enabled Payments: 0 Envelopeld Stamping: Enabled Time Zone: (UTC -06:00) Central Time (US & Canada) Record Tracking Status: Original 4/7/2017 11:37:13 AM Signer Events Karen E. Smith karen.smith@cityofdenton.com Assistant Purchasing Manager City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Lewis Dickerson dcc.jld@sbcglobal.net PRESIDENT Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Accepted: 4/7/2017 11:54:16 AM ID:1eb1ff91-47c9-4269-b9ae-de930708165e John Knight john.knight@cityofdenton.com Deputy City Attorney City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Julia Winkley julia.winkley@cityofdenton.com Contracts Administration Supervisor City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: EXHIBIT 5 Holder: Karen E. Smith karen.smith@cityofdenton.com Signature s!+ Using IP Address: 129.120.6.150 [—,,USi,n1d ny: .2F42DDBCF457... Using IP Address: 172.0.161.150 OD—Si,nld ny: 6LL6�o- C821996C2A2B439... Using IP Address: 129.120.6.150 Status: Sent Envelope Originator: Karen E. Smith karen.smith@cityofdenton.com IP Address: 129.120.6.150 Location: DocuSign Timestamp Sent: 4/7/2017 11:48:41 AM Viewed: 4/7/2017 11:48:53 AM Signed: 4/7/2017 11:49:41 AM Sent: 4/7/2017 11:49:43 AM Viewed: 4/7/2017 11:54:16 AM Signed: 4/7/2017 1:53:38 PM Sent: 4/7/2017 1:53:41 PM Viewed: 4/7/2017 2:01:25 PM Signed: 4/7/2017 2:01:32 PM Sent: 4/7/2017 2:01:36 PM Viewed: 4/7/2017 2:55:06 PM Ua EXHIBIT 5 Signer Events Signature Timestamp Todd Hileman todd.hileman@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Accepted: 2/8/2017 6:52:51 PM ID:8154723a-9757-4d53-a4b5-794656233671 Jennifer Walters jennifer.walters@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Julia Winkley Sent: 4/7/2017 1:53:40 PM julia.winkley@cityofdenton.com OPIE Contracts Administration Supervisor City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Sherri Thurman sherri.thurman@cityofdenton.com [:::C:OPIED Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Jane Richardson jane.richardson@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Robin Fox Robin.fox@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Accepted: 10/9/2015 1:39:51 PM ID:04463961-03db-4c4d-9228-d660d6146ed6 Sent: 4/7/2017 1:53:40 PM EXHIBIT 5 Carbon Copy Events Status Timestamp Jennifer Bridges jennifer.bridges@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Jane Richardson jane.richardson@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Jim Wilder james.wilder@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Notary Events Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 4/7/2017 2:01:36 PM Payment Events Status Timestamps Electronic Record and Signature Disclosure Electronic Record and Signature Disclosure created on: 4/20/2015 9:25:38 AM Parties agreed to: Lewis Dickerson, Todd Hileman, Robin Fox EXHIBIT 5 ELECTRONIC RECORD AND SIGNATURE DISCLOSURE From time to time, City of Denton (we, us or Company) may be required by law to provide to you certain written notices or disclosures. 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McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON Legislation Text File #: ID 17-481, Version: 1 AGENDA DATE: April 18, 2017 DEPARTMENT: Parks and Recreation DCM: Bryan Langley SUBJECT Consider a request for an exception to the limitations imposed by Section 17-20 of the City of Denton Noise Ordinance for the purpose of the Fry Street Freedom Festival held on the corner of Mulberry and Avenue A on Sunday, May 21, 2017. The exception is specifically requested to increase sound levels from 70 to 75 decibels and to have amplified sound on Sunday, from noon to 9 p.m. Staff recommends approval from noon to 6 p.m. BACKGROUND Brett Fields, Fry Street Freedom Fest organizer, requests an exception to the noise ordinance to allow amplified sound from 70 to 75 decibels on the corner of Mulberry and Avenue A, on Sunday, May 21, 2017, from noon to 9 P.M. Fry Street Freedom Fest is a music event that benefits a nonprofit Veterans charity, with a certain percentage of proceeds to benefit Veterans Extreme Activities 501(c)(3). RECOMMENDATION Given the proximity of the festival to multi -family housing, staff recommends City Council approve a noise exception from noon to 6 p.m., ending three hours earlier than the organizer's request. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Liveable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area Related Goal: EXHIBIT 1. Letter of Request 2. Proximity Map Safe, Liveable & Family -Friendly Community Provide and support outstanding leisure, cultural, and educational opportunities Respectfully submitted: Emerson Vorel Director of Parks and Recreation City of Denton Page 1 of 1 Printed on 4/14/2017 povveied by I_egivt9i IN Fry Street Freedom Fest 1212 W Mulberry Denton, TX 76201 To Whom It May Concern: Exhibit Public House and Tom's Daiquiri would like to request a noise variance to increase decibel levels to 75 for the duration of Sunday, May 21s' from 12pm-9pm. Weare wanting to throw a music event called Fry Street Freedom Fest that benefits a non profit Veterans charity, with a certain percentage of proceeds to benefit VXA. Where: Corner of Mulberry and Ave A. What: Fry Street Freedom Fest, Texas Country Vets Charity Concert. Who: Public House and Tom's Daiquiri to organize and run event When: Sunday, May 21St Time: 12pm-9pm Cause: To benefit Veterans Extreme Activities (VXA) (501 (c) 3) Thank you for your consideration. Respectfully, Brett Fields Tom's Daiquri 817-602-4831 Mitchell Wilson Public House 940-230-5703 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-482, Version: 1 Legislation Text AGENDA INFORMATION SHEET AGENDA DATE: April 18, 2017 DEPARTMENT: Parks and Recreation DCM: Bryan Langley SUBJECT Consider a request for an exception to the limitations imposed by Section 17-20 of the City of Denton Noise Ordinance for the purpose of the Cinco de Mayo Festival held in Quakertown Park located at 321 E McKinney St. on Saturday, May 6, 2017, from 10 a.m. till 10 p.m. The exception is specifically requested to increase sound levels from 70 to 75 decibels. BACKGROUND Blanca Govea, chairperson of the Cinco de Mayo Festival requests an exception to the noise ordinance for the Cinco de Mayo Festival held in Quakertown Park on Saturday, May 6, 2017. RECOMMENDATION Staff recommends approval. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long -teen Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Liveable, and Family -Friendly Coinrnunity; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Safe, Liveable & Family -Friendly Community Related Goal: Provide and support outstanding leisure, cultural, and educational opportunities EXHIBITS Letter of request from the Cinco de Mayo Committee Respectfully Submitted: Emerson Vorel Director of Parks and Recreation Prepared By: Janie McLeod, Community Events Coordinator City of Denton Page 1 of 1 Printed on 4/14/2017 povveied by I_egivt9i IN To whom it may concern: Exhibit February 24, 2017 I, Blanca Govea, chairperson for the Denton Cinco de Mayo festival, am requesting an exception to the noise ordinance to be granted for our 2017 festival which will take place on Saturday, May 6, 2017. 1 am requesting an increase in the level of decibels from 70 to 75. Thank you for your time and I look forward to your response. If any question may arise, please feel free to contact me. I can be reached by phone at (940) 594-9146 or by email at b vvoa 'hof, ii.c ar . Sincerely, Blanca Covea Blanca Govea Cinco de Mayo Chairperson City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com DENTON Legislation Text File #: ID 17-483, Version: 1 AGENDA INFORMATION SHEET AGENDA DATE: April 18, 2017 DEPARTMENT: Parks and Recreation DCM: Bryan Langley SUBJECT Consider a request for an exception to the limitations imposed by Section 17-20 of the City of Denton Code Of Ordinances the City of Denton, Texas, for the purpose of hosting the Denton Arts and Jazz Festival, located at Quakertown Park, from April 28 through April 30, 2017. The exception is specifically requested to increase hours of operation from 10 a.m. to midnight on Friday, April 28, and Saturday, April 29; and from 11 a.m. until 10 p.m. on Sunday, April 30, 2017. BACKGROUND Carol Short, Executive Director of the Denton Festival Foundation, requests an exception to the noise ordinance for the Denton Arts and Jazz Festival held in Quakertown Park, April 28-30, 2017. RECOMMENDATION Staff recommends approval. PRIOR ACTION/REVIEW On April 1, 2014, City Council approved Ordinance No. 2014-092, granting an exception to the noise ordinance for the Denton Festival Foundation that expired in 2016. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Liveable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Safe, Liveable & Family -Friendly Community Related Goal: Provide and support outstanding leisure, cultural, and educational opportunities. EXHIBITS Letter of Request Respectfully submitted: Emerson Vorel Director of Parks and Recreation City of Denton Page 1 of 1 Printed on 4/14/2017 povveied by I_egivt9i IN D1i" NT 0 N V jazz dentonjazzfest,com Denton Festival Foundation, InC. RO, Box 2104 Denton, Texas 76202 (940) 565-0931 Fax (9401, 566-7007 Exhibit 1 Ff_X,TJT,TPWW1 Mayor Chris Watts City Council Members City of Denton 215 E. M Kinne Street The Denton Festival Foundation, Inc. is requesting a three year exception to tkz Noise Ordinance for the Denton Arts and Jazz Festival. Dates for the current event are April 28, 29 and 30, 2017. We further ask that the exception cover the current year plus 2018 and 2019. 111 ITT117 'e—d0e-YC_%1 MIM, RIM on Friday and Saturday evenings and on Sunday from 11:00 am until 10:00 pm. Thank you tor your consiaeration. four suppo rarjlvff Jazz Festival is greatly appreciated. Please let us know if you have questions or require additional information. ww'. d M, 4 V, 0 M � r0T7-Tn= "le 4w ? w�m.* a ekwq. ed a ae4oe goe ff4ae 4"./" City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON Legislation Text File #: ID 17-484, Version: 1 AGENDA DATE: DEPARTMENT: DCM: April 18, 2017 Parks and Recreation Bryan Langley SUBJECT Consider a request for an exception to the limitations imposed by Section 17-20 of the City of Denton Noise Ordinance for the purpose of The Village Church service held in North Lakes Park located at 2001. N. Windsor Dr., on Sunday, April 23, 2017. The exception is specifically requested to have amplified sound on a Sunday from 10 a.m. to 4 p.m. BACKGROUND Roy Onyebetor, connections minister for The Village Church, requests an exception to the noise ordinance for amplified sound for their church service and picnic held in the North Lakes Park, 2001. N. Windsor Dr., on Sunday, April 23, 2017. RECOMMENDATION Staff recommends approval. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Liveable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Safe, Liveable & Family -Friendly Community Related Goal: Provide and support outstanding leisure, cultural, and educational opportunities EXHIBIT Letter of Request Respectfully submitted: Emerson Vorel Director of Parks and Recreation Prepared by: Janie McLeod, Community Events Coordinator City of Denton Page 1 of 1 Printed on 4/14/2017 povveied by I_egivt9i IN Dear Ms. McLeod, Exhibit 1106 West Oak Street Denton, Texas 76201 P (940) 382-8888 F (940) 323-8708 thevilla edenton,ch rch The Village Church Denton is requesting a noise ordinance exception for a church service we are wanting to hold at North Lakes Park on April 23. We will be singing a few songs together, reading from the bible and praying. We will also be performing the ordinance of baptism. Our church is made up of Denton residents who love and serve many people in our city and our gatherings together on Sunday serve to equip and encourage our church in these good works. The information about the event is noted below: Date: April 23rd, 2017 Time: 10 a.m. Location: North Lakes Park Please feel free to contact me at our offices if you have any questions at all. Regards, Roy Onyel etc Connections Minister The Village Church Denton City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON Legislation Text File #: ID 17-485, Version: 1 AGENDA INFORMATION SHEET AGENDA DATE: April 18, 2017 DEPARTMENT: Parks and Recreation Department DCM: Bryan Langley SUBJECT Consider approval of a resolution allowing Pro -Fest, Inc., to sell alcoholic beverages for the Denton Arts and Jazz Festival from April 28 - 30, 2017, upon certain conditions; authorizing the City Manager or his designee to execute an agreement in conformity with this resolution; and providing for an effective date. BACKGROUND The Denton Arts and Jazz Festival is organized by the Denton Festival Foundation, which has requested that the sale of alcohol be permitted and Pro -Fest, Inc. as the vendor. Pro -Fest, Inc., will be responsible for rental of the booth space, obtaining the temporary license for selling alcohol, securing the temporary permit for selling alcohol, and providing comprehensive liability insurance in the amount of $500,000. In addition Pro Fest, Inc. agrees to indemnify the City of Denton against any liability incident to the selling of alcoholic beverages at the Arts and Jazz Festival. The Festival Foundation will have police security at the event. The 37' Annual Denton Arts and Jazz Festival event promotes cultural enhancement and is co-sponsored by the City of Denton. It is held in Quakertown Park and includes over 2,700 professional and amateur performers, local and statewide vendors, children's activities, art exhibits, and seven stages with various entertainers. The three-day free event is Friday, April 28, 5 p.m. to 11 p.m., Saturday April 29, 10 a.m. to 11 p.m., and Sunday, April 30, 11 a.m. to 9 p.m. The event continues to grow each year through community participation, vendors, and entertainment. This year's event is expected to host 225,000 participants, 250 booths, and seven entertainment stages. RECOMMENDATION Staff recommends approval. PRIOR ACTION/REVIEW On April 3, 2017, the Parks, Recreation and Beautification Board recommended approval 5-0. April 2, 2014, City Council approved a resolution and allowed Pro -Fest to sell alcoholic beverages for three consecutive years. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Liveable, and Family -Friendly Community; and Sustainability City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-485, Version: 1 and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Safe, Liveable & Family -Friendly Community Related Goal: Provide and support outstanding leisure, cultural, and educational opportunities. EXHIBITS 1. Letter of Request 2. April 3, Draft Minutes Excerpt 3. Resolution/Contract Respectfully submitted: Emerson Vorel Director of Parks and Recreation Prepared By: Janie McLeod, Community Events Coordinator City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, Exhibit 1 February 1, 2017 jazz Mayor CH, Walls City Council Members 1Cityof Denton 215 E. McKinney dentonjazziest.cwR Denton, f Denton *r Watts and City Council Members: Foundation', The Denton - requesting .' ! Box 2104 approvalfor r beer and wine the annual Denton, Tex -is 76202 during (940) 565-0931 Denton Arts & Jazz Festival Fax (940) 566-7007 for 3 years in 2017, 2018 & 2019. questions or requirp..information. Carol Short Executive Director Exhibit 2 EXCERPT from DRAFT MINUTES PARKS, RECREATION AND BEAUTIFICATION BOARD April 3, 2017 Civic Center Community Room After determining that a quorum of the City of Denton, Texas, Parks, Recreation and Beautification Board is present, the Chair of the Board thereafter convened into an open meeting on Monday, April 3, 2017, at 6:00 p.m. in the Denton Civic Center, 321 E. McKinney Street, Denton, Texas. Members Present: Russ Stukel, Chair; Paul Leslie, Frances Punch, Kent Boring, Gary Barber. Members Absent: Maria Renner, Johanna McDaniel Staff present: Emerson Vorel, Julie Leal, D'Lee Williams, Janie McLeod, Jim Mays Staff absent: John Schubert OPEN MEETING ACTION ITEM: Consider making a recommendation to the Denton City Council on the following: Approve and recommend the Denton Festival Foundation's request for ProFest, Inc., to be the sole proprietor allowed to sell alcoholic beverages at the Denton Arts and Jazz Festival for three consecutive years, 2017, 2018, and 2019. Per Janie McLeod, Community Events Coordinator, the Denton Festival Foundation submitted a request to approve ProFest, Inc. be the sole proprietor allowed to sell alcoholic beverages at the Denton Arts and Jazz Festival for three successive years, April 28-30, 2017, April 27-29, 2018, and April 26-28, 2019. The annual Denton Arts and Jazz Festival event promotes cultural enhancement and is co- sponsored by the City of Denton. It is held in Quakertown Park and includes over 2,700 professional and amateur performers, local and statewide vendors, children's activities, art exhibits, and various entertainers. The free three-day event runs Friday, 5 p.m. to 11 p.m., Saturday, 10 a.m. to 11 p.m., and Sunday, 11 a.m. to 9 p.m. ProFest, Inc. will be responsible for rental of the booth spaces, obtaining the temporary license, and securing the temporary permit. Police security will be present at the event. Staff recommends approval of the request, which is consistent with agreements for previous events. Board Members posed clarity -based questions, which McLeod answered to their satisfaction. MOTION: Barber made a motion to approve; Boring seconded. Motion passed unanimously 5-0. Exhibit 3 c:Ausers\2278217\desktop\arts & jazz festival res.docx RESOLUTION NO. A RESOLUTION ALLOWING PRO -FEST, INC. TO SELL ALCOHOLIC BEVERAGES FOR THE DENTON ARTS & JAZZ FESTIVAL TO BE HELD IN QUAKERTOWN PARK FROM APRIL 28-30, 2017, UPON CERTAIN CONDITIONS; AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE AN AGREEMENT IN CONFORMITY WITH THIS RESOLUTION; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Denton ("City") is the owner of the Quakertown Park and through the City of Denton co-sponsors the Denton Arts & Jazz Festival at Quakertown Park; WHEREAS, Denton Arts and Jazz Festival and Pro -Fest, Inc. have entered into a private agreement whereby Pro -Fest will serve alcohol at the festival; and WHEREAS, the consumption of alcoholic beverages is allowed in Quakertown Park pursuant to City of Denton Code, §22-32 (b); and WHEREAS, Pro -Fest requests the City to allow it to sell alcohol at the festival; and WHEREAS, the Parks, Recreation, and Beautification Board has recommended that Pro - Fest, Inc., be allowed to sell alcoholic beverages at the Denton Arts and Jazz Festival; and WHEREAS, the City agrees with the recommendation of the Parks, Recreation and Beautification Board; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES: SECTION 1. Pro -Fest, Inc. shall be the allowed to sell alcoholic beverages at the Denton Arts & Jazz Festival from April 28-30, 2017 at the Quakertown Park upon the following conditions: 1. They shall be responsible for rental of any booth space necessary; 2. They shall be responsible to obtain the temporary license and permit for selling alcoholic beverages approved by appropriate state agency; 3. They shall provide the security necessary for the sale of alcoholic beverages; 4. They shall provide general comprehensive liability insurance from a responsible carrier, with the City as an additional insured, in the amount of $500,000.00. 5. Agrees to indemnify the City of Denton against any liability incident to the selling of alcoholic beverages at the Denton Arts & Jazz Festival. SECTION 2. The City Manager or his designee is authorized to execute an agreement in conformity with this resolution, which shall be substantially in the form of the agreement attached hereto and made a part hereof by reference. SECTION 3. This resolution shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of 12017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY:�� S:ALegal\Our Documents\Contracts\I7\Arts and Jazz Festival Contract.docx Exhibit 3 QUAKERTOWN PARK AGREEMENT FOR THE DENTON ARTS & JAZZ FESTIVAL STATE OF TEXAS COUNTY OF DENTON This Agreement, made this day of , 2017, by and between the City of Denton, a municipal corporation, hereinafter referred to as the "CITY" and PRO -FEST, INC. WITNESSETH, that in consideration of the covenants and agreements herein contained, the parties hereto do mutually agree as follows: ARTICLE I GENERAL The City grants to PRO -FEST, INC. the privilege to sell alcoholic beverages, subject to the exceptions and conditions hereinafter set forth, for the Denton Arts and Jazz Festival celebration on April 28-30, 2017, to be held at the Quakertown Park. Attached hereto and made a part hereof by is a copy of the resolution passed by the City Council of Denton, Texas authorizing this privilege. This privilege does not extend past the Denton Arts and Jazz Festival celebration set for the year 2017. ARTICLE 2 TERMS AND CONDITIONS PRO -FEST, INC. in order to exercise the privilege to sell alcoholic beverages must perform the following: A. PRO -FEST, INC. shall be solely responsible for the rental and payment for any booth space necessary for the sale of alcoholic beverages at the Denton Arts and Jazz Festival. B. PRO -FEST, INC. shall be solely responsible to obtain any temporary license and permit necessary for the selling of alcoholic beverages at the Denton Arts and Jazz Festival. C. PRO -FEST, INC. shall be solely responsible for the obtaining and paying for any security necessary for their sale of alcoholic beverages at the Denton Arts and Jazz Festival. D. PRO -FEST, INC 's failure to do any of the above and to show proper proof of compliance shall waive their right to exercise the privilege of selling alcoholic beverages at the Denton Arts and Jazz Festival. Exhibit 3 ARTICLE 3 LOCAL RULES AND REGULATION PRO -FEST, INC. agrees to abide by all municipal, county, state and federal laws, ordinances, rules and regulations and specifically, without limitation, the Denton Civic Center Rules and Regulations, to obtain all necessary and proper licenses, permits and authorizations, and to comply with the requirements of any duly authorized person acting in connection therewith. PRO -FEST, INC. shall pay all taxes, if any, of every nature and description arising out of or in any manner connected with the sale of alcoholic beverages. PRO -FEST, INC. will exercise reasonable care and due diligence in their sale of alcoholic beverages at the Denton Arts and Jazz Festival. ARTICLE 4 INDEMNITY AGREEMENT PRO -FEST, INC. shall indemnify and save and hold harmless the CITY and its officers, agents, and employees from and against any and all liability, claims, demands, losses, and expenses, including but not limited to, court costs and reasonable attorney fees incurred by the CITY, and including, without limitation, damages for bodily and personal injury, death and property damage, resulting from the negligent acts or omissions of PRO -FEST, INC. or it officers, shareholders, agents, or employees in the execution, operation, or performance of this Agreement. Nothing in this Agreement shall be construed to create a liability to any person who is not a party to this Agreement, and nothing herein shall waive any of the parties' defenses, both at law or equity, to any claim, cause of action, or litigation filed by anyone not a party to this Agreement, including the defense of governmental immunity, which defenses are hereby expressly reserved. Al2TICIN S INSURANCE During the performance of the Agreement, PRO -FEST, INC. shall maintain the following insurance with an insurance company licensed to do business in the State of Texas by the State Insurance Commission or any successor agency that has a rating with Best Rate Carriers of at least an A- or above: A. Comprehensive General Liability Insurance with bodily injury limits of not less than $500,000 for each occurrence and not less than $500,000 in the aggregate, and with property damage limits of not less than $100,000 for each occurrence and not less than $100,000 in the aggregate. B. Liquor/Dram Shop Liability in the amount of $250,000 per occurrence for any event occurring on City -owned property where alcohol will be provided or served. Denton Arts and Jazz Festival Celebration Agreement — Page 2 Exhibit 3 C. PRO -FEST, INC. shall furnish insurance certificates or insurance policies at the CITY'S request to evidence such coverages. The insurance policies shall name the CITY as an additional insured on all such policies, and shall contain a provision that such insurance shall not be canceled or modified without written notice to the CITY and PRO -FEST, INC. In such event, PRO -FEST, INC. shall, prior to the effective date of the change or cancellation, serve substitute policies furnishing the same coverage. ARTICLE 6 NOTICES All notices, communications, and reports required or permitted under this Agreement shall be personally delivered or mailed to the respective parties by depositing same in the United States mail to the address shown below, certified mail, return receipt requested, unless otherwise specified herein. Mailed notices shall be deemed communicated as of three (3) days' mailing: To PRO -FEST, INC.: PRO -FEST, INC. Carol Short 319 Pennsylvania Ave. Denton, Texas 76205 To CITY: CITY OF DENTON: City Manager 215 E. McKinney Denton, Texas 76201 All notices shall be deemed effective upon receipt by the party to whom such notice is given, or within three (3) days' mailing. ARTICLE 7 ENTIRE AGREEMENT This Agreement, consisting of five (5) pages and one exhibit, constitutes the complete and final expression of the agreement of the parties, and is intended as a complete and exclusive statement of the terms of their agreements, and supersedes all prior contemporaneous offers, promises, representations, negotiations, discussions, communications, and agreements which may have been made in connection with the subject matter hereof. ARTICLE 8 SEVERABILITY If any provision of this Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of this Agreement and shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform this Agreement to replace such stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the stricken provision. Denton Arts and Jazz Festival Celebration Agreement — Page 3 Exhibit 3 ARTICLE 9 DISCRIMINATION PROHIBITED In performing the services required hereunder, PRO -FEST, INC. shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap. ARTICLE 10 PERSONNEL PRO -FEST, INC. represents that it has or will secure, at its own expense, all personnel required to perform all the services required under this Agreement. Such personnel shall not be employees or officers of, or have any contractual relations with the CITY. ARTICLE 11 ASSIGNABILITY PRO -FEST, INC. shall not assign any interest in this Agreement, and shall not transfer any interest in this Agreement (whether by assignment, novation, or otherwise) without the prior written consent of the CITY. ARTICLE 12 MODIFICATION No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith, and no evidence of any waiver or modification shall be offered or received in evidence in any proceeding arising between the parties hereto out of or affecting this Agreement, or the rights or obligations of the parties hereunder, and unless such waiver or modification is in writing and duly executed; and the parties further agree that the provisions of this section will not be waived unless as set forth herein. ARTICLE 13 MISCELLANEOUS A. The following exhibits are attached to and made a part of this Agreement: Exhibit "A" Resolution No. B. Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton County, Texas. This Agreement shall be construed in accordance with the laws of the State of Texas. C. The captions of this Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of this Agreement. Denton Arts and Jazz Festival Celebration Agreement — Page 4 JENVIFEZ r M. .VA 4,1011,290 m Wil w URN 10 !' CAROLSHORT m"NUM63 In i R' City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-486, Version: 1 Legislation Text AGENDA INFORMATION SHEET AGENDA DATE: April 18, 2017 DEPARTMENT: Parks and Recreation Department DCM: Bryan Langley SUBJECT Consider adoption of an ordinance approving a City sponsorship in an amount not to exceed $18,000 of in-kind services and resources for the Denton Cinco de Mayo Festival to be held in Quakertown Park on Saturday May 6, 2017; and providing an effective date. BACKGROUND The 30th Annual Denton Cinco de Mayo Festival is a Hispanic cultural celebration organized by community volunteers. In 2016, City Council authorized $16,000 for in-kind services and resources, staff, equipment, supplies; and Quakertown Park at no cost. The Cinco de Mayo Festival received $8,820 in fiscal year 2015-16 Hotel/Motel Occupancy Tax (HOT) funds. The event runs from 10 a.m. to 10 p.m. Activities include a parade, local vendors, children's activities, and entertainment. Last year's event hosted approximately 5,000 participants with 50 vendors and an entertainment stage. A change to the 2017 sponsorship agreement includes liability for damages done to City property that exceed normal wear and tear. This change was added in response to damages at Quakertown Park in 2015. The damage liability addition will be included in all future sponsorship agreements. Event organizers have been notified. RECOMMENDATION Staff recommends approval. PRIOR ACTION/REVIEW On April 5, 2016, City Council authorized an agreement for the City's sponsorship in the amount of $16,000 under Ordinance No. 2016-108. On February 17, 2015, City Council authorized $11,500 under Ordinance No. 2015-033, and on April 15, 2014, City Council authorized $9,500 under Ordinance No. 2014-101. FISCAL INFORMATION In 2017, the Cinco de Mayo Festival will receive $11,820 HOT funds. The estimated cost to the City to provide the requested in-kind services and use of facilities at the same level in 2016 is expected to be $18,000. This cost estimate is based upon clear weather; in the event of inclement weather, staff and supply cost increase. With the co-sponsorship the City is recognized as a sponsor at the appropriate level for the Cinco de Mayo Festival. Including this event, the City Council will have authorized a total of $187,608 of in-kind City support to seven of the nine previously sponsored special events for fiscal year 2016-17. (Exhibit 3) City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-486, Version: 1 The Legal Department has advised that only the City Council has the authority to gift city resources. All sponsorships where city facilities or city services are requested for free or at a reduced rate require City Council approval. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Liveable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Safe, Liveable & Family -Friendly Community Related Goal: Provide and support outstanding leisure, cultural, and educational opportunities EXHIBITS 1. Letter of Request 2. Actual Costs for Fiscal Years 2014-16 3. Running Total of Requested Support 4. Co -Sponsorship Agreement 5. Proposed Ordinance Respectfully submitted: Emerson Vorel, Director Parks and Recreation Prepared by: Janie McLeod Community Events Coordinator City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, To whom it may concern: Exhibit 1 January 9, 2017 I, Blanca Govea, chairperson for the Denton Cinco de Mayo festival, am requesting the City of Denton to be our sponsor for the 2017 festival which will take place on Saturday, May 6, 2017. It has been a great privilege to have the City sponsor our event in the past and am looking forward to your continuous support. 'I any question may arise, please feel free to call or email me at (940) 594-9146 or b govea@hotmaii.com. Sincerely, Blanca Govea Cinco de Mayo Chairperson Cinco de Mayo Festival In -Kind Resources and Services 2014-2016 In -Kind 2014 2015 2016 Contribution Actual Actual Actual Parks and Recreation $7,352 $9,578 $11,951 Police $3,686 $5,013 $6,022 Total In -Kind $11,038 $14,591 $17,973 X20,000 18,000 16,000 14,000 12,000 10,000 X8,000 X6,000 X4,000 X2,000 Costs of In -Kind Services and Resources 2014 2015 2016 gal Parks m Police Exhibit 2 CA w c O � � W N C�j —Cj �. O N � C/1 cp � w Exhibit 3 _4j CITYOF DENTON Exhibit 4 CITY OF DENTON TEXAS PARKS & RECREATION DEPARTMENT 601 E. Hickory, Suite B • DENTON, TEXAS 76205 (940) 349 -PARK • FAX (940) 349-8166 March 31, 2017 Ms. Blanca Govea, Chair Cinco de Mayo Committee P.O. Box 1572 Denton, TX 76202 Dear Ms. Govea: Congratulations, your sponsorship has been approved by the City Council in an amount not to exceed $18,000 of in-kind services and resources provided by the City of Denton. The Denton Cinco de Mayo Festival is to be held in Quakertown Park on May 6, 2017. The City of Denton is proud to be a sponsor of this event and will provide basic and critical support to the event as outlined below. As part of the approval process, the City Council has requested to see a report of revenues and expenses for the 2016 Denton Cinco de Mayo Festival included in the committee's request for future sponsorship. The following is a summary of the sponsorship role assumed by the City of Denton and the Denton Cinco de Mayo Festival organizing committee. 1. The Parks and Recreation Department will provide the rental of Quakertown Park and a meeting room at no charge. The in-kind value of the facilities is $3,000. The 2016 costs actuals will be used to calculate Park Maintenance staff's in-kind services. The Parks staff regular and over -time support totaled $7,675. Equipment and supplies provided totaled $1,276. The total value of Parks and Recreation in-kind services were $11,951. 2. The 2016 costs actuals will be used to calculate the Police in-kind services. Police provided regular and over -time support that totaled $6,022. 3. Administrative staff support will be provided in the form of a liaison, providing expertise and advice to the organizing committee. The liaison should attend any general meetings of the organizing committee, when information is related to the Department's role in the event. The liaison participation is as an ex -officio, non-voting representative of the Department. 4. The Park Maintenance Division will work with committee volunteers to prepare the park prior to the event, work at the event to assist with limited logistics, handle litter and recycling, and return park equipment to original locations after the event. www.cityofdenton.com Exhibit 4 5. The Department will provide limited promotional advertising for the event. Denton Cinco de Mayo Festival Event Organizers 1. As part of the approval process, a report of revenue and expenditures for the 2017 Denton Cinco de Mayo Festival should be included in the committee's request for future co- sponsorship. 2. The Denton Cinco de Mayo Festival committee will provide all planning, management, and organization for the event. 3. The organizing committee will provide a layout of the vendor locations, complete a Special Event Application, Public Safety Plan, event map, and an event schedule to the City liaison no later than five working days prior to the event. 4. Event organizers are responsible for securing all permits, licenses and approvals necessary to stage the event as stated on the permit applications. The City liaison will provide information to help facilitate these processes, if needed. 5. Event organizer assumes all liability for damages done to City property whatever the case, while hosting this event, and agrees to reimburse the City for reparations within 30 days of notice/invoice. 6. Prior to publication, all advertising, including any use of a City logo, must be submitted to the City liaison for approval from the Parks and Recreation Department. 7. The committee will charge and collect the Park Vendor Permit fees consistent with the City of Denton ordinance and remit these fees within five working days after the event. 8. The committee will host Denton Cinco de Mayo Festival as a "Litter Free Event" as defined by Keep Denton Beautiful (KDB). Recycling is required at all events held on City property and recycling containers are provided in City parks. 9. Within five working days following the event, the event organizers will provide a program evaluation and full payment of all fees to the City of Denton. 10. Vendors are responsible for their own set-up, including tents and lighting, prior to the event. The Department will not provide tents for vendors. 11. The City of Denton is recognized as a sponsor at the appropriate level in promotional materials. The Parks and Recreation Department is excited about the future of Denton Cinco de Mayo Festival and its continued success. Sincerely, Emerson Vorel, Director I hereby agree to the following conditions of the City of Denton sponsorship agreement. Denton Cinco de Mayo Festival www.cityofdenton.com Date: S:\Legal\Our Documents\0rdinances\17\0nco de Mayo Sponsorship.docx Exhibit 5 ORDINANCE NO. AN ORDINANCE APPROVING A CITY SPONSORSHIP IN AN AMOUNT NOT TO EXCEED $18,000 OF IN-KIND SERVICES AND RESOURCES FOR THE DENTON CINCO DE MAYO FESTIVAL TO BE HELD IN QUAKERTOWN PARK ON MAY 6, 2017; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Cinco de Mayo Festival is requesting the City of Denton to participate as a sponsor, at the same level as in previous years, for the event to be held in Quakertown Park on May 6, 2017; and WHEREAS, the City of Denton has sponsored up to $16,000 of in-kind services and supplies for the 2016 event which included police, park staff, equipment, supplies, and facilities; and WHEREAS, in exchange for the said support the City of Denton was considered to be an event sponsor of the said event at a sponsorship level equal to the value of the in-kind service tendered; and WHEREAS, the City Council finds that it is in the public interest and benefit to the citizens of the City of Denton to participate as a sponsor at a level not to exceed $18,000 of in-kind services for the event to be held in Quakertown Park on May 6, 2017; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Council finds that it is in the public interest and benefit to the citizens of the City of Denton to participate as a sponsor at a level not to exceed $18,000 of in- kind services and supplies, including but not limited to police, park staff, equipment, supplies and facilities, and the said participation is hereby approved. SECTION 2. This ordinance shall be effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: S:\Legal\Our Documents\Ordinances\17\Cinco de Mayo Sponsorship.docx Exhibit 5 APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY �Zl BY: City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-487, Version: 1 Legislation Text AGENDA INFORMATION SHEET DATE: April 18, 2017 DEPARTMENT: Parks and Recreation DCM: Bryan Langley SUBJECT Consider approval of a resolution allowing Mi Casita's Mexican Food to sell alcoholic beverages for the Cinco de Mayo Festival to be held in Quakertown Park beginning Saturday, May 6, 2017, upon certain conditions; authorizing the City Manager or his designee to execute an agreement in conformity with this resolution; and providing for an effective date. BACKGROUND The 19th Annual Cinco de Mayo Festival held in Quakertown Park, is a Hispanic cultural celebration co- sponsored by the City of Denton. The event runs from 10 a.m. to 10 p.m. Activities include a parade, local vendors, children's activities, and entertainment. Last year's event hosted approximately 5,000 participants with 50 vendors and an entertainment stage. The Cinco de Mayo Committee made up of community volunteers, voted to support the sale of alcohol at the event. Mi Casita was selected as the vendor and will be responsible for obtaining a temporary license and permit for selling alcoholic beverages, and providing comprehensive liability insurance in the amount of $500,000. In addition Mi Casita agrees to indemnify the City of Denton against any liability incident to the selling of alcoholic beverages at the Cinco de Mayo Festival. Cinco de Mayo Festival sponsors will provide police security at the event. RECOMMENDATION Staff recommends approval. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On April 3, 2017, the Parks, Recreation and Beautification Board recommended approval 4-1. On April 5, 2016, the City Council approved a resolution to allow Mi Casita Restaurant to sell alcoholic beverages for the Cinco de Mayo Festival. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Liveable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-487, Version: 1 Related Key Focus Area: Safe, Liveable & Family -Friendly Community Related Goal: Provide and support outstanding leisure, cultural, and educational opportunities. EXHIBITS: 1. Letter of Request 2. Parks, Recreation and Beautification Board Excerpt of April 3, 2017 Draft Minutes 3. Resolution/Contract Respectfully submitted: Emerson Vorel Director of Parks and Recreation Prepared By: Janie McLeod, Community Events Coordinator City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, To whom it may concern: Exhibit 1 March 27, 201 7 I, Blanca Govea, chairperson for the Denton Cinco de Mayo festival, am requesting for the City of Denton to allow the sale and consumption of alcohol at our event h e l d i n Q u a k e r t o w n P a r k. Our alcohol provider will be the same provider as last year, Mi Casita Restaurant. If any question may arise, please feel free to call or email me at (940) 594-9146 orb govegahotmail.com . Sincerely, Blanca Govea Blanca Govea Cinco de Mayo Chairperson Exhibit 2 EXCERPT from DRAFT MINUTES PARKS, RECREATION AND BEAUTIFICATION BOARD April 3, 2017 Civic Center Community Room After determining that a quorum of the City of Denton, Texas, Parks, Recreation and Beautification Board is present, the Chair of the Board thereafter convened into an open meeting on Monday, April 3, 2017, at 6:00 p.m. in the Denton Civic Center, 321 E. McKinney Street, Denton, Texas. Members Present: Russ Stukel, Chair; Paul Leslie, Frances Punch, Kent Boring, Gary Barber. Members Absent: Maria Renner, Johanna McDaniel Staff present: Emerson Vorel, Julie Leal, D'Lee Williams, Janie McLeod, Jim Mays Staff absent: John Schubert OPEN MEETING ACTION ITEM: Consider making a recommendation to the Denton City Council on the following: Cinco de Mayo Committee's request for Mi Casita Restaurant to be the sole proprietor allowed to sell alcoholic beverages at the Cinco de Mayo Celebration in Quakertown Park on May 6, 2017. Per Janie McLeod, Community Events Coordinator, the Cinco de Mayo Committee has supported the sale of alcohol at the Cinco de Mayo Celebration for 19 consecutive years. This year, the Mi Casita Restaurant will be responsible for obtaining the temporary license and permit for the sale of alcohol. The Cinco de Mayo Committee is made up of community volunteers. The annual event, held in Quakertown Park, is a Hispanic cultural festival co-sponsored by the City of Denton. The free event runs from 10 a.m. to 10 p.m. and includes a parade, local vendors, children's activities, and live entertainment. Police security will be present at the event. Staff recommends approval of the request, which is consistent with previous special events hosted in Quakertown Park. Board Members posed a variety of clarity -based questions regarding the vendor of choice, and the alcohol permit process, which McLeod answered to their satisfaction. MOTION: Punch made a motion to approve; Barber seconded. The motion passed with a vote of 4-1, with Leslie abstaining. s:\lcgal\our documcnts\resolutions\l7\cinco de mayo alcohol scll.docx RESOLUTION NO. Exhibit 3 A RESOLUTION ALLOWING MI CASITA'S MEXICAN FOOD TO SELL ALCOHOLIC BEVERAGES FOR THE CINCO DE MAYO FESTIVAL TO BE HELD IN QUAKERTOWN PARK BEGINNING SATURDAY, MAY 6, 2017, UPON CERTAIN CONDITIONS; AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE AN AGREEMENT IN CONFORMITY WITH THIS RESOLUTION; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City of Denton ("City") is the owner of the Quakertown Park and through the CITY OF DENTON co-sponsors the Cinco De Mayo Festival at Quakertown Park; and WHEREAS, Cinco de Mayo Festival and Mi Casita's Mexican Food have entered into a private agreement whereby Mi Casita's Mexican Food will serve alcohol at the festival; and WHEREAS, the consumption of alcoholic beverages is allowed in the Quakertown Park pursuant to City of Denton Code, §22-32 (b); and WHEREAS, Mi Casita's Mexican Food requests the City to allow it to sell alcohol at the festival; and WHEREAS, the Parks, Recreation, and Beautification Board has recommend that Mi Casita's Mexican Food be allowed to sell alcoholic beverages at the Cinco de Mayo Festival; and WHEREAS, the City agrees with the recommendation of the Parks, Recreation and Beautification Board; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES: SECTION 1. Mi Casita's Mexican Food shall be allowed to sell alcoholic beverages at the Cinco de Mayo Festival on May 6, 2017 at the Quakertown Park upon the following conditions: 1. The shall be responsible for rental of any booth space necessary; 2. They shall be responsible to obtain the temporary license and permit for selling alcoholic beverages approved by appropriate state agency; 3. They shall provide the security necessary for the sale of alcoholic beverages; 4. They shall provide general comprehensive liability insurance from a responsible carrier, with the City as an additional insured, in the amount of $500,000.00; Page 1 of2 s:\Jegal\our documcnts\resolutions\17\cinco de mayo alcohol scll.docx Exhibit 3 5. Agrees to indemnify the City of Denton against any liability incident to the selling of alcoholic beverages at the Cinco De Mayo Festival. SECTION 2. The City Manager or his designee is authorized to execute an agreement in conformity with this resolution, which shall be substantially in the form of the agreement attached hereto and made a part hereof by reference. SECTION 3. This Resolution shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of 12017. ATTEST: JENNIFER WALTERS, CITY SECRETARY IM APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY:�� Page 2 of2 CHRIS WATTS, MAYOR s:\Icgal\our documents\contracts\17\cisco de mayo aIcolioI sales. docx STATE OF TEXAS COUNTY OF DENTON This Agreement, made this Z day of „' °I , 2017, by and between the City of Denton, a municipal corporation, hereinafter r efor r ed to as the "CITY" and MI CASITA MEXICAN FOOD, (called "MI CASITA"). WITNESSETH, that in consideration of the covenants and agreements herein contained, the parties hereto do mutually agree as follows: The City grants to MI CASITA the exclusive privilege to sell alcoholic beverages, subject to the exceptions and conditions hereinafter set forth, for the CINCO DE MAYO CELEBRATION on May 6, 2017, to be held at the Quakertown Park. Attached hereto and made a part hereof by is a copy of the resolution passed by the City Council of Denton, Texas, authorizing this privilege. This privilege does not extend beyond the date of the CINCO DE MAYO CELEBRATION set for the year 2017. ARTICLE 2 RylflffJXW&4�� MI CASITA in order to exercise the privilege to sell alcoholic beverages must perform the following: A. MI CASITA shall be solely responsible for the rental and payment for any booth space necessary for the sale of alcoholic beverages at the CINCO DE MAYO CELEBRATION. B. MI CASITA shall be solely responsible to obtain any temporary license and permit necessary for the selling of alcoholic beverages at the CINCO DE MAYO CELEBRATION. C. MI CASITA shall be solely responsible for the obtaining and paying for any security necessary for their sale of alcoholic beverages at the CINCO DE MAYO CELEBRATION, D. MI CASITA failure to do any of the above and to show proper proof of compliance shall waive their right to exercise the privilege of selling alcoholic beverages at the CINCO DE MAYO CELEBRATION. ARTICLE 3 LOCAL RULES AND REGULATION MI CASITA agrees to abide by all municipal, county, state and federal laws, ordinances, rules and regulations and specifically, without limitation, the Quakertown Park Rules and Regulations, to obtain all necessary and proper licenses, permits and authorizations, and to comply with the requirements of any duly authorized person acting in connection therewith. MI CASITA shall pay all taxes, if any, of every nature and description arising out of or in any manner connected with the sale of alcoholic beverages. MI CASITA will exercise reasonable care and due diligence in their sale of alcoholic beverages at the CINCO DE MAYO CELEBRATION. ARTICLE 4 LWDEMNITY AGREEMENT MI CASITA shall indemnify and save and hold harmless the CITY and its officers, agents, and employees from and against any and all liability, claims, demands, losses, and expenses, including but not limited to, court costs and reasonable attorney fees incurred by the CITY, and including, without limitation, damages for bodily and personal injury, death and property damage, resulting from the negligent acts or omissions of MI CASITA or its officers, shareholders, agents, or employees in the execution, operation, or performance of this Agreement. Nothing in this Agreement shall be construed to create a liability to any person who is not a party to this Agreement, and nothing herein shall waive any of the parties' defenses, both at law or equity, to any claim, cause of action, or litigation filed by anyone not a party to this Agreement, including the defense of governmental immunity, which defenses are hereby expressly reserved. ARTICLE 5 INSURANCE During the performance of the Agreement, MI CASITA shall maintain the following insurance with an insurance company licensed to do business in the State of Texas by the State Insurance Commission or any successor agency that has a rating with Best Rate Carriers of at least an A- or above: A. Comprehensive General Liability Insurance with bodily injury limits of not less than $500,000 for each occurrence and not less than $500,000 in the aggregate, and with property damage limits of not less that $100,000 for each occurrence and not less than $100,000 in the aggregate. B. Liquor/Dram Shop Liability in the amount of $250,000 per occurrence for any event occurring on City -owned property where alcohol will be provided or served. C. MI CASITA shall furnish insurance certificates or insurance policies at the CITY'S request to evidence such coverages. The insurance policies shall name the CITY as an additional insured on all such policies, and shall contain a provision that such insurance shall not be CINCO DE MAYO CELF,BRATION Agreement — Page 2 canceled or modified without written notice to the CITY and MI CASITA. In such event, MI CASITA shall, prior to the effective date of the change or cancellation, serve substitute policies furnishing the same coverage. All notices, communications, and reports required or permitted under this Agreement shall be personally delivered or mailed to the respective parties by depositing same in the United States mail to the address shown below, certified mail, return receipt requested, unless otherwise specified herein. Mailed notices shall be deemed communicated as of three (3) days' mailing: To MI CASITA: Mi Casita Mexican Food Matt Kohandani 110 N. Carroll Blvd Denton, TX 76201 To CITY: City of Denton City Manager 215 E. McKinney Denton, Texas 76201 All notices shall be deemed effective upon receipt by the party to whom such notice is given, or within three (3) days' mailing. ARTICLE 7 ENTIRE AGREEMENT This Agreement, consisting of five (5) pages and one exhibit, constitutes the coMplete and final expression of the agreement of the parties, and is intended as �j complete and exclusive statement of the terms of their agreements, and supersedes all prior contemporaneous offers, promises, representations, negotiations, discussions, con-imlinications, and agreements which. may have been made in connection with the subject matter hereof. I Eel a 0 OLVA 01 R.113 I If any provision of this Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of this Agreement and shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform this Agreement to replace such stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the stricken provision, ARTICLE 9 DISCRIMINATION PROHIBITED In performing the services required hereunder, MI CASITA shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap. CINCO DE MAYO CELEBRATION Agreement — Page 3 ARTICLE 10 PERSONNEL MI CASITA represents that it has or will secure, at its own expense, all personnel required to perform all the services required under this Agreement. Such personnel shall not be employees or officers of, or have any contractual relations with the CITY. ARTICLE 11 ASSIGNABILITY MI CASITA shall not assign any interest in this Agreement, and shall not transfer any interest in this Agreement (whether by assignment, novation, or otherwise) without the prior written consent of the CITY. 19 on No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith, and no evidence of any waiver or modification shall be offered or received in evidence in any proceeding arising between the patties hereto out of or affecting this Agreement, or the rights or obligations of the parties hereunder, and unless such waiver or modification is in writing and duly executed; and the parties further agree that the provisions of this section will not be waived unless as set forth herein. ARTICLE 13 MISCELLANEOUS A. The following exhibits are attached to and made a part of this Agreement: (list exhibits) Exhibit "A" Resolution No. B. Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton County, Texas. This Agreement shall be construed in accordance with the laws of the State of Texas. C. The captions of this Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of this Agreement. CINCO DE MAYO CELEBRATION Agreement - Page 4 IN WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be executed by its duly authorized City Manager, and MI CASITA has executed "this A reemelit through its duly authorized undersigned officer on this the —ZI day of 2017, Ummmm ATTEST: JENNIFER WALTERS, CITY SECRETARY mm &V•Na t m Imll 0 M -e. "m BY: MI CA"i'1'1"A-M17XICAN FOOD BY: I KOHANDANI, OWNER WITNESS: im. CINCO DE MAYO CELEBRATION Agreement — Page 5 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-490, Version: 1 Legislation Text AGENDA INFORMATION SHEET AGENDA DATE: April 18, 2017 DEPARTMENT: Parks and Recreation DCM: Bryan Langley SUBJECT Consider a request for an exception to the limitations imposed by Section 17-20 of the City of Denton Noise Ordinance for the purpose of hosting the Denton Juneteenth Celebration in Fred Moore Park, located at 629 Lakey St., on Friday, June 16 and Saturday, June 17, 2017. The exception is specifically requested to increase sound levels from 70 to 75 decibels, and to extend the hours from 10 p.m. to 11:30 p.m. on Friday, and until midnight on Saturday. BACKGROUND Cheylon Brown, chair of the Juneteenth Celebration, has requested an exception to the noise ordinance for the Denton Juneteenth Celebration held in Fred Moore Park located at 629 Lakey St. The event is hosted on Friday, June 16 and Saturday, June 17, 2017. This outdoor festival is hosted annually, one weekend prior to June 19, and held in Fred Moore Park. This event commemorates the date, June 19, 1865, when General Gordon Granger informed the slaves of Texas that the Emancipation Proclamation was signed and made all slaves free. The Juneteenth Coimmittee's mission is to actively preserve and promote the broad spectrum of African American heritage through educational and cultural activities that benefit the City of Denton's community. The Juneteenth Celebration features a parade, live bands, food vendors, choirs, entertainment, and children's games. RECOMMENDATION Staff recoimmends approval. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On May 6, 2014, the City Council approved a three-year noise exception via Ordinance No. 2014-130 that expired in 2016. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-tenm Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Liveable, and Family -Friendly Coimimunity; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Safe, Liveable & Family -Friendly Community Related Goal: Provide and support outstanding leisure, cultural, and educational EXHIBITS Letter of Request Respectfully submitted: Emerson Vorel Director of Parks and Recreation City of Denton Page 1 of 1 opportunities Printed on 4/14/2017 povveied by I_egivt9i IN Executive Committee Cheylon Brown Chairperson Willie Hudspeth Vice -Chairperson Sharetta Lee Secretary Edward Patterson Treasurer Tammy Riggs Asst. 'Treasurer Sub -Committees: Entertainment/Gospel Constance Pullam Nagaris Johnson Parade Beatrice Clay Athletics Johnathan Smith Bobby Givens Vendors Bobby Givens Clark Coleman Promotions/ Photography Anthony Caraway Advertising Design Marcus Godbolt Children's Games Michael Herron Pageant Sharetta Lee Constance Pullam Volunteer Coordinator Edward Patterson Exhibit 1 P.O. Box 51291 Denton, TX 76206 940-349-8575 Dear Mayor and Members of the City Council: The Denton Juneteenth Celebration Committee is requesting an exception of the Noise Ordinance for our annual celebration at Fred Moore Park. This request is for three years: June 16-17, 2017; June 15 16, 2018: and June 14-15, 2019. We are also requesting an increase in decibels from 70 to 75 with the hours for amplified sound on Friday to be extended from 10 p.m. to 11:30 p.m. and on Saturday until midnight. Thank you for your consideration. ays promoting "Unity in the Community" C eyl D. r n Chair Denton Juneteenth Celebration Committee "A reflection of our past, a celebration of our I=REEDOMI" www.juneteenthdentontx.org City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-492, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: City Manager's Office CM/ACM: Todd Hileman DATE: April 18, 2017 SUBJECT Consider adoption of an ordinance of the City of Denton authorizing an agreement between the City of Denton, Texas and the Denton Black Chamber of Commerce for the purpose of Denton Black Chamber Entrepreneurs Weekend; providing for the expenditure of funds therefor; and providing for an effective date. ($100) BACKGROUND This Agreement allows for the total expenditure of $100 from Council Contingency Funds. (Council Member Dalton Gregory) Key provisions of the Agreement include: Funds shall be used by the Denton Black Chamber of Commerce for expenditures related to 2017 Entrepreneurs Weekend. In addition to other reporting requirements, documentation in the form of cancelled checks and/or corresponding receipts specifically detailing expenditure of funds for the purpose provided is required for reimbursement from these designated funds. FISCAL INFORMATION Funding for the Agreement will come from Council Contingency Funds. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Related Goal: Safe, Liveable & Family -Friendly Community 4.4 Provide and support outstanding leisure, cultural, and educational City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-492, Version: 1 opportunities EXHIBITS 1. Ordinance 2. Agreement Respectfully submitted: Todd Hileman City Manager Prepared by: Robin Fox Senior Executive Assistant City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, s:Alegakour documents\ordinances\ I 7\sery agr-deuton black chamber-entrepreneures weekend.doc ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING AN AGREEMENTBETWEEN THE CITY OF DENTON, TEXAS, AND THE DENTON BLACK CHAMBER OF COMMERCE FOR THE PURPOSE OF THE 2017 DENTON BLACK CHAMBER ENTREPRENEURS WEEKEND; AUTHORIZING THE EXPENDITURE OF FUNDS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Denton hereby finds that the Agreement between the City and the Black Chamber of Commerce, attached hereto and made a part hereof by reference (the "Agreement"), serve a municipal and public purpose and is in the public interest; NOW, THEREFORE, ']'HE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings set forth in the preamble of this Ordinance are incorporated by reference into the body of this Ordinance as if fully set forth herein. SECTION 2. The City Manager, or his designee, is hereby authorized to execute the Agreement and to exercise all rights and duties of the City under the Agreement, including authorizing and ratifying the expenditure of funds. SECTION 3. This Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY C APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY ro BY: S:ALegal\Our Documents\Contracts\17\Sery Agr- Denton Black Chamber -Entrepreneurs Weekend. doc SERVICE AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND DENTON BLACK CHAMBER OF COMMERCE This Agreement is hereby entered into by and between the City of Denton, Texas, a home rule municipal corporation, hereinafter referred to as "City", and the Denton Black Chamber of Commerce, a not for profit organization, hereinafter referred to as 'Black Chamber". WHEREAS, City has determined that the proposal for services merits assistance and can provide needed services to citizens of City and has provided funds in its budget for the purpose of a donation to Black Chamber which provides a benefit to the citizens by sponsoring the Denton Black Chamber Entrepreneurs Weekend; and WHEREAS, this Agreement serves a valid municipal and public purpose and is in the public interest; NOW, THEREFORE, the parties hereto mutually agree as follows: I. SCOPE OF SERVICES Black Chamber shall, in a satisfactory and proper manner, perform the following tasks, for which the monies provided by City may be used: for expenditures for the 2017 Denton Black Chamber Entrepreneurs Weekend. 11. OBLIGATIONS OF BLACK CHAMBER In consideration of the receipt of funds from City, Black Chamber agrees to the following terms and conditions: A. One Hundred Dollars/ 100 ($100.00) shall be paid to Black Chamber by City to be utilized for the purposes set forth in Article I. B. Black Chamber will maintain adequate records to establish that the City funds are used for the purposes authorized by this Agreement. C. Black Chamber will permit authorized officials of City to review its books at any time. D. Upon request, Black Chamber will provide to City its By Laws and any of its rules and regulations that may be relevant to this Agreement. E. Black Chamber will not enter into any contracts that would encumber City funds for a period that would extend beyond the term of this Agreement. Page 1 S:ALegal\Our Doc uments\Contracts\17\Sery Agr - Denton Slack Chamber -Entrepreneurs Weekend.doc F. Black Chamber will appoint a representative who will be available to meet with City officials when requested. III. TIME OF PERFORMANCE The services funded by City shall be undertaken and completed by Black Chamber within the following time frame: The term of this Agreement shall commence on the effective date and terminate September 30, 2017, unless the contract is sooner terminated under Section VII "Suspension or Termination". IV. PAYMENTS A. PAYMENTS To BLACK CHAMBER. City shall pay to Black Chamber the sum specified in Article II after the effective date of this Agreement. B. EXCESS PAYMENT. Black Chamber shall refund to City within ten (10) working days of City's request, any sum of money which has been paid by City and which City at any time thereafter determines: 11) has resulted in overpayment to Black Chamber; or 2) has not been spent strictly in accordance with the terms of this Agreement; or 3) is not supported by adequate documentation to fully justify the expenditure. V. EVALUATION Black Chamber agrees to participate in an implementation and maintenance system whereby the services can be continuously monitored. Black Chamber agrees to make available its bank statements for review by City at City's discretion. In addition, Black Chamber agrees to provide City the following data and reports, or copies thereof: A. An explanation of any major changes in program services. B. To comply with this section, Black Chamber agrees to maintain records that will provide accurate, current, separate, and complete disclosure of the status of funds received and the services performed under this Agreement. Black Chamber's record system shall contain sufficient documentation to provide in detail full support and justification for each expenditure. Black Chamber agrees to retain all books, records, documents, reports, and written accounting procedures pertaining to the services provided and expenditure of funds under this Agreement for five years. C. Nothing in the above subsections shall be construed to relieve Black Chamber of responsibility for retaining accurate and current records that clearly reflect the level and benefit of services provided under this Agreement. Page 2 S,ALega1\0ur DOC umen ts\Contracts\17\Sery Agr - Denton Black Chainber-Entrepreneurs Weekend, doc VI. MEETINGS Minutes of all meetings of Black Chamber's governing body shall be available to City within ten (10) working days of approval. VII. TERMINATION The City may terminate this Agreement for cause if Black Chamber violates any covenants, agreements, or guarantees of this Agreement, the Black Chamber's insolvency or filing of bankruptcy, dissolution, or receivership, or the Black Chamber's violation of any law or regulation to which it is bound under the terms of this Agreement. The City may terminate this Agreement for other reasons not specifically enumerated in this paragraph. VIII. EQUAL OPPORTUNITY AND COMPLIANCE WITH LAWS A. Black Chamber shall comply with all applicable equal employment opportunity and affirmative action laws or regulations. B. Black Chamber will furnish all information and reports requested by City, and will permit access to its books, records, and accounts for purposes of investigation to ascertain compliance with local, State and Federal rules and regulations. C. In the event of Black Chamber's noncompliance with the nondiscrimination requirements, the Agreement may be canceled, terminated, or suspended in whole or in part, and Black Chamber may be barred from further contracts with City. IX. WARRANTIES Black Chamber represents and warrants that: A. All information, reports and data heretofore or hereafter requested by City and furnished to City, are complete and accurate as of the date shown on the information, data, or report, and, since that date, have not undergone any significant change without written notice to City. B. Any supporting bank statements heretofore requested by City and furnished to City, are complete, accurate and fairly reflect the financial conditions of Black Chamber on the date shown on said report, and the results of the operation for the period covered by the report, and that since said data, there has been no material change, adverse or otherwise, in the financial condition of Black Chamber. C. No litigation or legal proceedings are presently pending or threatened against Black Chamber. Page 3 S:ALegal\Our Documents\Contracts\17\Sery ng -Den ton Black Chamber -Entrepreneurs Weekend. doe D. None of the provisions herein contravenes or is in conflict with the authority under which Black Chamber is doing business or with the provisions of any existing indenture or agreement of Black Chamber. E. Black Chamber has the power to enter into this Agreement and accept payments hereunder, and has taken all necessary action to authorize such acceptance under the terms and conditions of this Agreement. F. None of the assets of Black Chamber are subject to any lien or encumbrance of any character, except for current taxes not delinquent, except as shown in the bank statements furnished by Black Chamber to City. Each of these representations and warranties shall be continuing and shall be deemed to have been repeated by the submission of each request for payment. X. CHANGES AND AMENDMENTS A. Any alterations, additions, or deletions to the terms of this Agreement shall be by written amendment executed by both parties, except when the terms of this Agreement expressly provide that another method shall be used. B. It is understood and agreed by the parties hereto that changes in the State, Federal or local laws or regulations pursuant hereto may occur during the term of this Agreement. Any such modifications are to be automatically incorporated into this Agreement without written amendment hereto, and shall become a part of the Agreement on the effective date specified by the law or regulation. C. Black Chamber shall notify City of any changes in personnel or governing board composition. XL INDEMNIFICATION To the extent authorized by law, the Black Chamber agrees to indemnify, hold harmless, and defend the City, its officers, agents, and employees from and against any and all claims or suits for injuries, damage, loss, or liability of whatever kind or character, arising out of or in connection with the performance by the Black Chamber or those services contemplated by this Agreement, including all such claims or causes of action based upon common, constitutional or statutory law, or based, in whole or in part, upon allegations of negligent or intentional acts of Black Chamber, its officers, employees, agents, subcontractors, licensees and invitees. XII. CONFLICT OF INTEREST A. Black Chamber covenants that neither it nor any member of its governing body presently has any interest, direct or indirect, which would conflict in any manner or degree with the performance of services required to be performed under this Agreement. Black Chamber further Page 4 S:ALegal\Our Documents\Contracts\] 7\Sery Agr - Denton BIack Chamber -Entrepreneurs Wee ken d.doc covenants that in the performance of this Agreement, no person having such interest shall be employed or appointed as a member of its governing body. B. Black Chamber further covenants that no member of its governing body or its staff, subcontractors or employees shall possess any interest in or use his/her position for a purpose that is or gives the appearance of being motivated by desire for private gain for himself/herself, or others; particularly those with which he/she has family, business, or other ties. C. No officer, member, or employee of City and no member of its governing body who exercises any function or responsibilities in the review or approval of the undertaking or carrying out of this Agreement shall participate in any decision relating to the Agreement which affects his personal interest or the interest in any corporation, partnership, or Black Chamber in which he has direct or indirect interest. XIII. NOTICE Any notice or other written instrument required or permitted to be delivered under the terms of this Agreement shall be deemed to have been delivered, whether actually received or not, when deposited in the United States mail, postage prepaid, registered or certified, return receipt requested, or via hand -delivery or facsimile, addressed to Black Chamber or City, as the case may be, at the following addresses: CITY City of Denton, Texas Attn: City Manager 215 E. McKinney Denton, TX 76201 BLACK CHAMBER OF COMMERCE Denton Black Chamber of Commerce Kerry Goree P.O. Box 51026 Denton, TX 76206 Either party may change its mailing address by sending notice of change of address to the other at the above address by certified mail, return receipt requested. XIV. MISCELLANEOUS A. Black Chamber shall not transfer, pledge or otherwise assign this Agreement or any interest therein, or any claim arising thereunder to any party or parties, bank, trust company or other financial institution without the prior written approval of City. B. If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the remaining provisions shall remain in full force and effect and continue to conform to the original intent of both parties hereto. C. In no event shall any payment to Black Chamber hereunder, or any other act or failure of City to insist in any one or more instances upon the terms and conditions of this Agreement constitute or be construed in any way to be a waiver by City of any breach of covenant or default Page 5 S:ALegal\Our Documents\Contracts\17\Sery Agr - Denton Black Chamber -Entrepreneurs Weekend.doc which may then or subsequently be committed by Black Chamber. Neither shall such payment, act, or omission in any manner impair or prejudice any right, power, privilege, or remedy available to City to enforce its rights hereunder, which rights, powers, privileges, or remedies are always specifically preserved. No representative or agent of City may waive the effect of this provision. D. This Agreement, together with referenced exhibits and attachments, constitutes the entire agreement between the parties hereto, and any prior agreement, assertion, statement, understanding, or other commitment occurring during the term of this Agreement or subsequent thereto, have any legal force or effect whatsoever, unless properly executed in writing, and if appropriate, recorded as an amendment of this Agreement. E. This Agreement shall be interpreted in accordance with the laws of the State of Texas and venue of any litigation concerning this Agreement shall be in a court of competent jurisdiction sitting in Denton County, Texas. IN WITNESS WHEREOF, the parties do hereby affix their signatures and enter into this Agreement as of the _ day of 20 ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY: CITY OF DENTON TODD HILEMAN, CITY MANAGER DENTON BLACK CHAMBER OF COMMERCE BY: KERRY GORES, CHAIRMAN Page 6 S 1,egal'.'Our Agr - Denton Black Weekend.dm SE14VICE AGREIEMENT BETWEEN THE CITY OF DENTON, TEXAS AND DENTON 13LACK CHAMBER OF COMMERCE TIiis Agreement is hereby entered into by and between the City of'Denton. Texas, a home rule Municipal corporation, hereinafter referred to as "City", and the Denton Black Chamber of Commerce, a not for profit organization, hereinafter referred to as "Black Chamber", WHEREAS,, City has determined that the proposal for services merits assistance and can provide needed services to citizens of City and has provided funds in its budget for the purpose ol'a donation to Black Chamber which provides a benefit to the citizens by sponsoring the Denton Black Chamber Entrepreneurs Weekend; and WI I 1�RE'AS, this Agreement serves a valid municipal and public purpose and is in the public interest; NOW', 'I'll the parties hereto tnutual1v agree as follows: 1, SC -01"I" Ol' SERVIC.11-1,S Black Charnber shall, in a satisfactory and proper manner, perform the following tasks, for wliicli the monies provided by City may be used: for expenditures for the 2017 Denton Black (..'hainber Entrepreneurs NV'eekend, 11. 0131,f(.'rA'I'IONSOI"131,ACK,CIIAMBf�IR 1111111-1-- ... ............... In consideration of the receipt of unds from City, Black Chamber agrees to the following terms and conditions: A. One I lundred Dollars/100 ($100,00) shall be paid to Black Chamber by City to be utilized for the purposes set forth in Article 1. 13. Black Chamber will rnaintain adequate records to establish that the City:funds are used for the purposes authorized by this Agreement, C, Black Chamber will permit authorized officials of'City to review its books at any time. 1). I.Jpon request, Black Chamber will provide to City its fly Laws and any of its rules and regulations that may be relevant to this Agreement. E. Black Chamber will not enter into any contracts that would encumber City fitinds for a period that would extend beyond the term of thus Agreement, Page 1 S:"Legal',Ou DocunieiitsiContracls` 171Sery Agr - Denton Black W'A-end.doc I", Black Chamber will appoint a representative who will be available to meet with City officials when requested. 111. TIME OF PF'RFORMANCE The sereicesfunded by City shall be undertaken and completed by Black Chairiberwithin the 1'ollowin-t-1 time frank: The term of this Agreement shall commence on the effective date and terminate September 30, 171, unless the contract is sooner terminated Linder Section VII "Suspension ot-Termination". IV. PAYMENTS A. PAYMEATS TO BLACK CI IAMB R. City shall pay to Black Chamber the surn specified in Article It after the effective (late of this Agreement, 13, f-ACESS PA)'mr-I'vi'. Black Chamber shall refund to City within tcn (10) working days of City's request, any SUM of money which has been paid by City and \,vIiich City at any time I I ime thereafter determines: has resulted in overpayment to Black Chamber-, or has not been spent strictly in accordance with the terms of this Agreement; or 3) is not supported by adequate documentation to fullyjustify the expenditure. V. LV.A 1,IUATION Black Chamber agrees to participate In art implementation and maintenance system ,,vhereby the services can be continuously monitored. Black Chamber agrees to make available its bank statements I'or review by City at City's discretion. In addition, Black Chamber agrees to provide City the following data and reports, or copies thereof: A. An explanation of any major chanes in progran-i services. B. To comply with this section, Black Chamber agrees to maintain records that will provide accurate, current, separate, and complete diSCIOSUre of the Status of funds received and the services performed Linder this Agreement. Black Chamber's record system shall contain sufficient documentation to provide in detail full support and justification for each expenditure, Black Chamber agrees to retain all books, records, documents, reports, and written accounting procedures pertaining to the services provided and expenditure of funds Under this Agreement for five years. C. Nothing it) the A)Me subsections shall be construed to relieve Black Chamber of responsibility for retaining accurate and curi-ent records that clearly reflect the level and benefit of services provided tinder this Agreement. Page 2 SALQgnrOLj Agn - Denton Mild: Weekend,&ic VI. MEETINGS Minutes of meetings of'Black Chamber's governing body shall be available to City within ten {Ip} working days ofapproval. VII. TERMINATION The City may terminate this Agreement for Cause, if Black Chamber violates any covenants, agreernents, or guarantees of this Agreement, the Black Chamber's insolvency or riling of bankruptcy, dissolution, or receivership, or the Black Chamber's violation ofany lav or regulation to which it is bound under the terms of this Agreement. The City may teri-ninate this Agreement for other reasons not specifically enUincrated in this paragraph. VIII, FOLIAL OPPORTUNITY AND COMPLIANCI," WTI -ll LAWS - — — — ------ ----- - -- A. Black Chamber shall comply with all applicable equal employment opportunity and at'firinative action laws or regulations. B. Black Chamber will furnish all information and reports requested by City, and will permit access to its books, records., and accounts for purposes of' investigation to ascertain compliance with local, State and Federal rules and regulations. C. In the event of Black Chamber's noncompliance with the nondiscrimination requirements, the Agreement may be canceled, terminated, or suspended in ""thole or in part, and Black Chamber may be barred from further contracts with City, IX, WAJJRANTII-,'S Black Chamber represents and warrants that: A. All ii-il'ormation, reports and data heretol-Ore or hereafter requested by City and furnished to City, are completeand accurate as of the date shown on the information, data, or report, and, since that date, have not undergone any, significant change N --without written notice to City. B. Any supporting bank statements heretofore requested by City and furnished to City, are completc., accurate and fairly reflect the linancial conditions ofBlack(..,hamberon the darts. shown on said report, and the results oftlie operation for the period covered by the report, and that since said data, there has been no material change, adverse or otherwise. in the financial condition of Black Chamber, C. No litigation or legal proceedings arc presently Pending or threatened against Black Chamber, Page 3 I)ocumcntsl.Contracts� 17'116- Agr - Denton 131ack \Veeknd,doc D. None of the provisions herein contravenes or is in conflict with the authority tinder which Black Chamber is doing business or with the provisions of any existing indenture or agreement of Black Chamber, I";. Black Chamber has the power to enter into this Agri errnent and accept payments hereunder, and has taken all necessary action to 8Uth0rize such acceptance under the terms and conditions of this Agreement. 1". Nonee of the assets of`Black Charnher are subject to any lien or encumbrance of any character, except f`ctr current taxes not delinquent, except as shown in the, bank statements furnished by Black Chamber to City. Each of these representations and warranties shall be continuing and shall be deemed to have been repeated by the submission of each request for payment. A. Any alterations, additions, or deletions to the terms of this Agreentent shall be by written amendment executed by both parties, except when the terms of this .Agreement expressly provide that another method shall be used. B. It is understood and agreed by the parties hereto that changes in the State, federal or local laws or regulations pursuant hereto may occur during the terns of this Agreement. Any such modifications are to be automatically incorporated into this Agreement without written amendment hereto, and shall become a part of the Agreement on the. effective date specified by the; law or regulation. C. Black Chamber shall notify, City of` any changes in personnel or 0overning board composition. Xl. INUI;MNIFICA` `ION To the extent lUthorized by law, the. Black Chamber agrees to inden-inify, hold harmless, and defi;nd the City, its officers, agents, and employees from and agciinst tiny and all claims or suits for injuries, darnage, loss, or liability ol'whalever kind or character. arising out ofor in connection with tlne performance by the Black Chamber or those services contemcnl .tted by this Agreement, including all Such claims or cause s of`action based upon common, constitutional or statutory law, or based, in whole or in part, upon allegations of negligent or intentional acts of Black Chamber, its officers, employees, a -tints, subcontractors, licensees and invitees. XII. CON I"1.1C T 01:, IN I F RE S`l` A. Black Chamber covenants that neither it nor any member of its governing body presently has any interest, direct or indirect, which would conflict in any manner or degree with the performance of'services required to be performed Under this A,,reement. Black Chamber further Page 4 kour Doc [I I 7\Scry Agr - Denton Black Ch amber-Fnin, prcrioirs Wkxkend.do� covenants that in the performance of this Agreement, no person having such interest shall be employed or appointed as a member of'its governing body, B. Black Chamber further covenants that no member of its governing body or its staff, subcontractors or employees shall possess any interest in or use his./her position lora purpose that is or Lives the appearance of'being motivated by desire for private gain for hirnself7herself, or others-, particularly those with which he/she has family, business, or other ties. C. No officer, member, or employee of City and no member of its governing body who exercises any function or responsib if i ties in the review or approval ofthe undertaking or carrying out of this Agreement shall participate in any decision relating to the Agreement which affects his personal interest or the interest in any corporation, partnership, or Black Chamber in which he has direct or indirect interest, X I 11. N OT' I (T� Any notice or other written instrument required or permitted to be delivered Undcr the terms of'this Agreement shall be deemed to have been delivered, �,vhethcr actually received or not, when deposited in the united States mail, postage prepaid, registered or certified., return receipt requested, or via hand -delivery or facsimile, addressed to Black Charrher or City., as the case may be, at the Following addresses: loom City offlenton, Texas Attn: City Manager I . 215 McKinney, Denton. TX 76201 BLACK CI JAMBER Of,' COMMERCL-' Denton Black Chamber of'Commerce Kerry Goree P.O. Rox 51026 Denton, TX 76? 06 l"ither party may, change its mailing address by sending, notice of'change ol'address to the other at the above address by certified mail, return receipt requested. XIV. MISCI-1-1-ANFIOUS A. Black Chamber shall not trailSfer, pledge or otherwise assion this'Agreement or any interest therein, or any claim arising thereunder to any party or parties, bank, tI-USt company or other financial institution without the prior written approval ()f'City. B. I f'any provision of this Agreement is field to be invalid, illegal, orunenforceable, the remaining provisions shall remain in full I-Orce and effect and continue to lconforrn to the original LI intent ol'both parties hereto, C. In no event shall any payment to Black Chamber hereunder, or any other act or failure of City to insist in any one or more instances Lipori the terms and conditions (.)I' this Agreement constitute or be construed in any �vay to be i waiver by City ol'any breach of"covenant or default Page 5 1 -1-1 ------ - -------- - SALegah0u, Agi - Dl,'nton Slack Weekend duc which may then or subsequently be committed by Black Chamber. Neither shall such payment, act, or omission in any manner impair or prejudice any right, power, privilege, or remedy available to City to enforcepowers, privileges, or its rights hereunder, which rights, remedies are always specifically preserved. No representative or agent of* (.,ity may \,vaive the effect ol'this provision. 1), This Agreement, together with relerenced exhibits and attachments, constitutes the entire agreement between the parties hereto, and any prior agreement, assertion, statement, understanding, or other commitment occurring during the term of this Agreement or subsequent thereto, have any legal force or efTect whatsoever, unless properly executed in writing, and if appropriate, recorded as an amendment of'this Agreement. I?. This Aillreernent shall be interpreted in accordanceI acrd venue ol'anv litigation with the laws of'the State ofTexas a gation concerning this Agreci-nent shall be in a court ot'competent jurisdiction sitting in Denton County, Tcxas. IN \VITNESS W11FREOF, the parties do hereby ailix their signatures and enter into this Agreement as of'the day of -)o CITY OF DENTON TODD I Iff-EMAN, CITY MANAGER A] " IT'ST: .11'NNIFF'R WAL'TFRS, CITY SECR]"ITARY BY: APPROVEf AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNFY BY. .. .. . ..... I DI1'1',NTON BLACK Cl IANIBI,'IZ OF COMMFRCL BY: RY GC C'HAIRMAN � 6-1 Ry 1( Page 6 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-493, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: City Manager's Office CM/ACM: Todd Hileman DATE: April 18, 2017 SUBJECT Consider adoption of an ordinance of the City of Denton authorizing an agreement between the City of Denton, Texas and Calhoun Middle School for the purpose of the Calhoun Color Run; providing for the expenditure of funds therefor; and providing for an effective date. ($300) BACKGROUND This Agreement allows for the total expenditure of $300 from Council Contingency Funds. (Council Member Joey Hawkins) Key provisions of the Agreement include: ■ Funds shall be used by Calhoun Middle School for expenditures related to the 2017 Calhoun Color Run. ■ In addition to other reporting requirements, documentation in the form of cancelled checks and/or corresponding receipts specifically detailing expenditure of funds for the purpose provided is required for reimbursement from these designated funds. FISCAL INFORMATION Funding for the Agreement will come from Council Contingency Funds. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Related Goal: opportunities Safe, Liveable & Family -Friendly Community 4.4 Provide and support outstanding leisure, cultural, and educational City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-493, Version: 1 EXHIBITS 1. Ordinance 2. Agreement Respectfully submitted: Todd Hileman City Manager Prepared by: Robin Fox Senior Executive Assistant City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, s:Alegal\our documents\ordinances\17\sery agr-ca Ihoun middle school -color run. doe ORDINANCE NO. AN ORDINANCE OF "I HE CITY OF DENTON AUTHORIZING AN AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS, AND CALHOUN MIDDLE SCHOOL, FOR THE PURPOSE OF THE 2017 CALHOUN COLOR RUN; AUTHORIZING THE EXPENDITURE OF FUNDS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Denton hereby finds that the Agreement between the City and Calhoun Middle School, attached hereto and made a part hereof by reference (the "Agreement"), serve a municipal and public purpose and is in the public interest; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings set forth in the preamble of this Ordinance are incorporated by reference into the body of this Ordinance as if fully set forth herein. SECTION 2. The City Manager, or his designee, is hereby authorized to execute the Agreement and to exercise all rights and duties of the City under the Agreement, including authorizing and ratifying the expenditure of funds. SECTION 3. This Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2017. CHRIS WAT'T'S, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY: s + I ega I I O\WrV flRT Calhoun nuck1k,- school doe SERVICE AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND CAIMOUN MIDDLE SCHOOL This Agreement is hereby entered into by and between the City of Denton, Texas, a Home Rule Municipal Corporation, hereinafter ref -erred to as "City", and Calhoun Middle School, hereinafter referred to as "Calhoun": WHEREAS, City has determined that the proposal for services n-lerits assistance and can provide needed services to citizens of City and has provided funds in its budget for the purpose of general expenses; and WHEREAS, this Agreement serves a valid municipal and public purpose and is in the public interest; N()W,TIl1,'R-1--:l`0R, the parties hereto mutually agree as follows: I. SC011E ()I' slRvlcl:is Calhoun shall in a satisfactory and proper mariner perform the following tasks, for which the monies provided by City may be used: The funds being provided shall be used by Calhoun to assist with the costs of the 2017 Calhoun Color Run. 11, OBLIGA,rion ot, CALL JUN In consideration of the receipt of funds from City, Calhoun agrees to the following terms and conditions: A. Three Hundred Dollars and no/100 (5300.00) shall be paid to Calhoun by City to be utilized for the purposes set forth in Article 1. B. Calhoun will maintain adequate records to establish that the City funds are used for the purposes authorized by this Agreement. C, Calhoun will permit authorized of't-iciils of (-"ity to revie\v its books at any tirne. 1). Upon request, Calhoun will provide to City its fly Laws and any of its rules and regulations that may be relcvant to this Agreement. E'. Calhoun will not enter into any contracts that would encumber City funds fora period that would extend beyond the term of this Agreement. F, Calhoun will appoint a representative who will be available to rriect with City officials when requested. G. Calhoun will submit to City copies of'year-crid audited financial statements. 111. TIME OF 11F:Rl-,'ORNIANCE The services funded by City shall be undertaken and completed by Organizatiorl within the following time frame: The term of this Agreement shall commence on the effective data and terminate September 30, 2017 unless the contract is sooner terminated under Section VII "Suspension or Termination". IV, PAYMENTS A. PAYM17NTSTC? CALHOUN, City shall pay to CaIhOUn the sum specified in Article III atier the effective date of this Agreement, B. EXCE.SS PAYMENT, Calhoun shall refund to City within ten ( 11 0) working days ol'City's request, ariv ,,,um of money which has been paid by City and which City ;jt :any time thereafter determines: I) has resulted in overpayment lo C'alhoun, or 1) has not been spent strictly in accordance with the terms oil' this Agreerricni�, or Z- 3) is not supported by adequate documentation to fully justify the expenditure. V. EVALUATION Calhoun agrees to participate in an implementation and maintenance system N)�,,hereby the services can be continuously monitored. Calhoun agrees to inake available its financial records for review by City at City's discretion. In addition, Calhoun agrees to provide City the following data and reports, or copies thereof. A. All external or internal audits. Calhoun shall siulbniit a copy of"Llie annual ilidepend;mt audit to City within ten (10) days of'receipt_ B. All external or internal evaluation reports. C. An explanation of any inaJor changes in progrann services, 1). To comply with this section, Calhoun agrees to maintain records that provide accurate., current, separate, and complete disclosure of the status offunds received and the services performed under this Agreement. The record system of Calhoun shall contain sufficient Page 2 of 7 documentation to provide in detail Full support and justification Ior each expenditure. Calhoun agrees to retain all books, records, doct,;rnents, reports, and written accounting procedures pertaining to the services provided and expenditure of'f'unds Linder this Agreement t`61• five years. I?. Nothing in the above subsections shall be construed to relieve Calhoun of'responsibi lity for retaining accurate and current records that clearly reflect the level and benefit of' services provided Under this Agreement, V I . DIRT R I. -ORS'. M. I f " I'l N ( i S Durino the term of this Agreement, Calhoun shall deliver to City copies of' all notices of meetings ol'its Board of Directors, setting forth the time and place thereof wherein this program is part c)t'tliesub,iectmatter ofthe meeting. Such notice shall be delivered to City in a timely manner to give adequate notice, and shall include an agenda and a brief description of the matters to be discussed. Calhoun understands and agrees that City's representatives shall be aftorded access to all meetings of'its Board of'Directors, Minutes ol'all meetings of'Calhoun' governing body shall be available to City within ten ( 10) working days of'approval. VII. TERMINATION The City may terminate this Agreement for cause if Calhoun violates any covenants, agreements, or guarantees of this Agreement, the Calhoun 's insolvency or filing ot'bankruptcy, dissolution, or receivership, or the Calhoun' violation of any law or regulation to which it is bound under the terms of' this Agreement. The City array terminate this Agreement for other reasons not specifically enumerated in this paragraph. VIII, DUAL OPPORTUNITY AND COMPLIANCE' WITI I LAWS A. Calhoun shall comply with all applicable equal ernployment opportunity and affirmative action la �. s or regulations. 13. Calhoun Nvi I I furnish al I information and reports re(ILICSt.ed by City, and will permit access to its books, records, and accounts toi- purposes o1' investigation to ascertain compliance with local, State and Federal rules and regUlatiOns. C. In the event of non-compliance by Calhoon with the non-discrimination requirements, the Agreement may be canceled, terminated, or suspended in \vliole or in part, and Calhoun may be barred from further contracts with City. Page 3 ol'7 X WARRANTIES Calhoun represents and warrants that: A, All information, reports and data heretol'Ore or hereafter requested by City and l'urnished to City, are complete and accurate as of the date shown on the information, data, or report, and, since that date, have not undergone any significant change without written notice to City. ll. Any supporting financial statements heretofore requested by City and furnished to City, are complete, accurate and f'airly reflect the financial conditions ol"Calhoun on the date shown on said report, and the results ot'the operation for the period covered by the report, and that since said data, there has been no material change, adverse or otherwise, in the financial condition of' Calhoun. C. No litigation or legal proccedings are presently pending or threatened against Calhoun, D. None of the provisions herein contravenes or is in conflict with the authority under which Calhoun is doing business or with the provisions of any existing indenture or agreement of Calhoun. F. Calhoun has the power to enter into this Agreement and accept payments hereunder, and has taken all necessary action to authorize Such acceptance under the terms and conditions of this Agreement. F. None of"the assets of Calhoun are subject to any lien or encumbrance of any character, except f'or current taxes not delinquent, except as shown in the financial statements furnished by Calhoun to City. F.ach of these representations and warranties shall be continuing and shall be deerned to have been repeated by the Submission ol'each request for payment. V CI JANGEOS AND AMI:`NDM.1",NTS A. Any alterations, additions, or deletions to the terms ol'this At shall be by written amendment executed by both parties, except when the terms of this Agreement expressly provide that another method shall be used. 11. It is understood and agreed by the parties hereto that changes in the State, Federal or local laws or regulations pursuant hereto may occur during the term of this Agreement. Any such niodi I ications are to be automatically incorporated into this Agreement without written amendment hereto, and shall become a part of the Agreement on the effective date specified by the law or regulation. Page 4 of'7 C. Calhoun shall noti ', City of any changes in personnel or governing board composition. X1. INDEMNIFICATION 'I"o the extent authorized by law, the Calhoun agrees to indemnify, hold harmless, and defend the CITY, its officers, agents, and employees tromand against any and all claims or Suits for injuries, damage, loss, or liability of' whatever kind or character, arising out of or in connection with the perf'on-nance by the Calhoun or those services contemplated by this Agreement, including all such claims or causes of action based upon common, constitutional or statutory law, or based, in vvhole or in part, upon allegations of negligent or intentional acts of' Calhoun, its officers, employees, agents, subcontractors, licensees and invitees. XII. ('ONFLICTOF INTIJZF'ST ..... . ........................... r A. Calhoun covenants that neither it nor any mernber ofits governing body presently has any Y fie pci-forinaricc ' interest, direct or indirect, which would conflict in am manner or degree �vitli t of services required to be performed Linder this Agreement. Calhoun further covenants that in the performance of this Agreement, no person having such interest shall be employed or appointed as a member of its governing body. B. Calhoun further covenants that no member of its governing body or its staff, subcontractors or employees shall possess any interest in or use his/her position for a purpose that is or gives the appearance of being motivated by desire for private gain for himself/herself, or others; particularly those with which he/she has family. business, or other lies, C. No officer, member, or employee of' City and no member of its governing body who exercises any function or responsibilities in the review or approval of the undertaking or carrying out of this Agreement shall participate in any decision relating to the Agreement which affects Ills L, personal interest or the interest in any corporation, partnership, or association in which he has direct or indirect interest, X111. NOTICE Any notice or other written iiistrUITIC111 FeLjUilCd or permitted to be delivered under the terms of this Agr , eernent shall be deemed to have been delivered, whether actually received or not, when deposited in the United States mail, postage prepaid, registered or certified, return receipt requested, or via hand -delivery or facsimile, addressed to Calhoun or City, as the case may be, at the following addresses: Page 5 of CITY City offlenton, Texas Attn: City Manager 2115 L McKinney Denton, TX 76201 Fax No. 940,349,8591 CALHOUN MIDDLE" SCH001- Bernadette Coleman Calhoun Middle School 709 W. Congress Street Denton, TX 76201 Either party may change its inailinoL- address by sending notice of change of address to the other at the above address by certified mail, return receipt requested. XIV, MI SCF11-AN 1.110 U S A. Calhoun shall not transfer, pledge or otherwise assign this Agreement or any interest therein, or any claim arising thereunder to any party or parties,, bank,, trust company or other Financial institution without the prior written approval of City. 11. If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the remaining provisions shall remain in full force and effect and continue to conform to the original intent of` both parties hereto. C. In no event shall any payment to Calhoun hereunder, or any other actor failure ol'City to insist in any one or more instances upon the terms and conditions of this Agreement constitute or be construed in any way to be a waiver by City of any breach of covenant or default which may then or SUbSeClUntly be committed by Calhoun. Neither shall such payment, act, or omission in any manner impair or prejudice right,, power, privilege, rnor reedv available to City to enforce its rights Ifice any _) rig hereunder, �khich rights, powers, privileges, or remedies are always specifically preserved. No representative or agent of City may waive the effect of this provision. D, This Agreement, together with ref'ercnccd exhibits and attachments, COTIStitUteS the entire agreement between the parties hereto, and any prior agreement, assertion, statement, understanding, or other commitment occurring during the term of this Agreement, or subsequent thereto, have any legal force or effect whatsoever, unless property executed in writing, and if appropriaic, recorded as an amendment of this Agreement. 11'. This Agreement shall be interpreted in accordance with the laws of the State ofTexas and venue of tiny litigation concerning this Agreement shall beinaCOUrl ofconipeteiitjLirisdictionsitting in Denton County, 'Texas. IN WITNESS WHERF'OF, the parties do hereby affix their signatures and enter into this Agreement as of the - day oI 2017. Page 6 of7 ATTEST: JENNIFER WALTERS, CITY SECRF"TARY BY: AI)13R(,)Vl3I) AS TO LEGAL FORM: AARON LI AL, INTUIRIM CITY ATTORNEY BY: CITY OF DENTON TODD HILEMAN, CITY MANAGER CALI IOUN MIDDLI.-, SCI 1001, BY: 'MAN _R DETIT'COI-1- Page 7 of"/ City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-494, Version: 1 Legislation Text Agenda Information Sheet DEPARTMENT: City Manager's Office CM/ACM: Todd Hileman DATE: April 18, 2017 SUBJECT Consider adoption of an ordinance of the City of Denton authorizing an agreement between the City of Denton, Texas and Denton Parks Foundation for the purpose of Cyclodia 2017; providing for the expenditure of funds therefor; and providing for an effective date. ($350) BACKGROUND This Agreement allows for the total expenditure of $350 from Council Contingency Funds. (Council Member Dalton Gregory, $250 and Council Member Keely Briggs $100) Key provisions of the Agreement include: ■ Funds shall be used by the Denton Parks Foundation for expenditures related to Cyclodia 2017. In addition to other reporting requirements, documentation in the form of cancelled checks and/or corresponding receipts specifically detailing expenditure of funds for the purpose provided is required for reimbursement from these designated funds. FISCAL INFORMATION Funding for the Agreement will come from Council Contingency Funds. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Related Goal: opportunities Safe, Liveable & Family -Friendly Community 4.4 Provide and support outstanding leisure, cultural, and educational City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-494, Version: 1 EXHIBITS 1. Ordinance 2. Agreement Respectfully submitted: Todd Hileman City Manager Prepared by: Robin Fox Senior Executive Assistant City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, s:\Iega1\our documents\ordinances\17\sery agr-den ton parks foundation.doc ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING AN AGREEMENT BETWEEN TIE CITY OF DENTON, TEXAS AND DENTON PARKS FOUNDATION FOR THE PURPOSE OF CYCLODIA 2017; AUTHORIZING THE EXPENDITURE OF FUNDS; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Denton hereby finds that the Agreement between the City and Denton Parks Foundation, attached hereto and made a part hereof by reference (the "Agreement"), serve a municipal and public purpose and is in the public interest; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings set forth in the preamble of this Ordinance are incorporated by reference into the body of this Ordinance as if fully set forth herein. SECTION 2. The City Manager, or his designee, is hereby authorized to execute the Agreement and to exercise all rights and duties of the City under the Agreement, including authorizing and ratifying the expenditure of funds. SECTION 3. This Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM ATTORNEY BY: �� S'A1eQ01\0Ur documents\0nuvos"I T'Sery aur demon parks foundation.doc SERVICE AGREEMENT BETWEENTHE. CITY OF DENTON, TEXAS AND DENTON PARKS FOUNDATION This Agreement is hereby entered into by and between the City of Denton, Texas, a f lone Rule Municipal Corporation, hereinafter referred to as "City", and Denton Parks Foundation, a Texas Non -Probit Corporation, hereinafter ret'erred to as "Denton Parks Foundation": WIIEREAS, City has determined that the proposal for services merits assistance and can provide needed services to citizens of'City and has provided funds in its budget J'( -)r the purpose of general expenses; and WHEREAS, this Agreement serves a valid municipal and public purpose and is in the public interest: NOIK1-11FRl"FORl�, the parties hereto mutually agree as follows: I. SCOPF, OF Sl.-"RVlCl.,.S Denton Parks Foundation shall, in a satisfactory and proper manner, perforrn the following tasks for which the monies provided by City may be used: The hinds being) provided shall be used by Denton Parks Foundation to assist with the costs of' Cvclodia 2017. 11, OBLIGATIONS OF Dl-,',N'I'ON PAJ�KS FOUNDATION In consideration of the receipt of` funds from City, Denton Parks Foundation agrees to the following terms and conditions: A. Three Hundred Fifty Dollars and no/100 ($350.00) shall be paid to Denton Parks Foundation by City to be utilized for the purposes set forth in Article I. B. Denton Parks Foundation will maintain adeqUate records to establish that the City funds are used for the purposes authorized by this Agreement. C. Denton Parks Foundation will permit authorized officials of City to review its books at any time. D. Upon request, Denton Parks Foundation will provide to City its By Laws and any of its rules and regulations that may be relevant to this Agreement. Denton Parks Foundation will not enter into any contracts that would encumber City funds for a period that would extend beyond the term of this Agreement. F, Denton Parks Foundation will appoint a representative who will be available to meet with City officials when requested, G Denton Parks Foundation will submit to City copies of' year-end audited financial statements. 111. TIME OF PERFORMANCE - - - ---_-_--- - The services funded by City shall be undertaken and completed by Organization within the following time frame: '. I'lle term of this Agreement shall commence on the effective date and terminate September 30, 2017 unless the contract is sooner terminated Linder Section VII "Suspension or Termination". IV. PAYNILINTS A. PAYNIFNTS TO DAN` ON PARKS FOUNDATION. City shall pay to Denton Parks Foundation the sum specified in Article 11 after the cf'f*cctivc date of this Agreement. B. Fx(,i:ss PAY"OFIN't'. Denton Parks Foundation shall refund to City within ten (10) working days ol'Cily's request, any sum of inoney which has been paid by City and which City at any time dicreaftcr determines-. 1) has resulted in overpayment to Denton Parks Foundation-, or 2) has not been spent strictly in accordance with the terms of this Agreement, or 3) is not supported by adequate documentation to fully justify the expenditure. V. EVALUATION Denton Parks Foundation agrees to participate in an implementation and maintenance System whereby the services can be continuously monitored. Denton Parks Foundation agrees to make available Ic its financial records for review by City at City's discretion. In addition, Dcnton Parks Foundation agrees to provide City the following data and reports, or copies thereof: A. All external or internal audits. Denton Parks Foundation shall submit acopy of the annual independent audit to City within ten (10) days ofreceipt. D. All external or internal evaluation reports. C. An explanation of any inajor changes in program services, 1), To comply with this section, Denton ])arks Foundation agrees to maintain records that will provide accurate, current, separate, and complete disclosure ofthe status of funds received and the Page 2 ol`7 services performed under this Agreement. The record system of Denton Parks Foundation shall contain sufficient documentation to provide in detail full support and justification for each expenditure. Denton Parks Foundation agrees to retain all books, records, documents, reports, and written accounting procedures pertaining to the services provided and expenditure of funds tinder this Agreement for five years, El. Nothing in the above subsections shall be construed to relieve Denton Parks Foundation of responsibility for retaining accurate and current records that clearly reflect the level and benefit of services provide(] Linder this Agreement. VI. DIRECTORS' MEETINGS During the term ofthis Agreement, Denton Parks Foundation shall deliver to City copies of all notices ofineetings of its Board of Directors, setting forth the time and place thereof wherein this program is a part of'the subject matter of the meeting. Such notice ,,hall be delivered to City in a tirnely manner to give adequate notice, and shall include an agenda and a brief description ofthe matters to be discussed. Denton Parks Foundation understands and agrees that City's representatives shall be afforded access to all meetings of its Board of Directors. Minutes of all meetings of Denton Parks Foundation' governing body shall be available to City within ten (10) working days of approval. VII, TERMINATIO The City may terminate this Agreement for cause it'Denton Parks Foundation violates any covenants, agreements, or guarantees ofthis Agreement, the Denton Parks Foundation's insolvency or filing of bankruptcy, dissolution, or receivership, or the Denton Parks foundation' violation ofany law or regulation to which it is bound tinder the terms of this Agreement, The City may terminate this Agreement 1*(.)r other reasons not specifically enumerated in this paragraph, VIII. F'QUAL OPPORTUNITYAND COMPLIANCE WITH LAWS A. Denton Parks Foundation shall comply with all applicable equal employment opportunity and affirmative action laws or regulations. 1.3. Denton Parks Foundatiun xN, ill furnish all information and reports requested by City, and will permit access to its books, records, and accounts for purposes of investigation to ascertain compliance with local, State and Federal rules and regulations. C. In the event oftion-compliance by Denton Parks Foundation with the non-discrimination requirements, the Agreement may be canceled, terminated, or suspended in whole or in part, and Denton Parks Foundation may be barred from further contracts with City. Page 3 of X WARRANTIES Denton Parks Foundation represents and warrants that: A. All information, reports and data heretofore or hereafter requested by City and furnished to City, are complete and accurate as ofthe date shown on the information, data, or report, and, since that date, have not undergone arty significant change without written notice to City. B. Any supporting financial statements heretofore requested by City and furnished to City, are complete, accurate and fairly reflect the financial conditions of Denton Parks Foundation on the date shown on said report, and the results of operation for the period covered by the report, and that since said data, there has been no material change, adverse or otherwise, in the Imancial condition ol'Denton Parks FOLindation. C. No litigation or legal proceedings are presently pending or threatened against Denton Parks Foundation. D. None of the provisions herein contravenes or is in conflict with the authority Linder which Denton Parks Foundation is doing business or with the provisions ot'any existing indenture or agreement of Denton Parks Foundation. t. Denton Parks Foundation has the power to enter into this Agreement and accept payments hereunder, and has taken all necessary action to authorize such acceptance Linder the terms and conditions of this Agreement. F. None of the assets of'Denton Parks Foundation are subject to any lien or encumbrance ol'any character, except for current taxcs not delinquent, except as shown in the financial statements furnished by Denton Parks Foundation to City. Each of these representations and warranties shall be continuing and shall be deemed to have been repeated by the submission of each request for or payment. X. CHANGES AND AMENDMI-XI'S A. Any alterations, additions, or deletions to the terms of" this Agreement shall be by written amendment. executed by both parties, except when the terms of this Agreement expressly provide that another method shall be used. B, It is understood and agreed by the parties hereto that changes in the State, Federal or local laws or regulations pursuant hereto may occur during the term of this Agreement. Any such modifications are to be automatically incorporated into this Agreement without written amendment hereto, and shall become a part of the Agreement on the effective date specified by the law or regulation. Page 4 of'7 C. Denton Parks Foundation shall notify City of'any changes in personnel or governing board composition, X1. INDEMMFICATION To the extent authorized by law, the Denton Parks Foundation agrees to indemnify, hold harmless., and defend the CITY, its officers, agents, and employees from and against any and all claims or suits for injuries, damage, loss, or liability of whatever kind or character, arising out of or in connection with the performance by the Denton Parks Foundation or those services contemplated by this Agreement, including all such claims or causes of action based upon common, constitutional or statutory law, or based, in whole or in part, upon allegations of negligent or intentional acts ot'Denton Parks Foundation, its officers, employees, agents, subcontractors, licensees and invitees. MI. CONFLICT OF INTI"Rt'ST - 111111.1111 111.11 ...... ... A. Denton Parks f'oundation covenants that neither it nor any member of its governing body presently has any interest, direct or indirect, which would conflict in any manner Or degree with the performance ot'services required to be perforined under this Agreement. Denton Parks Foundation further covenants that in the performance ol'this Agreement, no person having such interest shall be employed or appointed as a member of its governing body. 13. Denton Parks Foundation further covenants that no member of its governing body or its staff, subcontractors or employees shall possess any interest in or use his/her position for a purpose that is or gives the appearance of being motivated by desire for private gain for hirnself7herself, or others; particularly those with which he/she has family, business, or other tics. C. No officer, member, or employee of City and no member of its governing body who exercises any function or responsibilities in the review or approval of the undertaking or carrying out w of' this Agreement shall participate in any decision relating to the Agreement which affects his personal interest or the interest in any corporation, partnership, or association in which he has direct or indirect interest. X111. N9'J'j_C_E Any notice or other written instrument required or permitted to be delivered underthe terms of this Agreement shall be deemed to have been delivered, whether actually received or not, when deposited in the United States mail, postage prepaid, registered or certified, return receipt requested, or via hand -delivery or facsimile, addressed to Denton Parks Foundation or City, as the case may be, at the following addresses: Page 5 of'7 CITY City of Denton, Texas Attn: City Manager 215 F- McKinney Denton, TX 76101 Fax No. 940. 349.8591 DF'INTON PARKS FOUNDATION Molly Tarnpke F'xecutive Director 601 E. Hickory, Suite B Denton,TX 76201 Fax No. 940.349.8166 tither party may change its mailing address by sending notice of"change of'address to the other at the above address by certified mail, return receipt requested. XIV. -MISCE'LLANt"OUS A. Denton Parks Foundation shall not transfer, pledge or otherwise assign this Agreement or any interest therein, or any claim arising thereUnder to any party or parties, bank, trust company or other financial institution without the prior written approval ot'City. B. If any provision of this Agreement is held to be invalid, illegal, or uneriforceab1c, the remaining provisions shall remain in full force and effect and continue to conform to the original intent of both parties hereto. C. In no event shall any payment to Denton Parks Foundation hereunder, or any other act or failure of'City to insist in any one or more instances upon the Icn-ns and conditions of this Agreement constitute or be construed in any way, to be a waiver by City of any breach of'covenant or default which may then or subsequently be committed by Denton Parks Foundation, Neither shall such payment, act, or ormssion in any manner impair or prejudice any right, power, privilege, or remedy available to City to eril'orce its rights hereunder, which rights, powers, privileges, or remedies are al\vays specifically preserved. No representative or agent of' City may waive the effect of' this provision. 1). This Agreement, together with referenced exhibits and attachments, constitutes the entire agreement between the parties hereto, and any prior agreement,, assertion, statement, understanding, or other commitment occurring during the term of this Agreement. or subsequent thereto, have any L, legal force or effect whatsoever, unless properly executed in writing, and if"appropriate, recorded as an amendment of'this Agreement. 11. This Agreement shall be interpreted in accordance with the laws of the State of Texas and venue of any litigation concerning this Agreement shall he in acourt of competent jurisdiction sitting in Denton County, 'texas. IN WITH' ESS WI It" RI, --'0 F, the parties do hereby affix their signatures and enter into this Agreement as ofthe day of--------------------, --1 2017. Page 6 of ATTEST: JFINNIFEI.R. W'ALATRS, CITY St"CRETARY BY: APITOVI-J) AST O LE'GAL FORM: AARON ITIAL., INTES NI CITY ATTORNf-,'Y By: CITY OF Df-l'NTON "f'OT)f) HILEMAN, CITY MANAGER DENTON PARKS f,'OIJNI)A'f'fON BY: mo .Y T« 1 ill"XECUITIV DfRIE' 'TOR Page 7 of7 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-511, Version: 1 Legislation Text AGENDA INFORMATION SHEET DEPARTMENT: Materials Management DCM: Bryan Langley AGENDA DATE: April 18, 2017 SUBJECT Consider adoption of an ordinance of the City Council of the City of Denton, Texas, authorizing the City Manager to execute a Professional Services Agreement for architectural design services in support of the design of the new City of Denton Fire Station 3 to be located at 1210 IH35E; providing for the expenditure of funds therefor; and providing an effective date (File 6318 awarded to Kirkpatrick Architecture Studio in the not -to - exceed amount of $652,200). FILE INFORMATION This item is for design services relating to the construction of Fire Station 3 which will replace an existing fire station which is located at 1204 McCormick Street. The existing fire station is outdated and small (5,500 square feet) and is not capable of housing the state of the art fire equipment that is now required to provide adequate fire protection to the northeast section of Denton. The last four (4) City of Denton fire stations designed by Kirkpatrick Architecture Studio (Kirkpatrick), located in Denton, Texas, have won several awards and received national accolades for their designs and functionality. Kirkpatrick is a Leadership in Energy and Environmental Design (LEED) certified architect and was instrumental in Fire Station 7 becoming the first Gold LEED certified station in Texas and the second in the country. Both the Central Station and Station 7 were designed by Kirkpatrick and were completed under budget and on schedule. Even though Fire Station 2 experienced construction delays, the project was on budget. Throughout the construction process Kirkpatrick served as the City's advocate for maintaining quality and fair pricing. The relationship with this firm has been outstanding and the Fire Department has been very satisfied with the final result. In addition, Kirkpatrick has designed several other fire stations in Texas, Oklahoma, and Louisiana in the recent past; all with very good references. Several of these stations were also LEED certified fire stations. The selection of Kirkpatrick to design the City of Denton Fire Stations I and 7 resulted from a formal Request for Qualifications (RFQ) procurement process by which responses to the RFQ were openly marketed and solicited from multiple firms. Kirkpatrick has demonstrated excellent qualifications in the design of fire stations, and has a long, successful, and proven performance history with the City of Denton. In accordance with the provisions of Texas Local Government Code 252.022, and Texas Government Code 2254, staff recommends selection of Kirkpatrick Architecture Studio, without conducting a formal Request for Qualifications (RFQ) procurement process, for the design of Fire Station 3. The contract includes a provision City of Denton Page 1 of 3 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-511, Version: 1 that allows the City and Architect to renegotiate design fees upon completion of the schematic design in Phase 1. Once the schematic design is complete, a more accurate construction estimate will be available which will allow for design costs to be reassessed. A fire station is a civic statement, and the design should reflect a cost effective use of the taxpayer's dollars. The selection of materials, products, and systems should be based on reasonable initial cost and a cost effective life cycle. All Denton Fire/Rescue Department facilities should be designed to a 50 -year building life with minimal requirements for routine maintenance and repair. Durable materials are of high importance. Sustainability will also be a high priority in the fire station design. Energy Efficiency/LEED compliance and/or certification will be an important design consideration along with pursuing all energy sources including solar and wind. Function over form will take precedence in designing sustainability into the station. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On April 11, 2017, staff presented to the City Council a plan that includes scheduled updates to the City Council based on the City's collaboration with Kirkpatrick Architecture Studio. RECOMMENDATION Award a Professional Services Agreement for Design Services and Construction Oversight for the reconstruction of Fire Station 3, to Kirkpatrick Architecture Studio in the amount not -to- exceed $566,200 without LEED Certification or $652,200 with LEED Certification. PRINCIPAL PLACE OF BUSINESS Kirkpatrick Architecture Studio Denton, Texas ESTIMATED SCHEDULE OF PROJECT Project design will begin upon City Council approval. The entire construction project is anticipated to take eighteen (18) months to complete. FISCAL INFORMATION This project will be funded from Capital Improvement Plan account# 100 194468.1365.40 100. Requisition# 133707 has been entered in the Purchasing software system. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Safe, Liveable & Family -Friendly Community Related Goal: 4.1 Enhance public safety in the community City of Denton Page 2 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, File #: ID 17-511, Version: 1 EXHIBITS Exhibit l: Ordinance Exhibit 2: Professional Services Agreement Respectfully submitted: Ethan Cox, 349-7421 Customer Service Manager For information concerning this acquisition, contact: Herman Lawson at 349-7755. City of Denton Page 3 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT FOR ARCHITECTURAL DESIGN SERVICES IN SUPPORT OF THE DESIGN OF THE NEW CITY OF DENTON FIRE STATION 3 TO BE LOCATED AT 1210 IH35E; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (FILE 6318 AWARDED TO KIRKPATRICK ARCHITECTURE STUDIO IN THE NOT -TO -EXCEED AMOUNT OF $652,200). WHEREAS, The professional services provider (the "Provider) mentioned in this ordinance is being selected as the most highly qualified on the basis of its demonstrated competence and qualifications to perform the proposed professional services; and WHEREAS, The fees under the proposed contract are fair and reasonable and are consistent with and not higher than the recommended practices and fees published by the professional associations applicable to the Provider's profession and such fees do not exceed the maximum provided by law; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the City Manager is hereby authorized to enter into a professional service contract with Kirkpatrick Architecture Studio, to provide professional design services for the design of the new City of Denton Fire Station 3, a copy of which is attached hereto and incorporated by reference herein. SECTION 2. The City Manager is authorized to expend funds as required by the attached contract. SECTION 3. The City Council of the City of Denton, Texas hereby expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under File 6318 to the City Manager of the City of Denton, Texas, or his designee. SECTION 4. The findings in the preamble of this ordinance are incorporated herein by reference. SECTION 5. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY mm APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY mm EXHIBIT 2 CONTRACT #6318 PROFESSIONAL SERVICES AGREEMENT FOR ARCHITECT OR ENGINEER THIS AGREEMENT is made and entered into as of this date , by and between the City of Denton, Texas, a Texas municipal corporation, with its principal office at 215 East McKinney Street, Denton, Denton County, Texas 76201, hereinafter called "Owner" and Kirkpatrick Architecture Studio, with its corporate office at 100 West Mulberry Street, Denton, Texas 76201 hereinafter called "Design Professional," acting herein, by and through their duly authorized representatives. In consideration of the covenants and agreements herein contained, the parties hereto do mutually agree as follows: SECTION 1 EMPLOYMENT OF DESIGN PROFESSIONAL The Owner hereby contracts with the Design Professional, a licensed Texas architect or engineer, as an independent contractor. The Design Professional hereby agrees to perform the services as described herein and in the Proposal, the General Conditions, and other attachments to this Agreement that are referenced in Section 3, in connection with the Project. The Project shall include, without limitation, professional architectural services in support of the design for the City of Denton Fire Station #3 Project. The project shall be completed in five (5) separate phases: Phase 1 — Information Gathering and Schematic Design, Phase 2 — Design Development, Phase 3 — Construction Documents, Phase 4 — Bidding and Negotiations, and Phase 5 — Construction Administration. Phase I — Information Gathering and Schematic Design, shall include the following: 1. Zoning/Platting Research — Design Professional will meet with the City of Denton to understand the constraints and parameters affecting the proposed sites. 2. Programming — Design Professional will meet with all appropriate parties to determine a preliminary program. 3. Design Meeting — Design Professional will conduct a one and a half day design meeting with the owner. The meeting will begin with reviewing the owner's project goals and requirements. Then the program will be refined and a preliminary floor plan and site plan will be produced. 4. Schematic Design — Design Professional will continue to refine the building's plan and elevations until they met the Owner's requirements. Design Professional will produce a Schematic Design Package for the Owner's review and approval. After approval from the Owner, Design Development Phase will commence. Services in this phase are defined in AIA Document B101, 3.2. 5. Pre -application Submission — Design Professional will submit to the City a site plan, floor plan, and questions to the City. These plans and questions will be reviewed by the City in advance of the Pre - application Conference. Page 1 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 With the following deliverables: DI. Code and Zoning Research Report D2. Schematic Design Package Estimated completion time: 4 weeks. Phase 2 — Design Development, shall include the following: Design Development — During this phase the documents produced in the Schematic Design Phase are further developed. In this phase the mechanical, electrical, plumbing, and structural systems are refined. Additionally, architectural details such as for doors and windows are produced. Design Professional will produce a Design Development Package for the Owner's review and approval. After approval from the Owner, Construction Documents Phase will commence. Services in this phase are defined in AIA Document B101, 3.3.1 and 3.3.3. 2. Construction Cost Estimate — Design Professional will send the Design Development Package to a third party cost estimator for a construction cost estimate. With the following deliverables: D3. Design Development Package D4. Construction Cost Estimate Estimated completion time: 8 weeks. Phase 3 — Construction Documents, shall include the following: 1. Contract Documents — In this phase, construction documents and specifications are produced. Depending on timing and/or the Owner's wishes, separate Permit and Construction Sets can be produced. 2. Energy Model — Design Professional will produce an energy model to show compliance with International Energy and Conservation Code 2015 (ECC 2015). 3. Construction Cost Estimate — Design Professional will send the Design Development Package to a third party cost estimator for a construction cost estimate. 4. Site Permit Application — Design Professional will submit the construction set for Site Permit. 5. Building Permit Application — Design Professional will submit the construction set for permit. With the following deliverables: D5. 50% Progress Set D6. 95 % Progress Set D7. Construction Cost Estimate D8. Site Package D9. Construction Set Estimated completion time: 14 weeks. Page 2 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 Phase 4 — Bidding and Negotiations shall include the following: 1. Pre -Bid Conference and Tour — Design Professional will administer a conference and tour of the site for prospective bidders. 2. Addenda — Design Professional will respond to questions to potential bidders and provide clarification if necessary in the form of Addenda. 3. Evaluation of Bids - Once bids are received and opened by the City, Design Professional will aid in the evaluation of the bidders. With the following deliverables: D10. Bidder Recommendation Letter Estimated completion time: 6 weeks. Phase 5 — Construction Administration shall include the following: 1. Construction Administration — Design Professional will attend weekly meetings during construction, produce Field Observation reports, review submittals, produce responses to Request for Information's, and respond in a professional manner as needed during the construction process. Services in this phase are defined in AIA Document B101, 3.6 and in AIA Document A201-2007. 2. Commissioning — Design Professional will commission the mechanical, plumbing, and electrical systems per requirements in IECC 2015. With the following deliverables: D 11. Commissioning report Estimated completion time: 6 weeks. Scope of Services for Leadership in Energy and Environmental Design (LEED) Minimum Standards (Not LEED Certified) The Owner has requested that the project be designed to LEED minimum standards. After conversation with the Owner, we understand this to mean LEED prerequisites as listed below. The City's adopted energy code, International Energy and Conservation Code (IECC) 2015, requires Commissioning similar to that required under EA Prereq 1. Similarly, the energy model for EA Prereq 2, is the recommended method to show compliance under IECC 2015. The fee for these items is included in Base Services. The fee for these items is included in Base Services. Sustainable Sites SS Prereq 1 Construction Activity Pollution Prevention Water Efficiency WE Prereq 1 Water Use Reduction — 20% Reduction Energy and Atmosphere EA Prereq 1 Fundamental Commissioning of Building Energy Systems EA Prereq 2 Minimum Energy Performance EA Prereq 3 Fundamental Refrigerant Management Materials and Resources MR Prereq 1 Storage and Collection of Recyclables Page 3 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 Indoor Environmental Quality IEQ Prereq 1 Minimum Indoor Air Quality Performance Though Base Services includes the LEED prerequisites, it does include LEED certification. Scope of Services for Leadership in Energy and Environmental Design (LEED) Certification Design Professionals' services include those necessary for the design and preparation of documents for the referenced Project to pursue LEED Certification level "Certified" under the United States Green Building Council (USGBC) LEED Green Rating System for New Construction and Major Renovations, v. 2009. The proposed fee is based upon Design Professional's knowledge of which credit s may be appropriate for fire station pursuing LEED certification. If the owner chooses to pursue individual points not anticipated, additional services may be required. While Design Professional has had great success in achieving LEED certification, there are many factors outside the Architect's control that preclude a guarantee of LEED certification. Services in this phase are defined in AIA Document B214-2012. Scope of Work Provided by the Client 1. Topographical and Boundary surveys 2. Geotechnical Investigation and Report 3. Soil Investigation required for geothermal HVAC 4. Construction Observation and Materials Testing Items Outside of Scope of Work or Requiring Additional Services 1. Pursuing LEED version 4.0 in lieu of LEED 2009 2. Changes to the base modules of Station No.2, other than those discussed above. 3. Redsigns, new designs, meetings and other costs related to significant changes in scope of work or significant changes to approved designs. This includes work and meetings required to incorporate value engineering items. 4. Easements by separate instrument. 5. Work in or adjacent to an existing FEMA flood plain, design services necessary to establish a base flood elevation (BFE), flood plain permitting or flood plain mapping 6. Non -gravity storm sewer or sanitary sewer systems (systems requiring pump design, i.e. lift stations) 7. Public water or sewer system improvements beyond service connections and any off-site work 8. Traffic Impact Studies 9. TxDOT Permits 10. Zoning change requests 11. Retaining wall design 12. Environmental site assessments 13. Site features and amenities outside of building footprint and not directly attached to the building that are not required by zoning or code or related to the building's mechanical, electrical, or plumbing systems. 14. The design of currently unidentified specialty electrical, lighting or communication systems, including voice/data, audio/visual, security, or other low voltage electronic systems. Junction boxes and conduit for the systems will be shown in the construction documents. Fire alarm and related devices are included. 15. Design of franchise utilities (gas, electric, telephone, and cable television) 16. Costs related to non -anticipated LEED credits, including, but not limited to, a. WEc2 Innovative Wastewater Technologies, including rainwater collection and other greywater systems Page 4 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 SECTION 2 COMPENSATION The Owner shall compensate the Design Professional as follows: 2.1 BASIC SERVICES 2.1.1 PHASE 1 - For Basic Services the total compensation shall be $ 83,430.00 2.1.2 PHASE 2 - For Basic Services the total compensation shall be $ 111,240.00 2.1.3 PHASE 3 - For Basic Services the total compensation shall be $ 222,480.00 2.1.4 PHASE 4 - For Basic Services the total compensation shall be $ 27,810.00 2.1.5 PHASE 5 - For Basic Services the total compensation shall be $ 111,240.00 2.1.6 REIMBURSABLE EXPENSES — shall not exceed $ 10,000.00 Optional LEED Certification Services - For LEED Certification Services the total compensation shall be $ 86,000 Total Not to Exceed Contract Amount without LEED $ 566,200 Total Not to Exceed Contract Amount with LEED $ 652,200 Progress payments for Basic Services shall be paid upon satisfactorily completion of tasks for the Project. Non -reimbursable Expenses - KAS includes the following in our scope 1. In - house printing 2. Phone calls 3. Travel within north Texas *Upon completion of Phase 1, The City and Design Professional may renegotiate subsequent phase's basic service fees should the scope change significantly upon completion of the schematic design. 2.2 ADDITIONAL SERVICES 2.2.1 Compensation for Additional Services are stated below: James R. Kirkpatrick, FAIA $175/hour Project Manager 11 $140/hour Project Manager I $115/hour Technical Staff II $110/hour Technical Staff I $ 90/hour Expenses 1.10 times the cost Consultants have their own hourly rate structure. 2.2.2 Compensation for Additional Services of outside consultants, including additional engineering services shall be negotiated prior to delivery of the actual service. 2.3 REIMBURSABLE EXPENSES Reimbursable Expenses are expenses incurred by the Design Professional, the Design Professional's employees and consultants in the interest of the Project as defined in the General Conditions but not to exceed a total of $10,000 without the prior written approval of the Owner. Page 5 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 SECTION 3 ENTIRE AGREEMENT This Agreement includes this executed agreement and the following documents all of which are attached hereto and made a part hereof by reference as if fully set forth herein: City of Denton General Conditions to Agreement for Architectural or Engineering Services. 2. Attachment A -The Design Professional's Proposal, Project Schedule, and Pricing Attachments B — Awarded Contractor's documentation, including W-9 form, and Conflict of Interest documentation. 4. Attachment C — Awarded Contractor's certificate of insurance documentation. This Agreement is signed by the parties hereto effective as of the date first above written. CITY OF DENTON TODD HILEMAN CITY MANAGER ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY ®ocu5igne€@ 6y; BY:a� G829996U 2'.B439... JAMES R. KIRKPATRICK, ARCHITECT, INC. DBA KIRKPATRICK ARCHITECTURE STUDIO DENTON, TEXAS u5igneti tsy; BY:FDOC uw t,S 6 " atn JA?VtE@&0WKTRKPATR1CK, PRESIDENT Page 6 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 CITY OF DENTON GENERAL CONDITIONS TO AGREEMENT FOR ARCHITECTURAL OR ENGINEERING SERVICES ARTICLE 1. ARCHITECT OR ENGINEER'S RESPONSIBILITIES 1.1 The Architect or Engineer's services consist of thosc services for the Project (as defincd in the agreement (the "Agrcemcnt") and proposal (the "Proposal") to which these General Conditions are attached) performed by the Architect or Engineer (hereinafter called the "Design Professional") or Design Professional's employees and consultants as enumerated in Articles 2 and 3 of these General Conditions as modified by the Agreement and Proposal (the "Services"). 1.2 The Design Professional will perform all Services as an independent contractor to the prevailing professional standards consistent with the level of care and skill ordinarily exercised by members of the same profession currently practicing in the same locality ander similar conditions, including reasonable, informed judgments and prompt timely actions (the `'Degree of Care"). The Services shall be performed as expeditiously as is consistent with the Degree of Care necessary for the orderly progress of the Project. Upon request of the Owner, the Design Professional shall submit for the Owner's approval a schedule for the performance of the Services which may be adjusted as the Project proceeds, and shall include allowances for periods of time required for the Owner's review and for approval of submissions by authorities having jurisdiction over the Project. Time limits established by this schedule and approved by the Owner shall not, except for reasonable cause, be exceeded by the Design Professional or Owner, and any adjustments to this schedule shall be mutually acceptable to both parties. ARTICLE 2 SCOPE OF BASIC SERVICES 2.1 BASIC SERVICES DEFINED The Design Professional's Basic Services consist of those described in Sections 2.2 through 2.6 of these General Conditions and include without limitation normal structural, civil, mechanical and electrical engineering services and any other engineering services necessary to produce a complete and accurate set of Construction Documents, as described by and required in Section 2.4. The Basic Services may be modified by the Agreement. 2.2 SCHEMATIC DESIGN PHASE 2.2.1 The Design Professional, in consultation with the Owner, shall develop a written program for the Project to ascertain Owner's needs and to establish the requirements for the Project. 2.2.2 The Design Professional shall provide a preliminary evaluation of the Owner's program, construction schedule and construction budget requirements, each in tams of the other, subject to the limitations set forth in Subsection 5.2.1. 2.2.3 The Design Professional shall review with the Owner alternative approaches to design and construction of the Project. 2.2.4 Based on the mutually agreed-upon program, schedule and construction budget requirements, the Design Professional shall prepare, for approval by the Owner, Schematic Design Documents consisting of drawings and other documents illustrating the scale and relationship of Project components. The Schematic Design shall contemplate compliance with all applicable laws, statutes, ordinances, codes and regulations. 2.2.5 The Design Professional shall submit to the Owner a preliminary detailed estimate of Construction Cost based on current area, volume or other unit costs and which indicates the cost of each category of work involved in constructing the Project and establishes an elapsed time factor for the period of time from the commencement to the completion of construction. 2.3 DESIGN DEVELOPMENT PHASE 2.3.1 Based on the approved Schematic Design Documents and any adjustments authorized by the Omer in the program, schedule or construction budget, the Design Professional shall prepare for approval by the Owner, Design Development Documents consisting of drawings and other documents to fix and describe the size and character of the Project as to architectural, structural, mechanical and electrical systems, materials and such other elements as may be appropriate, which shall comply with all applicable laws, statutes, ordinances, codes and regulations. Notwithstanding Owner's approval of the documents, Design Professional represents that the Documents and specifications will be sufficient and adequate to fulfill the purposes of the Project. 2.3.2 The Design Professional shall advise the Owner of any adjustments to the preliminary estimate of Construction Cost in a further Detailed Statement as described in Section 2.2.5. 2.4 CONSTRUCTION DOCUMENTS PHASE 2.4.1 Based on the approved Design Development Documents and any further adjustments in the scope or quality of the Project or in the construction budget authorized by the Owner, the Design Professional shall prepare, for approval by the Owner, Construction Documents consisting of Drawings and Specifications setting forth in detail requirements for the construction of the Project, which shall comply with all applicable laws, statutes, ordinances, codes and regulations. 2.4.2 The Design Professional shall assist the Owner in the preparation of the necessary bidding or procurement information, bidding or procurement forms, the Conditions of the contract, and the form of Agreement between the Owner and contractor. 2.4.3 The Design Professional shall advise the Owner of any adjustments to previous preliminary estimates of Construction Cost indicated by changes in requirements or general market conditions. 2.4.4 The Design Professional shall assist the Owner in connection with the Owner's responsibility for filing documents required for the approval of governmental authorities having jurisdiction over the Project. 2.5 CONSTRUCTION CONTRACT PROCUREMENT 2.5.1 The Design Professional, following the Owner's approval of the Construction Documents and of the latest preliminary detailed estimate of Construction Cost, shall assist the Owner in procuring a construction contract for the Project through any procurement method that is legally applicable to the Project including without Page 7 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 limitation, the competitive sealed bidding process. Although the Owner will consider the advice of the Design Professional, the award of the construction contract is in the sole discretion ofthe Owner. 2.5.2 if the construction contract amount for the Project exceeds the total construction cost of the Project as set forth in the approved Detailed Statement of Probable Construction Costs of the Project submitted by the Design Professional, then the Design Professional, at its sole cost and expense, will revise the Construction Documents as may be required by the Owner to reduce or modify the quantity or quality of the work so that the total construction cost of the Project will not exceed the total construction cost set forth in the approved Detailed Statement of Probable Construction Costs. 2.6 CONSTRUCTION PHASE - ADNHNISTRATION OF THE CONSTRUCTION CONTRACT 2.6.1 The Design Professional's responsibility to provide Basic Services for the Construction Phase under this Agreement commences with the award of the Contract for Construction and terminates at the issuance to the Owner of the final Certificate for Payment, unless extended under the terms of Subsection 8.3.2. 2.6.2 The Design Professional shall provide detailed administration of the Contract for Construction as set forth below. For design professionals the administration shall also be in accordance with AIA document A201, General Conditions of the Contract for Construction, current as of the date of the Agreement as may be amended by the City of Denton special conditions, unless otherwise provided in the Agreement. For engineers the administration shall also be in accordance with the Standard Specifications for Public Works Construction by the North Central Texas Council of Governments, current as of the date of the Agreement, unless otherwise provided in the Agreement. 2.6.3 Construction Phase duties, responsibilities and limitations of authority of the Design Professional shall not be restricted, modified or extended without written agreement of the Owner and Design Professional. 2.6.4 The Design Professional shall be a representative of and shall advise and consult with the Owner (1) during construction, and (2) at the Owner's direction from time to time during the correction, or warranty period described in the Contract for Construction. The Design Professional shall have authority to act on behalf of the Owner only to the extent provided in the Agreement and these General Conditions, unless otherwise modified by written instrument. 2.6.5 The Design Professional shall observe the construction site at least one time a week, while construction is in progress, and as reasonably necessary while construction is not in progress, to become familiar with the progress and quality of the work completed and to determine if the work is being performed in a mariner indicating that the work when completed will be in accordance with the Contract Documents. Design Professional shall provide Owner a written report subsequent to each on-site visit. On the basis of on-site observations the Design Professional shall keep the Owner informed of the progress and quality of the work, and shall exercise the Degree of Care and diligence in discovering and promptly reporting to the Owner any observable defects or deficiencies in the work of Contractor or any subcontractors. The Design Professional represents that he will follow Degree of Care in performing all Services under the Agreement. The Design Professional shall promptly correct any defective designs or specifications furnished by the Design Professional at no cost to the Owner. The Owner's approval, acceptance, use of or payment for all or any part of the Design Professional's Services hereunder or of the Project itself shall in no way alter the Design Professional's obligations or the Owner's rights hereunder. 2.6.6 The Design Professional shall not have control over or charge of and shall not be responsible for construction means, methods, techniques, sequences or procedures, or for safety precautions and programs in connection with the work. The Design Professional shall not be responsible for the Contractor's schedules or failure to carry out the work in accordance with the Contract Documents except insofar as such failure may result from Design Professional's negligent acts or omis- sions. The Design Professional shall not have control over or charge of acts or omissions of the Contractor, Subcontractors, or their agents or employees, or of any other persons performing portions of the work. 2.6.7 The Design Professional shall at all rimes have access to the work wherever it is in preparation or progress. 2.6.8 Except as may otherwise be provided in the Contract Documents or when direct communications have been specially authorized, the Owner and Contractor shall communicate through the Design Professional. Coni rrunications by and with the Design Professional's consultants shall be through the Design Professional. 2.6.9 Based on the Design Professional's observations at the site of the work and evaluations of the Contractor's Applications for Payment, the Design Professional shall review and certify the amounts due the Contractor. 2.6.10 The Design Professional's certification for payment shall constitute a representation to the Owner, based on the Design Professional's observations at the site as provided in Subsection 2.6.5 and on the data comprising the Contractor's Application for Payment, that the work has progressed to the point indicated and that the quality of the Work is in accordance with the Contract Documents. The foregoing representations are subject to minor deviations from the Contract Documents cor- rectable prior to completion and to specific qualifications expressed by the Design Professional. The issuance of a Certificate for Payment shall further constitute a representation that the Contractor is entitled to payment in the amount certified. However, the issuance of a Certificate for Payment shall not be a representation that the Design Professional has (1) reviewed construction means, methods, techniques, sequences or procedures, or (2) ascertained how or for what purpose the Contractor has used money previously paid on account of the Contract Sum. 2.6.11 The Design Professional shall have the responsibility and authority to reject work which does not conform to the Contract Documents. Whenever the Design Professional considers it necessary or advisable for implementation of the intent of the Contract Documents, the Design Professional will have authority to require additional inspection or testing of the work in accordance with the provisions of the Contract Documents, whether or not such Work is fabricated, installed or completed. However, neither this authority of the Design Professional nor a decision made in good faith either to exercise or not exercise such authority shall give rise to a duty or responsibility of the Design Professional to the Contractor, Subcontractors, material and equipment suppliers, their agents or employees or other persons performing portions of the work. 2.6.12 The Design Professional shall review and approve or take other appropriate action upon Contractor's submittals such as Shop Drawings, Product Data and Samples for the purpose of (1) determining compliance with applicable laws, statutes, ordinances and codes; and (2) determining whether or not the work, when completed, will be in compliance with the requirements of the Contract Documents. The Design Professional shall act with such reasonable promptness to cause no delay in the work or in the construction of the Owner or of separate contractors, while allowing sufficient time in the Design Professional's professional judgment to permit adequate review. Review of such submittals is not conducted for the purpose of determining the accuracy and completeness of other details such as dimensions and quantities or for substantiating instructions for installation or performance of equipment or systems designed by the Contractor, all of which remain the responsibility of the Contractor to the extent required by the Contract Documents. The Design Professional's review shall not constitute approval of safety precautions or, unless otherwise specifically stated by the Design Professional, of construction means, methods, techniques, sequences or procedures. The Design Professional's approval of a specific item shall not indicate approval of an assembly of wlrich the item is a component. When professional certification of performance characteristics Page 8 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 of materials, systems or equipment is required by the Contract Documents, the Design Professional shall be entitled to rely upon such certification to establish that the materials, systems or equipment will meet the performance criteria required by the Contract Documents. 2.6.13 The Design Professional shall prepare Change Orders and Construction Change Directives, with supporting documentation and data if deemed necessary by the Design Professional as provided in Subsections 3.1.1 and 3.3.3, for the Owner's approval and execution in accordance with the Contract Documents, and may authorize minor changes in the work not involving an adjustment in the Contract Sum or an extension of the Contract Time which are not inconsistent with the intent of the Contract Documents. 2.6.14 On behalf of the Owner, the Design Professional shall conduct inspections to determine the dates of Substantial Completion and Final Completion, and if requested by the Owner shall issue Certificates of Substantial and Final Completion. The Design Professional will receive and review written guarantees and related documents required by the Contract for Construction to be assembled by the Contractor and shall issue a final certificate for Payment upon compliance with the requirements of the Contract Documents. 2.6.15 The Design Professional shall interpret and provide recommendations on matters concerning performance of the Owner mid Contractor wider the requirements of the Contract Documents on written request of either the Owner or Contractor. The Design Professional's response to such requests shall be made with reasonable promptness and with in any time limits agreed upon. 2.6.16 Interpretations and decisions of the Design Professional shall be consistent with the intent of and reasonably inferable from the Contract Documents and shall be in writing or in the forth of drawings. When making such interpretations and initial decisions, the Design Professional shall endeavor to secure faithful performance by both Owner and Contractor, and shall not be liable for results or interpretations or decisions so rendered in good faith in accordance with all the provisions of this Agreement and in the absence of negligence. 2.6.17 The Design Professional shall render written decisions within a reasonable time on all claims, disputes or other matters in question between the Owner and Contractor relating to the execution or progress of the work as provided in the Contract Documents. 2.6.18 The Design Professional (1) shall render services under the Agreement in accordance with the Degree of Care; (2) will reimburse the Owner for all damages caused by the defective designs the Design Professional prepares; and (3) by acknowledging payment by the Owner of any fees due, shall not be released from any rights the Owner may have under the Agreement or diminish any of the Design Professional's obligations thereunder. 2.6.19 The Design Professional shall provide the Owner with four sets of reproducible prints showing all significant changes to the Construction Documents during the Construction Phase. ARTICLE 3 ADDITIONAL SERVICES 3.1 GENERAL 3.1.1 The set -vices described in this Article 3 are not included in Basic Services unless so identified in the Agreement or Proposal, and they shall be paid for by the Owner- as provided in the Agreement, in addition to the compensation for Basic Services. The services described under Sections 3.2 and 3.4 shall only be provided if authorized or confirmed in writing by the Owner. If services described under Contingent Additional Services in Section 33 are required due to circumstances beyond the Design Professional's control, the Design Professional shall notify the Owner in writing and shall not commence such additional services until it receives written approval from the Owner to proceed. If the Owner indicates in waiting that all or part of such Contingent Additional Services are not required, the Design Professional shall have no obligation to provide those services. Owner will be responsible for compensating the Design Professional for Contingent Additional Services only if they are not required due to the negligence or fault of Design Professional. 3.2 PROJECT REPRESENTATION BEYOND BASIC SERVICES 3.2.1 If more extensive representation at the site than is described in Subsection 2.6.5 is required, the Design Professional shall provide one or more Project Representatives to assist in carrying out such additional on-site responsibilities. 3.2.2 Project Representatives shall be selected, employed and directed by the Design Professional, and the Design Professional shall be compensated therefor as agreed by the Owner and Design Professional. 3.3 CONTINGENT ADDITIONAL SERVICES 3.3.1 Making material revisions in Drawings, Specifications or other documents when such revisions are: I. inconsistent with approvals or instructions previously given by the Owner, including revisions made necessary by adjusttnents in the Owner's program or Project budget; 2. required by the enactment or revision of codes, laws or regulations subsequent to the preparation of such documents, or 3. due to changes required as a result of the Owner's failure to render decision in a timely manner. 3.3.2 Providing services required because of significant changes in the Project including, but not limited to, size, quality, complexity, or the Owner's schedule, except for services required under Subsection 2.5.2. 3.3.3 Preparing Drawings, Specifications and other docwnentation and supporting data, and providing other services in connection with Change Orders and Construction Change Directives. 3.3.4 Providing consultation concerning replacement of work damaged by fire or other cause dining construction, and furnishing services required in connection with the replacement of such work. 3.3.5 Providing services made necessary by the default of the Contractor, by major detects or deficiencies in the work of the Contractor, or by failure of performance of either the Owner or Contractor wider the Contract for Construction. Page 9 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 3.3.6 Providing services in evaluating an extensive number of claims submitted by the Contractor or others in connection with the work. 3.3.7 Providing services in connection with a public hearing, arbitration proceeding or legal proceeding except where the Design Professional is party thereto 3.3.8 Providing services in addition to those required by Article 2 for preparing documents for alternate, separate or sequential bids or providing services in connection with bidding or construction prior to the completion of the Construction Documents Phase. 3.3.9 Notwithstanding anything contained in the Agreement, Proposal or these General Conditions to the contrary, all services described in this Article 3 that arc caused or necessitated in whole or in part due to the negligent act or omission of the Design Professional shall be performed by the Design Professional as a part of the Basic Services under the Agreement with no additional compensation above and beyond the compensation due the Design Professional for the Basic Services. The intervening or concurrent negligence of the Owner shall not limit the Design Professional's obligations under this Subsection 3.3.9. 3.4 OPTIONAL ADDITIONAL SERVICES 3.4.1 Providing financial feasibility or other special studies. 3.4.2 Providing planning surveys, site evaluations or comparative studies ofprospective sites. 3.4.3 Providing special surveys, environmental studies and submissions required for approvals of governmental authorities or others having jurisdiction over the Project. 3.4.4 Providing services relative to future facilities, systems and equipment. 3.4.5 Providing services to investigate existing conditions or facilities or to make measured drawings thereof. 3.4.6 Providing services to verify the accuracy of drawings or other information furnished by the Owner. 3.4.7 Providing coordination of construction performed by separate contactors or by the Owner's own forces and coordination of services required in connection with construction performed and equipment supplied by the Owner. 3.4.8 Providing detailed quantity surveys or inventories of material, equipment and labor. 3.4.9 Providing analyses of operating and maintenance costs. 3.4.10 Making investigations, inventories of materials or equipment, or valuations and detailed appraisals of existing facilities. 3.4.12 Providing assistance in the utilization of equipment or systems such as testing, adjusting and balancing, preparation of operation and maintenance manuals, training personnel for operation and maintenance and consultation during operation. 3.4.13 Providing interior design and similar services required for or in connection with the selection, procurement or installation of furniture, furnishings and related equipment. 3.4.14 Providing services other than as provided in Section 2.6.4, after issuance to the Owner of the final Certificate for Payment and expiration of the Warranty period of the Contract for Construction. 3.4.15 Providing services of consultants for other than architectural, civil, structural, mechanical and electrical engineering portions of the Project provided as apart of Basic Services. 3.4.16 Providing any other services not otherwise included in this Agreement or not customarily furnished in accordance with generally accepted architectural practice. 3.4.17 Preparing a set of reproducible record drawings in addition to those required by Subsection 2.6.19, showing significant changes in the work made during con- struction based on marked -up prints, drawings and other data furnished by the Contractor to the Design Professional. 3.4.18 Notwithstanding anything contained in the Agreement, Proposal or these General Conditions to the contrary, all services described in this Article 3 that are caused or necessitated in whole or in part due to the negligent act or omission of the Design Professional shall be performed by the Design Professional as a part of the Basic Services under the Agreement with no additional compensation above and beyond the compensation due the Design Professional for the Basic Services. The intervening or concurrent negligence ofthe Owner shall not limit the Design Professional's obligations under this Subsection 3.4.1 S. ARTICLE 4 OWNER'S RESPONSIBILITIES 4.1 The Owner shall consult with the Design Professional regarding requirements for the Project, including (1) the Owner's objectives, (2) schedule and design constraints and criteria, including space requirements and relationships, flexibility, expendability, special equipment, systems and site requirements, as more speci- fically described in Subsection 2.2.1. 4.2 The Owner shall establish and update an overall budget for the Project, including the Construction Cost, the Owner's other costs and reasonable contingencies related to all of these costs. 4.3 If requested by the Design Professional, the Owner shall furnish evidence that financial arrangements have been made to fulfill the Owner's obligations under this Agreement. 4.4 The Owner shall designate a representative authorized to act on the Owner's behalf-,vith respect to the Project. The Owner or such authorized representative shall render decisions in a timely manner pertaining to documents submitted by the Design Professional in order to avoid rnueasonable delay in the orderly and sequential progress of the Design Professional's services. Page 10 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 4.5 Where applicable, the Owner shall furnish surveys describing physical characteristics, legal limitations and utility locations forthe site ofthe Project, and a written legal description of the site. The surveys and legal information shall include, as applicable, grades and lines of streets, alleys, pavements and adjoining property and structures; adjacent drainage; rights-of-way, restrictions, easements, encroachments, zoning, deed restrictions, boundaries and contours of the site; locations, dimensions and necessary data pertaining to existing buildings, other improvements and trees; and information concerning available utility services and lines, both public and private, above and below grade, including inverts and depths. All the information on the survey shall be referenced to a project benchmark. 4.6 Where applicable, the Owner shall furnish the scr-6ccs of geotechnical engineers when such services arc requested by the Design Professional. Such services may include but are not limited to test borings, test pits, determinations of soil bearing values, percolation tests, evaluations of hazardous materials, grotind corrosion and rc- sistivity, tests, including necessary operations for anticipating sub -soil conditions, with reports and appropriate professional recommendations. 4.6.1 The Owner shall furnish the services of other consultants when such services are reasonably required by the scope of the Project and are requested by the Design Professional and are not retained by the Design Professional as part of its Basic Services or Additional Services. 4.7 When not a part of the Additional Services, the Owner shall furnish structural, mechanical, chemical, air and water pollution tests, tests of hazardous materials, and other laboratory and environmental tests, inspections and reports required by law or the Contract Documents. 4.8 The Owner shall furnish all legal, accounting and insurance counseling services as may be necessary at any time for the Project, including auditing services the Owner may require to verify the Contractor's Applications for Payment or to ascertain how or for what purposes the Contractor has used the money paid by or on behalf of the Owner. 4.9 The services, information, surveys and reports required by Owner tinder Sections 4.5 through 4.8 shall be furnished at the Owner's expense, and the Design Professional shall be entitled to rely upon the accuracy and completeness thereof in the absence of any negligence on the part of the Design Professional. 4.10 The Owner shall give prompt written notice to the Design Professional if the Owner becomes aware of any fault or defect in the Project or nonconformance with the Contract Documents. 4.11 Design Professional shall propose language for certificates or certifications to be requested of the Design Professional or Design Professional's consultants and shall submit such to the Owner for review and approval at least fourteen (14) days prior to execution. The Owner agrees not to request certifications that would require knowledge or services beyond the scope of the Agreement. ARTICLES CONSTRUCTION COST 5.1 CONSTRUCTION COST DEFINED 5.1.1 The Construction Cost shall be the total cost or estimated cost to the Owner of all elements of the Project designed or specified by the Design Professional. 51.2 The Construction Cost shall include the cost at current market rates of labor and materials furnished by the Owner and equipment designed, specified, selected or specially provided for by the Design Professional, plus a reasonable allowance for the Contractor's overhead and profit. In addition, a reasonable allowance for con- tingencies shall be included for market conditions at the time ofbidding and for changes in the work during construction. 5.1.3 Construction Cost does not include the compensation of the Design Professional and Design Professional's consultants, the costs of the land, rights-of-way, financing or other costs which are the responsibility of the Owner as provided in Article 4. 5.2 RESPONSIBILITY FOR CONSTRUCTION COST 5.2.1 Evaluations of the Owner's Project budget, preliminary estimates of Construction Cost and detailed estimates of Construction Cost prepared by the Design Professional represent the Design Professional's best judgment as a design professional familiar with the construction industry. It is recognized, however, that neither the Design Professional nor the Owner has control over the cost of labor, materials or equipment, over the Contractor's methods of determining bid prices, or over competitive bidding or market conditions. Accordingly, the Design Professional cannot and does not warrant or represent that bids or cost proposals will not vary from the Owner's Project budget or from any estimate of Construction Cost or evaluation prepared or agreed to by the Design Professional. 5.2.2 No fixed limit of Construction Cost shall be established as a condition of the Agreement by the furnishing, proposal or establishment of a Project budget, unless such fixed limit has been agreed upon in writing and signed by the parties thereto. If such a fixed limit has been established, the Design Professional shall be permitted to include contingencies for design, bidding and price escalation, to determine what materials, equipment, component systems and types of construction are to be included in the Contract Documents, to make reasonable adjustments in the scope of the Project and to include in the Contract Documents alternate bids to adjust the Construction Cost to the fixed limit. Fixed limits, if any, shall be increased in the amount of an increase in the Contract Sum occurring after execution ofthe Contract for Construction. 5.2.3 If the Procurement Phase has not commenced within 90 days after the Design Professional submits the Construction Documents to the Owner, any Project budget or fixed limit of Construction Cost shall be adjusted to reflect changes in the general level of prices in the construction industry between the date of submission of the Construction Documents to the Owner and the date on which proposals are sought. ARTICLE 6 OWNERSHIP AND USE OF DOCUMENTS 6.1 The Drawings, Specifications and other documents prepared by the Design Professional for this Project are instruments of the Design Professional's service and shall become the property of the Owner upon termination or completion of the Agreement. The Design Professional is entitled to retain topics of all such documents. Such documents are intended only be applicable to this Project, and Owner's use of such documents in other projects shall be at Owner's sole risk and expense. In the event the Owner uses any of the information or materials developed pursuant to the Agreement in another project or for other purposes than are specified in the Agreement, the Design Professional is released from any and all liability relating to their use in that project 6.2 Submission or distribution of documents to meet official regulatory requirements or for similar purposes in connection with the Project is not to be construed as publication in derogation of the Design Professional's reserved rights. Page 11 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 ARTICLE 7 TERMINATION, SUSPENSION OR ABANDONMENT 7.1 The Design Professional may terminate the Agreement upon not less than thirty days written notice should the Owner fail substantially to perform in accordance with the terms of the Agreement through no fault of the Design Professional. Owner may terminate the Agreement or any phase thereof with or without cause upon thirty (30) days prior written notice to the Design Professional. All work and labor being performed under the Agreement shall cease immediately upon Design Professional's receipt of such notice. Before the end of the thirty (30) day period, Design Professional shall invoice the Owner for all work it satisfactorily performed prior to the receipt of such notice. No amount shall be due for lost or anticipated profits. All plans, field surveys, and other data related to the Project shall become property of the Ownerupon termination of the Agreement and shall be promptly delivered to the Owner in a reasonably organized toren. Should Owner subsequently contract with a new Design Professional for continuation of services on the Project, Design Professional shall cooperate in providing information. 7.2 If the Project is suspended by the Owner for more than 30 consecutive days, the Design Professional shall be compensated for services satisfactorily performed prior to notice of such suspension. When the Project is resumed, the Design Professional's compensation shall be equitably adjusted to provide for expenses incurred in the interruption and resumption ofthe Design Professional's services. 7.3 The Agreement may be terminated by the Owner upon not less than seven days written notice to the Design Professional in the event that the Project is permanently abandoned. If the Project is abandoned by the Owner for more than 90 consecutive days, the Design Professional or the Owner may terminate the Agreement by giving written notice. 7.4 Failure of the Owner to make payments to the Design Professional for work satisfactorily completed in accordance with the Agreement shall be considered substantial non- performance and cause for termination. 7.5 If the Owner fails to make payment to Design Professional within thirty (30) days of receipt of a statement for services properly and satisfactorily performed, the Design Professional may, upon seven days written notice to the Owner, suspend performance of services under the Agreement. 7.6 In the event of termination not the fault of the Design Professional, the Design Professional shall be compensated for services properly arid satisfactorily performed prior to termination. ARTICLE 8 PAYMENTS TO THE DESIGN PROFESSIONAL 8.1 DIRECT PERSONNEL EXPENSE 8.1.1 Direct Personnel Expense is defined as the direct salaries of the Design Professional's personnel engaged on the Project and the portion of the cost of their mandatory and customary contributions and benefits related thereto, such as employment taxes and other statutory employee benefits, insurance, sick leave, holidays, vacations, pensions and similar contributions and benefits. 8.2 REIMBURSABLE EXPENSES 8.2.1 Reimbursable Expenses are in addition to compensation for Basic and Additional Services and include expenses incurred by the Design Professional and Design Professional's employees and consultants in the interest of the Project, as identified in the following Clauses. 8.2.1.1 Expense of transportation in connection A4th the Project; expenses in connection A4th authorized out-of-towm travel; long-distance communications; and fees paid for securing approval of authorities having jurisdiction over the Project. 8.2.1.2 Expense of reproductions (except the reproduction of the sets of documents referenced in Subsection 2.6.19), postage and handling of Drawings, Specifications and other documents. 8.2.1.3 If authorized in advance by the Owner, expense of overtime work requiring higher than regular rates. 8.2.1.4 Expense of renderings, models and mock-ups requested by the Owner. 8.2.1.5 Expense of computer-aided design and drafting equipment time when used in connection with the Project. 8.2.1.6 Other expenses that are approved in advance in writing by the Owner. 8.3 PAYMENTS ON ACCOUNT OF BASIC SERVICES 8.3.1 Payments for Basic Services shall be made monthly and, where applicable, shall be in proportion to services performed within each phase of service, on the basis set forth in Section 2 of the Agreement and the schedule of work. 8.3.2 If and to the extent that the time initially established in the Agreement is exceeded or extended through no fault of the Design Professional, compensation for any services rendered during the additional period of time shall be computed in the manner set forth in Section 2 of the Agreement. 8.3.3 When compensation is based on a percentage of Construction Cost and any portions of the Project are deleted or othenvise not constructed, compensation for those portions of the Project shall be payable to the extent services are performed on those portions, in accordance with the schedule set forth in Section 2 of the Agreement based on (1) the lowest bona tide bid or (2) if no such bid or proposal is received, the most recent preliminary estimate of Construction Cost or detailed estimate of Constriction Cost for such portions of the Project. 8.4 PAYMENTS ON ACCOUNT OF ADDITIONAL SERVICES 8.4.1 Payments on account of the Design Professional's Additional Services and for Reimbursable Expenses shall be made monthly within 30 days after the presentation to the Owner of the Design Professional's statement of services rendered or expenses incurred. 8.5 PAYMENTS WITHHELD No deductions shall be made from the Design Professional's compensation on account of penalty, liquidated damages or other sums withheld firm payments to contractors, or on account of the cost of changes in the work other than those for which the Design Professional is responsible. Page 12 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 8.6 DESIGN PROFESSIONAL'S ACCOUNTING RECORDS Design Professional shall make available to Omer or Owner's authorized representative records of Reimbursable Expenses and expenses pertaining to Additional Services and services performed on the basis of a multiple of Direct Personnel Expense for inspection and copying during regular business hours for three years after the date of the final Certificate of Payment, or until any litigation related to the Project is final, whichever date is later. ARTICLE 9 INDEMNITY 9.1 The Design Professional shall indemnify and save and hold harmless the Omer and its officers, agents, and employees from and against any and all liability, claims, demands, damages, losses, and expenses, including, but not limited to court costs and reasonable attorney fees incurred by the Owner, and including, without limitation, damages for bodily and personal injury, death and property damage, resulting from the negligent acts or omissions of the Design Professional or its officers, shareholders, agents, or employees in the performance of the Agreement. 9.2 Nothing herein shall be construed to create a liability to any person who is not a party to the Agreement, and nothing herein shall waive any of the parties' defenses, both at law or equity, to any claim, cause of action, or litigation filed by anyone not a party to the Agreement, including the defense of governmental immunity, which defenses are hereby expressly reserved. ARTICLE 10 INSURANCE During the performance of the Services under the Agreement, Design Professional shall maintain the following insurance with an insurance company licensed or authorized to do business in the State of Texas by the State Insurance Commission or any successor agency that has a rating with Best Rate Carriers of at least an A- or above: 10.1 Comprehensive General Liability insurance with bodily injury limits of not less than $1,000,000 for each occurrence and not less than $2,000,000 in the aggregate, and with property damage limits of not less than $100,000 for each occurrence and not less than $250,000 in the aggregate. 10.2 Automobile Liability hisurance with bodily injury limits of not less than $500,000 for each person and not less than $500,000 for each accident, and with property damage limits of not less than $100,000 for each accident. 10.3 Worker's Compensation Insurance in accordance with statutory requirements, and Employers' Liability Insurance with limits of not less than $100,000 for each accident including occupational disease. 10.4 Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate. 10.5 The Design Professional shall furnish insurance certificates or insurance politics to the Owner evidencing insurance in compliance with this Article 10 at the time of the execution of the Agreement. The General Liability and Automobile Liability insurance policies shall name the Owner as an additional insured, the Workers' Compensation policy shall contain a waiver of subrogation in favor of the Owner, and each policy shall contain a provision that such insurance shall not be canceled or modified without thirty (30) days' prior written notice to Owner and Design Professional. In such event, the Design Professional shall, prior to the effective date of the change or cancellation, ftunish Owner with substitute certificates of insurance meeting the requirements of this Article 10. ARTICLE 11 MISCELLANEOUS PROVISIONS 11.1 The Agreement shall be governed by the laws of the State of Texas. Venue of any suit or cause of action under the Agreement shall lie exclusively in Denton County, Texas. 11.2 The Owner and Design Professional, respectively, bind themselves, their partners, successors, assigns and legal representatives to the other parry to this Agreement and to the partners, successors, assigns and legal representatives of such other party with respect to all covenants of this Agreement The Design Professional shall not assign its interests in the Agreement without the written consent of the Owner. 11.3 The term Agreement as used herein includes the executed Agreement, the Proposal, these General Conditions and other attachments referenced in Section 3 of the Agreement which together represent the entire and integrated agreement between the Owner and Design Professional and supersedes all prior negotiations, representations or agreements, either written or oral. The Agreement may be amended only by written instrument signed by both Owner and Design Professional. When interpreting the Agreement the executed Agreement, Proposal, these General Conditions and the other attachments referenced in Section 3 of the Agreement shall to the extent that is reasonably possible be read so as to harmonize the provisions. However, should the provisions of these documents be in conflict so that they can not be reasonably harmonized, such documents shall be given priority in the following order: 1. The executed Agreement 2. Attachments referenced in Section 3 of the Agreement other than the Proposal 3. These General Provisions 4. The Proposal 11.4 Nothing contained in the Agreement shall create a contractual relationship with or a cause of action in favor of a third parry against either the Owner or Design Professional. 11.5 Upon receipt of prior written approval of Owner, the Design Professional shall have the right to include representations of the design of the Project, including photographs of the exterior and interior, among the Design Professional's promotional and professional materials. The Design Professional's materials shall not include the Owner's confidential or proprietary information if the Owner has previously advised the Design Professional in writing of the specific information considered by the Owner to be confi- dential or proprietary. The Owner shall provide professional credit for the Design Professional on the construction sign and in the promotional materials for the Project. 11.6 Approval by the Owner shall not constitute, nor be deemed a release of the responsibility and liability of the Design Professional, its employees, associates, agents, subcontractors, and subconsultants for the accuracy and competency of their designs or other work; nor shall such approval be deemed to be an assumption of such responsibility by the Owner for any defect in the design or other work prepared by the Design Professional, its employees, subcontractors, agents, and consultants. Page 13 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 11.7 All notices, communications, and reports required or permitted under the Agreement shall be personally delivered or mailed to the respective parties by depositing same in the United States mail to the address shown below signature block on the Agreement, certified mail, return receipt requested, unless otherwise specified herein. All notices shall be deemed effective upon receipt by the party to whom such notice is given, or within three (3) days after mailing. 11.8 If any provision of the Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of the Agreement and shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform the Agreement to replace such stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the stricken provision. 11.9 The Design Professional shall comply with all federal, state, and local laws, rules, regulations, and ordinances applicable to the work covered hereunder as they may now read or hereinafter be amended during the term of this Agreement. 11.10 In performing the Services required hereunder, the Design Professional shall not discriminate against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or physical handicap. 11.11 The captions of the Agreement are for informational purposes only, and shall not in anyway affect the substantive terms or conditions of the Agreement. Adopted 06/29/2007 Page 14 DocuSigi 3254-0557-4EBD-AC29-14DEF89475C4 EX4]MR1Y3T B 28 March 2017 Mr. Herman Lawson Special Projects Coordinator Facilities Management City of Denton 869 S Woodrow Lane Denton, Texas 76205 Re: Design Services Fire Station No. 3 Dear Mr. Lawson: It is a pleasure to again offer services to the City of Denton. We have met with the Fire Department's Design Committee and have had several conversations with Deputy Chief Kenneth Hedges. The understanding we gained has shaped the following proposal. Project Understanding We understand the project to use the spaces, arrangements, and concepts that were developed for Fire Stations No. 2 and No. 4. But, the form, elevations, and materials will reflect to the University of North Texas's design guidelines and campus aesthetic. Additionally, the station shall be designed to support a second truck company and a battalion chief. Thus, from the design of Station No. 2, two sleep rooms and one shower room will be added, along with two office suites. The dayroom and bunker room will need to be enlarged to accommodate the larger crew and the tower shall be removed. If necessary, two of the four days can be reduced from seventy-five to sixty-five feet clear, with the other two being reduced to fifty feet clear. Finally, a police office will be added, If the bays aren't reduced, then a quick estimate finds the total size of the additional scope to be approximately 1,800 square feet. Adding that additional square footage to the approximate14,000 square feet of Station No. 4 renders a size of approximately 15,800 square feet for Station No. 3. Preliminary site plans suggest that the bays will not need to be reduced to fit on the site. But if reduced as discussed above, then approximately 1,000 square feet could be reduced. Our experience suggests that if the project is sufficiently funded, then the bays will not be reduced. Using Station No. 2 and recent cost estimate is problematic, since the different form will necessitate a different structural system. But for us to understand the scale of the project, we used an educated guess of $395/square foot. This cost is heavily dependent on many factors including the complexity of the building, the structural system, the building's veneer, its level of finishes, the level of quality, and the any specialized components. While understanding that the bays are likely the least cost per square foot in the building, if we use the same cost factor for the both the full-size bay option and the reduced bay option then the range of cost is approximately $5,850,000 to $6,250,000. Scope of Basic Services KAS' services include those necessary for the design and preparation of documents for the referenced Project. We envision the process as collaborative and as such, the scope may change slightly as the design is developed. 100 West Mulberry- Denton.Texas 940/383.0262fax i DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EX41MB1F3T $ • Page 2 28 March 2017 The duration of the phases and the following compensation are based upon the re -use of spaces, adjacencies, and standards developed and used for Station No.2 and No. 4. If significant, additional changes are made, other than those discussed above, then additional time and compensation may be required. In the description of work in each phase, AIA documents are referenced. In the event that there is conflict between these documents and City of Denton General Conditions. for Building Construction and City ofDenton General Conditions toAgreementforArchitectural or Engineering Services, the City of Denton documents shall dictate. Phase One - Information Gathering and Schematic Design 4 Weeks 1.1. Zoning/Platting Research - KAS will meet with the City of Denton to understand the constraints and parameters affecting the proposed sites. 1.2. Programming - KAS will meet with all appropriate parties to determine a preliminary program. 1.3. Design Meeting - KAS will conduct a one -and -a -half-day design meeting with the owner. The meeting will begin with reviewing the owner's project goals and requirements. Then the program will be refined and a preliminary floor plan and site plan will be produced. 1.4. Schematic Design - KAS will continue to refine the building's plan and elevations until they met the Owner's requirements. KAS will produce a Schematic Design Package for the Owner's review and approval. After approval from the Owner, Design Development Phase will commence. Services in this phase are defined in AIA Document B101, 3.2. 1.5. Pre -Application Submission - KAS will submit to the City a site plan, floor plan, and questions to the City. These plans and questions will be reviewed by the City in advance of the Pre -Application Conference. Deliverables D1. Schematic Design Package D2. Pre -application Package Phase Two - Design Development 8 Weeks 2.1. Design Development - During this phase the documents produced in the Schematic Design Phase are further developed. In this phase the mechanical, electrical, plumbing, and structural systems are refined. Additionally, architectural details such as for doors and windows are produced. KAS will produce a Design Development Package for the Owner's review and approval. After approval from the Owner, Construction Documents Phase will commence. Services in this phase are defined in AIA Document B101, 3.3.1 and 3.3.3. 2.2. Construction Cost Estimate - KAS will send the Design Development Package to a third -party cost estimator for a construction cost estimate. Deliverables D3. Design Development Package D4. Construction Cost Estimate Phase Three - Construction Documents 14 Weeks 3.1. Contract Documents - In this phase, construction documents and specifications are produced. Depending on timing and/or the Owner's wishes, separate Permit and Construction Sets can be produced. DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXEMBIFI[T B • Page 3 28 March 2017 3.2. Energy Model — KAS' consultant will produce an energy model to show compliance with International Energy and Conservation Code 2015 (IECC 2015). 3.3. Construction Cost Estimate — KAS will send the Design Development Package to a third -parry cost estimator for a construction cost estimate. 3.4. Site Permit Application — KAS will submit the construction set for Site Permit. 3.5. Building Permit Application — KAS will submit the construction set for Building Permit. Deliverables D5. 50% Progress Set D6. 95 % Progress Set D7. Construction Cost Estimate D8. Site Package D9. Construction Set Phase Four — Bidding and Negotiations 6 Weeks 4.1. Pre -Bid Conference and Tour — KAS will administer a conference and tour of the site for prospective bidders. 4.2. Addenda — KAS will respond to questions to potential bidders and provide clarification if necessary in the form of Addenda. 4.3. Evaluation of Proposals - Once bids are received and opened by the City, KAS will aid in the evaluation of the bidders. Deliverables D10. Bidder Recommendation Letter Phase Five — Construction Administration 5.1. Construction Administration — KAS will attend weekly meetings during construction, produce Field Observation reports, review submittals, produce responses to Request for Information's, and respond in a professional manner as needed during the construction process. Services in this phase are defined in AIA Document 8101, 3.6 and in AIA Document A201-2007. 5.2. Commissioning - KAS' consultant will commission the mechanical, plumbing, and electrical systems per requirements in IECC 2015. Deliverables DIE Commissioning Report Scope of Services for Leadership in Energy and Environmental Design (LEED) Minimum Standards (Not LEED Certified) The Owner has requested that the project be designed to LEED minimum standards. After conversation with the Owner, we understand this to mean LEED prerequisites as listed below. The City's adopted energy code, International Energy and Conservation Code (IECC) 2015, requires Commissioning similar to that required under EA Prereq 1. Similarly, the energy model for EA Prereq 2, is the recommended method to show compliance under IECC 2015. The fee for these items is included in Base Services. Sustainable Sites SS Prereq 1 Construction Activity Pollution Prevention Water Efficiency WE Prereq 1 Water Use Reduction — 20% Reduction Energy and Atmosphere DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EX4]MB1F3T B • Page 4 28 March 2017 EA Prereq 1 Fundamental Commissioning of Building Energy Systems EA Prereq 2 Minimum Energy Performance EA Prereq 3 Fundamental Reftigerant Management Materials and Resources MR Prereq 1 Storage and Collection of Recyclables Indoor Environmental Quality IEQ Prereq 1 Minimum Indoor Air Quality Performance Though Base Services includes the LEED prerequisites, it does include LEED certification. Scope of Services for Leadership in Energy and Environmental Design (LEED) Certification KAS' services include those necessary for the design and preparation of documents for the referenced Project to pursue LEED Certification level "Certified" under the United States Green Building Council (USGBC) LEED Green Rating System for New Construction and Major Renovations, v. 2009. The fee is based upon KAS's knowledge of which credit s may be appropriate for fire station pursuing LEED certification. If the owner chooses to pursue individual points not anticipated, additional services may be required. While KAS has had great success in achieving LEED certification, there are many factors outside the Architect's control that preclude a guarantee of LEED certification. Services in this phase are defined in AIA Document B214-2012. Scope of Work Provided by the Client 1. Topographical and Boundary surveys 2. Geotechnical Investigation and Report 3. Soil Investigation required for geothermal HVAC 4. Construction Observation and Materials Testing Items Outside of Scope of Work or Requiring Additional Services 1. Pursuing LEED version 4.01 lieu of LEED 2009 2. Changes to the base modules of Station No.2, other than those discussed above. 3. Redsigns, new designs, meetings and other costs related to significant changes in scope of work or significant changes to approved designs. This includes work and meetings required to incorporate value engineering items. 4. Easements by separate instrument. 5. Work in or adjacent to an existing FEMA flood plain, design services necessary to establish a base flood elevation (BFE), flood plain permitting or flood plain mapping 6. Non -gravity storm sewer or sanitary sewer systems (systems requiring pump design, i.e. lift stations) 7. Public water or sewer system improvements beyond service connections and any off-site work 8. Traffic Impact Studies 9. TxDOT Permits 10. Zoning change requests 11. Retaining wall design 12. Environmental site assessments 13. Site features and amenities outside of building footprint and not directly attached to the building that are not required by zoning or code or related to the building's mechanical, electrical, or plumbing systems. 14. The design of currently unidentified specialty electrical, lighting or communication systems, including voice/data, audio/visual, security, or other low voltage electronic DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EX4]MBIY3T B • Page 5 28 March 2017 systems. Junction boxes and conduit for the systems will be shown in the construction documents. Fire alarm and related devices are included. 15. Design of franchise utilities (gas, electric, telephone, and cable television) 16. Costs related to non -anticipated LEED credits, including, but not limited to, a. WEc2 Innovative Wastewater Technologies, including rainwater collection and other greywater systems Compensation Compensation to KAS for Basic Services, Additional Services, and Reimbursable Expenses shall be as shown below. Phase 1For Basic Services the total compensation shall be $83,430 ---------------------------------------------------------------------------- Phase 2 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ---------------------------------------- For Basic Services the total compensation shall be $111,240 - - - ------------------------------------------------------ Phase 3 ------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ --------------------------------------- For Basic Services the total compensation shall be ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------�--------------------------------------- $222,480 Phase 4 ---------------------------------------------------------------------------- For Basic Services the total compensation shall be ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- $27,810 Phase 5 1 For Basic Services the total compensation shall be $111,240 --------------------------------------------------------------------------- Reimbursable Expenses ----------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Shall not exceed -------- --------------------------------------- -------------- $10,000 Optional LEED ----------------------------------------- I For LEED Certification Services the total compensation shall 1 $86,000 Certification Reviewbe ---------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ --------------------------------------- Total Not to Exceed Contact Amount without LEED$566,200 ---------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------�----------------- Total Not to Exceed Contact Amount with LEED --------------------- $652,200 Non -reimbursable Expenses - KAS includes the following in our scope 1. In - house printing 2. Phone calls 3. Travel within north Texas Reimbursable Expenses The following are not included in Basic Services and shall be billed reimbursable expense and shall be provided to the Owner at the cost invoiced to KAS plus ten percent (10%). The total cost shall for printing shall not exceed $10,000 without the written permission of the owner. 1. Printing for presentations, Owner, meetings, and regulatory review 2. Texas Accessibility Standard Plan Review and Post -Construction Inspection Consultants — The finalization of the consultant team is dependent on if LEED certification is pursued. Additional Services — Services required and authorized beyond the scope of Basic Services will be invoiced on the basis of personnel time and expenses. James R. Kirkpatrick $175/hour Project Manager II $140/hour Project Manager I $115/hour Technical Staff II $100/hour Technical Staff I $90/hour Expenses 1.10 times the cost Consultants have their own hourly rate structure. Should you have any questions or require additional information, please contact me at your convenience. DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EX4]MBIF3T B • Page 6 Best Regards, r i ,t David M. Robinson, ATA 28 March 2017 DocuSign Envelope ID: 46BF3254-0557-4EBD-AC29-14DEF89475C4 EXHIBIT 2 AttV,jfflMtt B Continued CONFLICT OF INTEREST QUESTIONNAIRE - FORM CIQ For vendor or other person doing business with local governmental entity This questionnaire reflects changes made to the law by H.B. 23, 84th Leg., Regular Session. This questionnaire is being filed in accordance with Chapter 176, Local Government Code, by a vendor who has a business relationship as defined by Section 176.001(1-a) with a local governmental entity and the vendor meets requirements under Section 176.006(a). By law this questionnaire must be filed with the records administrator of the local government entity not later than the 7th business day after the date the vendor becomes aware of facts that require the statement to be filed. See Section 176.006(a-1), Local Government Code. A vendor commits an offense if the vendor knowingly violates Section 176.006, Local Government Code. An offense under this section is a misdemeanor. 1 Name of vendor who has a business relationship with local governmental entity. na 2 El Check this box if you are filing an update to a previously filed questionnaire. (The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7th business day after the date on which you became aware that the originally filed questionnaire was incomplete or inaccurate. 3 1 Name of local government officer about whom the information in this section is being disclosed. na Name of Officer This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the vendor has an employment or other business relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary. A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the vendor? F—x] Yes No B. Is the vendor receiving or likely to receive taxable income, other than investment income, from or at the direction of the local government officer named in this section AND the taxable income is not received from the local governmental entity'? Yes F–x–] No C. Is the tiler of this questionnaire employed by a corporation or other business entity with respect to which the local government officer serves as an officer or director, or holds an ownership of one percent or more? F–x–] Yes No D. Describe each employment or business and family relationship with the local government officer named in this section. na 4 ❑I have no Conflict of Interest to disclose. 5 DocuSigned by: 4/13/2017 1i1-1fiUhVRJWQ*M&doing business with the governmental entity Date Certificate Of Completion Envelope Id: 46BF325405574EBDAC2914DEF89475C4 Subject: Please DocuSign: City Council Contract 6318 rev Source Envelope: Document Pages: 22 Signatures: 3 Supplemental Document Pages: 0 Initials: 0 Certificate Pages: 6 AutoNav: Enabled Payments: 0 Envelopeld Stamping: Enabled Time Zone: (UTC -06:00) Central Time (US & Canada) Record Tracking Status: Original 4/13/2017 12:54:23 PM Signer Events Karen E. Smith karen.smith@cityofdenton.com Interim Purchasing Manager City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: James Kirkpatrick jim@k-a-studio.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Accepted: 4/13/2017 1:56:27 PM ID:b3c5660f-2bea-4799-bbf6-8851ae8c2e5d John Knight john.knight@cityofdenton.com Deputy City Attorney City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Julia Winkley julia.winkley@cityofdenton.com Contracts Administration Supervisor City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: EXHIBIT 2 Holder: Karen E. Smith karen.smith@cityofdenton.com Signature Completed Using IP Address: 129.120.6.150 10oco.Sig ne4 by apAfus 6yt 'a if wDA94r! C8MSII,Y... Using IP Address: 97.94.216.142 Docu5ig-d by: Using IP Address: 129.120.6.150 Docu S e C U R 9 D Status: Sent Envelope Originator: Karen E. Smith karen.smith@cityofdenton.com IP Address: 129.120.6.150 Location: DocuSign Timestamp Sent: 4/13/2017 1:03:48 PM Viewed: 4/13/2017 1:04:05 PM Signed: 4/13/2017 1:06:04 PM Sent: 4/13/2017 1:06:06 PM Viewed: 4/13/2017 1:56:27 PM Signed: 4/13/2017 1:57:53 PM Sent: 4/13/2017 1:57:58 PM Viewed: 4/14/2017 8:12:50 AM Signed: 4/14/2017 8:13:18 AM Sent: 4/14/2017 8:13:20 AM Signer Events Todd Hileman Todd.Hileman@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Accepted: 2/8/2017 6:52:51 PM ID:8154723a-9757-4d53-a4b5-794656233671 Jennifer Walters jennifer.walters@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: In Person Signer Events Editor Delivery Events Agent Delivery Events Intermediary Delivery Events Certified Delivery Events Carbon Copy Events Sherri Thurman sherri.thurman@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Julia Winkley julia.winkley@cityofdenton.com Contracts Administration Supervisor City of Denton Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Jane Richardson jane.richardson@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Robin Fox Robin.fox@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Accepted: 10/9/2015 1:39:51 PM ID:04463961-03db-4c4d-9228-d660d6146ed6 EXHIBIT 2 Signature Signature Status Status Status Status Status Timestamp Timestamp Timestamp Timestamp Timestamp Timestamp Timestamp Sent: 4/13/2017 1:57:56 PM Viewed: 4/13/2017 2:26:19 PM Sent: 4/13/2017 1:57:57 PM EXHIBIT 2 Carbon Copy Events Status Timestamp Jennifer Bridges jennifer.bridges@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Jane Richardson jane.richardson@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Not Offered via DocuSign ID: Herman Lawson herman.lawson@cityofdenton.com Security Level: Email, Account Authentication (Optional) Electronic Record and Signature Disclosure: Accepted: 8/11/2015 3:16:56 PM ID:c1ff2170-cbcd-401e-ab74-8bd3b4e69c87 Notary Events Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 4/14/2017 8:13:20 AM Payment Events Status Timestamps Electronic Record and Signature Disclosure Electronic Record and Signature Disclosure created on: 4/20/2015 9:25 MFIBIT 2 Parties agreed to: James Kirkpatrick, Todd Hileman, Robin Fox, Herman Lawson ELECTRONIC RECORD AND SIGNATURE DISCLOSURE From time to time, City of Denton (we, us or Company) may be required by law to provide to you certain written notices or disclosures. 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EXHIBIT 2 Acknowledging your access and consent to receive materials electronically To confine to us that you can access this information electronically, which will be similar to other electronic notices and disclosures that we will provide to you, please verify that you were able to read this electronic disclosure and that you also were able to print on paper or electronically save this page for your future reference and access or that you were able to e-mail this disclosure and consent to an address where you will be able to print on paper or save it for your future reference and access. Further, if you consent to receiving notices and disclosures exclusively in electronic format on the terms and conditions described above, please let us know by clicking the 'I agree' button below. By checking the 'I Agree' box, I confirm that: • I can access and read this Electronic CONSENT TO ELECTRONIC RECEIPT OF ELECTRONIC RECORD AND SIGNATURE DISCLOSURES document; and • I can print on paper the disclosure or save or send the disclosure to a place where I can print it, for future reference and access; and Until or unless I notify City of Denton as described above, I consent to receive from exclusively through electronic means all notices, disclosures, authorizations, acknowledgements, and other documents that are required to be provided or made available to me by City of Denton during the course of my relationship with you. City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com DEN, ` ON Legislation Text File #: ID 17-519, Version: 1 SUBJECT Consider approval of the minutes of April 4 and April 11, 2017. City of Denton Page 1 of 1 Printed on 4/14/2017 povveied by I_egivt9i IN CITY OF DENTON CITY COUNCIL MINUTES April 4, 2017 After determining that a quorum was present, the City Council convened in a Work Session on Tuesday, April 4, 2017 at 1:00 p.m. in the Council Work Session Room at City Hall. PRESENT: Mayor Pro Tem Roden, Council Member Wazny, Council Member Briggs, Council Member Hawkins, Council Member Gregory, Council Member Bagheri, and Mayor Watts. ABSENT: None. Citizen Comments on Consent Agenda Items Willie Hudspeth spoke about how much he spoke at meetings and that he would continue until he received answers to his questions. He spoke off topic regarding no African American firefighters in the City of Denton. 2. Requests for clarification of agenda items listed on the agenda for April 4, 2017. Staff responded to council requests for clarification of the following items: Council Member Briggs - Consent Agenda Item A Council Member Wazny - Consent Agenda Item D Council Member Bagheri - Consent Agenda Item F - pull for separate consideration Work Session Reports A. ID 17-305 Receive a report, hold a discussion, and give staff direction regarding any support for the Denton County Historical Park. County Commissioner Andy Eads presented information on the Denton County Historical Park in terms of tours, celebrations, events, and the Denton Community Market that happened in the Park. He reviewed the structural update on the buildings in the Park and the investments the County had expended on the structures and areas of the Park. The required electrical improvements were presented which were estimated to be $93,466 and $101,810 for a covered parking area for vendors. Council discussed the estimated number of vendors that would be accommodated under the covered parking and what the request from the County was for funding. Eads stated that the County was requesting the City provide the funding for the electrical improvements and awning structure. Council discussed the annual vote by Commissioners Court on the contract with the Community Market and the uncertainty of whether it would be renewed after paying for those improvements; the parking situation for people attending the Market as some of the current parking was scheduled to be reclaimed as green space; consideration of a wayfinding plan from Downtown to the Historical Park; any interest in using tree funds to increase the tree canopy in the area; the economic impact of the Community Market on other areas of the City and other future partnership City of Denton City Council Minutes April 4, 2017 Page 2 opportunities with the County for the Park. Council also discussed the use of the funds previously set aside for the Exposition Parking Lot improvements and relocation of the Community Market. Consensus of the Council was not to invest money for the specific purpose of the Community Market until they had a multi-year contract with the County. Staff was to move forward with the request and in the meantime the County would have discussions with the Market regarding continuation of the contracts. The amount of the Interlocal agreement would be the amount that the County was currently asking. B. ID 17-384 Receive a report, hold a discussion, and provide direction regarding House Bill 2445 concerning the allocation of hotel occupancy tax funds to the purpose of enhancing and upgrading existing City -owned sports facilities. Lindsey Baker, Intergovernmental Relations and PIO Officer, reviewed the details of the proposed bill. The City had been requested to approve a resolution of support for the bill which was on the later agenda for consideration. C. ID 17-398 Receive a report, hold a discussion, and give staff direction regarding monument assessment and restoration/preservation services at Oakwood and IOOF cemeteries. Emerson Vorel, Director of Parks and Recreation, provided the background information on the proposal for the assessment and restoration services at the cemeteries. Current challenges, assessment of the services needed, services to be provided, and staff recommendations/options were presented. Council discussed the mapping system to be used; responsibility for maintenance; status for updating the fencing around the cemeteries; and consideration of limiting the amount of funding to the original $150,000 approved in the last budget process to be used for restoration. Council Member Bagheri felt that $150,000 should be used for restoration and was not in favor of the consultant. She requested an analysis of what was being charged for the plots. Mayor Pro Tem Roden felt that if the comprehensive study was not done it would not be known how much future funding might be needed. Mayor Watts felt that solid decorative fencing was needed first. He suggested considering private funding to assist with the restoration. Council Member Gregory stated that the original suggestion was to do restoration of some of the monuments that were in danger of falling. Consensus of the Council was to return with a bid on the fencing and postpone direction until that bid was received. Staff was also requested to do a comparison of plot pricing. D. ID 17-290 Receive a report, hold a discussion, and give staff direction regarding the acquisition of property for the purpose of tree preservation. City of Denton City Council Minutes April 4, 2017 Page 3 Lauren Barker, Program Manager-KDB, spoke on the criteria for evaluation of tree preservation. Topics of discussion included background and purpose, overview of property selection criteria and options for consideration. Council discussed how the preservation of a natural area blended with a park as a park designation had different amenities than just a natural area; look at the fund in terms of funding projections for future years and associated goals; consider increasing the tree canopy through the planting of trees and not just purchasing current trees as they eventually die and thus reduced the canopy; and purchasing property in the City would be very expensive due to the real estate market. Council continued their discussion with riparian zones and why they were not included on the priority list as they were probably not developable and not in danger; whether there was a point for connectivity between park areas and trail development; and a fourth option might be considered of a conservation easement on properties. Following the completion of the Work Session, the City Council convened in a Closed Meeting at 3:50 p.m. to consider the specific items listed below under the Closed Meeting section of this agenda. Closed Meeting: A. ID 17-302 Deliberations Regarding Real Property - Under Texas Government Code, Section 551.072; Consultation with Attorneys - Under Texas Government Code, Section 551.071. Discuss, deliberate, and receive information from staff and provide staff with direction pertaining to the potential purchase of the following real property interests located within the City of Denton, Denton County, Texas in: (1) the N. Britton Survey, Abstract No. 51(generally south of 1400 block of E. Ryan Rd.); (2) the D. Hough Survey, Abstract No. 646 (generally west of the 1900 block of S. Mayhill Rd.); (3) the J. McGowan Survey, Abstract No. 797 (generally west of the 2500 block of S. I-35 East) (4) the G. Walker Survey, Abstract No. 1330 (generally west of the 4100 block of Swisher Rd.); and (5) the M. Austin Survey, Abstract No. A-4 (generally west of the 1200 block of S. Loop 288). The potential purchases are related to the City's tree preservation initiatives. Consultation with the City's attorneys regarding legal issues associated with the potential acquisition of the real property interests described above where a public discussion of these legal matters would conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Rules of Professional Conduct of the State Bar of Texas. Regular Meeting of the City of Denton City Council at 6:30 p.m. in the Council Chambers at City Hall, 215 E. McKinney Street, Denton, Texas. 1. PLEDGE OF ALLEGIANCE The Council and members of the audience recited the Pledge of Allegiance to the U. S. and Texas flags. City of Denton City Council Minutes April 4, 2017 Page 4 2. PROCLAMATIONS/PRESENTATIONS A. ID 17-441 Denton Arbor Day Mayor Watts presented the proclamation for Denton Arbor Day. 3. PRESENTATION FROM MEMBERS OF THE PUBLIC A. Review of procedures for addressing the City Council. B. Receive Scheduled Citizen Reports from Members of the Public. ID 17-363 Harry Eaddy regarding the Denton Black Film Festival. Mr. Eaddy thanked the City's support for the Festival over the past years. He presented an update on the success of the Festival and the accomplishments of the Festival. 2. ID 17-402 Margarete Neale regarding gas leaks in the Guyer neighborhood. Ms. Neale presented information regarding a leaking gas well near Guyer High School. She felt that there was a clear and present danger at Guyer and at any school near a gas well. She asked for a viable evacuation plan in the areas near a gas well; monitoring and surveillance 24/7 at the wells; increase the number of inspections; and notification to stakeholders and the community. C. Additional Citizen Report Willie Hudspeth spoke regarding Code Enforcement being difficult to work with especially in terms of his business on Oak and Bonnie Brae. He was trying to clean up his property but Code Enforcement was making it difficult to do. 2. Janice Heidlberger read passages regarding Earth honoring faith. 4. CONSENT AGENDA Mayor Watts noted that Consent Agenda Item F was being pulled for individual consideration. Council Member Hawkins motioned, Council Member Wazny seconded to approve the Consent Agenda and accompanying ordinances and resolutions with the exception of Item F which was being pulled for separate consideration. On roll call vote, Mayor Pro Tem Roden "aye", Council Member Wazny "aye", Council Member Briggs "aye", Council Member Hawkins "aye", Council Member Gregory "aye", Council Member Bagheri "aye", and Mayor Watts "aye". Motion carried unanimously. Ordinance No. 2017-109 A. ID 17-091 Consider adoption of an ordinance of the City Council of the City of Denton, Texas authorizing the City Manager to execute an Engagement Letter with the law firm of David A. Portz, P.C., Houston, Texas, for Professional Legal Services to be provided to the Energy Management Organization of the City's Electric City of Denton City Council Minutes April 4, 2017 Page 5 Department, Denton Municipal Electric; authorizing the expenditure of funds therefor; providing an effective date (File No. 5554 -in the additional amount of not - to -exceed $75,000, aggregating not -to -exceed $250,000). The Public Utilities Board recommended approval (6-0) on 3/21/2017 (PUB 17-033). Ordinance NO. 2017-110 B. ID 17-321 Consider adoption of an ordinance releasing, abandoning and vacating a public drainage easement granted to the City of Denton, Texas, by CPM Financial Corporation on July 2, 2004 and recorded in Cabinet V Page 760, Real Property Records, Denton County, Texas, situated in the B.B.B. & C.R.R. Co. Survey, Abstract No. 186, Denton County, Texas, and located within the 1600 block of Stuart Lane. [Amending Plat, The Village Phase 1, Lots IA & 2A Block 4] Approved the minutes listed below. C. ID 17-400 Consider approval of the minutes of March 7, March 20, March 21, March 28, and March 30, 2017. Resolution No. R2017-010 D. ID 17-418 Consider approval of a resolution by the City of Denton ("City") suspending the effective date for ninety days in connection with the rate increase filing of Oncor Electric Delivery Company, LLC on or about March 17, 2017; requiring the reimbursement of municipal rate case expenses; authorizing participation in the coalition of similarly situated cities; authorizing intervention and participation in related rate proceedings; authorizing the retention of special counsel; finding that the meeting complies with the open meetings act; making other findings and provisions related to the subject; and declaring an effective date. Ordinance No. 2017-111 E. ID 17-431 Consider adoption of an ordinance approving the expenditure of funds for the purchase of one (1) ambulance chassis and the refurbishment of the ambulance body for Medic 6, which is available from Houston -Galveston Area Cooperative Purchasing Contract 4AM10-14 and in accordance with the provisions of Texas Local Government Code 271.083, providing the statutory authority for the City to participate in the cooperative purchasing program; providing for the expenditure of funds therefor; and providing an effective date (File 6407 -awarded to Knapp Chevrolet in the not -to -exceed amount of $169,300). Ordinance No. 2017-112 F. ID 17-450 Consider adoption of an ordinance of the City Council of the City of Denton, Texas, approving the FYI Audit Plan and providing for an effective date. Craig Hametner presented an overview of his Audit Plan that included basis for the plan, allocations for time based on a six month projection and proposed engagements for use of his time. Willie Hudspeth submitted a Speaker Card and indicated that he was impressed with the proposed plan put forward by the Internal Auditor. City of Denton City Council Minutes April 4, 2017 Page 6 Council Member Bagheri motioned, Council Member Hawkins seconded to adopt the ordinance. On roll call vote, Mayor Pro Tem Roden "aye", Council Member Wazny "aye", Council Member Briggs "aye", Council Member Hawkins "aye", Council Member Gregory "aye", Council Member Bagheri "aye", and Mayor Watts "aye". Motion carried unanimously. 5. ITEMS FOR INDIVIDUAL CONSIDERATION Ordinance No. 2017-113 A. ID 17-315 Consider adoption of an ordinance approving a fourth amendment to an Economic Development Program Grant Agreement with Allegiance Hillview, L.P. (now Allegiance GL LLC, DB Denton 11 LLC, and Rayzor Ranch 380 Associates, LLC) for the Rayzor Ranch development. Caroline Booth, Director of Economic Development, presented the information on the fourth amendment to the Rayzor Ranch Economic Development agreement. She reviewed the background of the project, the need for the amendment, and the request from RED Development. She also presented information about the development status of the project and request details. Staff recommended approval with the stipulation that there be no further requests for extensions. Scott Waggoner, RED Development, presented an update on the status of the development of the Town Center. Council discussed the need for the extension and the use of the public improvement money. The following individuals submitted Speaker Cards: Roger Albright, Denton Center, spoke in opposition. Kade Pittman, Denton Movie Tavern, spoke in opposition. Matt Ludemann, Golden Triangle Mall, spoke in opposition. Gar Herring, Golden Triangle Mall, spoke in opposition. Janice Heidlberger spoke in opposition. Willie Hudspeth spoke in opposition. Bob Clifton spoke in opposition. Deb Armintor spoke in opposition. Jennifer Lane spoke in opposition. Katy Reynolds spoke in opposition. A Comment Card was submitted by Anne Sullivan in opposition. Council Member Bagheri motioned, Council Member Briggs seconded to deny the ordinance. On roll call vote, Council Member Briggs "aye", and Council Member Bagheri "aye". Mayor Pro Tem Roden "nay", Council Member Wazny "nay", Council Member Hawkins "nay", Council Member Gregory "nay", and Mayor Watts "nay". Motion failed with a 2-5 vote. Council Member Hawkins motioned, Council Member Gregory seconded to adopt the ordinance. On roll call vote, Mayor Pro Tem Roden "aye", Council Member Wazny "aye", Council Member City of Denton City Council Minutes April 4, 2017 Page 7 Hawkins "aye", Council Member Gregory "aye", and Mayor Watts "aye". Council Member Briggs "nay", and Council Member Bagheri "nay". Motion carried with a 5-2 vote. Resolution No. R2017-011 B. ID 17-385 Consider approval of a resolution of the City of Denton, Texas, supporting House Bill 2445 related to the allocation of hotel occupancy tax funds to the purpose of enhancing and upgrading existing city -owned sports facilities; and providing an effective date. Lindsey Baker, Intergovernmental Relations/PIO, reviewed the request by Rep. Lynn Stuckey for a resolution from the City of Denton in support of HB 2445. She noted that the Denton Chamber of Commerce was also in support of the bill. She reviewed the provisions of the proposed legislation, amount of hotel revenue generated by tournaments in the City, and that the proceeds would be used for current city facilities as requested by Council. Council Member Gregory motioned, Council Member Hawkins seconded to approve the resolution. On roll call vote, Mayor Pro Tem Roden "aye", Council Member Wazny "aye", Council Member Briggs "aye", Council Member Hawkins "aye", Council Member Gregory "aye", Council Member Bagheri "aye", and Mayor Watts "aye". Motion carried unanimously. C. ID 17-412 Consider nominations/appointments to the City's Boards and Commissions: Animal Shelter Advisory Committee; Human Services Advisory Committee; and Zoning Board of Adjustment. Council Member Briggs nominated Paul O'Neill for the Animal Shelter Advisory Committee and Mayor Pro Tem Roden nominated Charlie Hunter for the Animal Shelter Advisory Committee. Willie Hudspeth spoke on the lack of African American employees at the Animal Shelter. He spoke off topic on the IOOF Cemetery. Council Member Bagheri motioned, Council Member Wazny seconded to approve the nominations. On roll call vote, Mayor Pro Tem Roden "aye", Council Member Wazny "aye", Council Member Briggs "aye", Council Member Hawkins "aye", Council Member Gregory "aye", Council Member Bagheri "aye", and Mayor Watts "aye". Motion carried unanimously. Ordinance No. 2017-114 D. ID 17-413 Consider adoption of an ordinance of the City of Denton, Texas authorizing the approval of a first amendment to a professional services agreement between the City of Denton and Teague Nall and Perkins, Inc. (TNP), amending the contract approved by City Council on August 6, 2013, in the not -to -exceed amount of $4,160,000, to provide additional engineering and surveying services related to the Denton Municipal Electric Capital Improvement Plan; providing for the expenditure of funds therefor; and providing an effective date (File 5306 -providing for an additional expenditure amount not -to -exceed $4,360,000, with the total contract amount not -to -exceed $8,520,000). The Public Utilities Board recommends approval (6-0). City of Denton City Council Minutes April 4, 2017 Page 8 Phil Williams, General Manager -DME, presented the background, current status of projects and staff recommendation for the amendment to the agreement with Teague Nall and Perkins. PUB and staff recommend approval. The following individuals submitted Speaker Cards: Bob Clifton spoke in opposition. Willie Hudspeth spoke off topic on whether there were minorities at the firm. Council Member Gregory motioned, Mayor Pro Tem Roden seconded to adopt the ordinance. On roll call vote, Mayor Pro Tem Roden "aye", Council Member Wazny "aye", Council Member Hawkins "aye", Council Member Gregory "aye", Council Member Bagheri "aye", and Mayor Watts "aye". Council Member Briggs "nay". Motion carried with a 6-1 vote. 6. PUBLIC HEARINGS A. A17-0002 Hold a public hearing on the petition for voluntary annexation into the corporate limits of the City under Texas Local Government Code Sec. 43.028(4) filed by H3H, L.L.C. concerning approximately 16 acres generally located on the north side of Barthold Road, approximately 340 feet west of the I-35 Southbound Service Road (A17-0002; Blue Beacon). The Mayor opened the public hearing. Julie Wyatt, Senior Planner, presented the details of the request, background information and the annexation schedule. Speaker Cards were submitted by the following: Dana Morse, applicant, spoke in support. Comment Card in opposition were submitted by: Nona McCales Clifford Salwen The Mayor closed the public hearing. No action by Council was needed on this item at this time. B. Z16 -0023b Hold a public hearing and consider adoption of an ordinance to rezone approximately 1.39 acres from a Downtown Residential 2 (DR -2) District to a Downtown Commercial General (DC -G) District. The subject property is generally located 185 feet south of the Scripture Street and Normal Street intersection, in the City of Denton, Denton County, Texas; adopting an amendment to the city's official zoning map; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, providing a severability clause and an effective date. The Planning City of Denton City Council Minutes April 4, 2017 Page 9 and Zoning Commission recommends denial (5-2). (Z16-0023) A supermajority vote by Council is required for approval. The Mayor opened the public hearing. Munal Mualadad, Director of Development Services, presented the request and site data for the proposal. She provided an analysis of the proposal in terms of compatibility with the surrounding area zoning and with the future land use map. Mobility in terms of walkability, ingress/egress were reviewed. Staff was recommending approval; however, the Planning and Zoning Commission recommended denial. A supermajority vote by Council would be required. Council discussed the issues of concern from the Planning and Zoning Commission in terms of building height, the split zoning on the property, the property was not in any of the historical districts located near the property; and what type of zoning would apply to the property due to two zoning designations on one lot. Paul Leving, Mike Dallas, Ron Butler and Lee Allison, applicants and representatives of the applicant, spoke in favor. Council discussed sidewalk widths, history of the vacant properties, setback distances, the determination of the number of trips per day; why rezoning was done in 2001 that bisected a building; and legal research on a bisected zoned building. Comment Cards were submitted in opposition by: Tim Gieringer Anne Sullivan John Morris Michael Hennen Emily Cline Kristi Koons David Kaplan Brian Morrison Clifford Salwen Nona McCales John Wright Becky Wright Andrea Schreiber Speaker Cards were submitted by: Janice Heidlberger spoke in opposition. Donna Morris spoke in opposition. Kim McKibben spoke in opposition. Dan Krutka spoke in favor. Larry Beck spoke in opposition. Jennifer Lane spoke in opposition. Deb Armintor spoke in opposition. Paul Meltzer spoke in opposition. Craig Clifton spoke in opposition. Jane Lunt spoke in opposition. Willie Hudspeth spoke in opposition. Ken Gold spoke in opposition. City of Denton City Council Minutes April 4, 2017 Page 10 Margaret Mills spoke in opposition. Bob Clifton spoke in opposition. The Mayor closed the public hearing. Mayor Pro Tem Roden motioned to adopt the ordinance. After Council discussion, Council Member Gregory motioned to postpone to a date certain in order to receive answers on the split property and which zoning prevailed. Council Member Hawkins seconded. Council Member Wazny suggested a date certain of April 18, 2017. She would also like an answer to the question of the developer believing he can move forward with the front half of the property with no rezoning. City Manager Hileman suggested using a date certain of April 25' as the April 18' meeting was very full. Council Member Gregory and Hawkins were in agreement with the April 25th meeting. Mayor Pro Tem Roden noted that he would not be at the meeting of April 25th and requested the April 18th date. Council Member Hawkins withdrew his second. Council Member Gregory withdrew his motion as he no longer had a second. Council Member Gregory seconded Mayor Pro Tem Roden's motion to adopt the ordinance. On roll call vote, Mayor Pro Tem Roden "aye", Council Member Hawkins "aye", Council Member Gregory "aye", and Council Member Bagheri "aye". Council Member Wazny "nay", Council Member Briggs "nay", and Mayor Watts "nay". Motion failed with a 4-3 vote as a supermajority vote was required. C. DCA17-0005a Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, regarding amending Subchapter 35.5 of the Denton Development Code by adding a Specific Use Permit (SUP) requirement for multi- family dwelling units in the Downtown Residential 2 (DR -2), Downtown Commercial Neighborhood (DC -N) and Downtown Commercial General (DC -G) zoning district and use classifications and adding a limitation L(44); providing for a penalty in the maximum amount of $2,000 for violations thereof, providing a severability clause, savings clause, and an effective date. The Planning and Zoning Commission recommends denial (5-1). A supermajority vote by Council is required for approval. The Mayor opened the public hearing. Ron Menguita, Long Range Planning Administrator, presented the details of the request for an amendment to the Denton Development Code by adding a specific use permit requirement for multi -family dwelling units that contained three or more dwelling and any ancillary uses. He reviewed the zoning districts and limitations for multi -family dwelling units, parking requirements City of Denton City Council Minutes April 4, 2017 Page 11 and design standards. He also presented the details of the code amendment which would be in the DR -2, DCN and DCG zoning districts and would add an L-44 limitation and remove the L-5 limitation. The Planning and Zoning Commission recommended denial as it did not think the SUP was the correct tool to address collegiate or SRO zoning. Staff was recommending approval as it was a land use analysis tool, addressed density and compatibility and was consistent with the goals of Denton 2030 Plan. Speaker Cards were submitted by: Craig Clifton spoke in support. Janice Heidlberger spoke in opposition. Comment Cards were submitted by: Brian Morrison to support Planning to zoning decision in the Small Area Plan. Kim McKibben was undecided on the issue. Council discussed whether this tool could have a negative effect as the Planning and Zoning Commission could deny a proposal and then Council would have to consider it with a supermajority vote. Paul Meltzer offered short and long term recommendations. The Mayor closed the public hearing. Mayor Pro Tem Roden questioned what the amendment would solve as it was still required to go through the Planning and Zoning Commission and Council. Menguita stated that it would help with the effect of SROs going into established neighborhoods. Mayor Pro Tem Roden felt it would be a tool to kill worthwhile projects. Council Member Gregory did not see how it addressed SROs and felt that it was just adding another hurdle that did not give much guidance to developers. Council Member Wazny suggested discussing just the large SRO projects and not the smaller ones. She would like a proposal that dealt with larger developments. Mayor Watts stated that he was not in favor as the current process worked and didn't need to be changed. Council Member Hawkins motioned, Mayor Pro Tem Roden seconded to deny the ordinance. On roll call vote, Mayor Pro Tem Roden "aye", Council Member Wazny "aye", Council Member Hawkins "aye", Council Member Gregory "aye", Council Member Bagheri "aye", and Mayor Watts "aye". Council Member Briggs "nay". Motion carried with a 6-1 vote. City of Denton City Council Minutes April 4, 2017 Page 12 7. CONCLUDING ITEMS A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. Council Member Wazny requested more public announcements of the hands free implementation on June 1st Council Member Wazny requested an update on hands free signs. Council Member Wazny asked for a discussion to address monster SRO projects. Council Member Briggs requested a Council discussion to clarify which committees the Internal Auditor would serve on. Council Member Briggs requested a crime report on SROs. Council Member Bagheri requested a memo from Legal on age discrimination and excluding student housing from certain areas. Council Member Bagheri requested a Work Session on the city's mowing policy. Council Member Bagheri requested a legal review of no engine braking on the highways. Council Member Bagheri requested a discussion on family friendly bathrooms on new construction. Council Member Bagheri requested a Work Session on possibly adding fitness equipment on walkways in parks. Council Member Bagheri requested a memo on adding blue lights on the square for emergency calls. Mayor Watts requested a discussion on an update on City Hall West. City of Denton City Council Minutes April 4, 2017 Page 13 B. Possible Continuation of Closed Meeting topics, above posted. There was no continuation of the Closed Meeting. With no further business, the meeting was adjourned at 12:35 a.m. CHRIS WATTS MAYOR CITY OF DENTON, TEXAS JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON CITY COUNCIL MINUTES April 11, 2017 After determining that a quorum was present, the City Council convened in a Work Session on Tuesday, April 11, 2017 at 2:00 p.m. in the Council Work Session Room at City Hall. PRESENT: Mayor Pro Tem Roden, Council Member Wazny, Council Member Briggs, Council Member Hawkins, Council Member Gregory, and Mayor Watts. ABSENT: Council Member Bagheri. 1. Work Session Reports A. ID 17-356 Receive a report, hold a discussion and provide direction on the design schedule for the proposed reconstruction of Fire Station 3. Bryan Langley, Deputy City Manager, provided an update on the design of Fire Station 43. He presented the prior design and construction process that was used for the Station 44 design/cost concerns and proposed solution. The proposed design process involved the schematic design, design development and construction documents. Council Member Bagheri arrived at the meeting. Langley continued with the proposed project schedule. Council discussed the schedule in comparison to the other two stations and noted that by the construction documents phase a good estimate of the cost for the station should be known. B. ID 17-447 Receive a report and hold a discussion regarding activities of Council Committees and Council Liaisons. Alison Ream, Administrative Services Manager, stated that this item was the result of a request from Council for an update on Council Committee actions. Updates were provided in the Agenda Information Sheet and staff was available for additional information if needed. Council Member Bagheri stated that she had requested the updates but this type of formal presentation was not what she had envisioned. She merely wanted an opportunity for Council to provide an update on their Committees and not take staff time to make reports. She presented a brief update on the Regional Transportation Council. Council discussed how often to schedule these reports; whether to provide the reports in a Work Session setting or at the regular meetings; and at which meeting dates to schedule the reports. Consensus of the Council was to schedule the report for the Second Tuesday meetings with a time limit for the report. A lengthy report would be provided in an Informal Staff Report. A suggestion was made to also look for other means of providing the information. The Chair of the Committee should provide the report. City of Denton City Council Minutes April 11, 2017 Page 2 C. ID 17-451 Receive a report, hold a discussion, and give staff direction on potential changes to the scope of the City Council Employee Leave Ad Hoc Committee. Carla Romine, Director of Human Services, reviewed the background of the Ad Hoc committee. During their first meeting the Committee had discussions on possibly expanding the scope of the Committee's review. Council Member Wazny, Chair of the Committee, stated that at their first meeting they reviewed vacation time and sick leave only. However, there were other items the Committee would like to review but were unable to do so per the scope of the resolution. The Committee would like to look at all benefits provided to employees. Council Member Gregory noted that the resolution listed the three Council Members who volunteered to serve and questioned whether the resolution would have to be revised as one member would no longer be on the Committee in the near future. Council Member Wazny stated that the Committee was requesting permission to have one more meeting in the next five weeks. Mayor Watts stated that the original scope of the committee was to look at vacation time and sick leave under the current definitions and benefits and did the Committee want to change that. He asked if there was a decision or direction on the original scope. Council Member Wazny stated that the salary comparison was done looking at nine other cities but it did not include employee benefits. The Committee wanted to expand looking at the scope of employee benefits. They had some recommendations/ideas but would like to finish looking at all benefits and then bring back a recommendation as a whole. Mayor Watts felt that if the Committee was going to increase the scope of the original charge and do a comprehensive review of all benefits that somewhere in the process an employee group needed to be involved in the discussion. He did not have a problem if the Committee was just doing a comparison and making a recommendation but others needed to be included in the conversation as it would impact the employees. Council Member Wazny stated that the Committee wanted to meet one more time and after that turn the process over the Director of Human Resources and the City Manager. Mayor Pro Tem Roden questioned what the goals were for this type of a review. He felt this type of discussion happened during the budget process where the whole Council was involved. Consensus of the Council was to allow one more meeting of the Committee with an expansion of viewing the benefits presented in the staff report prior to Council terms expiring and bring back recommendations/observations as deemed appropriate. The resolution would keep the names of the current committee and if more meetings were needed, the resolution would be revised with new members. The resolution should contain an expiration date of the swearing in of new Council members following the May election. City of Denton City Council Minutes April 11, 2017 Page 3 D. ID 17-476 Receive a report, hold discussion and give staff direction regarding prohibiting parking along Denton Street from Oak Street to Hickory Street and Texas Street from Vine Street to Frame Street. Pritam Deshmukh, Program Engineer, reviewed the request for no parking on Texas Street and Denton Street. He presented information regarding concerns from the Fire Department for access to Texas Street in terms of the height on a building reconstruction and turn around space. The Traffic Safety Commission recommended approval of the no parking in this area of Texas Street. Council discussed the width of a fire lane; the width needed for equipment access; code requirements; limiting the parking just on one side of the street instead of both sides; and whether the property owners were notified. Council also discussed that this was a public safety decision versus a parking issue for the area residents and that there was a need to find a global solution to this problem as there were streets all over the city that had the same issue. This issue was not about opposing the Fire Department and safety but that it was favoring a developer who did not meet the fire code and the taking of the street to be used for a fire lane for the development. Council Member Wazny suggested a compromise to remove parking only on the apartment side of the street instead of both sides. Laura Behrens, Fire Marshal, stated that restricting parking on one side would provide better access than allowing parking on both sides. Mayor Watts stated that he had a problem with using a public street as an unobstructed fire lane for the developer. Consensus of the Council was to limit parking 150 feet from the stop signs on both sides of the street at both ends of the street and limit parking on the south side in the middle section of the street. Deshmaukh continued with the proposed parking restrictions on Denton Street from Oak to Hickory parking. Staff had received multiple complaints with parking on the street and the inability of cars to traverse the street. Council discussed limiting the no parking to only one side of the street instead of both sides; consider a 30 feet strip of no parking from the stop signs and no parking on one side only; consider neighborhood restricted parking for these types of areas. Council talked about why the City was no longer painting restricted parking on the curbs. Consensus was to restrict parking within 30 feet from the stop signs and restrict parking on the apartment side of the street. E. ID 17-502 Receive a report, hold a discussion and provide direction regarding the design and project schedule for the proposed parallel runway at the Denton Enterprise Airport. Mark Nelson, Director of Transportation, provided information on a proposed west parallel runway at the Denton Airport. He presented information on the site plan for the west runway City of Denton City Council Minutes April 11, 2017 Page 4 project; airport operations overview; design options in terms of a TxDOT scope, the Master Plan scope and the recommended scope; the need to have a confirm commitment to funding; and the proposed schedule for financing the project. Consensus of the Council was to move forward with the recommended scope. Council convened in a Special Called Session at 4:00 p.m. 1. ITEMS FOR INDIVIDUAL CONSIDERATION A. A16 -0004c Conduct the first of two readings of an ordinance of the City of Denton annexing approximately 4.7 acre of land, generally located north of Ryan Road, west of FM 2181 (Teasley Lane) and Lake Forest Good Samaritan Village, and east of Country Club Road; providing for a correction to the city map to include the annexed lands; providing for a savings clause and an effective date. Ron Menguita, Long Range Planning Administrator, stated that this was the first reading of the annexation ordinance. Per current annexation regulations, Mayor Watts would need to read the ordinance caption into the official record. Mayor Watts read the ordinance caption into the official record "An ordinance of the City of Denton annexing approximately 4.7 acres of land, generally located north of Ryan Road, west of FM 2181 (Teasley Lane) and Lake Forest Good Samaritan Village, and east of Country Club Road; providing for a correction to the city map to include the annexed lands; providing for a savings clause and an effective date." No action was required on this item at this time. 2. CONCLUDING ITEMS A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. Council Member Briggs asked about a follow-up on the hiring of gas well inspectors. City of Denton City Council Minutes April 11, 2017 Page 5 City Manager Hileman stated that a plan would be presented to Council shortly. Mayor Watts asked staff to look at the intersection of Granada and Ryan Road in terms of a sight issue at the intersection on Granada. Following the completion of the Special Called Session, the Council convened in a Closed Meeting to consider the specific item listed below. 1. Closed Meeting: A. ID 17-495 Consultation with Attorneys - Under Texas Government Code Section 551.071. Consult with the City's Attorneys on the status, strategy, and potential resolution of litigation styled Green Education Foundation v. City of Denton, Cause No. 4:16-cv- 00795, currently pending in the U.S. District Court, Eastern District, Sherman Division. With no further business, the Council reconvened in Open Session and the meeting was adjourned at 5:05 p.m. CHRIS WATTS MAYOR CITY OF DENTON, TEXAS JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON Legislation Text File #: ID 17-533, Version: 1 Agenda Information Sheet DEPARTMENT: Human Resources DCM: Bryan Langley Date: April 18, 2017 SUBJECT Consider approval of a resolution of the City of Denton, Texas, amending Resolution No. 2017-007 by expanding the scope of review of the ad hoc City Council Committee to include all employee benefits and to advise the City Council with regard to these matters; and providing an effective date. BACKGROUND At the April 11, 2017, City Council meeting, Councilmember Wazny, chair of the ad hoc City Council Employee Leave Committee, requested the scope of the committee be expanded to include review of all City of Denton employee benefits, not just vacation and sick leave. If any changes to employee benefits are recommended based on the committee's review, the changes would be presented to the entire Council for consideration. The Council agreed. As such, resolution 2017-007 has been amended. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Organizational Excellence Related Goal: 1.1 Manage financial resources in a responsible manner EXHIBITS 1 - Resolution Respectfully submitted: Carla Romine Director of Human Resources City of Denton Page 1 of 1 Printed on 4/14/2017 povveied by I_egivt9i IN sAlegal\our documents\reso1uti0ns\17\1eave committee resolution - first amendment.doex RESOLUTION NO. A RESOLUTION OF THE CITY OF DENTON, TEXAS, AMENDING RESOLUTION NO. 2017-007 BY EXPANDING THE SCOPE OF REVIEW OF THE AD HOC CITY COUNCIL COMMITTEE TO INCLUDE ALL EMPLOYEE BENEFITS AND TO ADVISE THE CITY COUNCIL WITH REGARD TO THESE MATTERS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, at its April 11, 2017 Second Tuesday Work Session, the City Council considered the Ad Hoc City Council Committee's request to expand the scope of its review from employee vacation and sick leave benefits to all employee benefits; and WHEREAS, the City Council agreed with the request and directed City Staff to prepare an amendatory resolution; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES: SECTION 1. That Section 2 of Resolution No. 2017-007 is hereby amended in its entirety to read as follows: "The duties and purpose of the Committee shall be to review, consider, and make recommendations to the City Council regarding the City's policies for all employee benefits. The Committee shall proceed with its assigned duties in collaboration with the Human Resources Department and City Manager's Office." SECTION 2. That Section 3 of Resolution No. 2017-007 is hereby amended in its entirety to read as follows: "Upon completion of the aforementioned duties, or on May 16, 2017, the Ad Hoc City Council Committee shall be dissolved without further action of the City Council." SECTION 4. This Resolution shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2017. CHRIS WATTS, MAYOR s:Alegal\our d0cuments\resolutions\l7\1eave committee resohition - first amendment.docx ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY: t Page 2 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 16-1591, Version: 1 Legislation Text AGENDA INFORMATION SHEET DEPARTMENT: Denton Municipal Electric CM: Todd Hileman AGENDA DATE: April 18, 2017 SUBJECT Consider adoption of an ordinance of the City Council of the City of Denton, Texas, a home -rule municipal corporation, providing for, authorizing, and approving the execution by the City Manager, or his designee, of an interconnect agreement between the City of Denton and Enterprise Pipeline Texas, LLC, a Texas limited liability company, in the amount of $1,386,000.00 for the construction of gas supply and metering infrastructure in conjunction with the Denton Energy Center project; approving the execution of such other and further related documents deemed necessary to effectuate this agreement by the City Manager or his designee, which are incident or related thereto; authorizing the expenditure of funds therefore; and providing an effective date. The Public Utilities Board recommends approval (5-0). BACKGROUND In order to provide a fuel supply for the Denton Energy Center, Denton Municipal Electric will contract with Enterprise Texas Pipeline, LLC to provide the infrastructure necessary to connect the Denton Energy Center to the pipeline owned by Enterprise. This infrastructure includes the pipeline tap, lateral line, water separator and associated water storage tanks, meters and various types of valves. Enterprise has extensive experience providing this type of infrastructure to facilities such as the Denton Energy Center. In accordance with Texas Local Government Code 252.022(x)(14), the procurement of goods purchased by a municipality for subsequent sale by the municipality is exempt from the requirement of competition based selection. Based upon the Finn's professional qualifications, expertise, reputation, knowledge of operations and economics, and the existence of the Finn's main pipeline on the property where the Denton Energy Center is being constructed, staff is of the opinion that Enterprise is a good fit to provide the needed infrastructure. RECOMMENDATION Approve a contract with Enterprise Texas Pipeline, LLC in the not -to -exceed amount of $1,386,000. PRINCIPAL PLACE OF BUSINESS Enterprise Texas Pipeline, LLC Houston, TX ESTIMATED SCHEDULE OF PROJECT This agreement will be in effect until all required services are completed or until all authorized funds have been expended. The estimated completion of construction is in July 2017. FISCAL INFORMATION The construction services will be funded from Denton Municipal Electric account 603996501.1360.3410. City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 16-1591, Version: 1 STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long -teen Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Public Infrastructure Related Goal: 2.3 Promote superior utility services and facilities EXHIBITS Exhibit 1: Presentation Exhibit 2: Ordinance Exhibit 3: Interconnection Agreement Respectfully submitted: Phil Williams, 349-8487 General Manager For information concerning this acquisition, contact: Lawrence Collister at 349-8198. City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, U ime F i rA V IM rl `O r-� 00 O O O M 0O r-� T 00 In 00 O O O O N 00 O O O O G\ kr� 01 6f� F�9 6f� 6f� 6f� F�9 rl U U U U U U U •~ U V 4i V b�A O V 0 O O O 0 0 O r••i � O r O O � � O � .PMO v Cl coo 4 coo coo v coo �..� v tit r.{ ��t�t �¢l��li�3 t t� (�i �i114 �,t �� 4��U�i 111` t1,ri int s it1;�+ <S,}Y i �{� ��n�rtt ili Iti inti,,` ORDINANCE NO. 2017 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, A TEXAS HOME - RULE MUNICIPAL CORPORATION, PROVIDING FOR, AUTHORIZING, AND APPROVING THE EXECUTION BY THE CITY MANAGER, OR HIS DESIGNEE, OF AN INTERCONNECT AGREEMENT BETWEEN THE CITY OF DENTON AND ENTERPRISE PIPELINE TEXAS, LLC, A TEXAS LIMITED LIABILITY COMPANY, IN THE AMOUNT OF $1,386,000.00 FOR THE CONSTRUCTION OF GAS SUPPLY AND METERING INFRASTRUCTURE IN CONJUNCTION WITH THE DENTON ENERGY CENTER PROJECT; APPROVING THE EXECUTION OF SUCH OTHER AND FURTHER RELATED DOCUMENTS DEEMED NECESSARY TO EFFECTUATE THIS AGREEMENT BY THE CITY MANAGER OR HIS DESIGNEE, WHICH ARE INCIDENT OR RELATED THERETO; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFORE; PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Denton is a Texas home -rule municipal corporation governed by the constitution and laws of the State of Texas; and WHEREAS, on March 13, 2017, Denton's Public Utilities Board ("PUB"), after due notice of the public meeting was provided as required by law, considered the Interconnect Agreement between the City of Denton and Enterprise Texas Pipeline, LLC, a Texas limited liability company, for the construction of the gas supply and metering infrastructure in conjunction with the Denton Energy Center Project; and WHEREAS, the PUB, after discussion, consideration and deliberation, then recommended to Denton's City Council, unanimously, that the Interconnect Agreement between the City of Denton and Enterprise Texas Pipeline, LLC, be approved; and WHEREAS, Denton's City Council has considered the Interconnect Agreement between the City of Denton and Enterprise Texas Pipeline, LLC, for the construction of the gas supply and metering infrastructure in conjunction with the Denton Energy Center Project, as well as the recommendation of the PUB and finds the Interconnect Agreement between the City of Denton and Enterprise Texas Pipeline, LLC, be approved; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON ORDAINS: SECTION 1. The recitations contained in the above Preamble are incorporated herewith and are considered to be a part of this Ordinance. SECTION 2. The City Council, approves and authorizes the City Manager and City Secretary, or their designees, to execute, and attest respectively, the Interconnect Agreement between the City of Denton, a Texas home -rule municipal corporation, and Enterprise Texas Pipeline, LLC, a Texas limited liability company, in the amount of $1,386,000.00 and in the form and under the terms and conditions set forth in Exhibit "A" ("Agreement"), including all exhibits attached thereto, and made a part hereof, and to consummate the delivery thereof on behalf of the City of Denton by or at the direction of the City Manager, or his designee. SECTION 3. The City Council, approves and authorizes the City Manager and City Secretary, and their respective designees, to execute and attest respectively, all other documents which are incident and related to the Agreement, and to take such additional actions as the City Manager, or his designee, shall determine to be necessary and advisable to effectuate the matters set forth in this Ordinance and the Agreement. SECTION 4. The City Manager, the City Attorney, or their designees, be, and each of them individually is, authorized and empowered to perform all such acts and obligations as required with respect to the Agreement. SECTION 5. The expenditure of funds as provided for in this ordinance is authorized. SECTION 6. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of April, 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY IC APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM qIYY ATTORNEY By: INTERCONNECT AGREEMENT This INTERCONNECT AGREEMENT (the "Agreement") is by and between ENTERPRISE TEXAS PIPELINE LLC, a Texas limited liability company ("Company"), and CITY OF DENTON, a Texas home -rule municipal corporation ("Interconnecting Party"). Company and Interconnecting Party are sometimes referred to herein individually as a "Party" and collectively as the "Parties." BACKGROUND A. Company transports Gas on its pipeline system. B. Interconnecting Party desires to connect its facilities to Company's pipeline system in Denton County, Texas. C. The Parties desire to enter into this Agreement to set forth the terms, conditions, and procedures regarding the interconnection of the Parties' facilities. The Parties agree as follows: ARTICLE I. DEFINITIONS Capitalized terms used in this Agreement have the following meanings unless otherwise specified: A. "Agreement" is defined in the preamble of this Agreement. B. "Applicable Law" means all laws, rules, orders, or regulations established by a Governmental Authority with jurisdiction and applicable to the Parties and the transactions contemplated hereby. C. "Claims" means claims, demands, and causes of action accruing on account of taxes, liens, debts, personal injuries, death, or damages to property, and any other claim, demand, or cause of action of any character. D. "Company" is defined in the preamble of this Agreement. E. "Company Facilities" means the Company facilities installed as part of the Interconnect, including: (i) the pipeline connection between the Pipeline and the isolating flange of the Interconnecting Party Facilities; (ii) the Meter Station; and (iii) associated piping, valves, and fittings necessary to connect the Meter Station described herein. F. "Company Indemnitees" means Company, its affiliated companies, and the managers, members, directors, officers, employees, attorneys -in -fact, agents, and consultants of Company and/or its affiliated companies. G. "Company Specifications" means Company's engineering and construction requirements and standards. H. "Confidential Information" is defined in Section K of Article XI. "Data Collection Equipment" is defined in Section 1 of Exhibit B. Interconnect Agreement Page 1 of 16 "Disclosing Party" is defined in Section K of Article XI. K. "Effective Date" is defined is the date this Agreement is signed by the Company. L. "Estimated Connection Fee" is defined in Section A of Article IV. M. "Force Majeure Event" means any act, cause, condition, event, or circumstance (whether of the kind described below or otherwise) that is not within the control of the Party claiming Force Majeure, and that, despite the exercise of commercially reasonable efforts, the claiming Party is unable to prevent or overcome, including: (i) fire, flood, atmospheric disturbance, lightning, storm, hurricane, cyclone, typhoon, tidal wave, tornado, earthquake, volcanic eruption, landslide, subsidence, washout, epidemic, extreme heat or extreme cold, or other natural disaster or act of God, and threats or warnings of any of the foregoing; (ii) acts of war (declared or undeclared), invasion, armed conflict, embargo, revolution, sabotage, arrests or restraints of rulers and peoples, terrorism or threat thereof, riot, civil war, blockade, insurrection, acts of the public enemy, or civil disturbances; (iii) strikes, lockouts, or other industrial disturbances; (iv) acts after the date of this Agreement of a Governmental Authority that would prevent, delay, or make unlawful a Party's performance under this Agreement, or would require a Party to take unreasonable measures in the circumstances to comply; (v) expropriation, requisition, confiscation or nationalization, embargoes, export or import restrictions, or restrictions of production, rationing, or allocation of the same, whether imposed by Applicable Law or by insistence, request, or instruction of any Governmental Authority with jurisdiction; (vi) explosions, breakdown, blockage, or destruction of facilities or equipment (including breakage, accidents, hydrate obstruction, or blockages of any kind on machinery or lines of pipe) or any act, cause, condition, event, or circumstances enumerated herein, which impacts operating conditions on Company's or Interconnecting Party's facilities or on any pipeline connected to the Interconnect; (vii) repairs, improvements, replacements, or alterations to facilities, equipment, or lines of pipe; and (viii) inability of either Party to obtain necessary machinery, materials, fuel, permits, easements, or rights-of-way at reasonable cost and after the exercise of reasonable diligence. N. "Gas" means natural gas produced from gas wells, vaporized natural gas liquids, gas produced in association with oil (casinghead gas), and/or the residue gas resulting from processing casinghead gas and/or gas well gas. O. "Governmental Authority" means: any federal, state, local, or municipal government body, other than the City of Denton, Texas; any governmental, quasi -governmental, regulatory, or Interconnect Agreement Page 2 of 16 administrative agency, commission, body, or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, policy, regulatory, or taxing authority or power; any court or governmental tribunal; or any independent operator, regional transmission organization, or other regulatory body; in each case having jurisdiction over either Party, the Interconnect, the Company Facilities, or the Interconnecting Party Facilities. P. "Government and Industry Standards" means Applicable Law and generally -accepted gas industry standards. Q. "Interconnect" means the physical facilities, surface easements, right-of-way, and utilities required for the movement of Gas from a point on Company's pipeline with Global Positioning System coordinates of —33°12'47.96"N 97°12'32.44"W, which establishes a physical connection and custody transfer point between the Company Facilities and the Interconnecting Party Facilities. R. "Interconnecting Party" is defined in the preamble of this Agreement. S. "Interconnecting Party Facilities" means the valves, piping, and pipe -related facilities located downstream of the isolating flange installed as part of the Interconnect. T. "Interconnecting Party Indemnitees" means Interconnecting Party, its elected and appointed officials, employees, attorneys -in -fact, agents, contractors, subcontractors, and consultants of Interconnecting Party. U. "Losses" means losses, liens, judgments, penalties, interest, court costs, investigation expenses, and costs and legal fees incurred in defense of any Claim. V. "Meter Station" means the gas measurement facility, including one or more meters capable of measuring the flow range specified in Article II, one or more electronic flow meter, one or more polling communication device, and a continuous Gas sampler, at the Interconnect to be used for custody transfer measurement of Gas flowing between the Company Facilities and the Interconnecting Party Facilities. W. "Monitoring and Shutdown Equipment" means carbon dioxide and hydrogen sulfide monitoring and shut -down devices to protect the Company Facilities and Pipeline. X. "Party" and "Parties" are defined in the preamble of this Agreement. Y. "Pipeline" means the Company pipeline more specifically known as the Sherman Extension, Company Pipeline Number 225-21, and located in Denton County, Texas. Z. "Receiving Party" is defined in Section K of Article XI. AA. "SOC" means, if applicable, Company's then -current Statement of Operating Conditions for Transportation Services filed with the Federal Energy Regulatory Commission. ARTICLE II. FACILITIES Exhibit A, attached hereto and incorporated by reference herein, sets forth in detail the responsibilities of Company and Interconnecting Party for the design, acquisition of materials, Interconnect Agreement Page 3 of 16 construction and installation, ownership, operation and maintenance, and removal of the Company Facilities and Interconnecting Facilities. The Company Facilities and Interconnecting Facilities shall be designed, engineered and constructed: (i) with a maximum allowable operating pressure of 1,440 psig, and (ii) to deliver quantities between 0.6 MMcfd and 44.2 MMcfd to Interconnecting Party at the prevailing operating pressures that may exist on Company Facilities from time to time at the point of delivery. ARTICLE Ill. CONSTRUCTION AND COMPLETION DATE A. Company Installation/Construction Responsibilities: Subject to the contingencies contained herein, Company shall install/construct the Company Facilities in the manner set forth on Exhibit A. The Parties will agree to a construction schedule that provides for a targeted date for each Party to have its facilities available for service. Company warrants that the Facilities and additional facilities will be designed, constructed, installed, operated, maintained, abandoned, and, if necessary, removed to meet applicable government standards and regulations. B. Interconnecting Party Installation/Construction Responsibilities: Subject to the contingencies contained herein, Interconnecting Party shall install/construct the Interconnecting Facilities in the manner set forth on Exhibit A. Interconnecting Party warrants that the Facilities and additional facilities will be designed, constructed, installed, operated, maintained, abandoned, and, if necessary, removed to meet applicable government standards and regulations. C. Completion Date: Both Parties will use commercially reasonable efforts to complete the Company Facilities and Interconnecting Party Facilities by September 1, 2017. The Facilities and additional facilities will be considered to be complete when Company places them in-service. D. "As Built" Drawings: Within 45 days following the Completion Date each Party will provide the other with an "as installed" set of drawings of each Party's Facilities. ARTICLE IV. GRANT OF RIGHT TO CONNECT Interconnecting Party hereby grants to Company, and Company hereby accepts, the right to connect with the Interconnecting Party Facilities under the following terms and conditions: A. Connection Fee. Interconnecting Party shall pay to Company $1,386,000 as an estimated connection fee (the "Estimated Connection Fee") for construction, testing, and proper operation of the Company Facilities. Company will not commence construction of the Company Facilities until Company has received this Agreement, executed by Interconnecting Party, and payment of the Estimated Connection Fee. Upon completion of the Company Facilities: (i) if the actual connection costs, including applicable overheads, incurred by Company or its designee are greater than the Estimated Connection Fee, then Company shall provide documentation to verify the difference in costs and Interconnecting Party shall promptly pay the difference between the two sums to Company; or (ii) if the actual connection costs, including applicable overheads, incurred by Company or its designee are less than the Estimated Connection Fee, then Company shall provide documentation to verify the difference in costs and promptly pay the difference between the two sums to Interconnecting Party. Interconnect Agreement Page 4 of 16 B. Surface Site for Company Facilities. At all times during the term of this Agreement, if requested by Company, Interconnecting Party shall provide to Company, at Interconnecting Party's sole cost and expense: (i) a fenced and graded surface site suitable for the Company Facilities; and (ii) all rights of way, leases, easements, and/or ingress and egress rights necessary for Company to perform its obligations under this Agreement. The existence and continuing effectiveness of the rights of way, leases, easements, and ingress and egress rights described herein are conditions precedent to Company's obligations under this Agreement. ARTICLE V. OPERATION AND MAINTENANCE A. Company and/or Interconnecting Party will operate and maintain the Facilities and additional facilities in the manner set forth on Exhibit A. Company will provide normal and routine operation and maintenance of the measurement equipment. As further clarification of Exhibit A, normal and routine operation and maintenance of the measurement equipment encompasses the following activities: (i) Testing, inspecting and calibration of the primary and secondary measuring elements, and of other devices that directly affect measurement and energy determination, such as gas samplers, chromatographs, and flow computers. Test and inspection frequencies and corresponding equipment tolerances, shall be specified by Company; (ii) Determining custody transfer volume and energy quantities delivered through the Facilities; and (iii) Obtaining and analyzing gas samples. Exhibit B, attached hereto and incorporated by reference herein, specifies the Parties' rights and obligations concerning access to data from the measurement equipment. B. Company will own, operate and maintain the pipeline tap, valve and station piping beginning at the pipeline tap valve and extending to a designated above ground flange with insulation device or other Company approved electrical isolation device at the edge of the Company pipeline right of way or other designated point as outlined in Exhibit A and will provide a one -line diagram clearly identifying Company Facilities and the Interconnecting Party Facilities. C. Company will use its best efforts in operation and volume/energy determination and will provide delivery detail statements to Interconnecting Party or Interconnecting Party's designee. Interconnecting Party may request additional tests or inspections beyond those normally scheduled by Company. Interconnecting Party shall reimburse Company for the actual cost of the test, inspection and repairs, as applicable. Any correction of volume and energy quantities will be performed in compliance with Company's FERC tariff. D. Company shall have the right, regardless of which party is responsible for operation and maintenance activities, to inspect the Facilities and additional facilities and perform any tests it deems necessary at such times as it deems appropriate without prior notice to assure the proper operation and performance of the measurement equipment. If Company, in its discretion, determines the Facilities and additional facilities are not performing satisfactorily, Company reserves the right to make repairs or Interconnect Agreement Page 5 of 16 require Interconnecting Party to do so. If Company makes the repairs, Interconnecting Party will pay Company for all non -routine operation and maintenance, repairs or equipment replacement within 30 days after receipt of an invoice from Company. Company will invoice Interconnecting Party and Interconnecting Party will be required to pay, within 30 days from the date of the invoice for any costs resulting from extraordinary visits to the Facilities and additional facilities required to perform non routine maintenance, repairs, equipment replacement or obtain electronic measurement data due to extended communications outage. In the event major components are required to be replaced including but not limited to meters, flow computer, gas chromatograph, etc., Company will notify the Interconnecting Party of such requirement as early as reasonably possible. E. When Exhibit A defines Interconnecting Party as being responsible for operation and maintenance of the measurement equipment, Interconnecting Party will utilize a Company approved service contractor to perform operation and maintenance activities. Company will provide the Interconnecting Party and the service contractor with detailed operation and maintenance instructions at that time. Any modification of the responsibilities set forth on Exhibit A between Company and Interconnecting Party, whether for operation and maintenance of the measurement equipment or any other activity, shall be an amendment to this Agreement. F. Interconnecting Party will operate and maintain the Facilities and additional facilities in the manner set forth on Exhibit A as well as other Interconnecting Party owned facilities not specifically defined in this Agreement at its sole expense. G. Dewatering, Purging, and Line Pack. Upon Company's request, Interconnecting Party shall furnish, at no cost to Company, Gas as required for dewatering, purging, and line pack in the Company Facilities, in connection with the proposed interconnection between the Pipeline and Interconnecting Party's system. ARTICLE VI. TERM The primary term of this Agreement commences on the Effective Date and ends five years after the Effective Date. This Agreement will continue after the primary term on a month-to-month basis until terminated by either Party with at least 30 days' prior written notice, with the termination to be effective at the end of the primary term or at the end of any month thereafter, as applicable. Upon termination of this Agreement, each Party shall continue to allow the other party access, for a reasonable period of time not to exceed 90 days, to the Interconnect in order that the Parties may remove their facilities, but either Party may, at its sole option, abandon its underground facilities in place if such abandonment is permitted by Applicable Law. ARTICLE VII. AUDIT RIGHTS Each Party has the right, at its sole expense, during normal working hours and upon no less than 10 Business Days' advance notice, to examine the records of the other Party to the extent reasonably necessary to verify the accuracy of any statement, charge or computation made pursuant to this Agreement. If any such examination reveals any inaccuracy in any statement, the necessary adjustments in such statement and the payments thereof will be made promptly and shall bear interest calculated at the Interest Rate from the date the overpayment or underpayment was made until paid; provided, Interconnect Agreement Page 6 of 16 however, that no adjustment for any statement or payment will be made unless objection to the accuracy thereof was made prior to the lapse of 12 months from the rendition thereof, and thereafter any objection will be deemed waived except to the extent any misinformation was from a third party not affiliated with any Party and such third party corrects its information after such 12 -month period. ARTICLE VIII. INDEMNITY A. Interconnecting Party, to the extent allowed by Applicable Law, and Company shall indemnify and hold harmless the other party, its officers, employees, subcontractors and agents from and against any and all loss, damage, and liability (including attorney's fees and costs and expenses of any suit) from any and all claims for damages on account of or by reason of bodily injury, including death, which may be sustained or claimed to be sustained by any person, including the employees, subcontractors or agents of Company or Interconnecting Party, and from and against any and all damages to property, including loss of use and including property of Interconnecting Party or Company, caused by or arising out of or claimed to have been caused by or to have arisen out of an act or omission (including, but not limited to, breach of Interconnecting Party's or Company's obligations, representations and warranties set forth in this Agreement) by Interconnecting Party or Company, or the agents, subcontractors or employees of Interconnecting Party or Company in connection with their performance of this Agreement, including any required operation and maintenance, whether or not insured against; provided, however, that the foregoing indemnification will not cover loss, damage, or liability arising from the gross negligence or willful misconduct of Interconnecting Party or Company, their agents, subcontractors and employees. Interconnecting Party and Company shall pay any and all judgments which may be recovered in any such actions, claims, proceedings, or suits in accordance with the foregoing indemnification given by Interconnecting Party to Company and by Company to Interconnecting Party. Notwithstanding the foregoing, in the event of such actions, claims, proceedings or suits, Interconnecting Party and Company shall be entitled, if either so elects, to representation by attorneys of its own selection, including attorneys employed by Interconnecting Party and Company. B. Exclusion of Special, Incidental, Indirect, and Consequential Damages: To the fullest extent permitted by law, and notwithstanding any other provision in the Agreement, consistent with the terms of Paragraph B the Company and Company's officers, directors, members, partners, agents, and employees shall not be liable to Interconnecting Party or anyone claiming by, through, or under Interconnecting Party for any special, incidental, indirect, or consequential damages whatsoever arising out of, resulting from, or in any way related to the Company Facilities or the Agreement from any cause or causes, including but not limited to any such damages caused by the negligence, professional errors or omissions, strict liability, breach of contract, indemnity obligations, or warranty, express or implied of Company or Company's officers, directors, members, partners, agents, employees. The following damages are not to be considered special, incidental, indirect or consequential damages: cost of replacement electric power resulting from the interruption of the gas supply to Interconnecting Party's gas fired electric generation facility. C. Notice of Claims. Each Party shall notify the other Party immediately of the filing of all Claims and any liens, including laborers', materialmen's, and mechanics' liens upon its property or property of the other and upon which the work is performed through the services, labor, and material furnished by either Party or its contractors or subcontractors under this Agreement. Either Party may, upon receipt of notice of the filing of any such liens, at its option, require a bond or other reasonable security in an amount and with such sureties as may be approved by such Party, conditioned to save Interconnect Agreement Page 7 of 16 harmless such Party from all such liens upon or against its property. If such Party fails or refuses to furnish such bond or other reasonable security when so required, then the other Party may pay any sums necessary to obtain the release of such liens and bill the costs to the Party failing to keep the other's property free of liens. ARTICLE IX. REMEDY FOR BREACH Except as otherwise specifically provided herein, if either Party fails to perform any of its material obligations under this Agreement (except where such failure is excused under the provisions of Article X), then the other Party may, at its option, (without waiving any other remedy for breach hereof), by written notice specifying the default that has occurred, indicate such Party's election to terminate this Agreement. The defaulting Party will have 30 days from receipt of such notice to (i) remedy the default, or (ii) pay or fully indemnify the other Party for all loss or damage resulting from the breach. If the defaulting Party does not timely cure the default in accordance with the previous sentence, then this Agreement will terminate at the end of the 30 -day period. Any such termination is not an election of remedies and does not prejudice the right of the non -defaulting Party (i) to collect amounts due hereunder for damage or loss suffered by it, or (ii) to pursue any other remedy for the breach. ARTICLE X. FORCE MAJEURE To the extent either Party is prevented by a Force Majeure Event from carrying out, in whole or part, its obligations under this Agreement (other than the obligation to make payments hereunder) and such Party gives notice and details of the Force Majeure Event to the other Party as detailed below, then, the Party impacted by the Force Majeure Event will be excused from the performance of its obligations (other than the obligation to make payments hereunder) to the extent impacted. As soon as practicable after commencement of a Force Majeure Event, the non-performing Party shall provide the other Party with oral notice of the Force Majeure Event, and within two weeks of the commencement of a Force Majeure Event, the non-performing Party shall provide the other Party with notice in the form of a letter describing in detail the particulars of the occurrence giving rise to the Force Majeure Event claim. The suspension of performance due to a claim of a Force Majeure Event must be of no greater scope and of no longer duration than is required by the Force Majeure Event. The affected Party shall use commercially reasonable efforts to remedy the effect of the Force Majeure Event with all reasonable dispatch. This Agreement may be terminated by either Party with no further obligation to the other Party if such Force Majeure Event prevents the performance of a material portion of the obligations hereunder and such Force Majeure Event is not resolved within 180 days after the commencement of such Force Majeure Event. ARTICLE XI INSURANCE A. During the term of this Agreement both Company and Interconnecting Party shall maintain the following insurance coverages: 1. Commercial General Liability Insurance. Company shall maintain commercial general liability (CGL) insurance with a limit of $1,000,000 each occurrence with a $2,000,000 aggregate. This insurance shall cover liability including, but not limited to, liability arising from Interconnect Agreement Page 8 of 16 premises, operations, blowout or explosion, products -completed operations, contractual liability, underground property damage, broad form property damage, sudden and accident pollution and independent contractors. This insurance shall also include coverage for underground resources and equipment hazard damage. 2. Automobile Liability Insurance. Automobile liability insurance with a limit of $1,000,000 each accident. Such insurance shall cover liability arising out of any auto (including owned, non -owned, and hired autos). 3. Worker's Compensation Insurance. The workers compensation limits shall be as required by statute and employers liability limits shall be $1,000,000 each accident for bodily injury by accident and $1,000,000 each employee for bodily injury by disease. 4. Excess (or Umbrella) Liability Insurance with a limit of $10,000,000) per occurrence with a $10,000,000 aggregate. Such insurance shall be excess of the commercial general liability insurance, automobile liability insurance and employers liability insurance as specified above. B. Contractors and Sub -Contractors. Both Parties will (i) use reasonable efforts to cause its contractors and sub -contractors to maintain insurance programs consistent with the coverage and limits required herein. C. Either Party may maintain a self-insurance program for all or any part of the foregoing liability risks, provided such self-insurance policy in all material respects complies with the requirements set forth in this Article XI. ARTICLE XII. MISCELLANEOUS A. Applicable Law. This Agreement is subject to Applicable Law. This Agreement and all rights and obligations of the Parties arising from or relating to this Agreement will be governed by and construed, enforced, and performed in accordance with the laws of the State of Texas, without giving effect to provisions concerning conflict of laws that might require the application of the laws of any other legal system. B. Venue. Any dispute, controversy, or Claim arising out of or in connection with this Agreement, including any question regarding its existence, validity, or termination, will be resolved by the state or federal courts sitting in Dallas, Dallas County, Texas. The Parties irrevocably submit to the exclusive jurisdiction of such courts in any such action or proceeding and irrevocably waive the defense of an inconvenient forum to the maintenance of any such action or proceeding. C. Headings. The headings used in this Agreement are included as a matter of convenience and are for reference purposes only. These headings do not define, limit, modify, or describe the scope and nature of the subject matter contained in this Agreement. D. Notices. To be effective, all notices, demands, and other communications provided under this Agreement must be in writing and (i) given by personal delivery, (ii) sent by United States mail, postage Interconnect Agreement Page 9 of 16 pre -paid, return receipt requested; (iii) sent by overnight delivery; or (iv) sent by courier. All notices will be deemed duly given upon receipt when addressed as follows: For Interconnecting Party: City of Denton c/o Denton Municipal Electric 1659 Spencer Rd Denton, TX 76205 Attention: General Manager Phone: (940) 349-7105 and City of Denton City Attorney's Office 215 E. McKinney St. Denton, TX 76201 Phone: (940) 349-8333 For Company: Enterprise Texas Pipeline LLC 1100 Louisiana St., 15th Floor Houston, TX 77002-5227 Attention: Gas Contract Administration Phone: (713) 381-8252 or (713) 381-6500 Email: ContractAdmin-Gas@eprod.com Either Party may change its address listed above by providing written notice of the change to the other Party E. Waiver. To be effective, any waiver of a provision of this Agreement must be in writing and signed by the Parties. No waiver by a Party of any one or more defaults by the other Party in the performance of any provisions of this Agreement operates as, or is to be construed as, a waiver of any future default, whether of a like or different character. F. Conflicts. If there is a conflict between the provisions of this Agreement and the provisions of any exhibit attached hereto, if any, then the provisions of this Agreement control. If there is a conflict between the provisions of this Agreement and the provisions of the SOC or any Gas purchase, sales, or transportation agreement between Company and Interconnecting Party, then the provisions of the SOC and/or such Gas purchase, sales, or transportation agreement control. G. Assignment. This Agreement is binding upon and inures to the benefit of the Parties and their respective successors and assigns. Neither Party may assign this Agreement, in whole or in part, without the other Party's express written consent, which shall not unreasonably withheld, conditioned, or delayed. Interconnect Agreement Page 10 of 16 H. No Third -Party Beneficiary. Except for persons indemnified hereunder, this Agreement is not for the benefit of any third party, and nothing herein, expressed or implied, confers any right or remedy upon any person not a Party hereto, other than successors or permitted assigns of a Party. 1. Transportation. The execution of this Agreement does not authorize or set forth the terms and conditions of transportation service by Company. Company will render transportation service using the facilities contemplated by this Agreement only after the execution, if any, of the appropriate service agreement. The execution of this Agreement does not guarantee Gas will flow through the Interconnect within any specified period of time, or ever. In addition, unless otherwise specified in this Agreement, financial responsibility for the connection facilities hereunder does not convey any exclusive rights to the other Party's facilities for which it paid or for which it made a payment in aid of construction. J. Entirety of Agreement. This Agreement and the exhibits attached hereto, if any, contain the entire agreement of the Parties related to the subject matter of this Agreement. This Agreement supersedes all prior oral discussions, negotiations, representations, and agreements relating to the subject matter of this Agreement. This Agreement may be amended only by a written instrument signed by both Parties. K. Confidentiality. (i) The Parties have and will develop certain information, processes, know-how, techniques, and procedures concerning the Interconnect that they consider confidential and proprietary (together with the terms and conditions of this Agreement, the "Confidential Information"). Notwithstanding the confidential and proprietary nature of such Confidential Information, the Parties (each, the "Disclosing Party") may make such Confidential Information available to the other (each, a "Receiving Party") subject to the provisions of this Section L. (ii) Upon receiving or learning of Confidential Information, the Receiving Party shall: (a) treat such Confidential Information as confidential and use reasonable care not to divulge such Confidential Information to any third party except as required by Applicable Law, subject to the restrictions set forth below; (b) restrict access to such Confidential Information to only those employees, Affiliates, subcontractors, suppliers, vendors, and advisors whose access is reasonably necessary for the development, construction, operation, or maintenance of the Interconnect and for the purposes of this Agreement who shall be bound by the terms of this Section; (c) use such Confidential Information solely for the purpose of developing the Interconnect and for purposes of this Agreement; and (d) upon the termination of this Agreement, destroy or return to the Disclosing Party any such Confidential Information in written or other tangible form and any copies thereof. (iii) The restrictions of this Section do not apply to: (a) release of this Agreement to any Governmental Authority required for obtaining any approval or making any filing relating to the Interconnect, provided that each Party shall cooperate in good faith with the other to maintain the confidentiality of Interconnect Agreement Page 11 of 16 the provisions of this Agreement by requesting confidential treatment with all filings to the extent appropriate and permitted by Applicable Law; (b) information that is, or becomes, publicly known or available other than through the action of the Receiving Party in violation of this Agreement; (c) information in the possession of the Receiving Party prior to receipt from the Disclosing Party or that is independently developed by the Receiving Party, provided that the Person or Persons developing such information have not had access to any Confidential Information; (d) information received from a third party that is not known (after due inquiry) by the Receiving Party to be prohibited from disclosing such information pursuant to a contractual, fiduciary, or legal obligation; and (e) information that is, in the reasonable written opinion of counsel of the Receiving Party, required to be disclosed pursuant to Applicable Law (including any Freedom of Information Act or Texas Public Information Act request); provided, however, that the Receiving Party, prior to such disclosure, shall provide reasonable advance notice to the Disclosing Party of the time and scope of the intended disclosure in order to provide the Disclosing Party an opportunity to obtain a protective order or otherwise seek to prevent, limit the scope of, or impose conditions upon such disclosure. (iv) The obligations of the Parties under this Section will remain in full force and effect for three years following the expiration or termination of this Agreement. (v) Notwithstanding any other provision of this Section, the Parties understand that Interconnecting Party is a governmental entity and is required to comply, and Interconnecting Party does hereby agree to comply, with the Texas Public Information Act (Chapter 552 of the Texas Government Code) when responding to requests for records in its possession. Disclosure of information required by the Texas Public Information Act will not constitute a breach of any provision contained herein if so ordered by the State of Texas Attorney General. Notwithstanding the foregoing, the Parties acknowledge and agree that this Agreement is confidential, commercially sensitive information protected from disclosure pursuant to the Texas Public Information Act. L. Rules of Construction. In construing this Agreement, the following principles apply unless the context otherwise requires: (i) examples are not to be construed to limit, expressly or by implication, the matters they illustrate; (ii) the word "includes" and its syntactical variants means "includes, but is not limited to" and corresponding syntactical variant expressions; (iii) the word "shall" means "is required to" when the subject is singular and "are required to" when the subject is plural; and (iv) the plural is deemed to include the singular and vice versa, as applicable. M. Drafting. Each and every provision of this Agreement was drafted jointly by Interconnecting Party and Company. In the event of any ambiguity in, or controversy with respect to, the meaning of any provision in this Agreement, no presumption or inference is to be drawn against either Party's interpretation or construction of this Agreement by reason of such Party's or its counsel's participation in the drafting of this Agreement. N. Severability. If any of the terms of this Agreement are finally held or determined to be invalid, illegal, or void, then all other terms of the Agreement will remain in effect; provided that the Interconnect Agreement Page 12 of 16 Parties shall enter into negotiations concerning the terms affected by such decision for the purpose of achieving conformity with requirements of any Applicable Law and the intent of the Parties. 0. Survival. The representations, warranties, and indemnities given by the Parties, and any other provision that by its nature should survive termination, will survive the termination of this Agreement, including the provisions of Article I, Article 11, Article III, Article IV, Article VII, Article VIII, and this Article XII. P. Counterparts. This Agreement may be executed in any number of counterparts, each of which is an original, but all of which together constitute one and the same instrument. Authorized representatives of the Parties have signed this Agreement to be effective as of the Effective Date. For Company: ENTERPRISE TEXAS PIPELINE LLC, a Texas limited liability company Signature Printed Name Title Signed on the day of 12017. For Interconnecting Party: CITY OF DENTON, a Texas home -rule municipal corporation Todd Hileman, City Manager Signed on the day of ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LE AL FORM: A ROIb EAL, INTERIM CITY ATTORNEY , 2017 under the authority of Ordinance No. 2017-. Interconnect Agreement Page 13 of 16 EXHIBIT A Responsibility Matrix Project: ETP Delivery to City of Denton Direction of Flow: To Interconnecting Party Company = ENT; Interconnecting Party = IP Item Facilities Design Installation Costs Ownership Operation Maintenance IP FACILITIES A Tap & Tie-in to Downstream Pipeline IP IP IF IP IP IP B Downstream Pipeline Shut-in Valves and Actuators IP IP IF IP IP IP C Pipeline Lateral & Over Pressure Valve Downstream of Meter IP IP IP IP IF IP D Easement/ROW, Permits, Licenses Downstream of Meter IP IP IP IP IF IP E Odorizer IP IP IF IP IP IP F Electronic Flow Measurement Equipment IP IF IF IP IP IP INTERCONNECT A Meter Site ENT ENT IF ENT ENT ENT B Fencing ENT ENT IP ENT ENT ENT C Primary Measurement Equipment ENT ENT IP ENT ENT ENT D Custody Measurement ENT ENT IP ENT ENT ENT E Check Measurement IF IP IP IP IP IP F Separator ENT ENT IF ENT ENT ENT G Insulation Kit ENT ENT IP ENT ENT ENT H Over Pressure Protection IP IP IP IP IP IP I Gas Chromatograph ENT ENT IF ENT ENT ENT 1 IP RTU Building IP K ENT RTU Building ENT ENT IF ENT ENT ENT L Instrumentation ENT ENT IP ENT ENT ENT M Telemetry (SCADA) ENT ENT IP ENT ENT ENT N Easement/ROW, for Meter Site IP IP IP IP IP IP O Utilities — Electric Power and Telephone — to site ENT ENT IP ENT ENT ENT P Block Valves, Check Valve, & Control Valves ENT ENT IP ENT ENT ENT Q Road Access IP IP IF IP IP IP R Operator Engineering, Inspections and related activities ENT ENT IP ENT ENT ENT COMPANY FACILITIES A Easement/ROW, Permits, Licenses Upstream of Meter ENT ENT IP ENT ENT ENT B Upstream Pipeline Shut-in Valves and Actuators ENT ENT IP ENT ENT ENT C Tap & Tie-in to Upstream Pipeline ENT ENT IP ENT ENT ENT D ENT Instrumentation ENT ENT IP ENT ENT ENT E ENT Telemetry (SCADA) ENT ENT IP ENT ENT ENT END OF EXHIBIT A Interconnect Agreement Page 14 of 16 EXHIBIT B Data Sharing 1. Data Access. Interconnecting Party and/or its designee will have limited access to Company's electronic measurement equipment at the Meter Station for the sole and limited purpose of installing, operating, and maintaining "read only' electronic data gathering equipment and appurtenant connection facilities designed to acquire electronic measurement data (the "Data Collection Equipment"). Interconnecting Party will only have access to such electronic measurement data in a format established by Company, which will not interfere with the operation of the Meter Station. 2. Raw Data. Interconnecting Party expressly recognizes and agrees that the data acquired from any Data Collection Equipment is "raw data," which is subject to further refinement, correction, or interruption due to maintenance, repair, or other activities by Company, or due to Force Majeure. Company makes no warranties or representations as to the accuracy, completeness, consistency, availability, or continued accessibility of such "raw data" and has no obligation to advise Interconnecting Party of any such interruptions, or to verify the integrity of such data, whether or not resulting from activities performed by Company. Interconnecting Party shall not use the "raw data" as the basis for any dispute between the Parties. 3. Data. At a minimum, Company shall use commercially reasonable efforts to make necessary connections to its electronic measurement equipment to provide Interconnecting Party with the following: a. pressure; b. temperature; c. instantaneous flow and instantaneous energy; d. total flow today; e. total flow yesterday and total energy yesterday; f. flow control set point; g. flow control valve position; and h. gas compositional data (including specific gravity). 4. Hardware. Interconnecting Party, at its sole risk, cost, and expense, may install or cause to be installed Data Collection Equipment as Company, in its sole discretion, determines reasonable and necessary, at locations mutually agreed upon by the Parties. Interconnecting Party shall supply isolation devices acceptable to Company, which provide surge protection between each Party's equipment. Company will terminate all cabling in Company-owned equipment as necessary. 5. Title to Property. Interconnecting Party will retain title to the Data Collection Equipment installed by Interconnecting Party, and Interconnecting Party shall operate and maintain said Data Collection Equipment. Title to the facilities installed by Company will be in Company's name, and Company will own, operate, and maintain said facilities. 6. Right of Access. Interconnecting Party, at its sole risk, cost, and expense may access to the Meter Station at all reasonable times upon 24 hours' prior notice forthe sole and limited purpose of installing, inspecting, calibrating, maintaining, or removing its Data Collection Equipment, which access must be performed without unreasonable interference to Company's facilities and operations; provided, however, all Interconnecting Party personnel accessing such Meter must first complete training reasonably required by Company due to the nature and proximity of other pipelines and equipment within the site. Company may require a representative present to witness the installation or removal of Interconnecting Party's Data Collection Equipment and to coordinate the activities, as well as any subsequent operations and maintenance activities, to assure such activities do not interfere with the operation of Company's facilities. Interconnect Agreement Page 15 of 16 7. Notifications Prior to Commencement of Work. Prior to the commencement by Interconnecting Party of the installation or removal of Interconnecting Party's Data Collection Equipment at the Meter Station, Interconnecting Party shall give notice to Company's measurement specialist or such other contact as specified from time to time by Company, so Company may require a representative present to witness the installation or removal of such Data Collection Equipment and to coordinate the activities, as well as any subsequent operations and maintenance activities, to assure that such activities do not interfere with the operation of Company's facilities. 8. Operation of Data Collection Equipment. Interconnecting Party shall install, operate, and maintain the Data Collection Equipment in conformity with Company's operational and safety requirements and Applicable Law. 9. Company's Right to Disconnect Equipment. Company reserves the right to disconnect Interconnecting Party's Data Collection Equipment without prior notice if at any time such Data Collection Equipment interferes with or adversely affects Company's ability to perform effective measurement, or in any way interferes with Company's operations. If it is necessary for Company to disconnect Interconnecting Party's Data Collection Equipment, then Company shall notify Interconnecting Party of said disconnection, prior to or as soon as possible thereafter, and shall coordinate with Interconnecting Party the reconnection of the Data Collection Equipment following correction of the problem by Interconnecting Party to Company's reasonable satisfaction. 10. Modification and/or Removal of Facilities. Notwithstanding anything to the contrary herein, Interconnecting Party may remove the Data Collection Equipment at any time, at Interconnecting Party's sole risk, cost, and expense, after giving reasonable prior notice to Company, so long as such removal does not interfere with Company's facilities and operations. If Company modifies, alters, or changes the meter at the Meter Station, then Interconnecting Party shall promptly move, change, or modify the Data Collection Equipment, at Interconnecting Party's sole cost and expense, in a manner reasonably necessary to maintain compatibility with the meter, in Company's sole discretion. 11. Failure to Comply. If Company determines that Interconnecting Party has failed to comply with the provisions of this Exhibit B, then Company shall provide Interconnecting Party with written notice of such failure. If Interconnecting Party does not correct such failure within 15 days after the receipt of such notice from Company, then Company may immediately disconnect the cable connections to Interconnecting Party's equipment and terminate Interconnecting Party's ability to access data from Company's measurement equipment. Notwithstanding the foregoing, nothing in this Section restricts Company's right to take immediate action, as Company deems reasonably necessary, to protect Company's personnel or equipment or to protect the public. Interconnect Agreement Page 16 of 16 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-371, Version: 1 DEPARTMENT: DCM: Date: Finance Bryan Langley April 18, 2017 Legislation Text Agenda Information Sheet SUBJECT Consider adoption of an ordinance considering all matters incident and related to the issuance, sale and delivery of up to $102,000,000 in principal amount of "City of Denton Certificates of Obligation, Series 2017" (including up to $18,940,000 for General Government activities, up to $17,600,000 for Solid Waste Fund activities, and up to $65,460,000 for Electric Fund activities); authorizing the issuance of the Certificates; delegating the authority to certain City officials to execute certain documents relating to the sale of the Certificates; approving and authorizing instruments and procedures relating to said Certificates; enacting other provisions relating to the subject; and providing an effective date. BACKGROUND On March 7, 2017, the City Council adopted Ordinance No. 2017-076 and 2017-077 directing the publication of a Notice of Intention to issue Certificates of Obligation (COs) of the City of Denton for General Government, Solid Waste, Wastewater, and Electric System projects. The notices were published on March 13, 2017, and March 20, 2017, in the Denton Record Chronicle, as required by state law. The COs will be issued as a single series of obligations and may include up to $720,000 for issuance costs and to allow flexibility in marketing and pricing the bond sale. Since approval of the Notice of Intentions and as a result of preliminary reviews of budgets, staff has delayed the issuance of $6,000,000 previously planned for the Wastewater Fund until the next fiscal year. Along with the previous reduction in the Solid Waste Fund and reduced Water Fund issuance, this recommended sale of COs has been reduced by $24,375,000 from the adopted FY 2016-17 CIP. Staff recommends the sale of $18,830,000 in COs for General Government projects plus related issuance costs. Below is a listing of recommended CO funded projects for General Government's FY 2016-17 CIP: 1. Vehicle Replacements/Additions - $ 3,955,000 2. Public Safety Radio Upgrades to Digital - $ 2,000,000 3. Computer Aided Dispatch (CAD) System Replacement - $ 3,000,000 4. Facilities Maintenance Program (HVAC, Roofing & Flooring) - $ 1,175,000 5. Bonnie Brae Road Improvement Matching Funds - $ 8,500,000 6. Fleet Fuel Truck - $ 200,000 Total - $18,830,000 Staff recommends the sale of $17,450,000 in COs for Solid Waste projects plus related issuance costs. This City of Denton Page 1 of 5 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-371, Version: 1 amount is a decrease of $6,130,000 from the planned bond sale of $23,580,000 included in the FY 2016-17 CIP. Below is a listing of recommended CO funded projects for Solid Waste: 1. Roll Off Truck - $ 222,000 2. Auto Side Load Truck - $ 294,000 3. Auto Side Load Truck - $ 294,000 4. Auto Side Load Truck - $ 329,000 5. Rear Load Truck - $ 264,000 6. Front Load Truck - $ 290,000 7. Front Load Truck - $ 352,000 8. Front Load Truck - $ 290,000 9. Landfill Excavator - $ 450,000 10. TCEQ Permitted Control Systems - $ 1,050,000 11. Articulated Dump Truck - $ 580,000 12. Track Loader - $ 500,000 13. Dump Truck - $ 150,000 14. Mobile Light Power Plants - $ 30,000 15. Roll Off Containers - $ 50,000 16. Mining Material Diversion Equipment - $ 2,150,000 17. Building Materials Recovery Material Diversion Equipment - $ 300,000 18. Building Materials Recovery Excavator Material Handler - $ 550,000 19. Building Materials Recovery Facility Improvements - $ 250,000 20. Building Materials Recovery Wheeled Excavator - $ 450,000 21. Building Materials Recovery Trommel - $ 580,000 22. Municipal Solid Waste Facility Machinery and Equipment - $ 150,000 23. Leachate Recirculation Infrastructure Expansion - $ 75,000 24. Solidification Equipment - $ 290,000 25. Cell Development - $ 3,155,000 26. 100 Yard Trailers - $ 180,000 27. Site Maintenance Improvements - $ 325,000 28. Process Upgrades and Technology Improvements - $ 400,000 29. Permit Amendment - $ 250,000 30. Solid Waste Fund Property Acquisition - $ 3,200,000 Total - $17,450,000 Staff recommends the sale of $65,000,000 in COs for Electric projects plus related issuance costs. Below is a listing of recommended CO funded projects for Electric's FY 2016-17 CIP, which is broken down between transmission and distribution projects. Transmission projects represent approximately 69% of Electric's total bond sale and are eligible for Transmission Costs of Service (TCOS) recovery through rates charged to other utilities as mandated by the Public Utilities Commission of Texas. L Kings Row Substation - $ 585,000 1. Locust Substation - $ 3,020,509 2. Denton North Interchange - $ 216,635 3. Hickory Substation - $ 7,198,466 4. Eagle Substation - $ 550,871 5. RD Wells Interchange - $ 74,275 6. Mayhill Substation - $ 4,970,222 City of Denton Page 2 of 5 Printed on 4/14/2017 povveied by I_egist9i I;, File #: ID 17-371, Version: 1 7. Long Road Substation - $ 1,145,070 8. Woodrow Substation (Switchgear & Main Control Building) - $ 1,411,221 9. North Lakes Substation - $ 711,800 10. Underwood Substation - $ 303,289 11. North of Loop 288 at TX 428 Substation - $ 519,924 12. Brinker Substation - $ 7,922,646 13. Denton Energy Center Substation - $ 1,716,002 14. TMPA Spencer Interchange - $ 1,640,235 15. Various Substation Remote Terminal Unit Installs - $ 273,579 16. SCADA Computer Replacement - $ 247,583 17. Other Substation Projects - $ 306,384 18. Bonnie Brae/North Lakes Transmission Line - $ 1,003,252 19. Pockrus/Mayhill Transmission Line - $ 1,714,650 20. Spencer Switch/Locust Transmission Line - $ 1,106,618 21. Denton North/North Lakes Transmission Line - $ 1,903,140 22. Hickory/Locust Transmission Line - $ 3,927,886 23. New 138 kV Transmission Line from Woodrow to Brinker - $ 370,899 24. New 138 kV Transmission Line to connect Brinker to Spencer - $ 565,470 25. New 138 kV Transmission Line to connect Mayhill to Brinker/Spencer - $ 188,490 26. New 138 kV Transmission Line to connect Brinker to Loop 288 - $ 747,879 27. Arco -Cooper Creek Reconstruction - $ 1,355,911 28. Transmission Line Routing Study - $ 304,016 Subtotal - Electric Transmission Projects $45,416,922 29. Automated Meter Reading - $ 1,070,957 30. Building Construction - $ 831,533 31. Communications Equipment - $ 238,575 32. Office Furniture and Computer Equipment - $ 1,939,614 33. Distribution Transformers - $10,864,057 34. Feeders and Extensions - $ 3,611,129 35. New Residential and Commercial - $ 561,715 36. Over/Under Conversions and Power Factor Improvements - $ 331,300 37. Street Lighting - $ 134,198 Subtotal - Electric Distribution Projects $19,583,078 Electric Projects Grand Total - $65,000,000 Of the $102,000,000 CO issuance, approximately $98,100,000 was previously authorized through a reimbursement ordinance (Ord. No. 2016-318). The City sells debt in accordance with the useful life of the asset that is being acquired. For example, vehicles are typically sold with debt that will be paid within five years. For the FY 2016-17 proposed CO issuance: $15,730,000 will be 5 year debt, $7,875,000 will be 10 year debt, $12,675,000 will be 20 year debt, and $65,000,000 will be 30 year debt. In addition, the 20 and 30 year debt issues will also have a 10 year call feature. The additional $720,000 is for the cost of issuance and to allow flexibility in marketing and pricing the bond sale. City of Denton Page 3 of 5 Printed on 4/14/2017 povveied by I_egist9i I;, File #: ID 17-371, Version: 1 Since bond market conditions can change rapidly, staff is recommending that the City Council approve a delegated parameters sale for the COs. The parameters ordinance sets the following requirements in order to complete the sale of the COs. - Maximum amount of sale is $102,000,000 - Final stated maturity of February 15, 2047 - Maximum net effective interest rate of 4.00% - Delegation authority ends October 18, 2017 By doing so, City staff will be authorized to execute the sale without additional Council approval. Once the exact terms of the transaction are determined, staff will provide the City Council with additional information in an informal staff report. RECOMMENDATION Staff recommends approval of the ordinance. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On March 7, 2017, the City Council adopted Ordinance No. 2017-076 and 2017-077 directing the publication of Notice of Intention to Issue Certificates of Obligation of the City of Denton totaling $108,250,000. On March 7, 2017, the Audit/Finance Committee received a presentation on the bond program and Notice of Intent Ordinance. The Audit/Finance Committee unanimously recommended approval to forward the upcoming bond issuance to the City Council for consideration. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Organizational Excellence Related Goal: 1.1 Manage financial resources in a responsible manner FXUTRTTC 1. Preliminary Official Statement 2. Ordinance Respectfully submitted: Chuck Springer, 940-349-8260 Director of Finance City of Denton Page 4 of 5 Printed on 4/14/2017 povveied by I_egist9i I;, File M ID 17-371, Version: 1 Prepared by: Antonio Puente, Jr. Assistant Director of Finance City of Denton Page 5 of 5 Printed on 4/14/2017 povveied by I_egist9i I;, FSCCoiitiriuiriqDisc.losurtServices' 1'R11;1,1MENARl 0 I l( IM, S 1A H 1, I1.. "i' Ratings: A Division of Hilltop 5ecunties. Fitch. (See "Continuing Disclosure oftnHnnintion"herein) Dated April_, 2017 S&P: (See "Other Information - NEW ISSUE - Book -Entry -Only Ratings" herein) In the opinion of Bond Counsel, interest on the Certificates will be excludable from gross income for federal income tax purposes under statutes, regulations, published rulings and court decisions existing on the date thereof, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. THE CERTIFICATES WILL NOT BE DESIGNATED AS "QUALIFIED TAX-EXENIPT OBLIGATIONS" FOR FINANCIAL INSTITUTIONS S94,485,000* CITY OF DENTON, TEXAS i (Denton County) DENTON CERTIFICATES OF OBLIGATION, SERIES 2017 Dated Date: May 1, 2017 Due: February 15, as shown below Interest Accrues from Delivery Date PAYMENT TERMS ... Interest on the $94,485,000* City of Denton, Texas Certificates of Obligation, Series 2017 (the "Certificates") will accrue from the delivery date (the "Delivery Date"), will be payable February 15 and August 15 of each year, commencing February 15, 2018, until maturity or prior redemption, and will be calculated on the basis of a 360 -day year consisting of twelve 30 -day months. The definitive Certificates will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book -Entry -Only System described herein. Beneficial ownership of the Certificates may be acquired in denominations of $5,000 or integral multiples thereof within a maturity. No physical delivery of the Certificates will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Certificates will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Certificates. See "The Obligations - Book -Entry -Only System" herein. The initial Paying Agent/Registrar is BOKF, NA, Dallas, Texas (see "The Obligations - Paying Agent/Registrar"). AUTHORITY FOR ISSUANCE ... The Certificates are issued pursuant to the Constitution and general laws of the State of Texas, (the "State") particularly Subchapter C of Chapter 271, Texas Local Government Code (the Certificate of Obligation Act of 1971), as amended, and Texas Government Code, Chapter 1371, as amended, and constitute direct obligations of the City of Denton, Texas (the "City"), payable from a combination of (i) the levy and collection of a direct annual ad valorem tax, within the limits prescribed by law, on all taxable property within the City, and (ii) a limited pledge of surplus net revenues of the City's Utility System not in excess of $1,000, as provided in the Certificate Ordinance (defined herein) authorizing the Certificates (see "The Obligations - Authority for Issuance"). PURPOSE .. . Proceeds from the sale of the Certificates will be used for (a) acquisition of vehicles and equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's solid waste disposal system; (b) renovations to, and equipping of, existing municipal buildings, including the acquisition and installation of replacement heating, venting and air conditioning equipment, roofing and flooring; (c) acquisition of vehicles and equipment for the fire, police, building inspections, community improvement services, animal services, streets and traffic control, facilities management, and parks and recreation departments; (d) acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to parking facilities; (e) constructing and improving streets, including landscaping, drainage, utility line relocations and the acquisition of land and rights-of-way therefor; (f) acquisition of equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's electric light and power system; 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 projects and said Certificates (see "Plan of Financing"). MATURITY SCHEDULE See page 2 SEPARATE ISSUES ... The Certificates are being offered by the City concurrently with the "City of Denton, Texas General Obligation Refunding and Improvement Bonds, Series 2017" (the "Bonds"), and such Certificates and Bonds are hereinafter sometimes referred to collectively as the "Obligations." The Certificates and Bonds are separate and distinct securities offerings being issued and sold independently except for the common Official Statement, and, while the Obligations share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including the type of obligation being offered, its terms for payment, the security for its payment, the rights of the holders, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY ... The Certificates are offered for delivery when, as and if issued and received by the Initial Purchaser subject to the approving opinion of the Attorney General of Texas and the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, Dallas, Texas (see Appendix C, "Forms ofBond Counsel's Opinions"). DELIVERY ... It is expected that the Certificates will be available for delivery through The Depository Trust Company on June 13, 2017. SEALED BIDS DUE MAY 9, 2017, AT 10:30 AM, CDT** * Preliminary, subject to change. See "Adjustment of Principal Amount and/or Types of Bids" in the Notice of Sale for the Certificates. ** Place and Time of Bid Opening ... The City will accept bids for the sale of the Certificates on a day during the period beginning May 9, 2017 and initially ending June 5, 2017. At least 12 hours prior to the sale of the Certificates, FirstSouthwest, a Division of Hilltop Securities Inc., as Financial Advisor to the City, will communicate, through Parity and Bloomberg, the date and time for submission of bids The Financial Advisor, acting on behalf of the City, shall accept bids up to the time specified in the notice as hereinbefore described. MATURITY SCHEDULE* Principal Interest CUSIP Principal Amount* Maturity Rate Yield Suffix (l) Amount* Maturity $3,985,000 2018 $2,930,000 2033 4,920,000 2019 3,050,000 2034 5,175,000 2020 3,175,000 2035 5,445,000 2021 3,300,000 2036 5,720,000 2022 3,415,000 2037 1,975,000 2023 2,450,000 2038 2,075,000 2024 2,550,000 2039 2,185,000 2025 2,650,000 2040 2,300,000 2026 2,760,000 2041 2,420,000 2027 2,870,000 2042 2,340,000 2028 2,990,000 2043 2,460,000 2029 3,110,000 2044 2,590,000 2030 3,240,000 2045 2,710,000 2031 3,370,000 2046 2,815,000 2032 3,510,000 2047 CUSIP Prefix: 248866 (t) Interest CUSIP Rate Yield Suffix (l) (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Capital IQ on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. Neither of the City or the Financial Advisor shall be responsible for the selection or correctness of the CUSIP numbers set forth herein. REDEMPTION ... The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2028, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2027, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Obligations — Optional Redemption"). * Preliminary, subject to change. See "Adjustment of Principal Amount and/or Types of Bids" herein. 2 FSC;Co§,itirlu r't,gDisclos,ure5ervi«s PRELIMINARY OFFICIAL STATEMENT Ratings: A Divikibn of Hilltop 5t urities. Fitch. rr " (See "Continuing Disclosure of tnRor'n,aa"n"herein) Dated April _ , 2017 S&P: " it (See "Other Information - NEW ISSUE - Book -Entry -Only Ratings" herein) In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under statutes, regulations, published rulings and court decisions existing on the date thereof, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. THE BONDS WILL NOT BE DESIGNATED AS "QUALIFIED TAX-EXEMPT OBLIGATIONS" FOR FINANCIAL INSTITUTIONS $29,220,000* CITY OF DENTON, TEXAS (Denton County) D' GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 2017 Dated Date: May 1, 2017 Interest Accrues from Delivery Date Due: February 15, as shown below PAYMENT TERMS ... Interest on the $29,220,000* City of Denton, Texas General Obligation Refunding and Improvement Bonds, Series 2017 (the "Bonds") will accrue from the delivery date (the "Delivery Date"), will be payable August 15 and February 15 of each year, commencing February 15, 2018, until maturity or prior redemption, and will be calculated on the basis of a 360 -day year consisting of twelve 30 -day months. The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book -Entry -Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof within a maturity. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See "The Obligations - Book -Entry -Only System" herein. The initial Paying Agent/Registrar is BOKF, NA, Dallas, Texas (see "The Obligations - Paying Agent/Registrar"). AUTHORITY FOR ISSUANCE ... The Bonds are issued pursuant to the Constitution and general laws of the State of Texas, (the "State") including particularly Texas Government Code, Chapters 1207, 1371 and 1331, as amended, and are direct obligations of the City of Denton, Texas (the "City"), payable from an annual ad valorem tax levied, within the limits prescribed by law, on all taxable property within the City, as provided in the Bond Ordinance (defined herein) authorizing the Bonds (see "The Obligations - Authority for Issuance" and "The Obligations — Security and Source of Payment"). PURPOSE ... Proceeds of the Bonds are expected to be used (i) to refund certain outstanding obligations of the City described on Schedule I attached hereto (the "Refunded Obligations") for debt service savings; (ii) for street improvements and public safety facilities improvements, and (iii) to pay the costs associated with the issuance of the Bonds (see "Plan of Financing"). MATURITY SCHEDULE See page 4 SEPARATE ISSUES ... The Bonds are being offered by the City concurrently with the "City of Denton, Texas Certificates of Obligation, Series 2017" (the "Certificates"), under a common Official Statement, and such Bonds and Certificates are hereinafter sometimes referred to collectively as the "Obligations." The Bonds and Certificates are separate and distinct securities offerings being issued and sold independently except for the common Official Statement, and, while the Obligations share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including the type of obligation being offered, its terms for payment, the security for its payment, the rights of the holders, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY ... The Bonds are offered for delivery when, as and if issued and received by the Initial Purchaser subject to the approving opinion of the Attorney General of Texas and the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, Dallas, Texas (see Appendix C, "Forms of Bond Counsel's Opinions"). DELIVERY ... It is expected that the Bonds will be available for delivery through The Depository Trust Company on June 13, 2017. SEALED BIDS DUE MAY 9, 2017, AT 11:00 AM, CDT** * Preliminary, subject to change. See "Adjustment of Principal Amount and/or Types of Bids" in the Notice of Sale for the Bonds. ** Place and Time of Bid Opening ... The City will accept bids for the sale of the Bonds on a day during the period beginning May 9, 2017 and initially ending June 5, 2017. At least 12 hours prior to the sale of the Bonds, FirstSouthwest, a Division of Hilltop Securities Inc., as Financial Advisor to the City, will communicate, through Parity and Bloomberg, the date and time for submission of bids. The Financial Advisor, acting on behalf of the City, shall accept bids up to the time specified in the notice as hereinbefore described. MATURITY SCHEDULE* CUSIP Prefix: 248866 (1) Principal Interest Initial CUSIP Principal Interest Initial CUSIP Amount* Maturity Rate Yield Suffix Amount* Maturity Rate Yield Suffix $4,020,000 2018 $ 850,000 2028 3,490,000 2019 875,000 2029 2,885,000 2020 900,000 2030 2,985,000 2021 930,000 2031 2,110,000 2022 960,000 2032 730,000 2023 990,000 2033 750,000 2024 1,030,000 2034 775,000 2025 1,065,000 2035 800,000 2026 1,110,000 2036 825,000 2027 1,140,000 2037 (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Capital IQ on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. Neither of the City or the Financial Advisor shall be responsible for the selection or correctness of the CUSIP numbers set forth herein. REDEMPTION ... The City reserves the right, at its option, to redeem Bonds having stated maturities on and after February 15, 2028, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2027, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Obligations — Optional Redemption"). * Preliminary, subject to change. See "Adjustment of Principal Amount and/or Types of Bids" herein. 4 This Official Statement, which includes the cover pages, Schedule and the Appendices hereto, sloes not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation, or sale. No dealer, broker, salesperson, or other person has been authorized to give information or to make any representation other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon. For purposes of compliance with Rule I5c 2-12 of the Securities and Exchange Commission (the 'Rule ), this document constitutes an Official Statement of the City with respect to the Obligations that has been "deemed final" by the City as of its date except for the omission of no more than the information permitted by the Rule. The information set forth herein has been obtained f om the City and other sources believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as the representation, promise, or guarantee of the Financial Advisor. Any information and expressions of opinion herein contained are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or other matters described herein since the date hereof. See "Other Information - Continuing Disclosure of Information" for a description of the City's undertaking to provide certain information on a continuing basis. Neither the City nor its Financial Advisor make any representation as to the accuracy, completeness, or adequacy of the information supplied by The Depository Trust Company for use in this Official Statement. THIS OFFICIAL STATEMENT CONTAINS "FORWARD-LOOKING" STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. SUCH STATEMENTS MAY INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES, AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE, AND ACHIEVEMENTS TO BE DIFFERENT FROM FUTURE RESULTS, PERFORMANCE, AND ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD- LOOKING STATEMENTS. INVESTORS ARE CAUTIONED THAT THE ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS. THE OBLIGATIONS ARE EXEMPT FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION AND CONSEQUENTLY HAVE NOT BEEN REGISTERED THEREWITH. THE REGISTRATION, QUALIFICATION, OR EXEMPTION OF THE OBLIGATIONS IN ACCORDANCE WITH APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTION IN WHICH THE OBLIGATIONS HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. TABLE OF CONTENTS TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL TABLE 13 - MUNICIPAL SALES TAX HISTORY ................... 40 PRELIMINARY OFFICIAL STATEMENT FINANCIAL POLICIES..........................................................40 28 SUMMARY.............................................................6 28 HISTORY.................................................................. 25 TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY..25 INVESTMENTS............................................................. 41 CITY OFFICIALS, STAFF AND CONSULTANTS ..... 8 TABLE 14- CURRENT INVESTMENTS .................................. 42 ELECTED OFFICIALS.............................................................8 SELECTED ADMINISTRATIVE STAFF......................................8 TAX MATTERS ............................................................. 43 CONSULTANTS AND ADVISORS.............................................8 CONTINUING DISCLOSURE OF INFORMATION 45 INTRODUCTION............................................................9 PLAN OF FINANCING...................................................9 THE OBLIGATIONS.....................................................10 TAX INFORMATION...................................................16 TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT...................................................23 TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY.........................................................24 28 TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT 28 HISTORY.................................................................. 25 TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY..25 TABLE 5 - TEN LARGEST TAXPAYERS...............................25 TABLE 6 - ESTIMATED OVERLAPPING TAX DEBT..............26 DEBT INFORMATION.................................................27 TABLE 7 - GENERAL OBLIGATION DEBT SERVICE REQUIREMENTS.......................................................27 TABLE 8 - INTEREST AND SINKING FUND BUDGET PROJECTION............................................................. 28 TABLE 9 - COMPUTATION OF SELF-SUPPORTING DEBT..... 28 TABLE 10 - AUTHORIZED BUT UNISSUED GENERAL OBLIGATION BONDS................................................28 TABLE 11 - OTHER OBLIGATIONS.....................................29 FINANCIAL INFORMATION.....................................38 TABLE 12 - CHANGES IN NET POSITION OF GOVERNMENTAL FUNDS.....................................................................38 TABLE 12A - GENERAL FUND REVENUES AND EXPENDITURE HISTORY.................................................................. 39 OTHER INFORMATION ............................................. 46 RATINGS............................................................................ 46 LITIGATION........................................................................ 46 REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR SALE....................................................................... 46 LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS ..................................................... 47 LEGAL OPINIONS AND NO -LITIGATION CERTIFICATE ........ 47 AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION......................................................... 47 FINANCIAL ADVISOR.......................................................... 48 INITIAL PURCHASER OF THE BONDS ................................... 48 INITIAL PURCHASER OF THE CERTIFICATES ........................ 48 CERTIFICATION OF THE OFFICIAL STATEMENT .................. 48 FORWARD-LOOKING STATEMENTS DISCLAIMER ................ 48 MISCELLANEOUS............................................................... 49 SCHEDULE OF REFUNDED OBLIGATIONS ......... Schedule I APPENDICES GENERAL INFORMATION REGARDING THE CITY ................. A EXCERPTS FROM THE ANNUAL FINANCIAL REPORT .......... B FORMS OF BOND COUNSEL'S OPINIONS ............................. C The cover pages hereof, this page, the schedule, the appendices included herein and any addenda, supplement or amendment hereto, are part of the Preliminary Official Statement. PRELIMINARY OFFICIAL STATEMENT SUMMARY This summary is subject in all respects to the more complete information and definitions contained or incorporated in this Preliminary Official Statement. The offering of the Bonds and Certificates to potential investors is made only by means of this entire Preliminary Official Statement. No person is authorized to detach this summary from this Preliminaiy Official Statement or to otherwise use it without the entire Preliminaiy Official Statement. THE CITY ....................................... The City of Denton (the "City") is a political subdivision and municipal corporation of the State, located in Denton County, Texas. The City covers approximately 97.411 square miles (see "Introduction - Description of the City"). THE BONDS .................................... The $29,220,000* City of Denton General Obligation Refunding and Improvement Bonds, Series 2017 are to mature on February 15 in the years 2018 through 2037 (see "The Obligations - Description of the Obligations"). THE CERTIFICATES ....................... The $94,485,000* City of Denton Certificates of Obligation, Series 2017 are to mature on February 15 in the years 2018 through 2047 (see "The Obligations - Description of the Obligations"). PAYMENT OF INTEREST ................ Interest on the Bonds accrues from the Delivery Date (defined herein) and is payable August 15, 2017 and each February 15 and August 15 thereafter until maturity or prior redemption. Interest on the Certificates accrues from the Delivery Date and is payable February 15, 2018 and each August 15 and February 15 thereafter until maturity or prior redemption (see "The Obligations - Description of the Obligations" and "The Obligations - Optional Redemption"). AUTHORITY FOR ISSUANCE........... The Bonds are issued pursuant to the Constitution and general laws of the State, including particularly Texas Government Code, Chapters 1207, 1371 and 1331, as amended, and an ordinance (the "Authorizing Bond Ordinance") of the City in which the City Council delegated to each of the City Manager, the Deputy City Manager and the Assistant City Manager authority to complete the sale of the Bonds. The terms of the sale will be included in a "Pricing Certificate," which will complete the sale of the Bonds (the Authorizing Bond Ordinance and the Pricing Certificate for the Bonds are jointly referred to as the 'Bond Ordinance") (see "The Obligations - Authority for Issuance"). The Certificates are issued pursuant to the Constitution and general laws of the State, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, and Texas Government Code, Chapter 1371, as amended, and an ordinance (the "Authorizing Certificate Ordinance") of the City in which the City Council delegated to each of the City Manager, the Deputy City Manager and the Assistant City Manager authority to complete the sale of the Certificates. The terms of the sale will be included in a "Pricing Certificate," which will complete the sale of the Certificates (the Authorizing Certificate Ordinance and the Pricing Certificate for the Certificates are jointly referred to as the "Certificate Ordinance") (see "The Obligations - Authority for Issuance"). SECURITY FOR THE BONDS ........... The Bonds constitute direct obligations of the City, payable from a direct annual ad valorem tax levied, within the limits prescribed by law, on all taxable property located within the City (see "The Obligations - Security and Source of Payment"). SECURITY FOR THE CERTIFICATES ................................ The Certificates constitute direct obligations of the City, payable from a combination of (i) a direct annual ad valorem tax levied, within the limits prescribed by law, on all taxable property within the City, and (ii) a limited pledge (not to exceed $1,000) of surplus net revenues of the City's Utility System (see "The Obligations - Security and Source of Payment"). REDEMPTION ................................. The City reserves the right, at its option, to redeem Bonds and Certificates, as the case may be, having stated maturities on and after February 15, 2028, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2027, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Obligations - Optional Redemption"). TAx EXEMPTION .............................. In the opinion of Bond Counsel, the interest on the Obligations will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. * Preliminary, subject to change. USE OF PROCEEDS ......................... Proceeds of the Bonds are expected to be used (i) to refund certain outstanding obligations of the City described on Schedule I attached hereto (the "Refunded Obligations") for debt service savings; (ii) for street improvements and public safety facilities improvements, and (iii) to pay the costs associated with the issuance of the Bonds (see "Plan of Financing"). Proceeds from the sale of the Certificates will be used for (a) acquisition of vehicles and equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's solid waste disposal system; (b) renovations to, and equipping of, existing municipal buildings, including the acquisition and installation of replacement heating, venting and air conditioning equipment, roofing and flooring; (c) acquisition of vehicles and equipment for the fire, police, building inspections, community improvement services, animal services, streets and traffic control, facilities management, and parks and recreation departments; (d) acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to parking facilities; (e) constructing and improving streets, including landscaping, drainage, utility line relocations and the acquisition of land and rights-of-way therefor; (f) acquisition of equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's electric light and power system; 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 projects and said Certificates (see "Plan of Financing"). . RATINGS ......................................... The Obligations and the presently outstanding general obligation debt of the City are rated " " by Fitch Ratings ("Fitch") and " " by Standard & Poor's Rating Services, a Standard & Poor's Financial Services LLC business ("S&P"). See "Other Information — Ratings" herein. BooK-ENTRY-ONLY SYSTEM....... The definitive Obligations will be initially registered and delivered only to Cede & Co., the nominee of DTC pursuant to the Book -Entry -Only System described herein. Beneficial ownership of the Obligations may be acquired in denominations of $5,000 or integral multiples thereof within a maturity. No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Obligations will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Obligations (see "The Obligations - Book -Entry -Only System"). PAYMENT RECORD ........................ The City has never defaulted on the payment of its tax -supported indebtedness. SELECTED FINANCIAL INFORMATION Net Net Ratio Net Fiscal Net Taxable Tax Debt Per Capita Tax Debt to Year Taxable Assessed Outstanding Net Funded Net Taxable % of Ended Estimated Assessed Valuation at End of Tax Assessed Total Tax 9/30 Population (1) Valuation (2) Per Capita Fiscal Year (8) Debt Valuation Collections 2013 117,397 $ 6,706,462,587 (3) 57,126 $120,375,588 1,025 1.79% 99.74% 2014 119,158 6,962,293,178 (4) 58,429 123,827,115 1,039 1.78% 99.73% 2015 120,945 7,761,202,411 (5) 64,171 135,879,058 1,123 1.75% 99.61% 2016 122,759 8,424,062,606 68,623 144,036,173 1,173 1.71% 99.40% 2017 124,988 9,117,506,344 (7) 72,947 167,907,663 (9) 1,343 1.84% 96.72% �10� (1) Source: City Officials. (2) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District to the State Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District updates records. Source: Denton Central Appraisal District as of July 22, 2016. (3) Includes tax incremental value of approximately $10,248,781 that is not available for the City's general obligations and debt of City. (4) Includes tax incremental value of approximately $16,931,096 that is not available for the City's general obligations and debt of City. (5) Includes tax incremental value of approximately $35,975,197 that is not available for the City's general obligations and debt of City. (6) Includes tax incremental value of approximately $39,084,154 that is not available for the City's general obligations and debt of City. (7) Includes tax incremental value of approximately $54,744,149 that is not available for the City's general obligations and debt of City. (8) Excludes self -supported general obligation debt. (9) Includes aportion of the Bonds and aportion of the Certificates. Excludes the Refunded Obligations. Preliminary, subject to change. (10) Collections for part year only, through March 1, 2017. ELECTED OFFICIALS CITY OFFICIALS, STAFF AND CONSULTANTS Term City Council Expires Chris Watts May, 2018 Mayor Kevin Roden May, 2017 (i) Councilmember, District 1 Keely Briggs May, 2017 Councilmember, District 2 Kathleen Wazny May, 2017 (3) Councilmember, District 3 Joey Hawkins May, 2017 (3) Councilmember, District 4 Dalton Gregory May, 2018 Councilmember, At Large Place 5 Sara Bagheri May, 2018 Councilmember, At Large Place 6 (1) Term ends in May and may not run for re-election for District 1. (2) Running unopposed for the May 6, 2017 election. (3) Not running for re-election. SELECTED ADMINISTRATIVE STAFF CONSULTANTS AND ADVISORS Name Position Todd Hileman City Manager Bryan Langley Deputy City Manager Jon Fortune Assistant City Manager Chuck Springer Director of Finance Jennifer K. Walters City Secretary Aaron Leal Interim City Attorney Auditors............................................................................................................................................ Pattillo, Brown and Hill, L.L.P. Waco, Texas Bond Counsel............................................................................................................................. McCall, Parkhurst & Horton L.L.P. Dallas, Texas Financial Advisor.............................................................................................. FirstSouthwest, a Division of Hilltop Securities Inc. Fort Worth, Texas For additional information regarding the City, please contact Chuck Springer Laura Alexander Director of Finance David Medanich City of Denton FirstSouthwest, a Division of Hilltop Securities Inc. 215 E. McKinney Street or 777 Main Street, Suite 1200 Denton, Texas 76201 Fort Worth, Texas 76102 (940) 349-8224 (817) 332-9710 8 OFFICIAL STATEMENT RELATING TO CITY OF DENTON, TEXAS $29,220,000* $94,485,000* GENERAL OBLIGATION REFUNDING CERTIFICATES OF OBLIGATION, SERIES 2017 AND IMPROVEMENT BONDS, SERIES 2017 INTRODUCTION This Preliminary Official Statement, which includes the Schedule and Appendices hereto, provides certain information regarding the issuance of $29,220,000* City of Denton. Texas General Obligation Refunding and Improvement Bonds, Series 2017 (the "Bonds") and $94,485,000* City of Denton, Texas Certificates of Obligation, Series 2017 (the "Certificates"). The Bonds and the Certificates (collectively the "Obligations") are separate and distinct securities offerings being authorized for issuance under separate ordinances (the "Bond Ordinance" and the "Certificate Ordinance", respectively, each as defined below, and collectively the "Ordinances") adopted by the City Council of the City, but are being offered and sold pursuant to a common Official Statement, and while the Bonds and Certificates share certain common attributes, each issue is separate and apart from the other and should be reviewed and analyzed independently, including the kind and type of obligation being issued, its terms of payment, the security for its payment, the rights of the holders, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and the covenants and agreements made with respect thereto. The City Council adopted an ordinance on April 18, 2017 authorizing the issuance of the Bonds (the "Authorizing Bond Ordinance"). In the Authorizing Bond Ordinance, as permitted by the provisions of Chapters 1207 and 1371, Texas Government Code, as amended, the City Council delegated the authority to each of the City Manager, the Deputy City Manager and the Assistant City Manager to establish the terms and details of the Bonds and to effect the sale of the Bonds pursuant to a "Pricing Certificate" (the Authorizing Bond Ordinance and the Pricing Certificate for the Bonds are jointly referred to as the "Bond Ordinance"). The City Council adopted an ordinance on April 18, 2017 authorizing the issuance of the Certificates (the "Authorizing Certificate Ordinance"). In the Authorizing Certificate Ordinance, as permitted by the provisions of Chapters 1371, Texas Government Code, as amended, the City Council delegated the authority to each of the City Manager, the Deputy City Manager and the Assistant City Manager to establish the terms and details of the Certificates and to effect the sale of the Certificates pursuant to a "Pricing Certificate" (the Authorizing Certificate Ordinance and the Pricing Certificate for the Certificates are jointly referred to as the "Certificate Ordinance"). Capitalized terms used in this Preliminary Official Statement have the same meanings assigned to such terms in each respective Ordinance, except as otherwise indicated herein. There follows in this Preliminary Official Statement descriptions of the Obligations and certain information regarding the City and its finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document. Copies of such documents may be obtained from the City's Financial Advisor, FirstSouthwest, a Division of Hilltop Securities Inc., Fort Worth, Texas. DESCRIPTION of THE CITY ... The City of Denton, Texas (the "City") is a political subdivision located in Denton County operating as a home -rule city under the laws of the State of Texas and a charter approved by the voters in 1959. The City operates under the Council/Manager form of government where the Mayor and six Councilmembers are elected for staggered two-year terms. The City Council formulates operating policy for the City while the City Manager is the chief administrative officer. The City is approximately 97.411 square miles in area. PLAN OF FINANCING PURPOSE ... Proceeds of the Bonds are expected to be used (i) to refund certain outstanding obligations of the City described on Schedule I attached hereto (the "Refunded Obligations") for debt service savings; (ii) for street improvements and public safety facilities improvements, , and (iii) to pay the costs associated with the issuance of the Bonds. Proceeds from the sale of the Certificates will be used for (a) acquisition of vehicles and equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's solid waste disposal system; (b) renovations to, and equipping of, existing municipal buildings, including the acquisition and installation of replacement heating, venting and air conditioning equipment, roofing and flooring; (c) acquisition of vehicles and equipment for the fire, police, building inspections, community improvement services, animal services, streets and traffic control, facilities management, and parks and recreation departments; (d) acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to parking facilities; (e) constructing and improving streets, including landscaping, drainage, utility line relocations and the acquisition of land and rights-of-way therefor; ,(f) acquisition of equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's electric light and power system; 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 projects and said Certificates. * Preliminary, subject to change. REFUNDED OBLIGATIONS ... The principal and interest due on the Refunded Obligations are to be paid on the scheduled redemption date of such Refunded Obligations, from funds to be deposited pursuant to an escrow agreement (the "Escrow Agreement") between the City and The Bank of New York Mellon Trust Company, N.A. (the "Escrow Agent"). The Bond Ordinance provides that from the proceeds of the sale of the Bonds received from the Initial Purchasers, together with other funds of the City, if any, the City will deposit with the Escrow Agent the amount necessary to accomplish the discharge and final payment of the Refunded Obligations on their redemption date as described in "Schedule I - Schedule of Refunded Obligations". Such funds will be held by the Escrow Agent in a separate special escrow account (the "Escrow Fund"). FirstSouthwest, acting as financial advisor to the City, will provide a sufficiency certificate (the "Sufficiency Certificate") as to the sufficiency of the funds to be deposited with the Escrow Agent for the redemption of the Refunded Obligations. Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Refunded Obligations and amounts therein will not be available to pay the Obligations. By deposit of the cash with the Escrow Agent pursuant to the Escrow Agreement, the City will have effected the defeasance of all the Refunded Obligations in accordance with State law and in reliance upon the Sufficiency Certificate. It is the opinion of Bond Counsel that, as a result of such defeasance and in reliance upon the Sufficiency Certificate, the Refunded Obligations will be outstanding only for the purpose of receiving payments from the cash held for such purpose by the Escrow Agent and such Refunded Obligations will not be deemed as being outstanding obligations of the City payable from taxes nor for the purpose of applying any limitation on the issuance of debt, and the City will have no further responsibility with respect to amounts available in the Escrow Funds for the payment of the Refunded Obligations from time to time. THE OBLIGATIONS DESCRIPTION OF THE OBLIGATIONS ... The Obligations are dated May 1, 2017, and mature on February 15 in each of the years and in the amounts shown on page 2 and page 4 hereof. Interest will accrue from the date of initial delivery thereof (the "Delivery Date"), will be computed on the basis of a 360 -day year of twelve 30 -day months, and will be payable on August 15 and February 15 of each year, commencing August 15, 2017 for the Bonds and commencing February 15, 2018 for the Certificates, until maturity or prior redemption. The definitive Obligations will be issued only in fully registered form in any integral multiple of $5,000 for any one maturity and will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book -Entry -Only System described herein. No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Obligations will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Obligations. See "The Obligations - Book -Entry -Only System" herein. AUTHORITY FOR ISSUANCE ... The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Chapters 1207, 1371 and 1331, Texas Government Code, as amended, and the Bond Ordinance. The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, and Texas Government Code, Chapter 1371, as amended, and the Certificate Ordinance. SECURITY AND SOURCE OF PAYMENT The Bonds ... The Bonds constitute direct obligations of the City and the principal thereof and interest thereon are payable from an annual ad valorem tax levied by the City, within the limits prescribed by law, upon all taxable property in the City, as provided in the Bond Ordinance. The Certificates ... The Certificates constitute direct obligations of the City, payable from a combination of (i) a direct annual ad valorem tax levied, within the limits prescribed by law, on all taxable property within the City, and (ii) a limited pledge (not to exceed $1,000) of surplus net revenues of the City's Utility System (consisting of the electric system and the waterworks and sewer system). TAx RATE LIMITATION ... All taxable property within the City is subject to the assessment, levy and collection by the City of a continuing, direct annual ad valorem tax sufficient to provide for the payment of principal of and interest on all ad valorem tax debt, including the Obligations, within the limits prescribed by law. Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits its maximum ad valorem tax rate to $2.50 per $100 Taxable Assessed Valuation for all City purposes. The Home Rule Charter of the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 Taxable Assessed Valuation. Administratively, the Attorney General of the State of Texas will permit allocation of $1.50 of the $2.50 maximum tax rate for all general obligation debt, as calculated at the time of issuance and based on 90% tax collection factor. OPTIONAL REDEMPTION ... The City reserves the right, at its option, to redeem the Obligations having stated maturities on and after February 15, 2028 in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2027 or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. If less than all of the Bonds or Certificates are to be redeemed, the City may select the maturities of Bonds or Certificates, as the case may be, to be redeemed. If less than all the Bonds or Certificates of any maturity are to be redeemed, the Paying Agent/Registrar (or DTC while the Bonds 10 or Certificates, as the case may be, are in Book -Entry -Only form) shall determine by lot the Bonds or Certificates, or portions thereof, within such maturity to be redeemed. If a Bond or Certificate (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such Bond or Certificate (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date. With respect to any optional redemption of the Bonds or Certificates, as the case may be, unless certain prerequisites to such redemption required by the respective Ordinance have been met and money sufficient to pay the principal of and premium, if any, and interest on the Bonds or Certificates, as the case may be, to be redeemed will have been received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice may state that said redemption will, at the option of the City, be conditional upon the satisfaction of such prerequisites and receipt of such money by the Paying Agent/Registrar on or prior to the date fixed for such redemption or upon any prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given and such prerequisites to the redemption are not fulfilled, such notice will be of no force and effect, the City will not redeem such Bonds or Certificates, as the case may be, and the Paying Agent/Registrar will give notice in the manner in which the notice of redemption was given, to the effect that the Bonds or Certificates, as the case may be, have not been redeemed. NOTICE of REDEMPTION ... Not less than 30 days prior to a redemption date for the Obligations, the City shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Obligations to be redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN WHETHER OR NOT THE REGISTERED OWNER RECEIVES SUCH NOTICE. IF AN OBLIGATION (OR ANY PORTION OF ITS PRINCIPAL SUM) SHALL HAVE BEEN DULY CALLED FOR REDEMPTION AND NOTICE OF SUCH REDEMPTION DULY GIVEN, THEN UPON THE REDEMPTION DATE SUCH OBLIGATION (OR THE PORTION OF ITS PRINCIPAL SUM TO BE REDEEMED) SHALL BECOME DUE AND PAYABLE, AND, IF MONIES FOR THE PAYMENT OF THE REDEMPTION PRICE ARE HELD FOR THE PURPOSE OF SUCH PAYMENT BY THE PAYING AGENT/REGISTRAR AND ALL OTHER CONDITIONS TO REDEMPTION ARE SATISFIED, INTEREST SHALL CEASE TO ACCRUE AND BE PAYABLE FROM AND AFTER THE REDEMPTION DATE ON THE PRINCIPAL AMOUNT REDEEMED. DEFEASANCE ... The Ordinances provide that any Obligation and the interest thereon shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Obligation") within the meaning of such Ordinance when payment of the principal of such Obligation, plus interest thereon to the due date either (i) shall have been made or caused to be made in accordance 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 City with the Paying Agent/Registrar for the payment of its services until all Defeased Obligations shall have become due and payable, and thereafter the City will have no further responsibility with respect to amounts available to such paying agent (or other financial institution permitted by applicable law) for the payment of such defeased bonds, including any insufficiency therein caused by the failure of such paying agent (or other financial institution permitted by applicable law) to receive payment when due on the Government Obligations. At such time as an Obligation shall be deemed to be a Defeased Obligation hereunder, as aforesaid, such Obligation and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and pledged as provided in the Ordinance, and such principal and interest shall be payable solely from such money or Government Obligations. Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the City also be invested in Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from such Government Obligations received by the Paying Agent/Registrar which is not required for the payment of the Obligations and interest thereon, with respect to which such money has been so deposited, shall be turned over to the City, or deposited as directed in writing to the City. The Ordinances provide that "Government Obligations" means (a) direct, noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (b) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the City Council approves such defeasance, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, (c) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the City Council approves such defeasance, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (d) any other then authorized securities or obligations under applicable Texas state law that may be used to defease obligations such as the Obligations. There is no assurance that the current law will not be changed in a manner which would permit investments other than those described above to be made with amounts deposited to defease the Obligations. Because the Ordinances do not contractually limit such investments, registered owners will be deemed to have consented to defeasance with such other investments, notwithstanding the fact that such investments may not be of the same investment quality as those currently permitted under State law. There is no assurance that any particular rating for U.S. Treasury securities used as Government Obligations or the rating for any other Government Obligations will be maintained at any particular rating category. 11 Upon such deposit as described above, such Defeased Obligations shall no longer be regarded to be outstanding obligations payable from ad valorem taxes levied by the City or from the other revenues pledged to their payment in the Ordinances, but will be payable only from the funds and Government Obligations deposited in escrow and will not be considered debt of the City for any purpose. After firm banking and financial arrangements for the discharge and final payment or redemption of the Obligations have been made as described above, all rights of the City to initiate proceedings to call the Obligations for redemption or take any other action amending the terms of the Obligations are extinguished; provided, however, that the right to call the Obligations for redemption is not extinguished if the City: (i) in the proceedings providing for the firm banking and financial arrangements, expressly reserves the right to call the Obligations for redemption; and (ii) gives notice of the reservation of that right to the owners of the Obligations immediately following the making of the firm banking and financial arrangements; (iii) directs that notice of the reservation be included in any redemption notices that it authorizes. Boox-ENTRY-ONLY SYSTEM ... This section describes how ownership of the Obligations is to be transferred and how the principal of, premium, if any, and interest on the Obligations are to be paid to and accredited by DTC while the Obligations are registered in its nominee name. The information in this section concerning DTC and the Book -Entry -Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The City believes the source of such information to be reliable, but takes no responsibility for the accuracy or completeness thereof. The City cannot and does not give any assurance that (1) DTC will distribute payments of debt service on the Obligations, or redemption or other notices, to DTC Participants, (2) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Obligations), or redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or (3) DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC. DTC will act as securities depository for the Obligations. The Obligations will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered security certificate will be issued for each maturity of the Obligations in the aggregate principal amount thereof and will be deposited with DTC. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of "AA+". The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc,com and www.dtc.M. Purchases of Obligations under the DTC system must be made by or through Direct Participants, which will receive a credit for the Obligations on DTC's records. The ownership interest of each actual purchaser of each Obligation ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owners entered into the transaction. Transfers of ownership interest in the Obligations are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Obligations, except in the event that use of the book -entry system for the Obligations is discontinued. To facilitate subsequent transfers, all Obligations deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Obligations with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Obligations; DTC's records reflect only the identity of the Direct Participant to whose account such Obligations are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. 12 Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Obligations may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners of Obligations may wish to ascertain that the nominee holding the Obligations for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Obligations within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Obligations unless authorized by a Direct Participant in accordance with DTC's procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Obligations are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments on the Obligations will be made to DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the City or the Paying Agent/Registrar on payable dates in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as in the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent/Registrar or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment to DTC is the responsibility of the City, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Obligations at any time by giving reasonable notice to the City and the Paying Agent/Registrar. Under such circumstances, in the event that a successor securities depository is not obtained, Obligation certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, Obligations will be printed and delivered. Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that while the Obligations are in the Book -Entry -Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Obligations, but (i) all rights of ownership must be exercised through DTC and the Book -Entry -Only System, and (ii) except as described above, notices that are to be given to registered owners under the Ordinances will be given only to DTC. Information concerning DTC and the Book -Entry -Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the City, the Financial Advisor or the Initial Purchasers. EFFECT OF TERMINATION OF BooK-ENTRY-ONLY SYSTEM ... In the event that the Book -Entry -Only System is discontinued by DTC or the use of the Book -Entry -Only System is discontinued by the City, printed Obligations will be issued to the holders and the Obligations will be subject to transfer, exchange and registration provisions as set forth in the Ordinances and summarized under "The Obligations - Transfer, Exchange and Registration" below. PAYING AGENT/REGISTRAR ... The initial Paying Agent/Registrar for the Bonds and the Certificates is BOKF, NA, Dallas, Texas. In the Ordinances, the City retains the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds and Certificates are duly paid and any successor Paying Agent/Registrar shall be a commercial bank, trust company, financial institution or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Bonds and Certificates. Upon any change in the Paying Agent/Registrar for the Bonds and Certificates, the City agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds and Certificates, as applicable, by United States mail, first class, postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. In the event the use of the Book -Entry -Only system is discontinued, principal of the Bonds and Certificates is payable to the registered holder appearing on the registration books of the Paying Agent/Registrar (the "Registered Owner") at the designated corporate trust office of the Paying Agent/Registrar upon surrender of the Bonds and Certificates for payment; provided, however, that so long as Cede & Co. (or other DTC nominee) is the registered owner of the Obligations, all payments will be made as described under "The Obligations - Book -Entry -Only System" herein. Interest on the Bonds and Certificates is payable to the Register Owners appearing on the registration books of the Paying Agent/Registrar at the close of business on the Record Date (identified below) and such interest shall be paid by the Paying Agent/Registrar by check mailed, first class postage prepaid, to the Register Owner or by such other arrangement, acceptable to the Paying Agent/Registrar, requested by and at the risk and 13 expense of the Registered Owner. If the date for the payment of the principal of or interest on the Bonds and Certificates shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the designated corporate office of the Paying Agent/Registrar is located is authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. TRANSFER, EXCHANGE AND REGISTRATION . . . In the event the Book -Entry -Only System should be discontinued, printed Obligations will be delivered to the Registered Owners and thereafter the Obligations may be transferred and exchanged on the registration books of the Paying Agent/Registrar only upon presentation and surrender of such printed Obligations to the Paying Agent/Registrar and such transfer or exchange shall be without expense or service charge to the Registered Owner, except for any tax or other governmental charges required to be paid with respect to such registration, exchange and transfer. Obligations may be assigned by the execution of an assignment form on the Obligations or by other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. New Obligations will be delivered by the Paying Agent/Registrar, in lieu of the Obligations being transferred or exchanged, at the designated office of the Paying Agent/Registrar, or sent by United States mail, first class, postage prepaid, to the new Registered Owner or his designee. To the extent possible, new Obligations issued in an exchange or transfer of Obligations will be delivered to the Registered Owner or assignee of the Registered Owner in not more than three business days after the receipt of the Obligations to be canceled, and the written instrument of transfer or request for exchange duly executed by the Registered Owner or his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. New Obligations registered and delivered in an exchange or transfer shall be in any integral multiple of $5,000 for any one maturity and for a like aggregate principal amount as the Obligations surrendered for exchange or transfer. See "The Obligations—Book-Entry-Only System" herein for a description of the system to be utilized initially in regard to ownership and transferability of the Obligations. Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange any Obligation called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the Registered Owner of the uncalled balance of an Obligation. RECORD DATE FOR INTEREST PAYMENT ... The record date ("Record Date") for the interest payable on the Bonds and Certificates on any interest payment date means the close of business on the last business day of the month next preceding such interest payment date. In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Registered Owner of a Bond and Certificate appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. AMENDMENTS ... In each Ordinance, the City has reserved the right to amend the Ordinance without the consent of any holder of the respective Obligation for the purpose of amending or supplementing the Ordinance to (i) cure any ambiguity, defect or omission therein that does not materially adversely affect the interests of the holders, (ii) grant additional rights or security for the benefit of the holders, (iii) add events of default as shall not be inconsistent with the provisions of the Ordinance that do not materially adversely affect the interests of the holders, (iv) qualify the Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time in effect or (v) make such other provisions in regard to matters or questions arising under the Ordinance that are not inconsistent with the provisions thereof and which, in the opinion of Bond Counsel for the City, do not materially adversely affect the interests of the holders. Each Ordinance further provides that the holders of the Bonds or Certificates, as applicable, aggregating in principal amount a majority of the outstanding Bonds or Certificates, as the case may be, shall have the right from time to time to approve any amendment not described above to the applicable Ordinance if it is deemed necessary or desirable by the City; provided, however, that without the consent of 100% of the holders in original principal amount of the then outstanding Bonds or Certificates so affected, no amendment may be made for the purpose of. (i) making any change in the maturity of any of the outstanding Bonds or Certificates; (ii) reducing the rate of interest borne by any of the outstanding Bonds or Certificates; (iii) reducing the amount of the principal of, or redemption premium, if any, payable on any outstanding Bonds or Certificates; (iv) modifying the terms of payment of principal or of interest or redemption premium on outstanding Bonds or Certificates, or imposing any condition with respect to such payment; or (v) changing the minimum percentage of the principal amount of the Bonds or Certificates necessary for consent to such amendment. Reference is made to the Ordinances for further provisions relating to the amendment thereof. REMEDIES ... Each Ordinance establishes specific events of default with respect to the respective series of Obligations. If the City defaults in the payment of the principal of or interest on the Bonds or Certificates when due or the City defaults in the observance or performance of any of the covenants, conditions, or obligations of the City, the failure to perform which materially, adversely affects the rights of the owners thereof, including but not limited to, their prospect or ability to be repaid in accordance with the respective Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by any owner to the City, each Ordinance provides that any registered owner of a respective Obligation is entitled to seek a writ of mandamus from a court of proper jurisdiction requiring the City to make such payment or observe and perform such covenants, obligations, or conditions. The issuance of a writ of mandamus may be sought if there is no other available remedy at 14 law to compel performance of the respective Obligations or Ordinance and the City's obligations are not uncertain or disputed. The remedy of mandamus is controlled by equitable principles, so rests with the discretion of the court, but may not be arbitrarily refused. There is no acceleration of maturity of the Obligations in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to year. The Ordinances do not provide for the appointment of a trustee to represent the interest of the owners of the respective Obligations upon any failure of the City to perform in accordance with the terms of the Ordinances, or upon any other condition and accordingly all legal actions to enforce such remedies would have to be undertaken at the initiative of, and be financed by, the Registered Owners. The Texas Supreme Court has ruled in Tooke v. City of Mexia 197 S.W.3d 325 (Tex. 2006) that a waiver of sovereign immunity in a contractual dispute must be provided for by statute in "clear and unambiguous" language. Because it is unclear whether the Texas legislature has effectively waived the City's sovereign immunity from a suit for money damages, owners of Obligations may not be able to bring such a suit against the City for breach of the Obligations or Ordinance covenants in the absence of City action. Chapter 1371, Texas Government Code ("Chapter 1371"), which pertains to the issuance of public securities by issuers such as the City, permits the City to waive sovereign immunity in the proceedings authorizing its debt, but in connection with the issuance of the Obligations, the City has not waived sovereign immunity. Even if a judgment against the City could be obtained, it could not be enforced by direct levy and execution against the City's property. Further, the Registered Owners cannot themselves foreclose on property within the City or sell property within the City to enforce the tax lien on taxable property to pay the principal of and interest on the Bonds or the Certificates. Furthermore, the City is eligible to seek relief from its creditors under Chapter 9 of the U.S. Bankruptcy Code ("Chapter 9"). Although Chapter 9 provides for the recognition of a security interest represented by a specifically pledged source of revenues, the pledge of ad valorem taxes in support of a general obligation of a bankrupt entity is not specifically recognized as a security interest under Chapter 9. Chapter 9 also includes an automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or Obligationholders of an entity which has sought protection under Chapter 9. Therefore, should the City avail itself of Chapter 9 protection from creditors, the ability to enforce would be subject to the approval of the Bankruptcy Court (which could require that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The opinions of Bond Counsel will note that all opinions relative to the enforceability of the Obligations are qualified with respect to the customary rights of debtors relative to their creditors, by principles of governmental immunity, and by general principles of equity which permit the exercise of judicial discretion. Initially, the only Registered Owner of the Bonds and Certificates will be Cede & Co., as DTC's nominee. See "The Obligations - Book -Entry -Only System" herein for a description of the duties of DTC with regard to ownership of the Bonds and Certificates. 15 TAX INFORMATION An VALOREM TAx LAW ... The appraisal of property within the City is the responsibility of the Denton Central Appraisal District (the "Appraisal District"). Excluding agricultural and open -space land, which may be taxed on the basis of productive capacity, the Appraisal District is required under V.T.C.A., Title I, Tax Code, as amended (the "Property Tax Code") to appraise all property within the Appraisal District on the basis of 100% of its market value and is prohibited from applying any assessment ratios. In determining the market value of property, different methods of appraisal may be used, including the cost method of appraisal, the income method of appraisal and the market data comparison method of appraisal, and the method considered most appropriate by the chief appraiser is to be used. State law requires the appraised value of a residence homestead to be based solely on the property's value as a residence homestead, regardless of whether residential use is considered to be the highest and best use of the property. State law further limits the appraised value of a residence homestead for a tax year to an amount that would not exceed the lesser of (1) the market value of the property for the most recent tax year that the market value was determined by the appraisal office or (2) the sum of (a) 10% of the property's appraised value in the preceding tax year, plus (b) the property's appraised value in the preceding tax year, plus (c) the market value of all new improvements to the property. The value placed upon property within the Appraisal District is subject to review by an Appraisal Review Board, consisting of members appointed by the Board of Directors of the Appraisal District. The Appraisal District is required to review the value of property within the Appraisal District at least every three years. The City may require annual review at its own expense, and is entitled to challenge the determination of appraised value of property within the City by petition filed with the Appraisal Review Board. Reference is made to the Property Tax Code, for identification of property subject to taxation; property exempt or which may be exempted from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the procedures and limitations applicable to the levy and collection of ad valorem taxes. Article VIII of the State Constitution ("Article VIII") and State law provide for certain exemptions from property taxes, the valuation of agricultural and open -space lands at productivity value, and the exemption of certain personal property from ad valorem taxation. Under Section 1-b, Article VIII, and State law, the governing body of a political subdivision, at its option, may grant an exemption of not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older and the disabled from all ad valorem taxes thereafter levied by the political subdivision. Once authorized, such exemption may be repealed or decreased or increased in amount (i) by the governing body of the political subdivision or (ii) by a favorable vote of a majority of the qualified voters at an election called by the governing body of the political subdivision, which election must be called upon receipt of a petition signed by at least 20% of the number of qualified voters who voted in the preceding election of the political subdivision. In the case of a decrease, the amount of the exemption may not be reduced to less than $3,000 of the market value. The surviving spouse of an individual who qualifies for the foregoing exemption for the residence homestead of a person 65 or older (but not the disabled) is entitled to an exemption for the same property in an amount equal to that of the exemption for which the deceased spouse qualified if (i) the deceased spouse died in a year in which the deceased spouse qualified for the exemption, (ii) the surviving spouse was at least 55 years of age at the time of the death of the individual's spouse and (iii) the property was the residence homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse. In addition to any other exemptions provided by the Property Tax Code, the governing body of a political subdivision, at its option, may grant an exemption of up to 20% of the market value of residence homesteads, with a minimum exemption of $5,000. In the case of residence homestead exemptions granted under Section 1-b, Article VIII, ad valorem taxes may continue to be levied against the value of homesteads exempted where ad valorem taxes have previously been pledged for the payment of debt if cessation of the levy would impair the obligation of the contract by which the debt was created. Under Article VIII and State law, the governing body of a county, municipality or junior college district may provide for a freeze on total amount of ad valorem taxes levied on the residence homestead of a disabled person or persons 65 years of age or older above the amount of tax imposed in the year such residence qualified for such exemption. Also, upon receipt of a petition signed by five percent of the registered voters of the county, municipality or junior college district, an election must be held to determine by majority vote whether to establish such a limitation on taxes paid on residence homesteads of persons 65 years of age or who are disabled. Upon providing for such exemption, the total amount of taxes imposed on such homestead cannot be increased except for improvements (other than maintenance, repairs or improvements required to comply with governmental requirements) and such freeze is transferable to a different residence homestead. Also, a surviving spouse of a taxpayer who qualifies for the freeze on ad valorem taxes is entitled to the same exemption so long as the property was the residence homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse and the spouse was at least 55 years of age at the time of the death of the individual's spouse. Once established such freeze cannot be repealed or rescinded. 16 State law and Section 2, Article VIII, mandate an additional property tax exemption for disabled veterans or the surviving spouse or children of a deceased veteran who died while on active duty in the armed forces; the exemption applies to either real or personal property with the amount of assessed valuation exempted ranging from $5,000 to a maximum of $12,000, dependent upon the degree of disability or whether the exemption is applicable to a surviving spouse or children; provided, however, that beginning in the 2009 tax year, a disabled veteran who receives from the United States Department of Veterans Affairs or its successor 100 percent disability compensation due to a service -connected disability and a rating of 100 percent disabled or of individual unemployability is entitled to an exemption from taxation of the total appraised value of the veteran's residence homestead. In addition, effective January 1, 2012, and subject to certain conditions, surviving spouses of a deceased veteran who had received a disability rating of 100% will be entitled to receive a residential homestead exemption equal to the exemption received by the deceased spouse until such surviving spouse remarries. Article VIII provides that eligible owners of both agricultural land (Section 1-d) and open -space land (Section 1-d-1), including open -space land devoted to farm or ranch purposes or open -space land devoted to timber production, may elect to have such property appraised for property taxation on the basis of its productive capacity. The same land may not be qualified under both Section 1-d and 1-d-1. Nonbusiness personal property, such as automobiles or light trucks, are exempt from ad valorem taxation unless the governing body of a political subdivision elects to tax this property. Boats owned as nonbusiness property are exempt from ad valorem taxation. Article VIII, Section 1-j, provides for "freeport property" to be exempted from ad valorem taxation. Freeport property is defined as goods detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication. Notwithstanding such exemption, counties, school districts, junior college districts and cities may tax such tangible personal property provided official action to tax the same was taken before April 1, 1990. Decisions to continue to tax may be reversed in the future; decisions to exempt freeport property are not subject to reversal. Article VIII, Section 1-n of the Texas Constitution provides for the exemption from taxation of "goods -in -transit." "Goods -in - transit" is defined by Section 11.253 of the Property Tax Code, as personal property acquired or imported into Texas and transported to another location in the State or outside of the State within 175 days of the date the property was acquired or imported into Texas. The exemption excludes oil, natural gas, petroleum products, aircraft and special inventory, including motor vehicle, vessel and out -board motor, heavy equipment and manufactured housing inventory. Section 11.253 permits local governmental entities, on a local option basis, to take official action by January 1 of the year preceding a tax year, after holding a public hearing, to tax "goods -in -transit" during the following tax year. After taking such official action, the goods -in -transit remain subject to taxation by the local governmental entity until the governing body of the governmental entity rescinds or repeals its previous actions to tax goods -in -transit. A taxpayer may only receive either the freeport exemption or the "goods -in - transit" exemption for items of personal property. The City or Denton County may create one or more tax increment financing districts ("TIF") within the City or Denton County, as applicable, and freeze the taxable values of property in the TIF at the value at the time of its creation. Other overlapping taxing units levying taxes in the TIF may agree to contribute all or part of future ad valorem taxes levied and collected against the value of property in the TIF in excess of the "frozen values" to pay or finance the costs of certain public improvements in the TIF. Taxes levied by the City against the values of real property in the TIF in excess of the "frozen" value are not available for general city use but are restricted to paying or financing "project costs" within the TIF. The City also may enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct certain improvements on its property. The City in turn agrees not to levy a tax on all or part of the increased value attributable to the improvements until the expiration of the agreement. The abatement agreement could last for a period of up to 10 years. The City has active reinvestment zones for tax abatements and tax increment financing zones for tax increment financing purposes. See "Tax Information - Tax Abatement Policy" and "- Tax Increment Financing" and "Table 1 - Valuation, Exemptions and General Obligation Debt". The City is also authorized, pursuant to Chapter 380, Texas Local Government Code, as amended ("Chapter 380"), to establish programs to promote state or local economic development and to stimulate business and commercial activity in the City. In accordance with a program established pursuant to Chapter 380, the City may make loans or grants of public funds for economic development purposes, however no obligations secured by ad valorem taxes may be issued for such purposes unless approved by voters of the City. The City has entered into several Chapter 380 Agreements. See "Tax Information - Chapter 380 Agreements". EFFECTIVE TAx RATE AND ROLLBACK TAx RATE ... Under the current Property Tax Code a governing body of a taxing unit is required to adopt its annual tax rate per $100 taxable value for the unit before the later of September 30 or the 60th day after the date the certified appraisal roll is received by the taxing unit, and a failure to adopt a tax rate by such required date will result in the tax rate for the taxing unit for the tax year to be the lower of the effective tax rate calculated for that tax year or the tax rate adopted by the taxing unit for the preceding tax year. By each September 1 or as soon thereafter as practicable, the City Council adopts a tax rate per $100 taxable value for the current year. The tax rate consists of two components: (1) a rate for funding of maintenance and operation expenditures, and (2) a rate for debt service. 17 Under the Property Tax Code, the City must annually calculate and publicize its "effective tax rate" and "rollback tax rate". The City Council may not adopt a tax rate that exceeds the lower of the effective tax rate or the rollback tax rate until it has held two public hearings on the proposed increase following notice to the taxpayers and otherwise complied with the Property Tax Code. If the adopted tax rate exceeds the rollback tax rate the qualified voters of the City by petition may require that an election be held to determine whether or not to reduce the tax rate adopted for the current year to the rollback tax rate. "Effective tax rate" means the rate that will produce last year's total tax levy (adjusted) from this year's total taxable values (adjusted). "Adjusted" means lost values are not included in the calculation of last year's taxes and new values are not included in this year's taxable values. "Rollback tax rate" means the rate that will produce last year's maintenance and operation tax levy (adjusted) from this year's values (adjusted) multiplied by 1.08 plus a rate that will produce this year's debt service from this year's values (unadjusted) divided by the anticipated tax collection rate. The Property Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize an additional one-half cent sales tax on retail sales of taxable items. If the additional tax is levied, the effective tax rate and the rollback tax rate calculations are required to be offset by the revenue that will be generated by the sales tax in the current year. Reference is made to the Property Tax Code for definitive requirements for the levy and collection of ad valorem taxes and the calculation of the various defined tax rates. PROPERTY ASSESSMENT AND TAX PAYMENT ... Property within the City is generally assessed as of January I of each year. Business inventory may, at the option of the taxpayer, be assessed as of September 1. Oil and gas reserves are assessed on the basis of a valuation process that uses pricing information contained in the most recently published Early Release Overview of the Annual Energy Outlook published by the United States Energy Information Administration, as well as appraisal formulas developed by the State Comptroller of Public Accounts. Taxes become due October 1 of the same year, and become delinquent on February 1 of the following year. Taxpayers 65 years old or older are permitted by State law to pay taxes on homesteads in four installments with the first due on February 1 of each year and the final installment due on August 1. PENALTIES AND INTEREST ... Charges for penalty and interest on the unpaid balance of delinquent taxes are made as follows: After July, the penalty remains at 12%, and interest accrues at a rate of one percent (1%) for each month or portion of a month the tax remains unpaid. A delinquent tax continues to incur the penalty interest as long as the tax remains unpaid, regardless of whether a judgment for the delinquent tax has been rendered. The purpose of imposing such interest is to compensate the taxing unit for revenue lost because of the delinquency. In addition, if an account is delinquent in July, an attorney's collection fee of up to 20% may be added to the total tax penalty and interest charge. Under certain circumstances, taxes which become delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of 8% per annum with no additional penalties or interest assessed. In general, property subject to the City's lien may be sold, in whole or in parcels, pursuant to court order to collect the amounts due. Federal law does not allow for the collection of penalty and interest against an estate in bankruptcy. Federal bankruptcy law provides that an automatic stay of action by creditors and other entities, including governmental units, goes into effect with the filing of any petition in bankruptcy. The automatic stay prevents governmental units from foreclosing on property and prevents liens for post-petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In many cases post-petition taxes are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court. PENDING LEGISLATION ... The Texas Legislature is currently in session for its 85th Regular Session (the "Regular Session"), which ends on May 29, 2017. While in session, the Texas Legislature may consider bills which could have a direct impact on the City and its operations, including the levying and collection of ad valorem taxes by the City. The City makes no representations or predictions concerning the substance or effect of any legislation that may be proposed and ultimately passed in the Regular Session or any special session that may convene after the end of the Regular Session, or how any such legislation would affect the financial condition of the City or its operations. 18 Cumulative Cumulative Month Penalty Interest Total February 6% 1% 7% March 7 2 9 April 8 3 11 May 9 4 13 June 10 5 15 July 12 6 18 After July, the penalty remains at 12%, and interest accrues at a rate of one percent (1%) for each month or portion of a month the tax remains unpaid. A delinquent tax continues to incur the penalty interest as long as the tax remains unpaid, regardless of whether a judgment for the delinquent tax has been rendered. The purpose of imposing such interest is to compensate the taxing unit for revenue lost because of the delinquency. In addition, if an account is delinquent in July, an attorney's collection fee of up to 20% may be added to the total tax penalty and interest charge. Under certain circumstances, taxes which become delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of 8% per annum with no additional penalties or interest assessed. In general, property subject to the City's lien may be sold, in whole or in parcels, pursuant to court order to collect the amounts due. Federal law does not allow for the collection of penalty and interest against an estate in bankruptcy. Federal bankruptcy law provides that an automatic stay of action by creditors and other entities, including governmental units, goes into effect with the filing of any petition in bankruptcy. The automatic stay prevents governmental units from foreclosing on property and prevents liens for post-petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In many cases post-petition taxes are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court. PENDING LEGISLATION ... The Texas Legislature is currently in session for its 85th Regular Session (the "Regular Session"), which ends on May 29, 2017. While in session, the Texas Legislature may consider bills which could have a direct impact on the City and its operations, including the levying and collection of ad valorem taxes by the City. The City makes no representations or predictions concerning the substance or effect of any legislation that may be proposed and ultimately passed in the Regular Session or any special session that may convene after the end of the Regular Session, or how any such legislation would affect the financial condition of the City or its operations. 18 CITY APPLICATION OF TAX CODE ... The City grants an exemption to the market value of the residence homestead of persons 65 years of age or older of $50,000. Disabled taxpayers also receive a $50,000 exemption. The City grants an additional one-half of one percent, or a minimum of $5,000 exemption of the market value of residence homesteads. See Table 1 for a listing of the amounts of the exemptions described above. Ad valorem taxes are not levied by the City against the exempt value of residence homesteads for the payment of debt. The City does not tax nonbusiness personal property. Denton County began collecting taxes for the City during the fiscal year 2006-07. The City does not allow split payments, and discounts are not allowed. The City does not tax freeport property. The City collects the additional one-half cent sales tax for reduction of ad valorem taxes. The City does tax "goods -in -transit". The City has not adopted the tax freeze for citizens who are disabled or are 65 years of age or older. However, the City has received a qualifying petition of the registered voters of the City which requires the City to hold an election to determine by majority vote whether to establish such a limitation on taxes paid on residence homesteads of disabled persons or persons 65 years of age or older. Such election will be held May 6, 2017. The City has adopted a tax abatement policy. The City participates in two tax increment reinvestment zones, which were created in 2010 and 2012. TAX INCREMENT FINANCING ... The City created Tax Increment Reinvestment Zone Number One (known as the Downtown TIF) in 2010. The TIF will expire in 2039 and reflects only the City's participation of: 100% for years 1-5; 95% for years 6-10; 90% for years 11-20; and 85% for years 21-30. According to Denton Central Appraisal District "DCAD" supplemental figures, the 2016 total appraised valuation of taxable real property in TIRZ Number One was $150.0 million. This represents a $22.8 million increase from the 2015 supplemental value of $127.2 million. Since its inception, the value of the TIRZ has increased $56.7 million, which represents a 71.4% increase in valuation. The City created Tax Increment Reinvestment Zone Number Two (known as the Westpark TIRZ) in 2012 to provide the public infrastructure necessary to encourage development in the largest industrially zoned area (Westpark) in the City. The 2012 certified base value of Westpark TIRZ, according to the Denton Central Appraisal District, is $119,458. The estimated revenue to be generated by the TIRZ is approximately $14.3 million over a 25 year period for infrastructure improvements. The City will contribute $10.1 million and Denton County will contribute $4.2 million into the Westpark TIRZ fund. According to DCAD supplemental figures, the 2016 total appraised valuation of taxable real property in TIRZ Number Two was $2.4 million. This is a $2.3 million increase from the 2012 base value of 119,458. PUBLIC IMPROVEMENT DISTRICTS ... The City created Rayzor Ranch Public Improvement District No. 1 (the "District") in 2014 for the undertaking and financing of public improvements authorized by Chapter 372 of the Texas Local Government Code. The project is located on the City's northern sector, east of Interstate 35, and encompasses approximately 229.693 contiguous acres. The estimated cost of the proposed public improvements total $40 million, which may be paid for with special assessments levied on property within the District. The authorized improvement costs will be apportioned 100% to the District. The method of assessment will impose equal shares of the cost of the proposed public improvements on parcels that are similarly benefited. No City property will be assessed, and the City will not be obligated to pay any assessments. TAX ABATEMENT POLICY ... The City has a tax abatement and incentive policy; the most recent version was adopted in 2016. In 1990, the City council adopted a resolution setting guidelines and criteria for granting abatements in reinvestment zones created within the City. These guidelines specifically note that incentives are limited to companies which create new wealth and do not adversely affect existing businesses operating within the City. The City Council has approved the following tax abatement agreements: • In 2010, a 65% tax abatement agreement for a term of five years was granted to Target Corporation for its 400,000 square foot frozen and refrigerated food distribution center. Target opened in March 2013 and employs 115 to 150 area residents. • In 2011, a 40% tax abatement agreement for a term of five years was granted to Peerless Manufacturing for its 80,000 square foot, $16 million manufacturing facility. Peerless is an existing Denton business that consolidated other 19 manufacturing operations to Denton. They completed construction of an 80,000 square foot manufacturing facility in October 2013. CECO Environmental purchased Peerless in late 2015. CECO leases all of its global manufacturing facilities, preferring 5 -7 -year leases to facility ownership and keeping its equity active in the production process. Consistent with its structure, CECO completed the sale of its Denton Peerless facility in June 2016. Consequently, the Tax Abatement with Peerless Manufacturing was terminated in 2016. In 2013, a 65% tax abatement agreement for a term of four years was granted to Tetra Pak Materials LP for expanding their facility and relocating their corporate headquarter operations from Chicago to Denton. The company manufactures, processes, packages and distributes liquid foods all over the globe. The current facility comprises approximately 220,000 square feet. The increase in real and business personal property valuation of the proposed project expansion is estimated at $10.7 million. Tetra Pak Materials expects to create a total of thirty new jobs with this expansion. The company received their Certificate of Occupancy in February 2015. In 2015, a 70% tax abatement for a term of eight years was granted to Peterbilt Motors for a 17,500 square foot expansion of their current facility to improve material flow from trucks into the expanded metering center. Peterbilt's growth in 2014 has resulted in a 20% increase in employment and a 32% increase in production levels. These increases have also been the driving force behind similar growth of other businesses in Denton that support Peterbilt. This project received its Certificate of Occupancy for the expansion in February 2016. The final phase of this project included a storage and retrieval system for painted parts to help balance the product flow from paint to cab trim; it was completed in October 2016. Also, in 2016, the existing Agreement was amended to add the construction and equipping of a 102,000 square -foot stand-alone building north of the existing plant. This $30 million dollar investment will provide space for a new cab product and will improve operational efficiencies; the building received its CO in December 2016. In 2016, West Gate Business Park received a 60% tax abatement for 10 years on improvements only to include Buildings 2 and 3 in the business park, which brings new Class A industrial/manufacturing space to Denton. West Gate could receive an additional 10% abatement for the location of a supplier to an existing primary industry and/or an additional 5% for the location of a national headquarters for a total abatement of up to 75%. The abatement will initiate the year following the year in which building 2 receives a CO. CHAPTER 380 AGREEMENTS ... The City has also entered into several Chapter 380 agreements. Each agreement is based on the project's contribution in either sales or property tax revenue. The City Council has approved the following Chapter 380 agreements: • In 2001, an agreement was approved for the 450,000 square foot, $50 million Denton Crossing retail center. The grantee receives one-third of the City sales tax generated by the project for a maximum of fifteen years as reimbursement for public improvement costs related to the project. The project was completed and the Chapter 380 Grant was initiated in 2005. The agreement will terminate in the spring of 2020. • In 2004, an agreement was approved for Teasley Partners for an urban style mixed-use development. The grantee may receive one-third of the City sales tax generated by the project for a maximum of fifteen years as reimbursement for public improvement costs related to the project. The project has not been completed. Although a new hotel and some residential units have been completed, no qualifying retail has been constructed. • In 2004, an agreement was approved for Unicorn Lake, an urban style mixed-use development. The grantee receives one-third of the City sales tax generated by the project for a maximum of fifteen years as reimbursement for public improvement costs related to the project. BJs Restaurant, Blue Ginger Japanese Bistro, Rising Sun Cafe, Chuy's and Bone Daddy's represent some of the businesses that have located in the development. Urban Square Apartments completed construction last fall and features 205 units. The agreement will terminate in 2024. • In 2007, an agreement was approved for Allegiance Hillview for the Rayzor Ranch mixed-use development. The 410 - acre project will have over 1 million square feet of retail and will be built in two phases. The agreement provides a sales tax reimbursement of 50% of the City sales taxes generated by the project for public improvement costs, which include the widening of a state highway that bisects the project. The grantee will receive a maximum of $20 million over a 15 year term for phase one and a maximum of $48 million over a term of 20 years for phase two. Rayzor Ranch Marketplace (north side of the development) has completed approximately 600,000 square feet of retail and commercial space. Some of the stores in the development include: Guitar Center and Taco Cabana. In 2016, Rayzor Ranch Marketplace was sold to FidCal/Fidelis Realty Partners (Rayzor Ranch 380 Associates). Construction is underway for the Rayzor Ranch Town Center located on the south side of the development. Heritage Trail Boulevard has been constructed to allow access to the next phases. Chili's, Raising Cane,WinCo Foods, In -N - Out Burger, Chipotle, and Firehouse Subs are now open. An 11 -story, 318 -room Embassy Suites hotel and 70,000 square foot Convention Center are planned to open in November 2017. An additional 15% sales tax rebate on the Rayzor Ranch Town Center and Marketplace have been added to offset the hotel and convention center until $5 million is reached. • In 2010, an agreement was approved for Grand Mesa, contractor for Schlumberger, equal to 50% of new property tax revenue generated for their 150,000 square foot regional maintenance facility. The agreement was assigned to Schlumberger Technology Corporation in 2012. Agreement thresholds require maintaining $5 million in real property improvements and business personal property valuation and the creation of 80 jobs with average wage of $45,000. The term of the agreement is seven years and will terminate in 2017. • In 2011, an agreement was approved for a major renovation of the Golden Triangle Mall. A threshold of a minimum $45 million must be invested into the property for the new owners to receive a 50% share of the sales tax resulting from 20 the renovations. The amended agreement allowed Golden Triangle Mall until October 1, 2015 to reach its investment threshold, which it did. The term of the agreement will terminate in 20 years. Exterior entrance updates, a new food court, pylon signs and wayfinding have been constructed as part of the second phase of the redevelopment. The Golden Triangle Mall J.C. Penney was one of the sites selected to include a Sephora and the Disney Store within the department store. An international retailer, H&M, and Francesca's opened in 2015. Bath and Body Works and Victoria's Secret expanded within the mall in 2016. In 2012, an agreement was approved for Mayday Manufacturing/Tailwind Technologies. The company manufactures precision bushings, sleeves, pins, and other machine parts used in the aerospace industry. Mayday subsidiary, High Tech Metal Refinishing is collocated with Mayday and provides metal finishing processes for Mayday products and for additional customers. The company purchased an 80,000 square foot facility in 2012 and completed the 15,000 square foot expansion of the facility at the close of 2013. The company received a 75%, ten-year tax rebate on increased valuation of at least $3 million over the base value. In 2015, an agreement was granted to West Gate Business Park (WGBP). The industrial development received a 70% rebate of City ad valorem taxes attributable to Improvements only for a period of ten years. The grant also included a one-time payment in the amount of $50,000 An amendment in 2016 applies the rebate to Building 1 only, while the planned Buildings 2 and 3 will be covered under a tax abatement. In 2015, a grant agreement was awarded to Business Air. The grant is equal to 70% of the increase in property tax revenues on the improvements to the building and new business personal property up to a maximum of $9.5 million in increased valuation for a period of two years. The company may extend the length of this grant by attracting additional investment in the form business aircraft based at its facilities at the Denton Enterprise Airport by specified date and investment level thresholds. In addition to a grant extension, Business Air would receive five percent of the increase in taxable valuation attributable to these new business aircraft for the duration of the grant extension. Business Air is a full service FBO and certified FAR 135 Air Carrier providing fuel, hangar, charter, and aircraft management services to corporate and private clients at the Denton Enterprise Airport. The company is expanding with plans to build a new 24,000 square foot hangar with an additional 4,000 square feet of office space. The hangar space should allow the addition of 10 corporate aircraft with values ranging from $1.5 to $10 million per aircraft. In addition to the hangar, Business Air will be purchasing a corporate aircraft to be based at the airport for the exclusive use of providing air taxi service to the area. In 2015, an agreement was approved for Victor Technologies, a global manufacturer of gas control and specialty welding solutions. The original San Francisco manufacturing operations were relocated to their new headquarters in Denton in the mid-1960s. Victor Technologies has expanded its existing facility, including approximately 30,000 square feet of new Research and Development space Along with a new 185,400 square foot warehouse and remodeled parking lots. Victor has approximately 500 employees at the facility. Over the next three years, Victor is expected to create an additional 100 new jobs. Victor Technologies received an incentive equal to 65% of the increase in the City's ad valorem taxes for seven years while maintaining a minimum of 85 percent of new jobs created with an average wage of $28.81 per hour. In 2015, an incentive was awarded to WinCo Foods for a $135 million, 800,000+/- square foot distribution facility located on approximately 77 acres in the Westpark TIRZ. The project received its CO in January 2017 and is expected to create 165 jobs with an annual payroll of around $7.2 million. The Agreement accomplishes two objectives: (1) full reimbursement of the cost of Phase 1 improvements using a combination of funding mechanisms; and (2) after full reimbursement, an economic development incentive of 60% of the City's ad valorem tax revenue for a period of four years following full reimbursement of Phase 1 improvements. It is anticipated that full reimbursement will occur in approximately four years and will be an approximately $6.5 million. The first year after full reimbursement, the second term of the grant agreement shall commence, and will include the following: a 60% rebate of the City's ad valorem revenue for a period of four years, for an estimated total incentive of $1.7 million. In 2015, an agreement was granted to the Railyard downtown project that is located in the Downtown TIF, Downtown Implementation Plan "DTIP" and Transit Oriented Development "TOD" areas. Rail Yard Partners, LTD. renovated an existing 28,000 square foot building as a part of a larger transit -oriented catalyst project. They invested an initial $12 million in the co -working and mixed-use space and will receive a total incentive of $380,000 over five years from the Downtown TIF revenue. The project involves a Commercial Lease Agreement with Rail Yard Partners, LTD for Stoke Denton, a 9,000 square foot entrepreneur center that provides coworking and office space, education and mentorship, and community for Denton's technology focused businesses The Commercial Lease Agreement is a five year lease at $9.75 per square foot for year one, with an approximate 3.7% increase in the cost annually thereafter, in addition to operating expenses including the City's pro rata share of real estate taxes, insurance, common area maintenance, and operating expenses. In 2015 an incentive was awarded to Buc-ee's Travel Center that will include an approximately 53,000 square foot retail store, fuel stations, car wash and peripheral development along I -35E. The incentive reimburses the developer for public infrastructure improvements and other neighborhood/public amenities. The proposed development has resulted in the Texas Department of Transportation "TxDOT" advancing several mobility improvements to the intersections of Loop 288/Lillian Miller and I -35E, Mayhill Road and I -35E, and Brinker Road and I -35E. These improvements will enhance mobility and address traffic congestion and will be completed in the spring of 2018. In order to facilitate these improvements, TxDOT requires a local funding match of $2 million. The developer will fund the $2 million, to be reimbursed as a part of the incentive agreement. Additionally, the developer will incur 21 approximately $5.2 million in public infrastructure costs, including water, wastewater, storm sewer, right-of-way dedication, and constructing a new city street. The City has granted an incentive of 50% sales tax rebate for 25 years, on the Buc-ee's parcel as well as the outparcels. The first phase consists of 50% for 5 years for infrastructure improvements. The second phase grants a 50% sales tax rebate for the Buc-ee's travel center, retail and sit down restaurants; and 25% on remaining fast food and service. In 2015 an incentive was awarded to O'Reilly Hotel Partners Denton's "OHPD" for a convention center and hotel. Development plans include the construction of a 318 -room Embassy Suites hotel, an approximately 70,000 square foot convention center, and a Houlihan's restaurant. The anticipated convention center meeting space is approximately 37,850 square feet and would accommodate conventions with up to 650 participants with a Grand Banquet room that will hold up to 1,750 people for banquet -style events. The hotel and convention center will be managed by O'Reilly Hospitality Management "OHM". The convention center and hotel will be located in the Rayzor Ranch Town Center. As a major anchor for the Town Center, the convention center and hotel can capitalize on the synergy associated with the planned shopping, entertainment, and restaurants located nearby. The facility is under construction and scheduled to open in November 2017. The agreement includes a 100% rebate of the ad valorem tax, hotel occupancy tax, and sales tax generated by the project. The term is for a maximum of 25 years or until the combined principal amount of $28 million and interest payment of $26 million, for a total aggregate amount of $54 million, is reached, whichever comes first. The incentive also includes 100% of the construction sales and use tax up to $850,000, at which time the grant will be reduced to 50%. In 2015, US Aviation Group was awarded a three-year, 70% incentive on the increment of improvements and new business personal property to support the expansion of its commercial pilot and Defense Department contract pilot training activities. USAG invested about $10.7 million in an expansion of its existing flight simulation training space as well as the purchase of additional simulation equipment and aircraft. In 2016, Sally Beauty Supply, LLC was awarded a three-year, 50% incentive on the increment of improvements to its facility at 3900 Morse Street in Denton. Sally's international corporate headquarters has been located in Denton since 1982, and the company has more than 5,000 stores and 10 distribution centers worldwide. The improvements at Morse Street will allow Sally Beauty to house 80 new or relocated employees. 22 TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT 2016/17 Market Valuation Established by Denton Central Appraisal District Less Exemptions/Reductions at 100% Market Value: Residence Homestead Exemptions $ 88,848,080 Over 65 Exemptions 327,388,062 Disabled Persons Exemptions 2,444,485 Disabled Veterans Exemptions 48,047,888 Agricultural Land Use Productivity 304,254,344 Historical/Other Exemptions 4,502,078 Freeport Exemptions 208,186,573 Abatement Exemptions 131,784,454 Police Patrol Vehicle Exemptions 233,221 Pollution Exemptions 17,907,977 Homestead Cap Adjustment 96,808,909 2016/17 Taxable Assessed Valuation (as of 7-22-2016) 2016/17 Incremental Taxable Assessed Value of Real Property within Reinvestment Zones 2016/17 Net Taxable Assessed Valuation available for General Obligations and Debt of City (as of 7-22-16) City Funded Debt Payable from Ad Valorem Taxes General Obligation Bonds (as of 3-1-17) $ 216,840,000 (1) Certificates of Obligation (as of 3-1-17) 389,670,000 Tax and Utility System Revenue Debt (as of 3-1-17) 36,435,000 The Bonds 29,220,000 (2) The Certificates 94,485,000 (2) Funded Debt Payable from Ad Valorem Taxes Less Self -Supporting General Obligation Debt (3) $10,402,656,564 1,230,406,071 $ 9,172,250,493 (54,744,149) $ 9,117,506,344 $ 766,650,000 Solid Waste System General Obligation Debt $ 56,202,337 (4) Utility System General Obligation Debt 542,540,000 (4) 598,742,337 Net Tax Supported Debt Payable from Ad Valorem Taxes $ 167,907,663 Interest and Sinking Fund as of 3-1-17 (estimated) $ 7,628,324 Ratio Total Funded Debt to Net Taxable Assessed Valuation ........................................... 8.41% Ratio Net Funded Debt to Net Taxable Assessed Valuation ............................................ 1.84% 2017 Estimated Population - 124,988 Per Capita Net Taxable Assessed Valuation - $72,947 Per Capita Total Funded Debt - $6,134 Per Capita Net Funded Debt - $1,343 (1) Excludes the Refunded Obligations. Preliminary, subject to change. (2) Preliminary, subject to change. (3) As a matter of policy, the City pays debt service on its general obligation debt issued to fund improvements to its Utility System and Solid Waste System from surplus revenues of these Systems (see "Table 7 — General Obligation Debt Service Requirements" and "Table 9 — Computation of Self -Supporting Debt"). This policy may be subject to change in the future. The City's Utility System is comprised of the City's entire existing electric, light and power system and the waterworks and sewer system. Drainage is managed under the waterworks and wastewater system. The City's Utility System General Obligation Debt has been issued to finance or refinance Utility System improvements and contractual obligations and is paid, or is expected to be paid, from Utility System revenues. In addition, the City has $214,890,000 Utility System Revenue Bonds outstanding payable from a pledge of Utility System revenues. The City's Solid Waste System General Obligation Debt has been issued to finance or refinance Solid Waste System improvements and is paid, or is expected to be paid, from Solid Waste System revenues. The City has no outstanding Solid Waste System Revenue Bonds. (4) Includes aportion of the Bonds and aportion of the Certificates. Preliminary, subject to change. 23 TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY in Category Real, Residential, Single Family Real, Residential, Multi -Family Real, VacantLots/Tracts Real, Acreage (Land Only) Real, Farm and Ranch Improvements Real, Commercial and Industrial Real, Oil, Gas, and Other Mineral Reserves Real and Tangible Personal, Utilities Tangible Personal, Commercial and Industrial Tangible Personal, Other Real Property, Inventory Total Appraised Value Before Exemptions Less: Total Exemptions/Reductions Less: Tax Increment Value Net Taxable Assessed Value Amount $ 3,720,193,268 924,229,117 150,027,306 274,941,322 80,481,975 1,621,678,792 78,106,929 91,097,444 943,996,533 15,167,604 62,732,470 % of Total 35.76% 8.88% 1.44% 2.64% 0.77% 15.59% 0.75% 0.88% 9.07% 0.15% 0.60% Amount $ 3,633,577,302 816,319,292 125,343,528 338,412,791 37,671,587 1,520,034,393 107,460,964 90,748,500 884,681,448 16,249,794 50.894.577 $ 7,962,652,760 76.54% $7,621,394,176 Taxable Appraised Value for Fiscal Year Ended September 30, (904,682,808) (16,931,096) 2017 $ 6,962,293,178 2016 2015 % of % of % of Category Amount Total Amount Total Amount Total Real, Residential, Single Family $ 5,050,316,875 48.55% $ 4,455,409,227 46.50% $ 4,062,947,070 45.57% Real, Residential, Multi -Family 1,247,987,048 12.00% 1,242,659,794 12.97% 1,089,958,543 12.23% Real, VacantLots/Tracts 183,550,766 1.76% 200,531,094 2.09% 180,886,051 2.03% Real, Acreage (Land Only) 313,050,791 3.01% 299,567,590 3.13% 299,966,303 3.36% Real, Farm and Ranch Improvements 119,724,601 1.15% 111,308,374 1.16% 95,625,308 1.07% Real, Commercial and Industrial 2,023,976,712 19.46% 1,932,405,225 20.17% 1,829,135,437 20.52% Real, Oil, Gas, and Other Mineral Reserves 60,792,028 0.58% 127,737,402 1.33% 93,196,666 1.05% Real and Tangible Personal, Utilities 64,350,693 0.62% 64,179,367 0.67% 91,139,063 1.02% Tangible Personal, Commercial and Industrial 1,236,965,926 11.89% 1,075,139,088 11.22% 1,091,736,374 12.25% Tangible Personal, Other 22,215,017 0.21% 21,987,482 0.23% 21,761,614 0.24% Real and Special Property, Inventory 79,726,107 0.77% 51,485,367 0.54% 58,971,257 0.66% Total Appraised Value Before Exemptions $ 10,402,656,564 100.00% $ 9,582,410,010 100.00% $ 8,915,323,686 100.00% Less: Total Exemptions/Reductions (1,230,406,071) (1,119,263,250) (1,118,146,078) Less: Tax Increment Value (54,744,149) (39,084,154) (35,975,197) Net Taxable Assessed Value $ 9,117,506,344 $ 8,424,062,606 $ 7,761,202,411 Taxable Appraised Value for Fiscal Year Ended September 30, 2014 2013 Category Real, Residential, Single Family Real, Residential, Multi -Family Real, VacantLots/Tracts Real, Acreage (Land Only) Real, Farm and Ranch Improvements Real, Commercial and Industrial Real, Oil, Gas, and Other Mineral Reserves Real and Tangible Personal, Utilities Tangible Personal, Commercial and Industrial Tangible Personal, Other Real Property, Inventory Total Appraised Value Before Exemptions Less: Total Exemptions/Reductions Less: Tax Increment Value Net Taxable Assessed Value Amount $ 3,720,193,268 924,229,117 150,027,306 274,941,322 80,481,975 1,621,678,792 78,106,929 91,097,444 943,996,533 15,167,604 62,732,470 % of Total 35.76% 8.88% 1.44% 2.64% 0.77% 15.59% 0.75% 0.88% 9.07% 0.15% 0.60% Amount $ 3,633,577,302 816,319,292 125,343,528 338,412,791 37,671,587 1,520,034,393 107,460,964 90,748,500 884,681,448 16,249,794 50.894.577 $ 7,962,652,760 76.54% $7,621,394,176 (983,428,486) (904,682,808) (16,931,096) (10,248,781) $ 6,962,293,178 $6,706,462,587 % of Total 47.68% 10.71% 1.64% 4.44% 0.49% 19.94% 1.41% 1.19% 11.61% 0.21% 0.67% 100.00% (1) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District to the State Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District updates records. For the Fiscal Year ended 2017, the values were reported on July 22, 2016 based on information as of January 1, 2016. 24 TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY Ratio Net Net Tax Debt Net Fiscal Outstanding Net Taxable Year Assessed Taxable Assessed Ended Estimated Assessed Valuation 9/30 Population (1) Valuation (Z) Per Capita 2013 117,397 $ 6,706,462,587 (3) $ 57,126 2014 119,158 6,962,293,178 (') 58,429 2015 120,945 7,761,202,411 (5) 64,171 2016 122,759 8,424,062,606 (6) 68,623 2017 124,988 9,117,506,344 (7) 72,947 Net Ratio Net Net Tax Debt Tax Debt to Funded Tax Outstanding Net Taxable Debt at End Assessed Per of Year (8) Valuation Capita $ 120,375,588 1.79% $ 1,025 123,827,115 1.78% 1,039 135,879,058 1.75% 1,123 144,036,173 1.71% 1,173 167,907,663 (9) 1.84% 1,343 (1) Source: City Officials. (2) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District to the State Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District updates records. Source: Denton Central Appraisal District as of July 22, 2016. (3) Excludes tax incremental value of approximately $10,248,781 that is not available for the City's general obligations and debt of City. (4) Excludes tax incremental value of approximately $16,931,096 that is not available for the City's general obligations and debt of City. (5) Excludes tax incremental value of approximately $35,975,197 that is not available for the City's general obligations and debt of City. (6) Excludes tax incremental value of approximately $39,084,154 that is not available for the City's general obligations and debt of City. (7) Excludes tax incremental value of approximately $54,744,149 that is not available for the City's general obligations and debt of City. (8) Excludes self -supported general obligation debt. (9) Projected. Includes a portion of the Bonds and Certificates. Excludes the Refunded Obligations. Preliminary, subject to change. TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY Fiscal % of Total Taxable Taxable Assessed Assessed Valuation Year $152,349,530 Distribution 101,024,543 1.10% 86,120,882 Ended Tax General Interest and 0.57% % Current % Total 9/30 Rate Fund Sinking Fund Tax Levy (1) Collections Collections 2013 $ 0.68975 0.47088 $ 0.21887 $ 46,984,330 99.26% 99.74% 2014 0.68975 0.47480 0.21495 48,436,040 99.27% 99.73% 2015 0.68975 0.48119 0.20856 53,661,933 99.70% 99.61% 2016 0.68975 0.47456 0.21519 58,634,172 99.40% 99.40% 2017 0.68334 0.46674 0.21660 62,606,588 96.72% (2) 96.72% (2) (1) Tax levy for the year 2017 is based on the adjusted certified value. Prior years represent adjusted values that include all supplements through September 30, 2016. Includes tax incremental reinvestment zone revenues. (2) Collections through March 1, 2017 (partial year). TABLE 5 - TEN LARGEST TAXPAYERS (I) Name of Taxpayer Well Services Division of STC Paccar Inc. Columbia Medical Center of Denton Inland Western Denton Crossing Ltd PS Cypress Denton Station LTD Timber Links Apts. LP Razor Ranch Market Place LP HRA University Courtyard LLC GTM Development LTD GTE Southwest, Inc. Nature of Property Services/ Manufacturing Diesel Truck Manufacturing Hospital/Professional Building Real Estate Development Residential Multifamily Apartment Complexes Shopping Center Apartments Shopping Center Telephone Utility (1) Source: Denton Central Appraisal District. 25 2016/17 % of Total Taxable Taxable Assessed Assessed Valuation Valuation $152,349,530 1.66% 101,024,543 1.10% 86,120,882 0.94% 52,782,340 0.58% 52,416,833 0.57% 43,509,314 0.47% 40,220,266 0.44% 34,935,824 0.38% 30,446,286 0.33% 29,347,570 0.32% $ 623,153,388 6.79% GENERAL OBLIGATION DEBT LIMITATION ... No general obligation debt limitation is imposed on the City under current State law or the City's Home Rule Charter (see "The Obligations — Tax Rate Limitation" for a description of the limitations on ad valorem tax rates). TABLE 6 - ESTIMATED OVERLAPPING TAX DEBT Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such entities on properties within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures. This statement of direct and estimated overlapping ad valorem tax debt ("Tax Debt") was developed from information contained in "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for the amounts relating to the City, the City has not independently verified the accuracy or completeness of such information, and no person should rely upon such information as being accurate or complete. Furthermore, certain entities listed may have issued additional Tax Debt since the date hereof, and such entities may have programs requiring the issuance of substantial amounts of additional Tax Debt, the amount of which cannot be determined. The following table reflects the estimated share of overlapping Tax Debt of the City. Authorized But Unissued Debt As Of 3-1-17 $ 53,785,000 (3) 118,408,296 50,000 (1) Includes tax incremental value of approximately $54,744,149 that is not available for the City's general obligations and debt of City. (2) Includes a portion of the Obligations. Excludes the Refunded Obligations and self-supporting debt. See Tables 1 and 9 herein for more detailed information on the City's general obligation self-supporting debt. Preliminary, subject to change. (3) Reflects remaining authorization after the issuance of the Bonds. 26 2016/17 City's Taxable 2016/17 Total Estimated Overlapping Assessed Tax Funded % Funded Debt Taxing Jurisdiction Value Rate Debt Applicable As of 3-1-17 City of Denton $9,172,250,493 CL) $ 0.68334 $ 167,907,663 (Z) 100.00% $ 167,907,663 CZ) Denton Independent School District 12,758,213,322 1.54000 862,652,256 63.71% 549,595,753 Denton County 78,259,024,841 0.24840 608,895,000 12.48% 75,990,096 Argyle Independent School District 1,360,020,910 1.57000 88,840,743 11.72% 10,412,135 Aubrey Independent School District 741,069,420 1.51000 49,189,229 0.13% 63,946 Krum Independent School District 669,310,010 1.54000 43,987,751 5.95% 2,617,271 Pilot Point Independent School District 556,020,211 1.37000 17,805,000 0.15% 26,708 Ponder Independent School District 555,657,742 1.46780 21,395,000 1.39% 297,391 Sanger Independent School District 849,493,050 1.37210 22,093,438 0.53% 117,095 Total Direct and Overlapping Funded Debt $ 807,028,057 Ratio of Direct and Overlapping Funded Debt to Taxable Assessed Valuation ............................................. 8.80% Per Capita Overlapping Funded Debt............................................................................................. $ 5,738.76 Authorized But Unissued Debt As Of 3-1-17 $ 53,785,000 (3) 118,408,296 50,000 (1) Includes tax incremental value of approximately $54,744,149 that is not available for the City's general obligations and debt of City. (2) Includes a portion of the Obligations. Excludes the Refunded Obligations and self-supporting debt. See Tables 1 and 9 herein for more detailed information on the City's general obligation self-supporting debt. Preliminary, subject to change. (3) Reflects remaining authorization after the issuance of the Bonds. 26 DEBT INFORMATION 00 M O- M N O v� l— W O M r- W v) M O\ O O O M W O\ N M --i Vl M �O �O M M 00 W l- O Oq M r- � W l� M 00 O M V1 M SO OO N OO �o �o M O o � co C:) co co ,� i " N co co ay av co o N m o m M M W O\ O\ O\ Vl N Vl ,--i Vl Vl Vl r- Vl Vl M r- O\ O rHO\ 00 0 00 00 O � � W O 0 00 � Vl Vl M �O '7t Vl Vl ,--i CO M CO M M O\ W Q E!j E!j W O Vl l— C� ,--i 00 Vl M 00 �O N 00 �O OO\ 00 Vl 00 l— y, O N Vl v1 W N N O CO N00 O O 00 N �c OO M �O Vl OO O N �O OO ,--i O\ M OO OO O v1 v1 O Vl l— r- r- N N N W l— O\ W 0 W O\ O\ 00 r- Vl M M M N N N N N ,--i — ,--i — ,--i O\ �O M 'o O\ M 'o 'o N V1 N M M O\ M '7t '7t V1 00 vl W Z O\ W r- 7t O M Op N 00 N 00 M r- 00 rH,--i �_ O\ l— O O\ M l— 00 N M m � W O\ O\ O l— �. 00 M y O M O M Vl O �O O M M ,--i M M W l— 00 O\ O\ W vl O --i l— Nm O p N vl W vl N--� ,--i ,--i vl W 00 l- O r- ,--i ,--i ,--i O � 00 ,--i O y M N 0O C, W ,--i 00 M r- O l— M Vl M O OO OO N O l— M CO Vl M M M M M M M O 0 r- W 00 00 l— M M M M (fi E!j r- r- O r- O OO ^ O , r- r- � Vl M m Vl o N O W m M M N O 00 �O -7t O r- W vv� Y W 00 �c M W M N--� O W N O M M M M N N N N N N N N — ——— ————— �p U � � w N vi O V1 vi O V1 vi O O O O O O_ V1 O O V1 O V1 O O O O O O O O O O V1 00 N l� N l� r- � 00 O N �O M vl O vl vl vl ,--i 00 l— O\ O ,--i M M Vl W O ,--i M Vl r- W O\ ,--i N M Vl a M F Vl Vl Vl ,--i N N N N N N N N N N M M M M N N N N N N M M M M f V)M_ M 00 00 M M M 00 M 00 M 00 O V) M_ �O V) M_ O M M IO 00 M IO IO IO 00 IO 00 IO 00 O N O l— V) IO V1 M 00 O ,--i r- MW O Vl O\ N M N O Vl 00 O O O M N M ,--i W 'O '1- 00 'O M C:) � Ef3 EA O O O O O O O O O O O O O O O O O O O O O ' .. ' ' ' ' ' ' O O O O O O O O O O O O O O O O O O O O O O o O O Vi o 0 o l0 l— Vi O vi O Vi o 0 0 0 o Ic O O O W 00 00 M Vl O N Vl O M CO O\ M N l- l- l- 00 00 00 00 C, C, C, C, O O N (fi � N_ �O 00 �O ,--i --i ,--i --i ,--i W O\ W r - W N l— l— 00 g O O Vl M 00 M 00 00 M O 00 M M O M M M ,--i Ic CO O\ O\ IO M M ,--i W N N � ` � M O\ --i ,--i � �--i V) M �O O ` vU y l-� 00 O\ r- M V) N O O V1 V1 N N C, , Ni O\ �6 W 00 'O O\ r- V1 c W i. 00 l— O 4 � r- W 00 N --� �O �O M O V1 V1 V1 l� N_ N V1 kn 00 C, ,--i 00 �, O O M O 00 l� 00 �O M O O O O N V1 V1 W V1 N N W V) N O O\ 00 l— 'O Vl M M M N N N ,--i — ,--i � CL O O O O O vi O O vi vi vi vi vi vi vi O Vi O vi vi vi O O Vi Vi r- O O vi O\ 00 '1-N '1-Vl 'O l- O\ g m M O n W Vl M lc N nO M 10 O\ O\ 00 C� � N W l— � r- r- Vl g C, r- r- r- W 00 00 C, C, �6 N W 0 a M M M N N N N N N --i ,--i--i ,--i 00 (fi E!j cd O l� 00 O N M V) IO l— 00 O\ C:) N M I- V) IO l— 00 O\ O N M I- V) IO l— w W o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N 27 N M 7t l— '7t O\ N O O W v) v) r- N 7t 7t W W �) v) M O rUj �O M M �O 00 O -7t r- O M N � N r- r- N --� V1 y O 00 00 l— 00 M l- N r- ll� ,--i Vl W l- :� V1 M Vl 00 �O O Vl ,--i 00 O O M N � W --i M M �O Vl N Vl �O r- l� � M r- W v) M O\ O O O M W O\ N M --i Vl M �O �O M M 00 W l- O Oq M r- � W l� M 00 O M V1 M SO OO N OO �o �o M O o � co C:) co co ,� i " N co co ay av co o N m o m M M W O\ O\ O\ Vl N Vl ,--i Vl Vl Vl r- Vl Vl M r- O\ O rHO\ 00 0 00 00 O � � W O 0 00 � Vl Vl M �O '7t Vl Vl ,--i CO M CO M M O\ W Q E!j E!j W O Vl l— C� ,--i 00 Vl M 00 �O N 00 �O OO\ 00 Vl 00 l— y, O N Vl v1 W N N O CO N00 O O 00 N �c OO M �O Vl OO O N �O OO ,--i O\ M OO OO O v1 v1 O Vl l— r- r- N N N W l— O\ W 0 W O\ O\ 00 r- Vl M M M N N N N N ,--i — ,--i — ,--i O\ �O M 'o O\ M 'o 'o N V1 N M M O\ M '7t '7t V1 00 vl W Z O\ W r- 7t O M Op N 00 N 00 M r- 00 rH,--i �_ O\ l— O O\ M l— 00 N M m � W O\ O\ O l— �. 00 M y O M O M Vl O �O O M M ,--i M M W l— 00 O\ O\ W vl O --i l— Nm O p N vl W vl N--� ,--i ,--i vl W 00 l- O r- ,--i ,--i ,--i O � 00 ,--i O y M N 0O C, W ,--i 00 M r- O l— M Vl M O OO OO N O l— M CO Vl M M M M M M M O 0 r- W 00 00 l— M M M M (fi E!j r- r- O r- O OO ^ O , r- r- � Vl M m Vl o N O W m M M N O 00 �O -7t O r- W vv� Y W 00 �c M W M N--� O W N O M M M M N N N N N N N N — ——— ————— �p U � � w N vi O V1 vi O V1 vi O O O O O O_ V1 O O V1 O V1 O O O O O O O O O O V1 00 N l� N l� r- � 00 O N �O M vl O vl vl vl ,--i 00 l— O\ O ,--i M M Vl W O ,--i M Vl r- W O\ ,--i N M Vl a M F Vl Vl Vl ,--i N N N N N N N N N N M M M M N N N N N N M M M M f V)M_ M 00 00 M M M 00 M 00 M 00 O V) M_ �O V) M_ O M M IO 00 M IO IO IO 00 IO 00 IO 00 O N O l— V) IO V1 M 00 O ,--i r- MW O Vl O\ N M N O Vl 00 O O O M N M ,--i W 'O '1- 00 'O M C:) � Ef3 EA O O O O O O O O O O O O O O O O O O O O O ' .. ' ' ' ' ' ' O O O O O O O O O O O O O O O O O O O O O O o O O Vi o 0 o l0 l— Vi O vi O Vi o 0 0 0 o Ic O O O W 00 00 M Vl O N Vl O M CO O\ M N l- l- l- 00 00 00 00 C, C, C, C, O O N (fi � N_ �O 00 �O ,--i --i ,--i --i ,--i W O\ W r - W N l— l— 00 g O O Vl M 00 M 00 00 M O 00 M M O M M M ,--i Ic CO O\ O\ IO M M ,--i W N N � ` � M O\ --i ,--i � �--i V) M �O O ` vU y l-� 00 O\ r- M V) N O O V1 V1 N N C, , Ni O\ �6 W 00 'O O\ r- V1 c W i. 00 l— O 4 � r- W 00 N --� �O �O M O V1 V1 V1 l� N_ N V1 kn 00 C, ,--i 00 �, O O M O 00 l� 00 �O M O O O O N V1 V1 W V1 N N W V) N O O\ 00 l— 'O Vl M M M N N N ,--i — ,--i � CL O O O O O vi O O vi vi vi vi vi vi vi O Vi O vi vi vi O O Vi Vi r- O O vi O\ 00 '1-N '1-Vl 'O l- O\ g m M O n W Vl M lc N nO M 10 O\ O\ 00 C� � N W l— � r- r- Vl g C, r- r- r- W 00 00 C, C, �6 N W 0 a M M M N N N N N N --i ,--i--i ,--i 00 (fi E!j cd O l� 00 O N M V) IO l— 00 O\ C:) N M I- V) IO l— 00 O\ O N M I- V) IO l— w W o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N 27 N M 7t TABLE 8 - INTEREST AND SINKING FUND BUDGET PROJECTION in Budgeted Tax Supported Debt Service Requirements and Fiscal Charges, Fiscal Year Ending 9/30/2017 ......... $ 75,559,790 Interest and Sinking Fund Balance as of 9/30/16 ...................................... $ 4,893,032 Interest and Sinking Fund Tax Levy ................................................ 19,748,519 From Revenue Supported Sources .................................................. 55,761,271 Interest Income................................................................ 50,000 80,452,822 Estimated Balance, 9/30/17...................................................................... $ 4,893,032 (1) Source: City's Annual Budget for Fiscal Year 2016/17. TABLE 9 - COMPUTATION OF SELF-SUPPORTING DEBT Net Revenue from Solid Waste System, Fiscal Year Ended 9-30-16 ........................................ $ 10,552,548 (i) Less: Solid Waste System Revenue Bond Requirements, 2017 Fiscal Year ................................... - Balance Available for Other Purposes................................................................ $ 10,552,548 Solid Waste System General Obligation Bond Requirements, 2017 Fiscal Year ............................... (8,056,056) Balance....................................................................................... $ 2,496,492 Net Revenue from Utility System, Fiscal Year Ended 9-30-16 ............................................ $ 91,780,472 (i) Less: Utility System Revenue Bond Requirements, 2017 Fiscal Year ....................................... (3,680,389) Balance Available for Other Purposes................................................................ $ 88,100,083 Utility System General Obligation Bond Requirements, 2017 Fiscal Year .................................... (46,914,293) Balance....................................................................................... $ 41,185,790 (1) Does not deduct franchise fees and/or return on investment paid to the General Fund. (2) Excludes a portion of the Refunded Obligations. Includes a portion of the Bonds. Prelminary, subject to change. TABLE 10 - AUTHORIZED BUT UNISSUED GENERAL OBLIGATION BONDS (1) Preliminary, subject to change. Unissued Balance 43,420,000 3,290,000 7,075,000 $ 53,785,000 ANTICIPATED ISSUANCE OF ADDITIONAL GENERAL OBLIGATION DEBT ... As shown in Table 10 above, after the issuance of the Bonds, the City will have $53,785,000 voted but unissued debt remaining to be issued from the November 4, 2014 authorization. The City may also issue tax -supported debt other than voter approved general obligation bonds to fund public improvements, such as certificates of obligation or tax anticipation notes, without submitting a measure to the voters, but in certain instances, subject to voter petition rights for a referendum. Further, the City may issue tax -supported debt other than voter approved general obligation bonds to refund bonds or other obligations not currently payable from or supported by ad valorem taxes, such as the City's Utility System revenue bonds. The City anticipates the issuance of approximately $33,700,000 in tax supported debt in the second quarter of 2018. 28 Amount Amount Date Amount Heretofore Being Purpose Authorized Authorized Issued Issued (')— Street 11/6/2012 $ 20,400,000 $ 16,400,000 $ 4,000,000 Street 11/4/2014 61,710,000 13,340,000 4,950,000 Public Safety 11/4/2014 16,565,000 8,355,000 8,210,000 Drainage 11/4/2014 8,545,000 5,255,000 - Parks 11/4/2014 11,355,000 4,280,000 - $ 118,575,000 $ 47,630,000 $ 17,160,000 (1) Preliminary, subject to change. Unissued Balance 43,420,000 3,290,000 7,075,000 $ 53,785,000 ANTICIPATED ISSUANCE OF ADDITIONAL GENERAL OBLIGATION DEBT ... As shown in Table 10 above, after the issuance of the Bonds, the City will have $53,785,000 voted but unissued debt remaining to be issued from the November 4, 2014 authorization. The City may also issue tax -supported debt other than voter approved general obligation bonds to fund public improvements, such as certificates of obligation or tax anticipation notes, without submitting a measure to the voters, but in certain instances, subject to voter petition rights for a referendum. Further, the City may issue tax -supported debt other than voter approved general obligation bonds to refund bonds or other obligations not currently payable from or supported by ad valorem taxes, such as the City's Utility System revenue bonds. The City anticipates the issuance of approximately $33,700,000 in tax supported debt in the second quarter of 2018. 28 TABLE 11 - OTHER OBLIGATIONS The City has entered into capital lease agreements. The following is a schedule of future minimum lease payments under these capital leases and the present value of the net minimum lease payments as of September 30, 2016: Year Annual Ending Lease 30 -Sep Payment 2017 $ 910,270 2018 505,054 2019 4,172 Total Minimum Lease Payment $ 1,419,496 Less: Amount Representing Interest 46,266 Present Value of Minimum Future Lease Payments $ 1,373,230 PENSION FUND ... The City participates as one of 866 plans in the nontraditional, joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System ("TMRS"). TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the "TMRS Act") as an agent multiple -employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the TMRS with a six -member board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS's defined benefit pension plan is a tax -qualified plan under Section 401(a) of the Internal Revenue Code. TMRS issues a publicly -available comprehensive annual financial report obtainable at www.tmrs.com. All eligible employees of the city are required to participate in TMRS. Benefits Provided ... TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the City Council of the City, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the city -financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven payments options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member's deposits and interest. At the inception of the plan, the city granted monetary credits for service rendered before the plan began (or prior service credits) of a theoretical amount at least equal to two times what would have been contributed by the employee, with interest (3% annual), prior to establishment of the plan. Monetary credits for service since the plan began (or current service credits) are a percent (200%) of the employee's accumulated contributions. In addition, the City grants on an annually repeating basis, another type of monetary credit referred to as an updated service credit. This monetary credit is determined by hypothetically recomputing the member's account balance by assuming the current member deposit rate of the City (7%) has always been in effect. The computation also assumes the member's salary has always been the member's average salary — using a salary calculation based on the 36 -month period ending a year before the effective date of calculation. This hypothetical account balance is increased by 3% each year, and increased by the city match currently in effect (200%). The resulting sum is then compared to the member's actual account balance increased by the actual city match and actual interest credited. If the hypothetical calculation exceeds the actual calculation, the member is granted a monetary credit (or Updated Service Credit) equal to the difference between the hypothetical calculation and the actual calculation times the percentage adopted. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the city -financed monetary credits with interest were used to purchase an annuity. The plan provisions also include an annually repeating basis cost of living adjustments for retires equal to 70% of the change in the consumer price index. Members can retire at ages 60 and above with 5 or more years of service or with 20 years of service regardless of age. A member is vested after five years. Employees covered by benefit terms ... At the December 31, 2015 valuation and measurement date, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 498 Inactive Employees Entitled to But Not Yet Receiving Benefits 443 Active Employees 1,188 2,129 29 Contributions ... The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the city matching percentages are either 100%, 150%, or 200%, both as adopted by the City Council. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City were 17.76% and 17.23% in calendar years 2015 and 2016, respectively. The City's contributions to TMRS for the year ended September 30, 2016 were $14,435,639 and were equal to the required contributions. Net Pension Liability ... The City's Net Pension Liability ("NPL") was measured as of December 31, 2015, and the Total Pension Liability ("TPL") used to calculate the NPL was determined by an actuarial valuation as of that date. Actuarial Assumptions ... The TPL in the December 31, 2015 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% per year Overall payroll growth 3.00% per year Investment Rate of Return 6.75%, net of pension plan investment expense, including inflation Salary increases were based on a service -related table. Mortality rates for active members, retirees, and beneficiaries were based on the gender -distinct RP2000 Combined Healthy Mortality Tables with Blue Collar Adjustment, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. For disabled annuitants, the gender -distinct RP2000 Combined Healthy Mortality Tables with Blue Collar Adjustment are used with male rates multiplied by 109% and female rates multiplied by 103% with a 3 -year set - forward for both males and females. In addition, a 3% minimum mortality rate is applied to reflect the impairment for younger members who become disabled. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements subject to the 3% floor. Actuarial assumptions used in the December 31, 2015, valuation were based on the results of actuarial experience studies. The experience study in TMRS was for the period December 31, 2010 through December 31, 2014. Healthy post-retirement mortality rates and annuity purchase rates were updated based on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December 31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a change to the Entry Age Normal ("EAN") actuarial cost method. Assumptions are reviewed annually. No additional changes were made for the 2014 valuation. After the Asset Allocation Study analysis and experience investigation study, the Board amended the long-term expected rate of return on pension plan investments from 7% to 6.75%. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short- term and long-term funding needs of TMRS. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. In determining their best estimate of a recommended investment return assumption under the various alternative asset allocation portfolios, TMRS's actuary focused on the area between (1) arithmetic mean (aggressive) without an adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time (aggressive). At its meeting on July 30, 2015, the TMRS Board approved a new portfolio target allocation. The target allocation and best estimates of real rates of return for each major asset class are summarized in the following table: 30 Long -Term Expected Real Target Rate of Return Asset Class Allocation (Arithmetic) Domestic Equity 17.5% 4.55% International Equity 17.5% 6.10% Core Fixed Income 10.0% 1.00% None -Core Fixed Income 20.0% 3.65% Real Return 10.0% 4.03% Real Estate 10.0% 5.00% Absolute Return 10.0% 4.00% Private Equity 5.0% 8.00% Total 100.0% 30 Discount Rate ... The discount rate used to measure the TPL was 6.75%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL. Changes in the Net Pension Liability Balance at 12/31/2014 Changes for the year: Service cost Interest Change of benefit terms Difference between expected and actual experience Changes of assumptions Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes Balance at 12/31/2015 Increase (Decrease) Total Plan Net Pension Fiduciary Pension Liability Net Position Liability (a) (b) (a) - (b) 7384,408,038 $ 318,166,193 $ 66,241,845 12,615,957 Current 12,615,957 26,905,700 Discount 26,905,700 (1,525,911) Rate (1,525,911) (428,789) - (428,789) actual investment earnings 13,615,410 (13,615,410) Contributions subsequent to the 5,365,231 (5,365,231) measurement date 469,530 (469,530) (12,697,735) (12,697,735) actual economic experience (285,957) 285,957 - (14,123) 14,123 24,869,222 6,452,356 18,416,866 $409,277,260 $ 324,618,549 $ 84,658,711 Sensitivity of the Net Pension Liability to changes in the Discount Rate ... The following presents the net pension liability of the City, calculated using the discount rate of 6.75%, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (5.75%) or 1 -percentage -point higher (7.75%) than the current rate: 1% Decrease Current 1% Increase in Discount Discount in Discount Rate Rate Rate City's Net Pension Liability $146,877,886 $84,658,711 $33,910,559 Pension Plan Fiduciary Net Position ... Detailed information about the pension plan's Fiduciary Net Position is available in a separately -issued TMRS financial report. That report may be obtained on the Internet at www.tmrs.com. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions ... For the year ended September 30, 2016, the City recognized pension expense of $16,873,960. This amount is included as part of personal services expenses. At September 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to TMRS pension from the following sources: Deferred Deferred Outflow of Inflows of Resources Resources Differences between projected and actual investment earnings $19,703,549 $ Contributions subsequent to the measurement date 10,660,116 Differences between expected and actual economic experience - (1,324,228) Difference in assumption changes - (342,859) Total $30,363,665 $(1,667,087) 31 $10,660,116 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability for the City's fiscal year ending September 30, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Measurement Year Ended December 31st 2016 $ 4,689,087 2017 4,689,087 2018 4,689,088 2019 3,969,200 2020 - Total $ 18,036,462 Supplemental Death Benefit Fund ... The City of Denton contributes to a cost-sharing multiple -employer defined benefit group - term life insurance plan known as the Supplemental Death Benefits Fund ("SDBF"). This is a separate trust administered by the TMRS Board of Trustees and is a voluntary program in which the City elected, by ordinance, to provide group term life insurance coverage to active and retired members. The City may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1st of any year to be effective the following January 1st. Payments from this fund are similar to group term life insurance benefits, and are paid to the designated beneficiaries upon the receipt of an approved application for payment. The death benefit for active employees provides a lump -sum payment approximately equal to the employee's annual salary (calculated based on the employee's actual earnings, for the 12 -month period preceding the month of death). The death benefit for retirees is considered an "other postemployment benefit" ("OPEB") and is a fixed amount of $7,500. The obligations of this plan are payable only from the SDBF and are not an obligation of, or claim against, the TMRS Pension Trust Fund. Contributions are made monthly based on the covered payroll of employee members of the City. The contractually required contribution rate is determined by an annual actuarial valuation and is based on the mortality and service experience of all employees covered by the SDBF and the demographics specific to the workforce of the City. There is a one-year delay between the actuarial valuation that serves as the basis for the employer contribution rate and the calendar year when the rate goes into effect. The contributions to the SDBF are pooled for investment purposes with those of the Pension Trust Fund described above. The TMRS Act requires the Pension Trust Fund to allocate investment income to the SDBF on an annual basis. The funding policy of the plan is to assure adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to prefund retiree term life insurance during employees' entire careers. As such, contributions are utilized to fund active member deaths on a pay-as-you-go basis; any excess contributions and investment income over payments then become net assets available for OPEB. The City's contributions to the TMRS SDBF for the fiscal years ended September 30, 2014, 2015, and 2016, were $118,782, $133,686, and $149,630, respectively, which equaled the required contributions each year. FIREMEN'S RELIEF AND RETIREMENT FUND Plan Description ... The City contributes to the retirement plan for firefighters in the Denton Fire Department known as the Denton Firemen's Relief and Retirement Fund (the "Fireman's Fund"). The Fireman's Fund is a single employer, contributory, defined benefit plan. The benefit provisions of the Fireman's Fund are authorized by the Texas Local Fire Fighters' Retirement Act ("TLFFRA"). TLFFRA provides the authority and procedure to amend benefit provisions. The plan is administered by the Board of Trustees of the Firemen's Fund. The City does not have access to nor can it utilize assets within the retirement plan trust. The Fireman's Fund issues a stand-alone report pursuant to GASB Statement No. 67, which may be obtained by writing the Denton Firemen's Relief and Retirement Fund at P.O. Box 2375, Denton, Texas 76202. See that report for all information about the plan fiduciary net position. Benefits Provided ... Firefighters in the Denton Fire Department are covered by the Fireman's Fund which provides service retirement, death, disability, and withdrawal benefits. These benefits fully vest after 20 years of credited service. Firefighters may retire at age 50 with 20 years of service. A partially -vested benefit is provided for firefighters who terminate employment with at least 10 but less than 20 years of service. If a terminated firefighter has a partially vested benefit, the firefighter may retire starting on the date they would have both completed 20 years of service if he had remained a Denton firefighter and attained age 50. As of the December 31, 2015 actuarial valuation date, the plan effective January 1, 2011 provided a monthly normal service retirement benefit, payable in a Joint and Two -Thirds to Spouse form of annuity, equal to 2.59% of Highest 36 - Month Average Salary for each year of service. 32 A retiring firefighter who is at least age 52 with at least 22 years of service has the option to elect the Retroactive Deferred Retirement Option Plan ("RETRO DROP") which will provide a lump sum benefit and a reduced monthly benefit. The reduced monthly benefit is based on the service and Highest 36 -Month Average Salary as if the firefighter had terminated employment on his selected RETRO DROP benefit calculation date, which is no earlier than the later of the date the firefighter meets the age 52 and 22 years of service requirements and the date four years prior to the date the firefighter actually retires. Upon retirement, the member will receive, in addition to the monthly retirement benefit, a lump sum equal to the sum of (1) the amount of monthly contributions the member has made to the Fireman's Fund after the RETRO DROP benefit calculation date plus (2) the total of the monthly retirement benefits the member would have received between the RETRO DROP benefit calculation date and the date retired under the plan. There are no account balances. The lump sum is calculated at the time of retirement and distributed as soon as administratively possible. There is no provision for automatic postretirement benefit increases. The Fireman's Fund has the authority to provide, and has periodically in the past provided, ad hoc postretirement benefit increases. Employees Covered by Benefit Terms ... In the December 31, 2015 actuarial valuation, the following numbers of members were covered by the Fireman's Fund: Inactive Employees or Beneficiaries Currently Receiving Benefits 84 Inactive Employees Entitled to But Not Yet Receiving Benefits 2 Active Employees 176 262 Contributions ... The contribution provisions of the Fireman's Fund are authorized by TLFFRA. TLFFRA provides the authority and procedure to change the amount of contributions determined as a percentage of pay by each firefighter and a percentage of payroll by the City. The funding policy of the Fireman's Fund requires contributions equal to 12.6% of pay by the firefighters, the rate elected by the firefighters according to TLFFRA. The City currently contributes according to a City ordinance the same percentage of payroll the City contributes to the TMRS for other employees each calendar year. The City contribution rate was 17.94% in calendar year 2015 and 17.41% in calendar year 2016. The December 31, 2015 actuarial valuation includes the assumption that the city contribution rate will average 15.5% over the plan's unfunded actuarial accrued liability ("UAAL") amortization period. The costs of administering the plan are paid from the Fireman's Fund assets. The City's contributions to the Fireman's Fund for the year ended September 30, 2016 were $2,819,046. Ultimately, the funding policy also depends upon the total return of the Fireman's Fund's assets, which varies from year to year. Investment policy decisions are established and maintained by the board of trustees. The board selects investments and employs investment managers with the advice of their investment consultant who is completely independent of the investment managers. For the calendar year ending December 31, 2015, the money -weighted rate of return on pension plan investments was -4.62%. This measurement of the investment performance is net of investment -related expenses, reflecting the effect of the timing of the contributions received and the benefits paid during the year. While the contribution requirements are not actuarially determined, state law requires that each change in plan benefits adopted by the Fireman's Fund must first be approved by an eligible actuary, certifying the contribution commitment by the firefighters and the assumed city contribution rate together provide an adequate contribution arrangement. Using the entry age actuarial cost method, the plan's normal cost contribution rate is determined as a percentage of payroll. The excess of the total contribution rate over the normal cost contribution rate is used to amortize the plan's UAAL. The number of years needed to amortize the plan's UAAL is actuarially determined using an open, level percentage of payroll method. Net Pension Liability ... The City's net pension liability for the Fireman's Fund was measured as of December 31, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2015. Actuarial Assumptions ... The total pension liability for the Fireman's Fund in the December 31, 2015 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.50% per year Overall payroll growth 3.00% per year, plus promotion, step and longevity increases that vary by service Investment Rate of Return 6.75%, net of pension plan investment expense, including inflation Mortality rates were based on the RP -2000 Combined Healthy Mortality Tables for males and for females (sex distinct) projected to 2024 by scale AA. 33 The long-term expected rate of return on the Fireman's Fund pension plan investments is reviewed for each biennial actuarial valuation and was determined using a building-block method in which expected future net real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These components are combined to produce the long-term expected rate of return by weighting the expected future net real rates of return by the target asset allocation percentage (currently resulting in 5.00%) and by adding expected inflation (2.50%). In addition, the final 6.75% assumption was selected by "rounding down" and thereby reflects a reduction of 0.75% for adverse deviation. The target allocation and expected arithmetic net real rates of return for each major asset class are summarized in the following table: Asset Class Equities Long -Term Expected Real Target Rate of Return Allocation (Arithmetic) Large Cap Domestic 40.0% 5.90% Small/Mid Cap Domestic 10.0% 6.40% International Developed 10.0% 6.40% Alternatives $71,018,518 $13,868,816 Master Limited Partnerships 8.0% 7.90% Real Estate 15.0% 4.40% Fixed Income 10.0% 0.90% Cash 7.0% 0.00% Total 100.0% (2,567,219) Discount Rate ... The discount rate used to measure the total pension liability for the Fireman's Fund was 6.75%. No projection of cash flows was used to determine the discount rate because the December 31, 2015 actuarial valuation showed expected contributions would pay the normal cost and amortize the UAAL in 32 years. Because of the 32 -year amortization period of the UAAL, the pension plan's fiduciary net position is expected to be available to make all projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments of 6.75% was applied to all periods of projected benefit payments as the discount rate to determine the total pension liability. Changes in Net Pension Liability Balance at 12/31/2014 Changes for the year: Service cost Interest Change of benefit terms Difference between expected and actual experience Changes of assumptions Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes Balance at 12/31/2015 34 Increase (Decrease) Total Plan Net Pension Fiduciary Pension Liability Net Position Liability $84,887,334 $71,018,518 $13,868,816 2,836,263 2,836,263 5,998,959 5,998,959 (2,063,421) (2,063,421) 2,331,908 - 2,331,908 - 2,567,219 (2,567,219) 1,803,064 (1,803,064) (3,287,188) 3,287,188 (4,048,358) (4,048,358) - (76,538) 76,538 5,055,351 (3,041,801) 8,097,152 $89,942,685 $67,976,717 $21,965,968 Sensitivity of the Net Pension Liability to Changes in the Discount Rate ... The following presents the net pension liability of the City for the Fireman's Fund, calculated using the discount rate of 6.75%, as well as what the city's net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (5.75%) or 1 -percentage -point higher (7.75%) than the current rate: 1% Decrease Current 1% Increase in Discount Discount in Discount Rate Rate Rate City's Net Pension Liability $33,465,927 $21,965,968 $12,286,613 Pension Plan Fiduciary Net Position ... The plan fiduciary net position reported above is the same as reported by the Fireman's Fund. Detailed information about the plan fiduciary net position is available in the Fireman's Fund's separately issued audited financial statements, which are reported using the economic resources measurement focus and the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Investments are reported at fair value, the price that would be recognized to sell an asset in an orderly transaction between market participants at the measurement date. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions ... For the year ended September 30, 2016, the City recognized pension expense of $3,858,602 for the Fireman's Fund. Amounts recognized in the fiscal year represent changes between the current and prior year measurement dates. This amount is included as part of personal services expenses. At September 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to the Fireman's Fund from the following sources: Deferred Deferred Outflow of Inflows of Resources Resources Differences between projected and actual investment earnings $ 6,760,431 Contributions subsequent to the measurement date 2,098,808 Differences between expected and actual economic experience - (1,852,437) Difference in assumption changes 2,093,472 Total $ 10,952,711 $(1,852,437) Deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date of $2,098,808 will be recognized as a reduction of the net pension liability for the measurement year ending December 31, 2016 and the City's fiscal year ending September 30, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Measurement Year Ended December 31st 2016 $ 1,729,791 2017 1,729,791 2018 1,729,791 2019 1,680,866 2020 27,452 Thereafter 103,775 Total $ 7,001,466 OTHER POST EMPLOYMENT BENEFITS . . . The cost of post -employment healthcare benefits, from an accrual accounting perspective, similar to the cost of pension benefits, should be associated with the periods in which the cost occurs, rather than in the future year when it will be paid. According to the requirements of GASB Statement No. 45 for the fiscal year ended September 30, 2016, the City recognizes the cost of post -employment healthcare in the year the employee services are received, reports the accumulated liability from prior years, and provides information useful in assessing potential demands on the City's future cash flows. Recognition of the liability accumulated from prior years will be amortized over 30 years, the first period commencing with the fiscal year ending September 30, 2008. 35 Plan Description ... The City provides post -employment medical care, which is also an OPEB, for retired employees through a single -employer defined benefit medical plan. The plan provides medical benefits for eligible retirees, their spouses and dependents though the City's group health insurance plans, which covers both active and retired members. The benefits, benefit levels, and contribution rates are recommended annually by the City management as part of the budget process. Any changes in rate subsidies for retirees are approved by the City Council. Since an irrevocable trust has not been established, the plan is not accounted for as a trust fund. The plan does not issue a separate financial report. Benefits Provided ... The City provides post -employment medical, dental, and vision care benefits to its retirees. To be eligible for benefits, an employee must qualify for retirement under the TMRS or the Firemen's Fund. Retirees must make a one-time irrevocable decision to choose benefits at the time of retirement, after that their eligibility for the benefits ceases. However, retirees can move between plans and can add and drop dependents based on qualifying events. All medical care benefits are provided through the City's self-insured health plan. The benefit levels are the same as those afforded to active employees. Funding Policy ... The plan premium rates are recommended annually by City management and approved by the City Council as part of the annual budget. The retiree's contribution is the full amount of the actuarially determined blended premium rate less a subsidy dependent upon years of service at retirement. By providing retirees with access to the City's healthcare plans based on the same rates it charges to active employees, the City is in effect providing a subsidy to retirees. This implied subsidy exists because, on average, retiree health care costs are higher than active employee healthcare costs. By the City not contributing anything toward this plan in advance, the City employs a pay-as-you-go method through paying the higher rate for active employees each year. The City contributes $40 per month for each five-year increment of service, up to $200 per month, toward the cost of retiree coverage. The full cost for dental and vision is paid by the retiree. Retirees are required to enroll in Medicare Part B once eligible (age 65) and are moved into a fully -insured Medicare Supplement plan at that time. The same City contribution level applies to the supplement. Annual OPEB Costs and Net OPEB Obligation ... The City's OPEB cost for post -employment medical care is calculated based on the annual required contribution of the City (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of accrual that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The City's annual OPEB cost for post -employment medical care for the current year and the related information are as follows at September 30, 2016: Annual required contribution $ 3,438,549 Interest on prior year net OPEB obligation 227,953 Adjustment to annual required contribution (386,669) Annual OPEB cost 3,279,833 Contributions made (630,522) Increase in net OPEB obligation 2,649,311 Net OPEB obligation - beginning of year 5,698,824 Net OPEB obligation - end of year $ 8,348,135 Percentage of OPEB costs contributed 19.2% Funded Status and Funding Progress ... The funded status of the plan as of the actuarial measurement date of December 31, 2015 was as follows: Actuarial accrued liability $ 25,361,327 Actuarial value of plan assets - Unfunded actuarial accrued liability $ 25,361,327 Funded ratio 0.0% Covered payroll $ 98,668,427 Unfunded actuarial accrued liability as a percentage of covered payroll 25.7% 36 Three -Year Trend Information for OPEB Funding Fiscal Year Ended September 30, 2016 2015 2014 Annual OPEB Costs $ 3,279,833 $ 1,716,639 $ 1,735,204 Actual Contributions $ 630,522 $ 671,072 $ 909,288 Percent Contributed 19.2% 39.1% 52.4% Net OPEB Obligations $ 8,348,135 $ 5,698,824 $ 4,653,257 The schedule of funding progress, presented as "Required Supplementary Information" (Exhibit XIII) following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability of benefits. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the status of the plan and the annual required contributions of the City's retiree health care plan are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Actuarial Methods and Assumptions ... The Projected Unit Credit actuarial cost method is used to calculate the GASB ARC for the City's retiree health care plan. Using the plan benefits, the present health premiums and a set of actuarial assumptions, the anticipated future payments are projected. The Projected Unit Credit method then provides for a systematic funding for these anticipated payments. The yearly ARC is computed to cover the cost of benefits being earned by covered members as well as to amortize a portion of the unfunded accrued liability. Projections of benefits are based on the substantive plan (the plan understood by the employer and plan members) and include the type of benefits in force at the valuation date and the pattern of sharing benefits between the City and the plan members at that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions designed to reduce short- term volatility in actuarial accrued liabilities and the actuarial value of assets. Significant method and assumptions used for this fiscal year valuation as shown on the following page were as follows: Actuarial cost method Amortization method Amortization period Asset valuation method Investment rate of return Inflation rate Payroll growth Healthcare inflation rate Actuarial Assumptions 12/31/15 Projected unit credit Level dollar 22 years, closed N/A 4.0%, net of expenses 2.5% N/A Initial rate of 7.50% declining to an ultimate rate of 4.25% after 15 years Medical Reimbursements ... The federal government may provide the city subsidy per the Medicare Part D Prescription Drug Subsidy Program for providing healthcare for Medicare eligible employees. As the City does not participate in these subsidies, any current and future year subsidies are not recognized as a reduction to the actuarial accrued liability. 37 FINANCIAL INFORMATION TABLE 12 - CHANGES IN NET POSITION OF GOVERNMENTAL FUNDS (1) Represents a net adjustment due to GASB 68, "Accounting and Financial Reporting for Pensions" and GASB 71, "Pension Transition for Contributions Made Subsequent to the Measurement Date". (2) Unrestricted net position, that part of the net position that may be used to meet the City's ongoing obligations, was ($3,620,580) as of September 30, 2016. This table refers to governmental activities only and does not include enterprise funds such as solid waste or utility activities. 38 Fiscal Year Ended September 30, Revenues: 2016 2015 2014 2013 2012 Program Revenue: Charges for Services $ 21,841,254 $ 18,274,498 $ 18,428,832 $ 17,091,719 $ 15,980,821 Operating Grants and Contributions 2,855,501 3,380,119 4,788,149 3,118,105 2,598,157 Capital Grants and Contributions 5,885,033 10,443,220 11,127,695 14,671,571 4,292,468 General Revenue: Property Tax 58,788,255 54,174,965 48,833,077 47,275,552 45,174,160 Sales Tax 32,624,297 30,601,965 27,764,114 26,522,473 25,886,940 Other Taxes/Fees 25,518,472 24,746,463 23,424,250 22,578,639 21,839,818 Miscellaneous 2,605,363 2,687,360 2,543,781 1,428,907 1,390,398 Total Revenue $150,118,175 $144,308,590 $136,909,898 $132,686,966 $117,162,762 Expenditures: General Government $ 33,847,052 $ 31,260,126 $ 30,476,840 $ 27,686,735 $ 29,421,275 Public Safety 63,118,516 58,132,146 56,893,859 52,906,985 52,496,010 Public Works 24,557,482 20,331,934 16,950,280 18,663,884 18,662,029 Parks and Recreation 16,043,697 14,982,742 14,543,461 13,714,245 12,968,426 Interest on Long -Term Debt 4,664,608 4,384,973 4,339,154 4,464,309 4,755,938 Total Expenses $142,231,355 $129,091,921 $123,203,594 $117,436,158 $118,303,678 Increase in Net Position before Transfers $ 7,886,820 $ 15,216,669 $ 13,706,304 $ 15,250,808 $ (1,140,916) Transfers 1,184,433 1,140,938 876,525 (101,707) 887,287 Increase (Decrease) in Net Position $ 9,071,253 $ 16,357,607 $ 14,582,829 $ 15,149,101 $ (253,629) Prior Period Adjustment - (39,247,319) (i) (737,505) - - Net Position at Beginning of Year 146,354,778 169,244,490 155,399,166 140,250,065 140,503,694 Net Position at End of Year 155,426,031 $146,354,778 $169,244,490 $155,399,166 $140,250,065 (1) Represents a net adjustment due to GASB 68, "Accounting and Financial Reporting for Pensions" and GASB 71, "Pension Transition for Contributions Made Subsequent to the Measurement Date". (2) Unrestricted net position, that part of the net position that may be used to meet the City's ongoing obligations, was ($3,620,580) as of September 30, 2016. This table refers to governmental activities only and does not include enterprise funds such as solid waste or utility activities. 38 TABLE 12A -GENERAL FUND REVENUES AND EXPENDITURE i$STORY Revenues: Taxes Licenses and Permits Franchise Fee Fines and Forfeitures Fees for Service Interest Revenue Intergovernmental Miscellaneous Total Revenues Expenditures: General Government Public Safety Public Works Parks and Recreation Capital Outlay Debt Service: Principal Retirement Total Expenditures Fiscal Year Ended September 30, 2016 2015 2014 2013 2012 $ 73,316,697 $68,844,155 $61,779,192 $59,278,152 $57,148,330 3,106,162 2,782,395 1,978,421 1,446,580 1,436,215 13,246,765 12,969,628 13,889,670 13,597,253 13,751,615 3,767,796 3,721,677 4,539,209 4,229,107 4,241,395 7,432,481 6,039,221 5,913,566 5,631,829 5,666,413 293,616 221,867 172,684 141,734 187,527 969,898 1,051,630 1,383,267 1,021,581 949,422 168,732 141,090 120,680 84,929 255,035 $102,302,147 $95,771,663 $89,776,689 $85,431,165 $83,635,952 $ 26,651,405 $24,694,516 $23,337,639 $21,067,238 $20,951,203 55,724,427 52,739,309 50,949,715 49,622,237 46,797,417 2,869,618 3,306,507 2,854,761 2,816,923 2,591,517 11,875,804 11,209,486 10,891,862 10,579,066 9,704,075 519,325 572,876 573,903 616,199 712,055 45,880 - - - 78,092 $ 97,686,459 $92,522,694 $88,607,880 $84,701,663 $80,834,359 Excess (Deficiency) ofRevenues Over Expenditures $ 4,615,688 $ 3,248,969 $ 1,168,809 $ 729,502 $ 2,801,593 Other Financing Sources (Uses): Transfers In $ (3,981,877) $ 250 $ $ 2,600 $ 14,301 Sale of Capital Assets 170,869 117,763 85,059 137,417 153,127 Transfers (Out) - (1,840,096) (1,170,764) (950,421) (1,556,944) Total Other Financing Sources (Uses) $ (3,811,008) $ (1,722,083) $ (1,085,705) $ (810,404) $ (1,389,516) Net Changes in Fund Balances $ 804,680 $ 1,526,886 $ 83,104 $ (80,902) $ 1,412,077 Fund Balances at Beginning of Year 27,365,168 25,838,282 25,755,178 25,836,080 24,424,003 Fund Balances at End of Year $ 28,169,848 $27,365,168 $25,838,282 $25,755,178 $25,836,080 39 TABLE 13 - MUNICIPAL SALES TAX HISTORY The City has adopted the Municipal Sales and Use Tax Act, Texas Tax Code, Chapter 321, which grants the City the power to impose and levy a 1% Local Sales and Use Tax within the City; the proceeds are credited to the General Fund and are not pledged to the payment of the Obligations. Collections and enforcements are effected through the offices of the Comptroller of Public Accounts, State of Texas, who remits the proceeds of the tax, after deduction of a 2% service fee, to the City monthly. In January 1994, the voters of the City approved the imposition of an additional one-half of one percent (% of 1%) for property tax reduction. In September 2003, the voters of the City approved the imposition of an additional one-half of one percent (% of 1%) for the Denton County Transportation Authority. The implementation of this tax began January 2004, and is allocated directly to the Denton County Transportation Authority. Fiscal 0.50¢ Denton County Transportation Authority 0.50¢ City Sales & Use Tax Year State Sales & Use Tax % of Equivalent of 8.250 Ended Total Ad Valorem Ad Valorem Per 9/30 Collected (1) Tax Levy Tax Rate Capita 2013 $ 26,522,473 56.45% $ 0.3955 $ 226 2014 27,764,114 57.32% 0.3988 233 2015 30,601,965 57.03% 0.3943 253 2016 32,624,299 55.64% 0.3873 266 2017 12,090,118 19.31% 0.1326 97 (1) Source: City of Denton Annual Program of Services. (2) Collections through March 1, 2017. The sales tax breakdown for the City is as follows: Property Tax Relief 0.50¢ Denton County Transportation Authority 0.50¢ City Sales & Use Tax 1.00¢ State Sales & Use Tax 6.25¢ Total 8.250 FINANCIAL POLICIES Basis of Accounting ... The accounting policies of the City conform to generally accepted accounting principles of the Governmental Accounting Standards Board and program standards adopted by the Government Finance Officers Association of the United States and Canada. The GFOA has awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Denton for each fiscal year since 1983. The City's current report will be submitted to GFOA to determine its eligibility for another Certificate. The City has also received the GFOA's award for Distinguished Budget Presentation each year since 1986. The measurement focuses for the Enterprise Funds, Internal Service Funds and Nonexpendable Trust Funds are income determination and cost of service, respectively. Accordingly, the accrual basis, whereby revenues and expenses are identified in the accounting period in which they are earned and incurred and net income, is utilized for these funds. The modified accrual basis, whereby revenues are recognized when they become both measurable and available for use during the year and expenditures are recognized when the related fund liability is incurred, is used for all other funds. Budgetary Procedures ... As prescribed by City Charter, the City Manager, within the time period required by law, submits to the City Council a proposed budget for the fiscal year beginning the following October 1. The budget includes proposed expenditures and revenues required to fund the expenditures. Following Council considerations, amendments and refinements, a public hearing is ordered and conducted for the purpose of obtaining taxpayer comments. The budget is finally approved and adopted by passage of an ordinance by the City Council prior to the beginning of the fiscal year. The budget is adopted on a basis consistent with generally accepted accounting principles. It is the goal of the City to achieve and maintain an unassigned fund balance in the general fund equal to 20% of budgeted expenditures. An additional 5% resiliency reserve (25% combined total) may be maintained to safeguard against unusual financial circumstances and/or economic downturns. 40 INVESTMENTS The City invests its investable funds in investments authorized by Texas law in accordance with investment policies approved by the City Council. Both Texas law and the City's investment policies are subject to change. LEGAL INVESTMENTS ... Under Texas law, the City is authorized to invest in (1) obligations, including letter of credit, of the United States or its agencies and instrumentalities, (2) direct obligations of the State of Texas or its agencies and instrumentalities; (3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States; (4) other obligations, the principal and interest of which is guaranteed or insured by or backed by the full faith and credit of, the State of Texas or the United States or their respective agencies and instrumentalities, including obligations that are fully guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United States; (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent; (6) bonds issued, assumed or guaranteed by the State of Israel; (7) certificates of deposit and share certificates meeting the requirements of the Texas Public Funds Investment Act (Chapter 2256, Texas Government Code, as amended (the "PFIA")) that are issued by or through an institution that either has its main office or a branch office in Texas, and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by obligations described in clauses (1) through (6) or in any other manner and amount provided by law for City deposits, or are invested by the City through a depository institution that has its main office or a branch office in the State of Texas and otherwise meet the requirements of the PFIA, (8) fully collateralized repurchase agreements that have a defined termination date, are fully secured a combination of cash and obligations described in clause (1) which are pledged to the City, held in the City's name, and deposited at the time the investment is made with the City or with a third party selected and approved by the City and are placed through a primary government securities dealer, as defined by the Federal Reserve, or a financial institution doing business in the State, (9) certain bankers' acceptances with the remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated at least A-1 or P-1 or the equivalent by at least one nationally recognized credit rating agency, (10) commercial paper with a stated maturity of 270 days or less that is rated at least A-1 or P-1 or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank, (11) no-load money market mutual funds registered with and regulated by the Securities and Exchange Commission that have a dollar weighted average stated maturity of 90 days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share, and (12) no-load mutual funds registered with the Securities and Exchange Commission that have an average weighted maturity of less than two years, invest exclusively in obligations described in this paragraph, and are continuously rated as to investment quality by at least one nationally recognized investment rating firm of not less than AAA or its equivalent. If specifically authorized in the authorizing document, bond proceeds may be invested in guaranteed investment contracts that have a defined termination date and are secured by obligations of the United States or its agencies and instrumentalities in an amount at least equal to the amount of bond proceeds invested under such contract, other than the prohibited obligations described in the next succeeding paragraph. The City may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than AAA or AAA -m or an equivalent by at least one nationally recognized rating service. The City may also contract with an investment management firm registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities Board to provide for the investment and management of its public funds or other funds under its control for a term up to two years, but the City retains ultimate responsibility as fiduciary of its assets. In order to renew or extend such a contract, the City must do so by order, ordinance, or resolution. The City is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security and bears no interest; (3) collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index. Political subdivisions such as the City are authorized to implement securities lending programs if (i) the securities loaned under the program are 100% collateralized, a loan made under the program allows for termination at any time and a loan made under the program is either secured by (a) obligations that are described in clauses (1) through (6) of the first paragraph under this subcaption, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm not less than "A" or its equivalent, or (c) cash invested in obligations that are described in clauses (1) through (6) and (10) through (12) of the first paragraph under this subcaption, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the governmental body, held in the name of the governmental body and deposited at the time the investment is made with the City or a third party designated by the City; (iii) a loan made under the program is placed through either a primary government securities dealer or a financial institution doing business in the State of Texas; and (iv) the agreement to lend securities has a term of one year or less. INVESTMENT POLICIES ... Under Texas law, the City is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that includes a list of authorized investments for City funds, maximum allowable stated maturity of any individual investment, the maximum average dollar -weighted maturity allowed for pooled fund groups, methods to monitor the market price of investments acquired with public funds, a requirement for settlement of all transactions, except investment pool 41 funds and mutual funds, on a delivery versus payment basis, and procedures to monitor rating changes in investments acquired with public funds and the liquidation of such investments consistent with the Public Funds Investment Act. All City funds must be invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each funds' investment. Each Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield. Under Texas law, City investments must be made "with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived." At least quarterly the investment officers of the City shall submit an investment report detailing: (1) the investment position of the City, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, the ending market value and the fully accrued interest during the reporting period of each pooled fund group, (4) the book value and market value of each separately listed asset at the end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council. ADDITIONAL PROVISIONS ... Under Texas law the City is additionally required to: (1) annually review its adopted policies and strategies; (2) adopt a rule, order, ordinance or resolution stating that it has reviewed its investment policy and investment strategies and records any changes made to either its investment policy or investment strategy in the respective rule, order, ordinance or resolution; (3) require any investment officers with personal business relationships or relatives with firms seeking to sell securities to the City to disclose the relationship and file a statement with the Texas Ethics Commission and the City Council; (4) require the registered principal of firms seeking to sell securities to the City to: (a) receive and review the City's investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to preclude investment transactions conducted between the City and the business organization that are not authorized by the City's investment policy (except to the extent that this authorization is dependent on an analysis of the makeup of the City's entire portfolio or requires an interpretation of subjective investment standards), and (c) deliver a written statement attesting to these requirements; (5) perform an annual audit of the management controls on investments and adherence to the City's investment policy; (6) provide specific investment training for the Treasurer, Chief Financial Officer and investment officers; (7) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase agreement funds to no greater than the term of the reverse repurchase agreement; (8) restrict the investment in no-load mutual funds in the aggregate to no more than 15% of the entity's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service; (9) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements; and (10) at least annually review, revise, and adopt a list of qualified brokers that are authorized to engage in investment transactions with the City. TABLE 14- CURRENT INVESTMENTS (1) As of March 1, 2017, the City's available funds were invested as follows: (1) There are no City funds invested in derivative securities, i.e., securities whose rate of return is determined by reference to some other instrument, index or commodity. (2) Fully insured by FDIC. (3) Insured up to the FDIC limit with uninsured amounts backed by a Federal Home Loan Bank standby letter of credit. (4) Insured up to the FDIC limit with uninsured amounts collateralized by U.S. federal agency securities at a minimum of 102% of principal plus accrued interest. 42 Market Value Market Book Description Percent Value Value Treasury Securities - Coupon 5.93% $ 44,415,155 $ 44,357,162 Federal Agency Issues - Coupon 30.97% 232,035,287 232,312,432 Federal Agency Issues - Callable 1.31% 9,849,875 9,999,204 Municipal Bonds - Coupon 4.69% 35,142,861 35,254,616 CDs - CDARS (2) 7.34% 55,000,000 55,000,000 CDS - SLOC (3) 12.68% 95,000,000 95,000,000 Commercial Paper Disc. - Amortizing 7.58% 56,823,600 56,813,529 Local Government Inv. Pool-TexSTAR 29.04% 217,564,298 217,564,298 Demand Deposits/Wells Fargo (4) 0.46% 3,420,592 3,420,592 100.00% $ 749,251,668 $ 749,721,833 (1) There are no City funds invested in derivative securities, i.e., securities whose rate of return is determined by reference to some other instrument, index or commodity. (2) Fully insured by FDIC. (3) Insured up to the FDIC limit with uninsured amounts backed by a Federal Home Loan Bank standby letter of credit. (4) Insured up to the FDIC limit with uninsured amounts collateralized by U.S. federal agency securities at a minimum of 102% of principal plus accrued interest. 42 TAX MATTERS OPINIONS The Bonds ... On the date of initial delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel to the City, will render its opinion that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof ("Existing Law"), (1) interest on the Bonds for federal income tax purposes will be excludable from the "gross income" of the holders thereof and (2) the Bonds will not be treated as "specified private activity bonds" the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue Code of 1986 (the "Code"). Except as stated above, Bond Counsel to the City will express no opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Bonds. See Appendix C — Forms of Bond Counsel's Opinions. The Certificates ... On the date of initial delivery of the Certificates, Bond Counsel to the City will render its opinion that, in accordance with Existing Law, (1) interest on the Certificates for federal income tax purposes will be excludable from the "gross income" of the holders thereof and (2) the Certificates will not be treated as "specified private activity bonds" the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Code. Except as stated above, Bond Counsel to the City will express no opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Certificates. See Appendix C — Forms of Bond Counsel's Opinions. In rendering each of the foregoing opinions, Bond Counsel to the City will rely upon (a) certain information and representations of the City, including information and representations contained in the City's federal tax certificate with respect to each Obligation issue, (b) covenants of the City contained in the Obligation documents relating to certain matters, including arbitrage and the use of the proceeds of the Obligations and the Refunded Obligations and the property financed or refinanced therewith and (c) with respect to the Bonds, the sufficiency certificate prepared by FirstSouthwest. Failure by the City to observe the aforementioned representations or covenants could cause the interest on the Obligations to become taxable retroactively to the date of issuance. The Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied subsequent to the issuance of the Obligations in order for interest on the Obligations to be, and to remain, excludable from gross income for federal income tax purposes. Failure to comply with such requirements may cause interest on the Obligations to be included in gross income retroactively to the date of issuance of the Obligations. The opinion of Bond Counsel to the City is conditioned on compliance by the City with such requirements, and Bond Counsel to the City has not been retained to monitor compliance with these requirements subsequent to the issuance of the Obligations. Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law and the reliance on the aforementioned information, representations and covenants. Bond Counsel's opinion is not a guarantee of a result. The Existing Law is subject to change by the Congress and to subsequent judicial and administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that such Existing Law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or disposition of the Obligations. A ruling was not sought from the Internal Revenue Service by the City with respect to the Obligations or the projects being financed or refinanced therewith. Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law and the representations of the City that it deems relevant to render such opinion and is not a guarantee of a result. No assurances can be given as to whether or not the Internal Revenue Service will commence an audit of the Obligations, or as to whether the Internal Revenue Service would agree with the opinion of Bond Counsel. If an audit is commenced, under current procedures the Internal Revenue Service is likely to treat the City as the taxpayer and the holders of the Obligations may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability. FEDERAL INCOME TAX ACCOUNTING TREATMENT OF ORIGINAL ISSUE DISCOUNT The initial public offering price to be paid for one or more maturities of the Obligations may be less than the principal amount thereof or one or more periods for the payment of interest on the Obligations may not be equal to the accrual period or be in excess of one year (the "Original Issue Discount Bonds"). In such event, the difference between (i) the "stated redemption price at maturity" of each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount Bond would constitute original issue discount. The "stated redemption price at maturity" means the sum of all payments to be made on the Obligations less the amount of all periodic interest payments. Periodic interest payments are payments which are made during equal accrual periods (or during any unequal period if it is the initial or final period) and which are made during accrual periods which do not exceed one year. Under Existing Law, any owner who has purchased such Original Issue Discount Bond in the initial public offering is entitled to exclude from gross income (as defined in section 61 of the Code) an amount of income with respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see discussion set forth below. 43 In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue Discount Bond was held by such initial owner) is includable in gross income. Under existing law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity thereof (in amounts calculated as described below for each six-month period ending on the date before the semiannual anniversary dates of the date of the Obligations and ratably within each such six-month period) and the accrued amount is added to an initial owner's basis for such Original Issue Discount Bond for purposes of determining the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the issue price and the amount of original issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such Original Issue Discount Bond. The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. All owners of Original Issue Discount Bonds should consult their own tax advisors with respect to the determination for federal, state and local income tax purposes of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Bonds and with respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale or other disposition of such Original Issue Discount Bonds. COLLATERAL FEDERAL INCOME TAX CONSEQUENCES The following discussion is a summary of certain collateral federal income tax consequences resulting from the purchase, ownership or disposition of the Obligations. This discussion is based on existing statutes, regulations, published rulings and court decisions, all of which are subject to change or modification, retroactively. The following discussion is applicable to investors, other than those who are subject to special provisions of the Code, such as financial institutions, property and casualty insurance companies, life insurance companies, individual recipients of Social Security or Railroad Retirement benefits, individuals allowed an earned income credit, certain S corporations with subchapter C earnings and profits, foreign corporations subject to the branch profits tax, taxpayers qualifying for the health insurance premium assistance credit, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase tax-exempt obligations. THE DISCUSSION CONTAINED HEREIN MAY NOT BE EXHAUSTIVE. INVESTORS, INCLUDING THOSE WHO ARE SUBJECT TO SPECIAL PROVISIONS OF THE CODE, SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX-EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE OBLGATIONS. Interest on the Obligations will be includable as an adjustment for "adjusted current earnings" to calculate the alternative minimum tax imposed on corporations by section 55 of the Code. Under section 6012 of the Code, holders of tax-exempt obligations, such as the Obligations, may be required to disclose interest received or accrued during each taxable year on their returns of federal income taxation. Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of a tax-exempt obligation, such as the Obligations, if such obligation was acquired at a "market discount" and if the fixed maturity of such obligation is equal to, or exceeds, one year from the date of issue. Such treatment applies to "market discount bonds" to the extent such gain does not exceed the accrued market discount of such bonds; although for this purpose, a de minimis amount of market discount is ignored. A "market discount bond" is one which is acquired by the holder at a purchase price which is less than the stated redemption price at maturity or, in the case of a bond issued at an original issue discount, the "revised issue price" (i.e., the issue price plus accrued original issue discount). The "accrued market discount" is the amount which bears the same ratio to the market discount as the number of days during which the holder holds the obligation bears to the number of days between the acquisition date and the final maturity date. STATE, LOCAL AND FOREIGN TAXES Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership or disposition of the Obligations under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax consequences unique to investors who are not United States persons. 44 INFORMATION REPORTING AND BACKUP WITHHOLDING Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Obligations will be sent to each registered holder and to the Internal Revenue Service. Payments of interest and principal may be subject to backup withholding under section 3406 of the Code if a recipient of the payments fails to furnish to the payor such owner's social security number or other taxpayer identification number ("TIN"), furnishes an incorrect TIN, or otherwise fails to establish an exemption from the backup withholding tax. Any amounts so withheld would be allowed as a credit against the recipient's federal income tax. Special rules apply to partnerships, estates and trusts, and in certain circumstances, and in respect of Non -U.S. Holders, certifications as to foreign status and other matters may be required to be provided by partners and beneficiaries thereof. FUTURE AND PROPOSED LEGISLATION Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the Federal or state level, may adversely affect the tax-exempt status of interest on the Obligations under Federal or state law and could affect the market price or marketability of the Obligations. Any such proposal could limit the value of certain deductions and exclusions, including the exclusion for tax-exempt interest. The likelihood of any such proposal being enacted cannot be predicted. Prospective purchasers of the Obligations should consult their own tax advisors regarding the foregoing matters. CONTINUING DISCLOSURE OF INFORMATION In each of the Ordinances, the City has made the following agreement for the benefit of the holders and beneficial owners of the respective series of Obligations. The City is required to observe each agreement while it remains obligated to advance funds to pay such Obligations. Under each agreement, the City will be obligated to provide certain updated financial information and operating data annually, and the timely notice of specified events to the Municipal Securities Rulemaking Board ("MSRB"). This information will be available free of charge from the MSRB via the Electronic Municipal Market Access ("EMMA") system at www.enima.msrb.orQ. ANNUAL REPORTS ... The City shall provide annually to the MSRB, in the electronic format prescribed by the MSRB, financial information and operating data (the "Annual Operating Report") with respect to the City of the general type included in this Official Statement under Tables numbered I through 5 and 7 through 14. The City will additionally provide financial statements of the City (the "Financial Statements"), that will be (i) prepared in accordance with the accounting principles described in the City's annual audited financial statements or such other accounting principles as the City may be required to employ from time to time pursuant to State law or regulation and shall be in substantially the form included in this Official Statement and (ii) audited, if the City commissions an audit of such Financial Statements and the audit is completed within the period during which they must be provided. The City will update and provide the Annual Operating Report within six months after the end of each fiscal year and the Financial Statements within 12 months of the end of each fiscal year, in each case beginning with the fiscal year ending in and after 2016. The City may provide the Financial Statements earlier, including at the time it provides its Annual Operating Report, but if the audit of such Financial Statements is not complete within 12 months after any such fiscal year end, then the City shall file unaudited Financial Statements within such 12 -month period and audited Financial Statements for the applicable fiscal year, when and if the audit report on such Financial Statements becomes available. The financial information and operating data to be provided may be set forth in full in one or more documents or may be included by specific reference to any document available to the public on the MSRB's Internet Web site or filed with the United States Securities and Exchange Commission (the "SEC"), as permitted by SEC Rule 15c2-12 (the "Rule"). The City's current fiscal year end is September 30. Accordingly, it must provide the Annual Operating Report by March 31 in each year, unless the City changes its fiscal year. If the City changes its fiscal year, it will notify the MSRB of the change. NOTICE OF CERTAIN EVENTS ... The City will also provide timely notices of certain events to the MSRB. The City will provide notice of any of the following events with respect to the Obligations to the MSRB in a timely manner (but not in excess of ten business days after the occurrence of the event): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (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, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of holders of the Obligations, if material; (8) Obligation calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Obligations, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership, or similar event of the City, which shall occur as described below; (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of its assets, other than in the ordinary course of business, the entry into of a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee or the change of name of a trustee, if material. In addition, the City will provide timely notice of any failure by the City to provide annual financial information in accordance with their agreement described above under "Annual Reports". 45 For these purposes, any event described in (12) in the immediately preceding paragraph is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. LIMITATIONS AND AMENDMENTS ... The City has agreed to update information and to provide notices of specified events only as described above. The City has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above. The City makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Obligations at any future date. The City disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders of Obligations may seek a writ of mandamus to compel the City to comply with its agreement. The City may amend its continuing disclosure agreement for either or both of the Bonds and Certificates from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, if (i) the agreement, as amended, would have permitted an underwriter to purchase or sell Bonds or Certificates, as the case may be, in the offering described herein in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the outstanding Bonds or Certificates, as the case may be, consent to the amendment or (b) any person unaffiliated with the City (such as nationally recognized bond counsel) determines that the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds or Certificates, as the case may be. The City may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provisions of the 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 Obligations in the primary offering of the Obligations. If the City so amends the agreement, it has agreed to include with the next financial information and operating data provided in accordance with its agreement described above under "Annual Reports" an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information and operating data so provided. COMPLIANCE WITH PRIOR UNDERTAKINGS ... During the last five years, the City believes it has complied in all material respects with all continuing disclosure agreements made by it in accordance with SEC Rule 15c2-12. However, there was one instance in 2014 where a bond insurer's credit rating was upgraded above the underlying rating on the insured bonds, and the City did not file a Notice of Material Event for the rating change until 94 days after the bond insurer's rating change. OTHER INFORMATION RATINGS The Obligations and the presently outstanding tax supported debt of the City are rated " " by Fitch and " " by S&P. An explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only the respective views of such organizations and the City makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the Obligations. LITIGATION It is the opinion of the City Attorney and City Staff that there is no pending, or to their knowledge threatened, litigation or other proceeding against the City that could have a material adverse financial impact upon the City or its operations over and above those already disclosed in the City's Comprehensive Annual Financial Report, see Appendix B, Notes V.F. and V.G., page 73. At the time of the initial delivery of the Obligations, the City will provide the Initial Purchasers with a certificate to the effect that no litigation of any nature has been filed or is then pending challenging the issuance of the Obligations or that affects the payment and security of the Obligations or in any other manner questioning the issuance, sale or delivery of the Obligations. REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR SALE The sale of the Obligations has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(a)(2); and the Obligations have not been qualified under the Securities Act of Texas 46 in reliance upon various exemptions contained therein; nor have the Bonds or Certificates been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Bonds or Certificates under the securities laws of any jurisdiction in which the Obligations may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Obligations shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS The Obligations. Section 1201.041 of the Public Security Procedures Act (Chapter 1201, Texas Government Code) provides that the Obligations are negotiable instruments, investment securities governed by Chapter 8, Texas Business and Commerce Code, and are legal and authorized investments for insurance companies, fiduciaries, and trustees, and for the sinking funds of municipalities or other political subdivisions or public agencies of the State of Texas. In addition, various provisions of the Texas Finance Code provide that, subject to a prudent investor standard, the Obligations are legal investments for state banks, savings banks, trust companies with at least $1 million of capital, and savings and loan associations. The Certificates. Section 271.051, Texas Local Government Code, provides that the Certificates are legal and authorized investments for banks, savings banks, trust companies, savings and loan associations, insurance companies, fiduciaries, trustees and guardians, and for the sinking funds of municipalities, school districts, and other political subdivisions or public agencies of the State of Texas. The Certificates are eligible to secure deposits of any public funds of the State, municipalities, school districts, and other political subdivisions of the State, and are legal security for those deposits to the extent of their market value. General Considerations. For political subdivisions in Texas that have adopted investment policies and guidelines in accordance with the Public Funds Investment Act (Texas Government Code, Chapter 2256), the Obligations may have to be assigned a rating of at least "A" or its equivalent as to investment quality by a national rating agency before such obligations are eligible investments for sinking funds and other public funds. The City has made no investigation of other laws, rules, regulations, or investment criteria which might apply to such institutions or entities or which might limit the suitability of the Obligations for any of the foregoing purposes or limit the authority of such institutions or entities to purchase or invest in the Obligations for such purposes. The City has made no review of laws in other states to determine whether the Obligations are legal investments for various institutions in those states. LEGAL OPINIONS AND NO -LITIGATION CERTIFICATE The City will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds and of the Certificates, including the unqualified approving legal opinions of the Attorney General of Texas approving the Initial Bond and the Initial Certificate and to the effect that the Bonds and the Certificates are valid and legally binding obligations of the City, and based upon examination of such transcript of proceedings, the approving legal opinions of Bond Counsel, to like effect and to the effect that the interest on the Bonds and the Certificates will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. The customary closing papers, including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Obligations, or which would affect the provision made for their payment or security or in any manner questioning the validity of said Obligations will also be furnished. Though it represents the Financial Advisor and purchasers of debt from governmental issuers from time to time in matters unrelated to the issuance of the Obligations, Bond Counsel has been engaged by and only represents the City in connection with the issuance of the Obligations. Bond Counsel was not requested to participate, and did not take part, in the preparation of the Notice of Sale and Bidding Instructions, the Official Bid Form and the Official Statement, and such firm has not assumed any responsibility with respect thereto or undertaken independently to verify any of the information contained therein, except that, in its capacity as Bond Counsel, such firm has reviewed the information describing the Obligations in the Official Statement to verify that such description conforms to the provisions of the Bond Ordinance and the Certificate Ordinance. The legal fee to be paid Bond Counsel for services rendered in connection with the issuance of the Obligations is contingent on the sale and delivery of the Obligations. The legal opinion will accompany the Obligations deposited with DTC or will be printed on the Obligations in the event of the discontinuance of the Book -Entry -Only System. The legal opinions to be delivered concurrently with the delivery of the Obligations express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of the parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION The financial data and other information contained herein have been obtained from City records, audited financial statements, and other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will be realized. All of the summaries of the statutes, documents, and ordinances contained in this Official Statement are made subject to all of the provisions of such statutes, documents, and ordinances. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further information. Reference is made to original documents in all respects. 47 FINANCIAL ADVISOR FirstSouthwest, a Division of Hilltop Securities Inc., ("FirstSouthwest") is employed as Financial Advisor to the City in connection with the issuance of the Obligations. The Financial Advisor's fee for services rendered with respect to the sale of the Obligations is contingent upon the issuance and delivery of the Obligations. FirstSouthwest, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not assume any responsibility for the information, covenants, and representations contained in any of the legal documents with respect to the federal income tax status of the Obligations, or the possible impact of any present, pending, or future actions taken by any legislative or judicial bodies. The Financial Advisor to the City has provided the following sentence for inclusion in this Official Statement. The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the City and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information. INITIAL PURCHASER OF THE BONDS After requesting competitive bids for the Bonds, the City accepted the bid of (the "Initial Purchaser of the Bonds") to purchase the Bonds at the interest rates shown on page 4 of the Official Statement at a price of par plus a cash premium of $ The Initial Purchaser of the Bonds can give no assurance that any trading market will be developed for the Bonds after their sale by the City to the Initial Purchaser of the Bonds. The City has no control over the price at which the Bonds are subsequently sold and the initial yield at which the Bonds will be priced and reoffered will be established by and will be the sole responsibility of the Initial Purchaser of the Bonds. INITIAL PURCHASER OF THE CERTIFICATES After requesting competitive bids for the Certificates, the City accepted the bid of (the "Initial Purchaser of the Certificates") to purchase the Certificates at the interest rates shown on page 2 of the Official Statement at a price of par plus a cash premium of $ . The Initial Purchaser of the Certificates can give no assurance that any trading market will be developed for the Certificates after their sale by the City to the Initial Purchaser of the Certificates. The City has no control over the price at which the Certificates are subsequently sold and the initial yield at which the Certificates will be priced and reoffered will be established by and will be the sole responsibility of the Initial Purchaser of the Certificates. The Initial Purchaser of the Bonds and the Initial Purchaser of the Certificates are herein collectively referred to as the "Initial Purchasers". CERTIFICATION OF THE OFFICIAL STATEMENT At the time of payment for and delivery of the Obligations, the City will furnish to the Initial Purchasers a certificate, executed by a proper City officer, acting in such officer's official capacity, to the effect that to the best of such officer's knowledge and belief: (a) the descriptions and statements of or pertaining to the City contained in the Official Statement, and any addenda, supplement, or amendment thereto, on the date of the Official Statement, on the date of sale of the Obligations, and the acceptance of the best bid therefor, and on the date of the delivery, were and are true and correct in all material respects; (b) insofar as the City and its affairs, including its financial affairs, are concerned, the Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (c) insofar as the descriptions and statements, including financial data, of or pertaining to entities, other than the City, and their activities contained in the Official Statement are concerned, such statements and data have been obtained from sources which the City believes to be reliable and the City has no reason to believe that they are untrue in any material respect; and (d) there has been no material adverse change in the financial condition of the City since the date of the last audited financial statements of the City. FORWARD-LOOKING STATEMENTS DISCLAIMER The statements contained in this Official Statement, and in any other information provided by the City, that are not purely historical, are forward-looking statements, including statements regarding the City's expectations, hopes, intentions, or strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forward-looking statements included in this Official Statement are based on information available to the City on the date hereof, and the City assumes no obligation to update any such forward-looking statements. The City's actual results could differ materially from those discussed in such forward-looking statements. The forward-looking statements included herein are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal, and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and legislative, judicial, and other governmental authorities and officials. Assumptions 48 related to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the City. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Official Statement will prove to be accurate. Links To Websites The City has provided links to websites in this Official Statement to allow investors independent access to information or expertise that may be of value. INFORMATION ON SUCH WEBSITES IS NOT INCORPORATED INTO THIS OFFICIAL STATEMENT BY REFERENCE OR OTHERWISE. The inclusion of any links does not imply a recommendation or endorsement of the information or views expressed within a website. The City has not participated in the preparation, compilation or selection of information or views in any website referenced in this Official Statement, and assumes no responsibility or liability for the information or views, or accuracy or completeness thereof, in any website referenced herein. MISCELLANEOUS The Ordinances authorizing the issuance of the Obligations approved the form and content of this Official Statement, and any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Obligations by the Initial Purchasers. PRICING OFFICER City of Denton, Texas 49 Schedule I SCHEDULE OF REFUNDED OBLIGATIONS* General Obligation Refunding Bonds, Series 2007 $12,980,000 $ 12,980,000 The 2018 - 2022 maturities will be redeemed prior to original maturity on July 14, 2017, at par. Principal Principal Original Maturity Interest Amount Amount Dated Date Date Rate Outstanding Refunded 9/15/2007 2/15/2018 4.250% $ 800,000 $ 800,000 2/15/2018 5.000% 2,755,000 2,755,000 2/15/2019 5.000% 3,030,000 3,030,000 2/15/2020 5.250% 2,390,000 2,390,000 2/15/2021 4.250% 2,460,000 2,460,000 2/15/2022 4.250% 1,545,000 1,545,000 $12,980,000 $ 12,980,000 The 2018 - 2022 maturities will be redeemed prior to original maturity on July 14, 2017, at par. APPENDIX A GENERAL INFORMATION REGARDING THE CITY APPENDIX B EXCERPTS FROM THE CITY OF DENTON, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended September 30, 2016 The information contained in this Appendix consists of excerpts from the City of Denton, Texas Comprehensive Annual Financial Report for the Year Ended September 30, 2016, and is not intended to be a complete statement of the City's financial condition. Reference is made to the complete Report for further information. APPENDIX C FORMS OF BOND COUNSEL'S OPINIONS s:Alegal\our documents\ordinances\17\co ordinance 2017 v2.docx ORDINANCE NO. 2017 - AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO THE ISSUANCE, SALE AND DELIVERY OF UP TO $102,000,000 IN PRINCIPAL AMOUNT OF "CITY OF DENTON CERTIFICATES OF OBLIGATION, SERIES 2017"; AUTHORIZING THE ISSUANCE OF THE CERTIFICATES; DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE CERTIFICATES; APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID CERTIFICATES; ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council of the City of Denton, Texas (the "Issuer"), deems it advisable to issue Certificates of Obligation in the amount of up to $102,000,000 for the purposes hereinafter set forth; and WHEREAS, the Certificates of Obligation hereinafter authorized and designated are to be issued and delivered for cash pursuant to Subchapter C of Chapter 271, Texas Local Government Code, Subchapter B, Chapter 1502, Texas Government Code and Chapter 1371, Texas Government Code; and WHEREAS, the City Council has heretofore passed two ordinances authorizing and directing the City Secretary to give notice of intention to issue Certificates of Obligation, and said notices have been duly published in a newspaper of general circulation in said Issuer, said newspaper being a "newspaper" as defined in Section 2051.044, Texas Government Code; and WHEREAS, the Issuer received no petition from the qualified electors of the Issuer protesting the issuance of such Certificates of Obligation; and WHEREAS, no bond proposition to authorize the issuance of bonds for the same purpose as any of the projects being financed with the proceeds of the Certificates of Obligation was submitted to the voters of the Issuer during the preceding three years and failed to be approved; and WHEREAS, the Issuer is an "issuer" within the meaning of Section 1371.001(4)(P), Texas Government Code, having (i) a principal amount of at least $100 million in outstanding long-term indebtedness, in long-term indebtedness proposed to be issued, or in a combination of outstanding or proposed long-term indebtedness and (ii) some amount of long-term indebtedness outstanding or proposed to be issued that is rated in one of the four highest rating categories for long-term debt instruments by a nationally recognized rating agency for municipal securities, without regard to the effect of any credit agreement or other form of credit enhancement entered into in connection with the obligation; and WHEREAS, it is officially found, determined, and declared that the meeting at which this Ordinance has been adopted was open to the public and public notice of the time, place and subject s:Alegal\our documents\ordinances\17\co ordinance 2017 v1doex matter of the public business to be considered and acted upon at said meeting, including this Ordinance, was given, all as required by the applicable provisions of Texas Government Code Chapter 551; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. RECITALS, AMOUNT, PURPOSE AND DESIGNATION OF THE CERTIFICATES. (a) The recitals set forth in the preamble hereof are incorporated herein and shall have the same force and effect as if set forth in this Section. (b) The term "Certificates" as used in this Ordinance shall mean and include collectively the certificate of obligation initially issued and delivered pursuant to this Ordinance (the "Initial Certificate") and all substitute certificates of obligation exchanged therefor, as well as all other substitute certificates of obligation and replacement certificates of obligation issued pursuant hereto, and the term "Certificate" shall mean any of the Certificates. (c) The Certificates of Obligation of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and delivered in the maximum aggregate principal amount of $102,000,000 for the purpose of paying all or a portion of the Issuer's contractual obligations incurred pursuant to contracts for the purchase, construction and acquisition of certain real and personal property, to wit: up to $65,460,000 in principal amount for the purpose of acquisition of equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the Issuer's electric light and power system; and also for the purpose of paying all or a portion of the Issuer's contractual obligations for professional services, including engineers, architects, attorneys, map makers, auditors, and financial advisors, in connection with said projects and said Certificates of Obligation; and up to $36,540,000 in principal amount for the purpose of: (a) acquisition of vehicles and equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the Issuer's solid waste disposal system; (b) renovations to, and equipping of, existing municipal buildings, including the acquisition and installation of replacement heating, venting and air conditioning equipment, roofing and flooring; (c) acquisition of vehicles and equipment for the fire, police, building inspections, community improvement services, animal services, streets and traffic control, facilities management, and parks and recreation departments; (d) acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to parking facilities; and (e) constructing and improving streets, including landscaping, drainage, utility line relocations and the acquisition of land and rights-of-way therefor; and also for the purpose of paying all or a portion of the Issuer's contractual obligations for professional services, including engineers, architects, attorneys, map makers, auditors, and financial advisors, in connection with said projects and said Certificates of Obligation (collectively, the "Projects"). (d) Each Certificate issued pursuant to this Ordinance shall be designated: "CITY OF DENfON CERTIFICATE OF OBLIGATION, SERIES 2017," and initially there shall be issued, sold, and delivered hereunder fully registered certificates, without interest coupons, payable to the respective registered owners thereof (with the Initial Certificate being made payable to the Page 2 s:Alegahour documents\ordinances\17\co ordinance 2017 v1doex Purchaser as described in Section 10 hereof), or to the registered assignee or assignees of said Certificates or any portion or portions thereof (in each case, the "Registered Owner"). The Certificates shall be in the respective principal amounts, shall be numbered, shall mature and be payable on the date or dates in each of the years and in the principal amounts, and shall bear interest to their respective dates of maturity or redemption prior to maturity at the rates per annum, as set forth in the Pricing Certificate. SECTION 2. DELEGATION TO PRICING OFFICER. (a) As authorized by Section 1371.053, Texas Government Code, as amended, the City Manager, the Deputy City Manager or the Assistant City Manager (the "Pricing Officer") is hereby authorized to act on behalf of the Issuer in selling and delivering the Certificates and carrying out the other procedures specified in this Ordinance, including, determining the date of the Certificates, any additional or different designation or title by which the Certificates shall be known, the price at which the Certificates will be sold, the years in which the Certificates will mature, the principal amount to mature in each of such years, the rate of interest to be borne by each such maturity, the interest payment and record dates, the price and terms upon and at which the Certificates shall be subject to redemption prior to maturity at the option of the Issuer, as well as any mandatory sinking fund redemption provisions, and all other matters relating to the issuance, sale, and delivery of the Certificates, including without limitation, obtaining municipal bond insurance for all or any portion of the Certificates (including in connection therewith the execution of any commitment agreements, membership agreements in mutual insurance companies, and other similar agreements) and providing for the terms and provisions thereof applicable to the Certificates, all of which shall be specified in the Pricing Certificate; provided that: (i) the aggregate original principal amount of the Certificates shall not exceed the amount set forth in Section 1(c) hereof, (ii) the maximum stated maturity of the Certificates shall not exceed February 15, 2047; (iii) the Certificates shall bear interest at a fixed rate, and the net effective interest rate on the Certificates shall not exceed 4.00%; (iv) the delegation made hereby shall expire if not exercised by the Pricing Officer through execution of the Pricing Certificate on or prior to October 18, 2017; and (v) on or prior to delivery, the Certificates shall be rated by a nationally recognized rating agency for municipal securities in one of the four highest categories for long-term obligations. (b) In establishing the aggregate principal amount of the Certificates, the Pricing Officer shall establish an amount not exceeding the aggregate principal amount authorized in Subsection (a) hereof, and not exceeding the respective amounts set forth in Section 1(c) hereof for each group Page 3 s:UegaRour documents\ordinances\17\co ordinance 2017 v2.docx of Projects, which shall be sufficient in amount to provide for the purposes for which the Certificates are authorized and to pay costs of issuing the Certificates. The Certificates shall be sold with and subject to such terms as set forth in the Pricing Certificate. SECTION 3. CHARACTERISTICS OF THE CERTIFICATES. (a) Registration Transfer Conversion and Exchange-, Authentication. The Pricing Officer shall designate in the Pricing Certificate a bank to act as the paying agent/registrar for the Bonds (the "Paying Agent/Registrar"). The Issuer shall keep or cause to be kept at the principal corporate trust office of the Paying Agent/Registrar books or records for the registration of the transfer, conversion and exchange of the Certificates (the "Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such registrations of transfers, conversions and exchanges under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations, transfers, conversions and exchanges as herein provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address 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 Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such registration, transfer, conversion, exchange and delivery of a substitute Certificate or Certificates. Registration of assignments, transfers, conversions and exchanges of Certificates shall be made in the manner provided and with the effect stated in the FORM OF CERTIFICATE set forth in this Ordinance. Each substitute Certificate shall bear a letter and/or number to distinguish it from each other Certificate. Except as provided in Section 3(c) of this Ordinance, an authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Certificate, date and manually sign said Certificate, and no such Certificate shall be deemed to be issued or outstanding unless such Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all paid Certificates and Certificates surrendered for conversion and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the governing body of the Issuer or any other body or person so as to accomplish the foregoing conversion and exchange of any Certificate or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Certificates in the manner prescribed herein, and said Certificates shall be printed or typed on paper of customary weight and strength. Pursuant to Chapter 1201, Government Code, as amended, the duty of conversion and exchange of Certificates as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Certificate, the converted and exchanged Certificate shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Certificates that initially were issued and delivered pursuant to this Ordinance, approved by the Attorney General of the State of Texas (the "Attorney General") and registered by the Comptroller of Public Accounts of the State of Texas (the "Comptroller"). Page 4 sAlegal\our d0cuments\ordinances\17\co ordinance 2017 v2.docx (b) 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, 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 "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer. Notice of the past due interest shall be sent at least five (5) business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of each Registered Owner appearing on the Registration Books at the close of business on the last business day next preceding the date of mailing of such notice. (c) In General. The Certificates (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Certificates to be payable only to the Registered Owners thereof, (ii) may or shall be redeemed prior to their scheduled maturities (notice of which shall be given to the Paying Agent/Registrar by the Issuer at least 45 days prior to any such redemption date), (iii) may be converted and exchanged for other Certificates, (iv) may be transferred and assigned, (v) shall have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Certificates shall be payable, and (viii) shall be administered and the Paying Agent/Registrar and the Issuer shall have certain duties and responsibilities with respect to the Certificates, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF CERTIFICATE set forth in this Ordinance (as modified in the Pricing Certificate). The Initial Certificate 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 any Certificate or Certificates issued under this Ordinance the Paying Agent/Registrar shall execute the Paying Agent/Registrar's Authentication Certificate, in the form set forth in the FORM OF CERTIFICATE. (d) Pang Agent/Registrar for the Certificates. 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 entity to act as and perform the services of Paying Agent/Registrar for the Certificates under this Ordinance, and that the Paying Agent/Registrar will be a single entity. The Issuer reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not less than 60 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days prior to the next principal or interest payment date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust company, 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 promptly shall 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 Page 5 s:Uegakour d0cuments\ordinances\17\co ordinance 2017 v2.docx 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. (e) Authentication. Except as provided below, no Certificate shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Paying Agent/Registrar's Authentication Certificate substantially in the form provided in this Ordinance, duly authenticated by manual execution of the Paying Agent/Registrar. It shall not be required that the same authorized representative of the Paying Agent/Registrar sign the Paying Agent/Registrar's Authentication Certificate on all of the Certificates. In lieu of the executed Paying Agent/Registrar's Authentication Certificate described above, the Initial Certificate delivered on the closing date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided in this Ordinance, manually executed by the Comptroller or by her duly authorized agent, which certificate shall be evidence that the Initial Certificate has been duly approved by the Attorney General and that it is a valid and binding obligation of the Issuer, and has been registered by the Comptroller. (f) Book-Entry-OnlSystem. The Certificates issued in exchange for the Initial Certificate shall be initially issued in the form of a separate single fully registered Certificate for each of the maturities thereof. Upon initial issuance, the ownership of each such Certificate shall be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), and except as provided in subsection (g) hereof, all of the outstanding Certificates shall be registered in the name of Cede & Co., as nominee of DTC. With respect to Certificates registered in the name of Cede & Co., as nominee of DTC, the Issuer and the Paying Agent/Registrar shall have no responsibility or obligation to any securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created ("DTC Participant") to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants or to any person on behalf of whom such a DTC Participant holds an interest in the Certificates. Without limiting the immediately preceding sentence, the Issuer and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Certificates, (ii) the delivery to any DTC Participant or any other person, other than a Registered Owner of Certificates, as shown on the Registration Books, of any notice with respect to the Certificates, or (iii) the payment to any DTC Participant or any other person, other than a Registered Owner of Certificates, as shown in the Registration Books of any amount with respect to principal of or interest on the Certificates. Notwithstanding any other provision of this Ordinance to the contrary, the Issuer and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Certificate is registered in the Registration Books as the absolute owner of such Certificate for the purpose of payment of principal and interest with respect to such Certificate, for the purpose of registering transfers with respect to such Certificate, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and interest on the Certificates only to or upon the order of the Registered Owners, as shown in the Registration Books as provided in this Ordinance, or Page 6 sAlegal\our d0cuments\ordinances\17\co ordinance 2017 v2.docx their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal of and interest on the Certificates to the extent of the sum or sums so paid. No person other than a Registered Owner, as shown in the Registration Books, shall receive a Certificate evidencing the obligation of the Issuer to make payments of principal and interest pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in this Ordinance with respect to interest checks being mailed to the Registered Owner at the close of business on the Record Date, the words "Cede & Co." in this Ordinance shall refer to such new nominee of DTC. The previous execution and delivery of the Blanket Issuer Letter of Representations with respect to obligations of the Issuer is hereby ratified and confirmed; and the provisions thereof shall be fully applicable to the Certificates. (g) Successor Securities Depository; Transfers Outside Book -Entry -Only System. In the event that the Issuer determines that DTC is incapable of discharging its responsibilities described herein and in the Blanket Issuer Letter of Representations to DTC or that it is in the best interest of the beneficial owners of the Certificates that they be able to obtain certificated Certificates, the Issuer shall (i) appoint a successor securities depository, qualified to act as such under Section 17A of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Certificates to such successor securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of Certificates and transfer one or more separate certificated Certificates to DTC Participants having Certificates credited to their DTC accounts. In such event, the Certificates shall no longer be restricted to being registered in the Registration Books in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Registered Owners transferring or exchanging Certificates shall designate, in accordance with the provisions of this Ordinance. (h) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Certificate is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of and interest on such Certificate and all notices with respect to such Certificate shall be made and given, respectively, in the manner provided in the Blanket Issuer Letter of Representations to DTC. (i) Cancellation of Initial Certificate. On the closing date, the Initial Certificate, representing the entire principal amount of the Certificates, payable in stated installments to the Purchaser designated in Section 10 or its designee, executed by manual or facsimile signature of the Mayor and City Secretary of the Issuer, approved by the Attorney General, and registered and manually signed by the Comptroller, will be delivered to such Purchaser or its designee. Upon payment for the Initial Certificate, the Paying Agent/Registrar shall cancel the Initial Certificate and deliver to DTC on behalf of such Purchaser one registered definitive Certificate for each year of maturity of the Certificates, in the aggregate principal amount of all of the Certificates for such maturity. To the extent that the Paying Agent/Registrar is eligible to participate in DTC's PAST Page 7 s:\legal\our documents\ordinances\17\co ordinance 2017 v2.docx System, pursuant to an agreement between the Paying Agent/Registrar and DTC, the Paying Agent/Registrar shall hold the definitive Certificates in safekeeping for DTC. 0) Conditional Notice of Redemption. With respect to any optional redemption of the Certificates, unless the prerequisites to such redemption required by this Ordinance have been met and moneys sufficient to pay the principal of and premium, if any, and interest on the Certificates to be redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice shall state that said redemption may, at the option of the Issuer, be conditional upon the satisfaction of such prerequisites and receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for such redemption, or upon any prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given and such prerequisites to the redemption and sufficient moneys are not received, such notice shall be of no force and effect, the Issuer shall not redeem such Certificates and the Paying Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to the effect that the Certificates have not been redeemed. SECTION 4. FORM OF CERTIFICATES. The form of the Certificates, including the form of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Comptroller's Registration Certificate to be attached to the Certificates initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, omissions or insertions as are permitted or required by this Ordinance, and with the Form of Certificate to be modified pursuant to, and completed with information set forth in, the Pricing Certificate. (a) [Form of Certificate] NO. R- UNITED STATES OF AMERICA STATE OF TEXAS CITY OF DENTON CERTIFICATE OF OBLIGATION SERIES 2017 Interest Rate REGISTERED OWNER: PRINCIPAL AMOUNT: Dated Date Maturity Date 20_ February 15, 20_ PRINCIPAL AMOUNT CUSIP No. DOLLARS ON THE MATURITY DATE specified above, the City of Denton, in Denton County, Texas (the "Issuer"), being a political subdivision and municipal corporation of the State of Texas, hereby promises to pay to the Registered Owner specified above, or registered assigns (hereinafter called the "Registered Owner"), on the Maturity Date specified above, the Principal Amount specified above. The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on Page 8 sllegal\our documents\ordinances\17\co ordinance 2017 v2.docx the basis of a 360 -day year of twelve 30 -day months) from , 2017 at the Interest Rate per annum specified above. Interest is payable on _, 20 and semiannually on each and thereafter to the Maturity Date specified above, or the date of redemption prior to maturity; except, if this Certificate is required to be authenticated and the date of its authentication is later than the first Record Date (hereinafter defined), such Principal Amount shall bear interest from the interest payment date next preceding the date of authentication, unless such date of authentication is after any Record Date but on or before the next following interest payment date, in which case such principal amount shall bear interest from such next following interest payment date; provided, however, that if on the date of authentication hereof the interest on the Certificate or Certificates, if any, for which this Certificate is being exchanged is due but has not been paid, then this Certificate shall bear interest from the date to which such interest has been paid in full. THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money of the United States of America, 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, or upon the date fixed for its redemption prior to maturity, at the principal corporate trust office of 5 , 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 or draft, 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 this Certificate (the "Certificate Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment date, to the Registered Owner hereof, at its address as it appeared on the last business day of the month preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In addition, interest may be paid by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Registered Owner. In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a Special 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 (which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of each Registered Owner of a Certificate appearing on the Registration Books at the close of business on the last business day next preceding the date of mailing of such notice. ANY ACCRUED INTEREST due at maturity or upon the redemption of this Certificate prior to maturity as provided herein shall be paid to the Registered Owner upon presentation and surrender of this Certificate for redemption and payment at the principal corporate trust office of the Paying Agent/Registrar. The Issuer covenants with the Registered Owner of this Certificate that on or before each principal 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 Page 9 s:Alegal\our documents\ordinances\17\co ordinance 2017 v2.docx payment, in immediately available funds, of all principal of and interest on the Certificates, when due. 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 principal corporate trust office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day that is not such a Saturday, Sunday, legal holiday or day on which banking institutions are 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 a series of Certificates dated _, 2017, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $ for the purpose of paying all or a portion of the Issuer's contractual obligations incurred pursuant to contracts for the purchase, construction and acquisition of certain real and personal property, to wit: $ for the purpose of acquisition of equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the Issuer's electric light and power system; and also for the purpose of paying all or a portion of the Issuer's contractual obligations for professional services, including engineers, architects, attorneys, map makers, auditors, and financial advisors, in connection with said projects and said Certificates; and $ for the purpose of: (a) acquisition of vehicles and equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the Issuer's solid waste disposal system; (b) renovations to, and equipping of, existing municipal buildings, including the acquisition and installation of replacement heating, venting and air conditioning equipment, roofing and flooring; (c) acquisition of vehicles and equipment for the fire, police, building inspections, community improvement services, animal services, streets and traffic control, facilities management, and parks and recreation departments; (d) acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to parking facilities; and (e) constructing and improving streets, including landscaping, drainage, utility line relocations and the acquisition of land and rights-of- way therefor; and also for the purpose of paying all or a portion of the Issuer's contractual obligations for professional services, including engineers, architects, attorneys, map makers, auditors, and financial advisors, in connection with said projects and said Certificates. ON , 20_, or on any date 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 may be redeemed only in an integral multiple of $5,000), at a redemption price equal to the principal amount to be redeemed plus accrued interest to the date fixed for redemption. [THE CERTIFICATES scheduled to mature on in the years and ( the "Term Certificates") are subject to scheduled mandatory redemption by the Paying Agent/Registrar by lot, or by any other customary method that results in a random selection, at a price equal to the principal amount thereof, plus accrued interest to the redemption date, out of Page 10 sAeeakour do cuments\ordinances\1 7\co ordinance 2017 v2.docx moneys available for such purpose in the interest and sinking fund for the Certificates, on the dates and in the respective principal amounts, set forth in the following schedule: Term Certificate Term Certificate Maturity: February 15, 20 Maturity: February 15,20 Principal Principal Mandatory Redemption Amount Mandatory Redemption Amount Date Date February 15,20 $ February 15,20 $ February 15,20 February 15,20 February 15,20_ February 15,20_ February 15,20 (maturity) February 15,20_ (maturity) The principal amount of Term Certificates of a stated maturity required to be redeemed on any mandatory redemption date pursuant to the operation of the mandatory sinking fund redemption provisions shall be reduced, at the option of the Issuer, by the principal amount of any Term Certificates of the same maturity which, at least 50 days prior to a mandatory redemption date (1) shall have been acquired by the Issuer at a price not exceeding the principal amount of such Term Certificates plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, (2) shall have been purchased and canceled by the Paying Agent/Registrar at the request of the Issuer at a price not exceeding the principal amount of such Term Certificates plus accrued interest to the date of purchase, or (3) shall have been redeemed pursuant to the optional redemption provisions and not theretofore credited against a mandatory redemption requirement.] AT LEAST 30 days prior to the date fixed for any redemption of Certificates or portions thereof prior to maturity a written notice of such redemption shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, to the Registered Owner of each Certificate to be redeemed at its address as it appeared on the 45th day prior to such redemption date; provided, however, that the failure of the Registered Owner to receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any Certificate. By the date fixed for any such redemption due provision shall be made with the Paying Agent/Registrar for the payment of the required redemption price for the Certificates or portions thereof that are to be so redeemed. If such written notice of redemption is sent and if due provision for such payment is made, all as provided above, the Certificates or portions thereof that are to be so redeemed thereby automatically shall be treated as 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 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, Page 11 sllegal\our documents\ordinances\17\co ordinance 2017 v2.docx will be issued to the Registered Owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as provided in the Certificate Ordinance. IF AT THE TIME OF MAILING of notice of optional redemption there shall not have either been deposited with the Paying Agent/Registrar or legally authorized escrow agent immediately available funds sufficient to redeem all the Certificates called for redemption, such notice may state that it is conditional, and is subject to the deposit of the redemption moneys with the Paying Agent/Registrar or legally authorized escrow agent at or prior to the redemption date or any prerequisite set forth in such notice of redemption. If such redemption is not effectuated, the Paying Agent/Registrar shall, within five days thereafter, give notice in the manner in which the notice of redemption was given that such moneys were not so received or such prerequisites were not met and shall rescind the redemption. ALL, CERTIFICATES OF THIS SERIES are issuable solely as fully registered certificates, without interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Certificate Ordinance, this Certificate may, at the request of the Registered Owner or the assignee or assignees hereof, be assigned, transferred, converted into and exchanged fora 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 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 cancellation, all in accordance with the form and procedures set forth in the Certificate Ordinance. Among other requirements for such assignment and transfer, this Certificate must be presented and surrendered to the Paying Agent/Registrar, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Certificate or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Certificate or any such portion or portions hereof is or are to be registered. The Form of Assignment printed or endorsed on this Certificate may be executed by the Registered Owner to evidence the assignment hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Certificate or any portion or portions hereof from time to time by the Registered Owner. The Paying Agent/Registrar's reasonable standard or customary fees and charges for assigning, transferring, converting and exchanging any Certificate or portion thereof will be paid by the Issuer. In any circumstance, any taxes or governmental charges required to be paid with respect thereto shall be paid by the one requesting such assignment, transfer, conversion or exchange, as a condition precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be required to make any such transfer, conversion, or exchange (i) during the period 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 Certificate or any portion thereof called for redemption prior to maturity, within 45 days prior to its redemption date. IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed to the Registered Owners of the Certificates. Page 12 s:AIega1\our documents\ordinances\17\co ordinance 2017 v2.docx 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; 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 said Issuer, and have been pledged for such payment, within the limit prescribed by law; and that this Certificate is additionally secured by and payable from a limited pledge (not to exceed $1,000) of the surplus revenues derived by the Issuer from the ownership and operation of the Issuer's Utility System (consisting of the Issuer's combined waterworks system, sanitary sewer system, and electric light and power system), all as provided in the Certificate Ordinance, THE ISSUER HAS RESERVED THE 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 Issuer's Utility System, on a parity with, or with respect to said revenues, superior in lien to, this Certificate. THE ISSUER HAS RESERVED THE RIGHT to amend the Certificate Ordinance as provided therein, and under some (but not all) circumstances amendments thereto must be approved by the Registered Owners of a majority in aggregate principal amount of the outstanding Certificates. BY BECOMING the Registered Owner of this Certificate, the Registered Owner thereby acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be 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 (or in the Mayor's absence, of the Mayor Pro -Tem) and countersigned with the manual or facsimile signature of the City Secretary of said Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Certificate. (signature) (signature___ City Secretary Mayor (SEAL) [INSERT BOND INSURANCE LEGEND, IF ANY] (b) [Form of Paying Agent/Registrar's Authentication Certificate] Page 13 s:Alegal\our documents\ordinances\1 7\co ordinance 2017 v2.docx PAYING AGENT/REGISTRAR'S AUTHENTICAFION CERTIFICATE (To be executed if this Certificate is not accompanied by an executed Comptroller's Registration Certificate) It is hereby certified that this Certificate has been issued under the provisions of the Certificate Ordinance described in the text of this Certificate; and that this Certificate has been issued in conversion or replacement of, or in exchange for, a certificate, certificates, or a portion of a certificate or certificates of a series that originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated: Texas Paying Agent/Registrar By: Authorized Representative (c) [Form of Assignment] ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto Please insert Social Security or Taxpayer Identification Number of Transferee (Please print or typewrite name and address, including zip code, of Transferee.) the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to register the transfer of the within Certificate on the books kept for registration thereof, with frill power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed NOTICE: The signature above must by an eligible guarantor institution correspond with the name of the Registered participating in a securities transfer Owner as it appears upon the front of this Page 14 s:Uegal\our documents\ordinances\17\co ordinance 2017 v2.doex association recognized signature guarantee certificate in every particular, without program. alteration or enlargement or any change whatsoever. (d) [Form of Comptroller's Registration Certificate] COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Certificate of Obligation has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and that this Certificate of Obligation has been registered by the Comptroller of Public Accounts of the State of Texas. Witness my signature and seal this Comptroller of Public Accounts of the State of Texas (COMPTROLLER'S SEAL) (e) [Initial Certificate Insertions] (i) The Initial Certificate shall be in the form set forth in paragraph (a) of this Section, except that: A. immediately under the name of the Certificate, the headings "Interest Rate" and "Maturity Date" shall both be completed with the words "As shown below" and "CUSIP No. " shall be deleted. B. the first paragraph shall be deleted and the following will be inserted: "THE CITY OF DENTON, TEXAS, in Denton County, Texas (the "Issuer"), being a political subdivision and municipal corporation of the State of Texas, hereby promises to pay to the Registered Owner specified above, or registered assigns (hereinafter called the "Registered Owner"), on February 15 in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: Years Principal Amounts Interest Rates (Information from Pricing Certificate to be inserted) The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360 -day year of twelve 30 -day months) from _, 2017 at the respective Interest Rate per annum specified above. Interest is payable on _, 20_ and semiannually on each and thereafter to the date of payment of the principal installment Page 15 sllegal\our documents\ordinances\17\co ordinance 2017 v2.docx specified above, or the date of redemption prior to maturity; except, that if this Certificate is required to be authenticated and the date of its authentication is later than the first Record Date (hereinafter defined), such Principal Amount shall bear interest from the interest payment date next preceding the date of authentication, unless such date of authentication is after any Record Date but on or before the next following interest payment date, in which case such principal amount shall bear interest from such next following interest payment date; provided, however, that if on the date of authentication hereof the interest on the Certificate or Certificates, if any, for which this Certificate is being exchanged is due but has not been paid, then this Certificate shall bear interest from the date to which such interest has been paid in full." C. The Initial Certificate shall be numbered "T-1." SECTION 5. INTEREST AND SINKING FUND; SURPLUS REVENUES. (a) A special Interest and Sinking Fund (the "Interest and Sinking Fund") is hereby created solely for the benefit of the Certificates, and the Interest and Sinking Fund shall be established and maintained by the Issuer at an 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 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 or is scheduled for redemption (but never less than 2% of the original principal amount 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 or is scheduled for redemption, are hereby pledged for such payment, within the limit prescribed by law. (b) The Certificates are additionally secured by revenues derived by the Issuer from the ownership and operation of the Issuer's Utility System (consisting of its combined waterworks system, sanitary sewer system, and electric light and power system) that remain after the payment of all maintenance and operation expenses thereof, and all debt service, reserve and other requirements in connection with all of the Issuer's revenue obligations (now or hereafter outstanding) or contractual obligations (now or hereafter existing) which are payable from all or any part of the net revenues of the Issuer's Utility System, constituting "Surplus Revenues", not to exceed $1,000. The Issuer shall deposit such Surplus Revenues to the credit of the Interest and Sinking Fund created pursuant to this Section, to the extent necessary to pay the principal and Page 16 sAlegal\our documents\ordinances\17\co ordinance 2017 v1doex interest on the Certificates. Notwithstanding the requirements of this Section, if Surplus Revenues or other lawfully available moneys of the Issuer are actually on deposit or budgeted and appropriated to be deposited in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes that otherwise would have been required to be levied pursuant to subsection (a) of this Section may be reduced to the extent and by the amount of the Surplus Revenues or other lawfully available funds then on deposit or budgeted and appropriated to be deposited in the Interest and Sinking Fund. If Surplus Revenues are budgeted and appropriated for deposit into the Interest and Sinking Fund, the Issuer: (i) shall transfer and deposit in the Interest and Sinking Fund each month an amount of not less than 1/12th of the annual debt service on the Certificates to be paid from Surplus Revenues until the amount on deposit in the Interest and Sinking Fund equals the amount required for annual debt service on the Certificates; (ii) shall establish, adopt and maintain an annual budget that provides for either the monthly deposit of sufficient Surplus Revenues and/or tax revenues, the monthly deposit of any other legally available funds on hand at the time of the adoption of the annual budget, or a combination thereof, into the Interest and Sinking Fund for the repayment of the Certificates; and (iii) shall at all times maintain and collect sufficient Utility System rates and charges in conjunction with any other legally available funds that, after payment of the costs of operating and maintaining the Utility System, produce revenues in an amount not less than the debt service requirements of all outstanding Utility System revenue bonds of the Issuer and other obligations of the Issuer which are secured in whole or in part by a pledge of revenues of the Utility System and for which the Issuer is budgeting the repayment of such obligations from the revenues of the Utility System, or the Issuer shall provide documentation which evidences the levy of an ad valorem tax rate dedicated to the Interest and Sinking Fund, in conjunction with any other legally available funds except Utility System rates and charges, sufficient for the repayment of Utility System debt service requirements. (c) Chapter 1208, Texas Government Code, applies to the issuance of the Certificates and the pledge of the taxes and Surplus Revenues granted by the Issuer under this Section and Section 9, respectively, and is therefore valid, effective, and perfected. Should Texas law be amended at any time while the Certificates are outstanding and unpaid, the result of such amendment being that the pledge of the taxes and Surplus Revenues granted by the Issuer under this Section is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, in order to preserve to the Registered Owners of the Certificates a security interest in said pledge, the Issuer agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code and enable a filing of a security interest in said pledge to occur. Page 17 sA Iegakour documents\ordinances\17\co ordinance 2017 v2.docx SECTION 6. DEFEASANCE OF CERTIFICATES. (a) Any Certificate and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased Certificate") within the meaning of this Ordinance, except to the extent provided in subsection (d) of this Section, when payment of the principal of such Certificate, plus interest thereon to the due date (whether such due date be by reason of maturity or otherwise) either (i) 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 in accordance with an escrow agreement or other instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Government Obligations that mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to provide for such payment, and when proper 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. Notwithstanding any other provision of this Ordinance to the contrary, it is hereby provided that any determination not to redeem Defeased Certificates that is made in conjunction with the payment arrangements specified in Subsection (a)(i) or (ii) of this Section shall not be irrevocable, provided that: (1) in the proceedings providing for such payment arrangements, the Issuer expressly reserves the right to call the Defeased Certificates for redemption; (2) gives notice of the reservation of that right to the Registered Owners of the Defeased Certificates immediately following the making of the payment arrangements; and (3) directs that notice of the reservation be included in any redemption notices that it authorizes. (b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer 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 that is not required for the payment of the Certificates and interest thereon, with respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer. Any Future Escrow Agreement pursuant to which the money and/or Government Obligations are held for the payment of Defeased Certificates may contain provisions permitting the investment or reinvestment of such moneys in Government Obligations or the substitution of other Government Obligations upon the satisfaction of the requirements specified in Subsection (a)(i) or (ii) of this Section. All income from such Government Obligations received by the Paying Agent/Registrar which is not required for the payment of the Defeased Certificates, with respect to which such money has been so deposited, shall be remitted to the Issuer or deposited as directed in writing by the Issuer. (c) The term "Government Obligations" means any securities and obligations now or hereafter authorized by state law that are eligible to discharge obligations such as the Certificates, including (i) direct, noncallable obligations of the United States of America, including obligations Page 18 sAlegahour documents\ordinances\17\eo ordinance 2017 v2.docx that are unconditionally guaranteed by the United States of America., (ii) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the governing body of the Issuer adopts or approves the proceedings authorizing the financial arrangements, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the governing body of the Issuer adopts or approves the proceedings authorizing the financial arrangements, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. (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. (e) In the event that the Issuer elects to defease less than all of the principal amount of Certificates of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Certificates by such random method as it deems fair and appropriate. SECTION 7. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED 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 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 to 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 Occurred. Notwithstanding the foregoing provisions of this Ordinance, in the event any such Certificate shall have matured, and no default has occurred that is then continuing in the payment of the principal of, redemption premium, if any, or interest on the Certificate, the Issuer may authorize the payment of the same (without surrender thereof except in Page 19 sAlegal\our documents\or(Iinances\17\co ordinance 2017 v2.docx 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 Sec. 1206.022, Government Code, this Section 7 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 3(a) of this Ordinance for Certificates issued in conversion and exchange for other Certificates. SECTION 8. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES; BOND COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION, IF OBTAINED; ENGAGEMENT OF BOND COUNSEL. (a) The Mayor of the Issuer is hereby authorized to have control of the Initial Certificate and all necessary records and proceedings pertaining to the Initial Certificate pending its delivery and its investigation, examination, and approval by the Attorney General, and its registration by the Comptroller. Upon registration of the Initial Certificate said Comptroller (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate attached to such Certificate, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such Certificate. The approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Certificates issued and delivered under this Ordinance, but neither shall have any legal effect, and shall be solely for the convenience and information of the Registered Owners of the Certificates. In addition, if bond insurance is obtained, the Certificates may bear an appropriate legend as provided by the insurer. (b) The obligation of the Purchaser to accept delivery of the Certificates is subject to the Purchaser being furnished with the final, approving opinion of McCall, Parkhurst & Horton L.L.P., bond counsel to the Issuer, which opinion shall be dated as of and delivered on the date of initial delivery of the Certificates to the Purchaser. The engagement of such firm as bond counsel to the Issuer in connection with the issuance, sale and delivery of the Certificates is hereby approved and confirmed. The execution and delivery of an engagement letter between the Issuer and such firm, with respect to such services as bond counsel, is hereby authorized in such form as may be approved by the Mayor, and the Mayor is hereby authorized to execute such engagement letter. Page 20 s:Uegal\our documents\ordinances\17\co ordinance 2017 v2.docx SECTION 9. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE CERTIFICATES. (a) Covenants. The Issuer covenants to take any action necessary to assure, or refrain from any action that would adversely affect, the treatment of the Certificates as obligations described in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which is not includable in the "gross income" of the holder for purposes of federal 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 Certificates (less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds or the projects financed therewith are so used, such amounts, whether or not received by 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 Certificates, 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 Certificates or the projects financed therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a "private business use" that is "related" and not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use; (3) to take any action to assure that no amount that is greater than the lesser of $5,000,000, or 5 percent of the proceeds of the Certificates (less amounts deposited into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section 141(c) of the Code; (4) to refrain from taking any action that would otherwise result in the Certificates being treated as "private activity bonds" within the meaning of section 141(b) of the Code; (5) to refrain from taking any action that would result in the Certificates being "federally guaranteed" within the meaning of section 149(b) of the Code; (6) . to refrain from using any portion of the proceeds of the Certificates, directly or indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) that produces a materially higher yield over the term of the Certificates, other than investment property acquired with B (A) proceeds of the Certificates invested for a reasonable temporary period of 3 years or less or, in the case of a refunding bond, for a period of 30 days or less until such proceeds are needed for the purpose for which the bonds are issued, Page 21 s:Afecal\our documents\ordinances\17\co ordinance 2017 v2.doex (B) amounts invested in a bona fide debt service fund, within the meaning of section 1.148-1(b) of the rules and regulations of the United States Department of the Treasury ("Treasury Regulations"), and (C) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 percent of the proceeds of the Certificates; (7) to otherwise restrict the use of the proceeds of the Certificates or amounts treated as proceeds of the Certificates, as may be necessary, so that the Certificates do not otherwise contravene the requirements of section 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 Certificates) 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 Certificates have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code. (b) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a "Rebate Fund" is hereby established by the Issuer for the sole benefit of the United States of America, and such Rebate Fund shall not be subject to the claim of any other person, including without limitation the Certificate holders. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. (c) Use of Proceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), the Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the Certificates. It is the understanding of the Issuer that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the United States Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated that modify or expand provisions of the Code, as applicable to the Certificates, 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 Certificates under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated that impose additional requirements applicable to the Certificates, the Issuer agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Certificates under section 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs the Mayor or the Pricing Officer to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the Issuer, that may be permitted by the Code as are consistent with the purpose for the issuance of the Certificates. Page 22 s:Alegal\our documents\ordinances\17\co ordinance 2017 v2.docx (d) Allocation of and Limitation on Expenditures for the Projects. The Issuer covenants to account for the expenditure of sale proceeds and investment earnings to be used for the construction and acquisition of the Projects on its books and records by allocating proceeds to expenditures within 18 months of the later of the date that (1) the expenditure is made, or (2) the Projects are completed. The foregoing notwithstanding, the Issuer shall not expend proceeds of the sale of the Certificates or investment earnings thereon more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Certificates, or (2) the date the Certificates are retired, unless the Issuer obtains an opinion of nationally -recognized bond counsel that such expenditure will not adversely affect the status, for federal income tax purposes, of the Certificates or the interest thereon. For purposes hereof, the Issuer 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. (e) Disposition of Projects. The Issuer covenants that the Projects 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 of the foregoing, the portion of the property comprising personal property and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains a legal opinion that such failure to comply will not adversely affect the excludability for federal income tax proposes from gross income of the interest. (f) Reimbursement. This Ordinance is intended to satisfy the official intent requirements set forth in section 1.150-2 of the Treasury Regulations. SECTION 10. SALE OF CERTIFICATES AND APPROVAL OF OFFICIAL STATEMENT; FURTHER PROCEDURES. (a) The Certificates shall be sold and delivered subject to the provisions of Section 1 and Section 2 hereof through a negotiated sale, competitive sale or private placement and pursuant to the terms and provisions of a purchase contract or a notice of sale and official bid form (in either case, the "Purchase Agreement"), the terms and provisions of which are to be determined by the Pricing Officer in accordance with Section 2 hereof, and in which the purchaser or purchasers of the Certificates (the "Purchaser") shall be designated. The Pricing Officer is hereby authorized to execute and deliver the Purchase Agreement for an on behalf of the Issuer. The Certificates shall initially be registered in the name of the Purchaser or its designee. (b) The Issuer hereby approves the form and content of the draft preliminary official statement relating to the Certificates and any addenda, supplement or amendment thereto, and approves the distribution of such preliminary official statement in the reoffering of the Certificates by the Purchaser in final form, with such changes therein or additions thereto as the Pricing Officer may deem advisable. The Pricing Officer is hereby authorized, in the name and on behalf of the Issuer, to approve, distribute, and deliver a final preliminary official statement and a final official statement relating to the Certificates to be used by the Purchaser in the marketing of the Certificates. Page 23 s:Alegal\our documents\ordinances\l 7\co ordinance 2017 v2.docx (c) The Pricing Officer is authorized, in connection with effecting the sale of the Certificates, to obtain from a municipal bond insurance company so designated in the Pricing Certificate (the "Insurer") a municipal bond insurance policy (the "Insurance Policy") in support of the Certificates. To that end, should the Pricing Officer exercise such authority and commit the Issuer to obtain a municipal bond insurance policy, for so long as the Insurance Policy is in effect, the requirements of the Insurer relating to the issuance of the Insurance Policy as set forth in the Pricing Certificate are incorporated by reference into this Ordinance and made a part hereof for all purposes, notwithstanding any other provision of this Ordinance to the contrary. The Pricing Officer shall have the authority to execute any documents to effect the issuance of the Insurance Policy by the Insurer, including commitment agreements, membership agreements in mutual insurance companies and other similar agreements. (d) The Mayor and Mayor Pro Tem, the City Manager, Pricing Officer and City Secretary and all other officers, employees and agents of the Issuer, and each of them, shall be and they are hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the Issuer a Paying Agent/Registrar Agreement with the Paying Agent/Registrar and all other 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 Pricing Certificate, the Certificates, the sale of the Certificates, any Purchase Agreement and the Official Statement. 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 11. INTEREST EARNINGS ON CERTIFICATE PROCEEDS. Interest earnings derived from the investment of proceeds from the sale of the Certificates issued for the Projects shall be used along with other Certificate proceeds for the Projects; provided that after completion of such purpose, if any of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinking Fund. It is further provided, however, that any interest earnings on Certificate proceeds that are required to be rebated to the United States of America pursuant to Section 9 hereof in order to prevent the Certificates from being arbitrage bonds shall be so rebated and not considered as interest earnings for the purposes of this Section. SECTION 12. CONSTRUCTION FUND OR ACCOUNT; INVESTMENTS. (a) The proceeds of sale of the Certificates, excluding any accrued interest received from the initial purchaser of the Certificates and any other amounts to be deposited into the Interest and Sinking Fund, and amounts to pay costs of issuance of the Certificates, shall be deposited in one or more construction funds or accounts for use, along with any investment earnings thereon, by the Issuer for payment of all lawful costs associated with the acquisition and construction of the Projects as hereinbefore provided. Upon payment of all such costs, any moneys remaining on deposit in said funds or accounts, including investment earnings, shall be transferred to the Interest and Sinking fund. Amounts so deposited to the Interest and Sinking Fund shall be used in the manner described in Section 5 of this Ordinance. Page 24 s:\Iega1\our documents\ordinances\17\co ordinance 2017 v2.docx (b) The Issuer may invest proceeds of the Certificates (including investment earnings thereon) issued for the Projects and amounts deposited into the Interest and Sinking Fund in investments authorized by the Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended; provided, however, that the Issuer hereby covenants that the proceeds of the sale of the Certificates will be used as soon as practicable for the purposes for which the Certificates are issued. (c) All deposits authorized or required by this Ordinance shall be secured to the fullest extent required by law for the security of public funds. SECTION 13. COMPLIANCE WITH RULE 15c2-12. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. (b) Annual Reports. (i) The Issuer shall provide annually to the MSRB, in the electronic format prescribed by the MSRB, financial information and operating data (the "Annual Operating Report") with respect to the Issuer of the general type included in the final Official Statement authorized by this Ordinance, being the information described in the Pricing Certificate. The Issuer will additionally provide financial statements of the Issuer (the "Financial Statements"), that will be (i) prepared in accordance with the accounting principles described in the Pricing Certificate or such other accounting principles as the Issuer may be required to employ from time to time pursuant to State law or regulation and shall be in substantially the form included in the final Official Statement and (ii) audited, if the Issuer commissions an audit of such Financial Statements and the audit is completed within the period during which they must be provided. The Issuer will update and provide the Annual Operating Report within six months after the end of each fiscal year and the Financial Statements within 12 months of the end of each fiscal year, in each case beginning with the fiscal year ending in and after 2017. The Issuer may provide the Financial Statements earlier, including at the time it provides its Annual Operating Report, but if the audit of such Financial Statements is not complete within 12 months after any such fiscal year end, then the Issuer shall file unaudited Financial Statements within such 12 -month period and audited Financial Statements for the applicable fiscal year, when and if the audit report on such Financial Statements becomes available. All documents provided to the MSRB, pursuant to this Section shall be accompanied by identifying information as prescribed by the MSRB. (ii) If the Issuer changes its fiscal year, it will notify the MSRB of the change (and of the date of the new fiscal year end) prior to the next date by which the Issuer otherwise would Page 25 s:\Iega1\our documents\ordinances\17\co ordinance 2017 v2.docx 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 the MSRB or filed with the SEC. (c) Event Notices. (i) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a timely manner (but not in excess of ten business days after the occurrence of the event) of any of the following events with respect to the Certificates, if such event is material within the meaning of the federal securities laws: 1. Non-payment related defaults; 2. Modifications to rights of holders of the Certificates; 3. Certificate calls; 4. Release, substitution, or sale of property securing repayment of the Certificates; 5. The consummation of a merger, consolidation, or acquisition involving the an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms; and 6. Appointment of a successor or additional trustee or the change of name of a trustee. (ii) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a timely manner (but not in excess of ten business days after the occurrence of the event) of any of the following events with respect to the Certificates, without regard to whether such event is considered material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Unscheduled draws on debt service reserves reflecting financial difficulties; 3. Unscheduled draws on credit enhancements reflecting financial difficulties; 4. Substitution of credit or liquidity providers, or their failure to perform; 5. Adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 BTEB) or other material notices or determinations with respect to the tax-exempt status of the Certificates, or other material events affecting the tax-exempt status of the Certificates; 6. Tender offers; 7. Defeasances; 8. Rating changes; and 9. Bankruptcy, insolvency, receivership or similar event of an obligated person. Page 26 s:Uegahour documents\ordinances\17\co ordinance 2017 v2.docx (iii) The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such subsection. (d) Limitations Disclaimers and Amendments. (i) The Issuer shall be obligated to observe and perform the covenants specified in this Section for so long as, but only for so long as, the Issuer remains an "obligated person" with respect to the Certificates within the meaning of the Rule, except that the Issuer in any event will give notice of any deposit made in accordance with this Ordinance or applicable law that causes the Certificates no longer to be outstanding. (ii) The provisions of this Section are for the sole benefit of the Registered Owners and beneficial owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Issuer undertakes to provide only the financial information, 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. (iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER 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 this 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 Page 27 sAegal\our d0cuments\ordinances\17\co ordinance 2017 v2.docx 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. 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. If the Issuer so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) of this 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. (e) Amendment of the Rule. The provisions of this Section shall be revised by the Pricing Officer to reflect the requirements of the Rule if the Rule is amended after the adoption of this Ordinance but prior to the delivery of the Certificates so as to permit an underwriter to purchase or sell Certificates in the primary offering of the Certificates in compliance with the Rule. Any such revisions shall be set forth in the Pricing Certificate and are incorporated by reference into this Ordinance and made a part hereof for all purposes, notwithstanding any other provision of this Ordinance to the contrary. SECTION 14. METHOD OF AMENDMENT, The Issuer hereby reserves the right to amend this Ordinance subject to the following terms and conditions, to -wit: (a) The Issuer may from time to time, without the consent of any holder, except as otherwise required by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any ambiguity, defect or omission in this Ordinance that does not materially adversely affect the interests of the holders, (ii) grant additional rights or security for the benefit of the holders, (iii) add events of default as shall not be inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the interests of the holders, (iv) qualify this Ordinance under the "frust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time in effect, or (v) make such other provisions in regard to matters or questions arising under this Ordinance as shall not be inconsistent with the provisions of this Ordinance and that shall not in the opinion of the Issuer's Bond Counsel materially adversely affect the interests of the holders. (b) Except as provided in paragraph (a) above, the holders of Certificates aggregating in principal amount a majority of the aggregate principal amount of then outstanding Certificates that are the subject of a proposed amendment shall have the right from time to time to approve any amendment hereto that may be deemed necessary or desirable by the Issuer; provided, however, that without the consent of 100% of the holders in aggregate principal amount of the then outstanding Certificates, nothing herein contained shall permit or be construed to permit amendment of the terms and conditions of this Ordinance or in any of the Certificates so as to: Page 28 s:AIegal\our documents\ordinances\17\co ordinance 2017 v2.docx (1) Make any change in the maturity of any of the outstanding Certificates; (2) Reduce the rate of interest borne by any of the outstanding Certificates; (3) Reduce the amount of the principal of, or redemption premium, if any, payable on any outstanding Certificates; (4) Modify the terms of payment of principal or of interest or redemption premium on outstanding Certificates or any of them or impose any condition with respect to such payment; or (5) Change the minimum percentage of the principal amount of Certificates necessary for consent to such amendment. (c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the Issuer shall send by U.S. mail to each Registered Owner of the affected Certificates a copy of the proposed amendment and cause notice of the proposed amendment to be published at least once in a financial publication published in The City of New York, New York or in the State of Texas. Such published notice shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the office of the Issuer for inspection by all holders of such Certificates. (d) Whenever at any time within one year from the date of publication of such notice the Issuer shall receive an instrument or instruments executed by the holders of at least a majority in aggregate principal amount of all of the Certificates then outstanding that are required for the amendment, which instrument or instruments shall refer to the proposed amendment and that shall specifically consent to and approve such amendment, the Issuer may adopt the amendment in substantially the same form. (e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this Section, this Ordinance shall be deemed to be modified and amended in accordance with such amendatory Ordinance, and the respective rights, duties, and obligations of the Issuer and all holders of such affected Certificates shall thereafter be determined, exercised, and enforced, subject in all respects to such amendment. (f) Any consent given by the holder of a Certificate pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of the publication of the notice provided for in this Section, and shall be conclusive and binding upon all future holders of the same Certificate during such period. Such consent may be revoked at any time after six months from the date of the publication of said notice by the holder who gave such consent, or by a successor in title, by filing notice with the Issuer, but such revocation shall not be effective if the holders of a majority in aggregate principal amount of the affected Certificates then outstanding, have, prior to the attempted revocation, consented to and approved the amendment. Page 29 sAlega]\our documents\ordinances\17\co ordinance 2017 v2.docx For the purposes of establishing ownership of the Certificates, the Issuer shall rely solely upon the registration of the ownership of such Certificates on the Registration Books kept by the Paying Agent/Registrar. SECTION 15. DEFAULT AND REMEDIES. (a) Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of or interest on any of the Certificates when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement or obligation of the Issuer, the failure to perform which materially, adversely affects the rights of the Registered Owners of the Certificates, including, but not limited to, their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by any Registered Owner to the Issuer. (b) Remedies for Default. (i) Upon the happening of any Event of Default, then and in every case, any Registered Owner or an authorized representative thereof, including, but not limited to, a trustee or trustees therefor, may proceed against the Issuer for the purpose of protecting and enforcing the rights of the Registered Owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Registered Owners hereunder or any combination of such remedies. (ii) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Registered Owners of Certificates then outstanding. (c) Remedies Not Exclusive. (i) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Certificates or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Certificates shall not be available as a remedy under this Ordinance. (ii) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. (iii) By accepting the delivery of a Certificate authorized under this Ordinance, such Registered Owner agrees that the certifications required to effectuate any covenants or Page 30 s:Alegakour documents\ordinances\17\co ordinance 2017 v2.docx representations contained in this Ordinance do not and shall never constitute or give rise to a personal or pecuniary liability or charge against the officers, employees or agents of the Issuer or the members of its governing body. SECTION 16. APPROPRIATION. To pay the debt service coming due on the Certificates, if any, prior to receipt of the taxes levied to pay such debt service, there is hereby appropriated from current funds on hand, which are hereby certified to be on hand and available for such purpose, an amount, which together with capitalized interest received from the sale of the Certificates, if any, will be sufficient to pay such debt service, and such amount shall be used for no other purpose. SECTION 17. EFFECTIVE DATE. In accordance with the provisions of Texas Government Code Section 1201.028, this Ordinance shall be effective immediately upon its adoption by the City Council. SECTION 18. SEVERABILITY. If any section, article, paragraph, sentence, clause, phrase or word in this Ordinance, or application thereof to any persons or circumstances is held invalid or unconstitutional by a court of competent jurisdiction, such holding shall not affect the validity of the remaining portion of this Ordinance, despite such invalidity, which remaining portions shall remain in full force and effect. [Signature page follows] Page 31 sAlegal\our d0cuments\ordinances\17\co ordinance 2017 v2.docx PASSED, APPROVED AND EFFECTIVE this day of , 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WAL,TERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY G � BY: Page 32 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-372, Version: 1 DEPARTMENT: ACM: Date: Finance Bryan Langley April 18, 2017 Legislation Text Agenda Information Sheet SUBJECT Consider adoption of an ordinance considering all matters incident and related to the issuance, sale and delivery of up to $30,700,000 in principal amount of "City of Denton General Obligation Refunding and Improvement Bonds, Series 2017"; authorizing the issuance of the Bonds; delegating the authority to certain City officials to execute certain documents relating to the sale of the Bonds; approving and authorizing instruments and procedures relating to said Bonds; and enacting other provisions relating to the subject; and providing an effective date. BACKGROUND This bond sale was previously discussed with the Audit/Finance Committee and the City Council on March 7, 2017. At the time of these discussions, staff anticipated refunding $12,980,000 in existing debt as part of this issuance, if market conditions were favorable. Based on the advice of the City's financial advisor, First Southwest Company, market conditions are favorable, and as such, staff requests approval to proceed with the refunding of a portion of the 2007A General Obligation Refunding Bonds. The refunding will not extend the maturity date of the existing debt and it is currently projected to produce approximately $700,000 in present value savings. The bond sale may include up to $560,000 for issuance and escrow costs. In addition, the bond sale includes the issuance of $17,160,000 in General Obligation Bonds (GOs) related to the 2012 and 2014 Bond Elections plus related issuance costs. The GO amount below represents the funding for the fifth and final year of projects approved by the voters in the 2012 Bond Election. 1. Street Improvements - $ 4,000,000 2012 Bond Election Total - $ 4,000,000 The GO amount below represents the funding for the third year of projects approved by the voters in the 2014 Bond Election. 1. Street Reconstructions - $ 2,000,000 2. Miscellaneous Traffic Signals - $ 500,000 3. Miscellaneous Sidewalks - $ 700,000 4. Morse Street Expansion (Loop 288 to Mayhill) - $ 1,650,000 5. Miscellaneous Roadways - $ 100,000 Subtotal - Street Improvements (Proposition 1) $ 4,950,000 City of Denton Page 1 of 3 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-372, Version: 1 6. Fire Station 43 Remodel/Rebuild (Land Acquisition/Design) - $ 6,415,000 7. Communications Center & Criminal Investigations Bureau Relocation - $ 1,795,000 Subtotal - Public Safety Facilities (Proposition 2) $ 8,210,000 2014 Bond Election Total - Total General Obligation Bonds - $13,160,000 $17,160,000 The below chart provides a summary of voter approved bonds including amounts previously issued and those being recommended: Purpose Date Authorized Amount Authorized Amount Heretofore Issued Amount Being Proposed Remaining Balance Streets 11/6/2012 $20,400,000 $16,400,000 $4,000,000 $ - Streets 11/4/2014 $61,710,000 $ 13,340,000 $4,950,000 $43,420,000 Public Safety 11/4/2014 $16,565,000 $ 8,355,000 $8,210,000 $ - Drainage 11/4/2014 $ 8,545,000 $ 5,255,000 $ - $ 3,290,000 Parks 11/4/2014 $11,355,000 $ 4,280,000 $ - $ 7,075,000 Since bond market conditions can change rapidly, staff is recommending that the City Council approve a delegated parameters sale for the GOs. The parameters ordinance sets the following requirements in order to complete the sale of the GOs. - Maximum amount of sale is $30,700,000 - Final stated maturity of February 15, 2037 - Maximum net effective interest rate of 3.50% - Refunding must produce savings of at least 3.00% - Delegation authority ends October 18, 2017 By doing so, City staff will be authorized to execute the sale without additional Council action. Once the exact terms of the transaction are determined, staff will provide the City Council with additional information in an informal staff report. RECOMMENDATION Staff recommends approval of the ordinance. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On March 7, 2017, the Audit/Finance Committee received a presentation on the bond program and Notice of Intent Ordinances. The Audit/Finance Committee unanimously recommended approval to forward the upcoming bond issuance to the City Council for consideration. City of Denton Page 2 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, File #: ID 17-372, Version: 1 On February 23, 2017, the 2014 Bond Oversight Committee received a presentation on the General Obligation bond sale. The Committee unanimously approve the GO bond issuance timeline (2014 Bond Election) be forwarded to the City Council for consideration and approval. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Organizational Excellence Related Goal: 1.1 Manage financial resources in a responsible manner EXHIBITS 1. Preliminary Official Statement 2. Ordinance Respectfully submitted: Chuck Springer, 940-349-8260 Director of Finance Prepared by: Antonio Puente, Jr. Assistant Director of Finance City of Denton Page 3 of 3 Printed on 4/14/2017 povveied by I_egist9i I;, FSCCoiitiriuiriqDisc.losurtServices' 1'R11;1,1MENARl 0 I l( IM, S 1A H 1, I1.. "i' Ratings: A Division of Hilltop 5ecunties. Fitch. (See "Continuing Disclosure oftnHnnintion"herein) Dated April_, 2017 S&P: (See "Other Information - NEW ISSUE - Book -Entry -Only Ratings" herein) In the opinion of Bond Counsel, interest on the Certificates will be excludable from gross income for federal income tax purposes under statutes, regulations, published rulings and court decisions existing on the date thereof, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. THE CERTIFICATES WILL NOT BE DESIGNATED AS "QUALIFIED TAX-EXENIPT OBLIGATIONS" FOR FINANCIAL INSTITUTIONS S94,485,000* CITY OF DENTON, TEXAS i (Denton County) DENTON CERTIFICATES OF OBLIGATION, SERIES 2017 Dated Date: May 1, 2017 Due: February 15, as shown below Interest Accrues from Delivery Date PAYMENT TERMS ... Interest on the $94,485,000* City of Denton, Texas Certificates of Obligation, Series 2017 (the "Certificates") will accrue from the delivery date (the "Delivery Date"), will be payable February 15 and August 15 of each year, commencing February 15, 2018, until maturity or prior redemption, and will be calculated on the basis of a 360 -day year consisting of twelve 30 -day months. The definitive Certificates will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book -Entry -Only System described herein. Beneficial ownership of the Certificates may be acquired in denominations of $5,000 or integral multiples thereof within a maturity. No physical delivery of the Certificates will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Certificates will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Certificates. See "The Obligations - Book -Entry -Only System" herein. The initial Paying Agent/Registrar is BOKF, NA, Dallas, Texas (see "The Obligations - Paying Agent/Registrar"). AUTHORITY FOR ISSUANCE ... The Certificates are issued pursuant to the Constitution and general laws of the State of Texas, (the "State") particularly Subchapter C of Chapter 271, Texas Local Government Code (the Certificate of Obligation Act of 1971), as amended, and Texas Government Code, Chapter 1371, as amended, and constitute direct obligations of the City of Denton, Texas (the "City"), payable from a combination of (i) the levy and collection of a direct annual ad valorem tax, within the limits prescribed by law, on all taxable property within the City, and (ii) a limited pledge of surplus net revenues of the City's Utility System not in excess of $1,000, as provided in the Certificate Ordinance (defined herein) authorizing the Certificates (see "The Obligations - Authority for Issuance"). PURPOSE .. . Proceeds from the sale of the Certificates will be used for (a) acquisition of vehicles and equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's solid waste disposal system; (b) renovations to, and equipping of, existing municipal buildings, including the acquisition and installation of replacement heating, venting and air conditioning equipment, roofing and flooring; (c) acquisition of vehicles and equipment for the fire, police, building inspections, community improvement services, animal services, streets and traffic control, facilities management, and parks and recreation departments; (d) acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to parking facilities; (e) constructing and improving streets, including landscaping, drainage, utility line relocations and the acquisition of land and rights-of-way therefor; (f) acquisition of equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's electric light and power system; 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 projects and said Certificates (see "Plan of Financing"). MATURITY SCHEDULE See page 2 SEPARATE ISSUES ... The Certificates are being offered by the City concurrently with the "City of Denton, Texas General Obligation Refunding and Improvement Bonds, Series 2017" (the "Bonds"), and such Certificates and Bonds are hereinafter sometimes referred to collectively as the "Obligations." The Certificates and Bonds are separate and distinct securities offerings being issued and sold independently except for the common Official Statement, and, while the Obligations share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including the type of obligation being offered, its terms for payment, the security for its payment, the rights of the holders, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY ... The Certificates are offered for delivery when, as and if issued and received by the Initial Purchaser subject to the approving opinion of the Attorney General of Texas and the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, Dallas, Texas (see Appendix C, "Forms ofBond Counsel's Opinions"). DELIVERY ... It is expected that the Certificates will be available for delivery through The Depository Trust Company on June 13, 2017. SEALED BIDS DUE MAY 9, 2017, AT 10:30 AM, CDT** * Preliminary, subject to change. See "Adjustment of Principal Amount and/or Types of Bids" in the Notice of Sale for the Certificates. ** Place and Time of Bid Opening ... The City will accept bids for the sale of the Certificates on a day during the period beginning May 9, 2017 and initially ending June 5, 2017. At least 12 hours prior to the sale of the Certificates, FirstSouthwest, a Division of Hilltop Securities Inc., as Financial Advisor to the City, will communicate, through Parity and Bloomberg, the date and time for submission of bids The Financial Advisor, acting on behalf of the City, shall accept bids up to the time specified in the notice as hereinbefore described. MATURITY SCHEDULE* Principal Interest CUSIP Principal Amount* Maturity Rate Yield Suffix (l) Amount* Maturity $3,985,000 2018 $2,930,000 2033 4,920,000 2019 3,050,000 2034 5,175,000 2020 3,175,000 2035 5,445,000 2021 3,300,000 2036 5,720,000 2022 3,415,000 2037 1,975,000 2023 2,450,000 2038 2,075,000 2024 2,550,000 2039 2,185,000 2025 2,650,000 2040 2,300,000 2026 2,760,000 2041 2,420,000 2027 2,870,000 2042 2,340,000 2028 2,990,000 2043 2,460,000 2029 3,110,000 2044 2,590,000 2030 3,240,000 2045 2,710,000 2031 3,370,000 2046 2,815,000 2032 3,510,000 2047 CUSIP Prefix: 248866 (t) Interest CUSIP Rate Yield Suffix (l) (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Capital IQ on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. Neither of the City or the Financial Advisor shall be responsible for the selection or correctness of the CUSIP numbers set forth herein. REDEMPTION ... The City reserves the right, at its option, to redeem Certificates having stated maturities on and after February 15, 2028, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2027, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Obligations — Optional Redemption"). * Preliminary, subject to change. See "Adjustment of Principal Amount and/or Types of Bids" herein. 2 FSC;Co§,itirlu r't,gDisclos,ure5ervi«s PRELIMINARY OFFICIAL STATEMENT Ratings: A Divikibn of Hilltop 5t urities. Fitch. rr " (See "Continuing Disclosure of tnRor'n,aa"n"herein) Dated April _ , 2017 S&P: " it (See "Other Information - NEW ISSUE - Book -Entry -Only Ratings" herein) In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under statutes, regulations, published rulings and court decisions existing on the date thereof, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. THE BONDS WILL NOT BE DESIGNATED AS "QUALIFIED TAX-EXEMPT OBLIGATIONS" FOR FINANCIAL INSTITUTIONS $29,220,000* CITY OF DENTON, TEXAS (Denton County) D' GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 2017 Dated Date: May 1, 2017 Interest Accrues from Delivery Date Due: February 15, as shown below PAYMENT TERMS ... Interest on the $29,220,000* City of Denton, Texas General Obligation Refunding and Improvement Bonds, Series 2017 (the "Bonds") will accrue from the delivery date (the "Delivery Date"), will be payable August 15 and February 15 of each year, commencing February 15, 2018, until maturity or prior redemption, and will be calculated on the basis of a 360 -day year consisting of twelve 30 -day months. The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book -Entry -Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof within a maturity. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See "The Obligations - Book -Entry -Only System" herein. The initial Paying Agent/Registrar is BOKF, NA, Dallas, Texas (see "The Obligations - Paying Agent/Registrar"). AUTHORITY FOR ISSUANCE ... The Bonds are issued pursuant to the Constitution and general laws of the State of Texas, (the "State") including particularly Texas Government Code, Chapters 1207, 1371 and 1331, as amended, and are direct obligations of the City of Denton, Texas (the "City"), payable from an annual ad valorem tax levied, within the limits prescribed by law, on all taxable property within the City, as provided in the Bond Ordinance (defined herein) authorizing the Bonds (see "The Obligations - Authority for Issuance" and "The Obligations — Security and Source of Payment"). PURPOSE ... Proceeds of the Bonds are expected to be used (i) to refund certain outstanding obligations of the City described on Schedule I attached hereto (the "Refunded Obligations") for debt service savings; (ii) for street improvements and public safety facilities improvements, and (iii) to pay the costs associated with the issuance of the Bonds (see "Plan of Financing"). MATURITY SCHEDULE See page 4 SEPARATE ISSUES ... The Bonds are being offered by the City concurrently with the "City of Denton, Texas Certificates of Obligation, Series 2017" (the "Certificates"), under a common Official Statement, and such Bonds and Certificates are hereinafter sometimes referred to collectively as the "Obligations." The Bonds and Certificates are separate and distinct securities offerings being issued and sold independently except for the common Official Statement, and, while the Obligations share certain common attributes, each issue is separate from the other and should be reviewed and analyzed independently, including the type of obligation being offered, its terms for payment, the security for its payment, the rights of the holders, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and other features. LEGALITY ... The Bonds are offered for delivery when, as and if issued and received by the Initial Purchaser subject to the approving opinion of the Attorney General of Texas and the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, Dallas, Texas (see Appendix C, "Forms of Bond Counsel's Opinions"). DELIVERY ... It is expected that the Bonds will be available for delivery through The Depository Trust Company on June 13, 2017. SEALED BIDS DUE MAY 9, 2017, AT 11:00 AM, CDT** * Preliminary, subject to change. See "Adjustment of Principal Amount and/or Types of Bids" in the Notice of Sale for the Bonds. ** Place and Time of Bid Opening ... The City will accept bids for the sale of the Bonds on a day during the period beginning May 9, 2017 and initially ending June 5, 2017. At least 12 hours prior to the sale of the Bonds, FirstSouthwest, a Division of Hilltop Securities Inc., as Financial Advisor to the City, will communicate, through Parity and Bloomberg, the date and time for submission of bids. The Financial Advisor, acting on behalf of the City, shall accept bids up to the time specified in the notice as hereinbefore described. MATURITY SCHEDULE* CUSIP Prefix: 248866 (1) Principal Interest Initial CUSIP Principal Interest Initial CUSIP Amount* Maturity Rate Yield Suffix Amount* Maturity Rate Yield Suffix $4,020,000 2018 $ 850,000 2028 3,490,000 2019 875,000 2029 2,885,000 2020 900,000 2030 2,985,000 2021 930,000 2031 2,110,000 2022 960,000 2032 730,000 2023 990,000 2033 750,000 2024 1,030,000 2034 775,000 2025 1,065,000 2035 800,000 2026 1,110,000 2036 825,000 2027 1,140,000 2037 (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by S&P Capital IQ on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. Neither of the City or the Financial Advisor shall be responsible for the selection or correctness of the CUSIP numbers set forth herein. REDEMPTION ... The City reserves the right, at its option, to redeem Bonds having stated maturities on and after February 15, 2028, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2027, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Obligations — Optional Redemption"). * Preliminary, subject to change. See "Adjustment of Principal Amount and/or Types of Bids" herein. 4 This Official Statement, which includes the cover pages, Schedule and the Appendices hereto, sloes not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation, or sale. No dealer, broker, salesperson, or other person has been authorized to give information or to make any representation other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon. For purposes of compliance with Rule I5c 2-12 of the Securities and Exchange Commission (the 'Rule ), this document constitutes an Official Statement of the City with respect to the Obligations that has been "deemed final" by the City as of its date except for the omission of no more than the information permitted by the Rule. The information set forth herein has been obtained f om the City and other sources believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as the representation, promise, or guarantee of the Financial Advisor. Any information and expressions of opinion herein contained are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or other matters described herein since the date hereof. See "Other Information - Continuing Disclosure of Information" for a description of the City's undertaking to provide certain information on a continuing basis. Neither the City nor its Financial Advisor make any representation as to the accuracy, completeness, or adequacy of the information supplied by The Depository Trust Company for use in this Official Statement. THIS OFFICIAL STATEMENT CONTAINS "FORWARD-LOOKING" STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. SUCH STATEMENTS MAY INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES, AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE, AND ACHIEVEMENTS TO BE DIFFERENT FROM FUTURE RESULTS, PERFORMANCE, AND ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD- LOOKING STATEMENTS. INVESTORS ARE CAUTIONED THAT THE ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE SET FORTH IN THE FORWARD-LOOKING STATEMENTS. THE OBLIGATIONS ARE EXEMPT FROM REGISTRATION WITH THE SECURITIES AND EXCHANGE COMMISSION AND CONSEQUENTLY HAVE NOT BEEN REGISTERED THEREWITH. THE REGISTRATION, QUALIFICATION, OR EXEMPTION OF THE OBLIGATIONS IN ACCORDANCE WITH APPLICABLE SECURITIES LAW PROVISIONS OF THE JURISDICTION IN WHICH THE OBLIGATIONS HAVE BEEN REGISTERED, QUALIFIED OR EXEMPTED SHOULD NOT BE REGARDED AS A RECOMMENDATION THEREOF. TABLE OF CONTENTS TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL TABLE 13 - MUNICIPAL SALES TAX HISTORY ................... 40 PRELIMINARY OFFICIAL STATEMENT FINANCIAL POLICIES..........................................................40 28 SUMMARY.............................................................6 28 HISTORY.................................................................. 25 TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY..25 INVESTMENTS............................................................. 41 CITY OFFICIALS, STAFF AND CONSULTANTS ..... 8 TABLE 14- CURRENT INVESTMENTS .................................. 42 ELECTED OFFICIALS.............................................................8 SELECTED ADMINISTRATIVE STAFF......................................8 TAX MATTERS ............................................................. 43 CONSULTANTS AND ADVISORS.............................................8 CONTINUING DISCLOSURE OF INFORMATION 45 INTRODUCTION............................................................9 PLAN OF FINANCING...................................................9 THE OBLIGATIONS.....................................................10 TAX INFORMATION...................................................16 TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT...................................................23 TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY.........................................................24 28 TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT 28 HISTORY.................................................................. 25 TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY..25 TABLE 5 - TEN LARGEST TAXPAYERS...............................25 TABLE 6 - ESTIMATED OVERLAPPING TAX DEBT..............26 DEBT INFORMATION.................................................27 TABLE 7 - GENERAL OBLIGATION DEBT SERVICE REQUIREMENTS.......................................................27 TABLE 8 - INTEREST AND SINKING FUND BUDGET PROJECTION............................................................. 28 TABLE 9 - COMPUTATION OF SELF-SUPPORTING DEBT..... 28 TABLE 10 - AUTHORIZED BUT UNISSUED GENERAL OBLIGATION BONDS................................................28 TABLE 11 - OTHER OBLIGATIONS.....................................29 FINANCIAL INFORMATION.....................................38 TABLE 12 - CHANGES IN NET POSITION OF GOVERNMENTAL FUNDS.....................................................................38 TABLE 12A - GENERAL FUND REVENUES AND EXPENDITURE HISTORY.................................................................. 39 OTHER INFORMATION ............................................. 46 RATINGS............................................................................ 46 LITIGATION........................................................................ 46 REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR SALE....................................................................... 46 LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS ..................................................... 47 LEGAL OPINIONS AND NO -LITIGATION CERTIFICATE ........ 47 AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION......................................................... 47 FINANCIAL ADVISOR.......................................................... 48 INITIAL PURCHASER OF THE BONDS ................................... 48 INITIAL PURCHASER OF THE CERTIFICATES ........................ 48 CERTIFICATION OF THE OFFICIAL STATEMENT .................. 48 FORWARD-LOOKING STATEMENTS DISCLAIMER ................ 48 MISCELLANEOUS............................................................... 49 SCHEDULE OF REFUNDED OBLIGATIONS ......... Schedule I APPENDICES GENERAL INFORMATION REGARDING THE CITY ................. A EXCERPTS FROM THE ANNUAL FINANCIAL REPORT .......... B FORMS OF BOND COUNSEL'S OPINIONS ............................. C The cover pages hereof, this page, the schedule, the appendices included herein and any addenda, supplement or amendment hereto, are part of the Preliminary Official Statement. PRELIMINARY OFFICIAL STATEMENT SUMMARY This summary is subject in all respects to the more complete information and definitions contained or incorporated in this Preliminary Official Statement. The offering of the Bonds and Certificates to potential investors is made only by means of this entire Preliminary Official Statement. No person is authorized to detach this summary from this Preliminaiy Official Statement or to otherwise use it without the entire Preliminaiy Official Statement. THE CITY ....................................... The City of Denton (the "City") is a political subdivision and municipal corporation of the State, located in Denton County, Texas. The City covers approximately 97.411 square miles (see "Introduction - Description of the City"). THE BONDS .................................... The $29,220,000* City of Denton General Obligation Refunding and Improvement Bonds, Series 2017 are to mature on February 15 in the years 2018 through 2037 (see "The Obligations - Description of the Obligations"). THE CERTIFICATES ....................... The $94,485,000* City of Denton Certificates of Obligation, Series 2017 are to mature on February 15 in the years 2018 through 2047 (see "The Obligations - Description of the Obligations"). PAYMENT OF INTEREST ................ Interest on the Bonds accrues from the Delivery Date (defined herein) and is payable August 15, 2017 and each February 15 and August 15 thereafter until maturity or prior redemption. Interest on the Certificates accrues from the Delivery Date and is payable February 15, 2018 and each August 15 and February 15 thereafter until maturity or prior redemption (see "The Obligations - Description of the Obligations" and "The Obligations - Optional Redemption"). AUTHORITY FOR ISSUANCE........... The Bonds are issued pursuant to the Constitution and general laws of the State, including particularly Texas Government Code, Chapters 1207, 1371 and 1331, as amended, and an ordinance (the "Authorizing Bond Ordinance") of the City in which the City Council delegated to each of the City Manager, the Deputy City Manager and the Assistant City Manager authority to complete the sale of the Bonds. The terms of the sale will be included in a "Pricing Certificate," which will complete the sale of the Bonds (the Authorizing Bond Ordinance and the Pricing Certificate for the Bonds are jointly referred to as the 'Bond Ordinance") (see "The Obligations - Authority for Issuance"). The Certificates are issued pursuant to the Constitution and general laws of the State, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, and Texas Government Code, Chapter 1371, as amended, and an ordinance (the "Authorizing Certificate Ordinance") of the City in which the City Council delegated to each of the City Manager, the Deputy City Manager and the Assistant City Manager authority to complete the sale of the Certificates. The terms of the sale will be included in a "Pricing Certificate," which will complete the sale of the Certificates (the Authorizing Certificate Ordinance and the Pricing Certificate for the Certificates are jointly referred to as the "Certificate Ordinance") (see "The Obligations - Authority for Issuance"). SECURITY FOR THE BONDS ........... The Bonds constitute direct obligations of the City, payable from a direct annual ad valorem tax levied, within the limits prescribed by law, on all taxable property located within the City (see "The Obligations - Security and Source of Payment"). SECURITY FOR THE CERTIFICATES ................................ The Certificates constitute direct obligations of the City, payable from a combination of (i) a direct annual ad valorem tax levied, within the limits prescribed by law, on all taxable property within the City, and (ii) a limited pledge (not to exceed $1,000) of surplus net revenues of the City's Utility System (see "The Obligations - Security and Source of Payment"). REDEMPTION ................................. The City reserves the right, at its option, to redeem Bonds and Certificates, as the case may be, having stated maturities on and after February 15, 2028, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2027, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption (see "The Obligations - Optional Redemption"). TAx EXEMPTION .............................. In the opinion of Bond Counsel, the interest on the Obligations will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. * Preliminary, subject to change. USE OF PROCEEDS ......................... Proceeds of the Bonds are expected to be used (i) to refund certain outstanding obligations of the City described on Schedule I attached hereto (the "Refunded Obligations") for debt service savings; (ii) for street improvements and public safety facilities improvements, and (iii) to pay the costs associated with the issuance of the Bonds (see "Plan of Financing"). Proceeds from the sale of the Certificates will be used for (a) acquisition of vehicles and equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's solid waste disposal system; (b) renovations to, and equipping of, existing municipal buildings, including the acquisition and installation of replacement heating, venting and air conditioning equipment, roofing and flooring; (c) acquisition of vehicles and equipment for the fire, police, building inspections, community improvement services, animal services, streets and traffic control, facilities management, and parks and recreation departments; (d) acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to parking facilities; (e) constructing and improving streets, including landscaping, drainage, utility line relocations and the acquisition of land and rights-of-way therefor; (f) acquisition of equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's electric light and power system; 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 projects and said Certificates (see "Plan of Financing"). . RATINGS ......................................... The Obligations and the presently outstanding general obligation debt of the City are rated " " by Fitch Ratings ("Fitch") and " " by Standard & Poor's Rating Services, a Standard & Poor's Financial Services LLC business ("S&P"). See "Other Information — Ratings" herein. BooK-ENTRY-ONLY SYSTEM....... The definitive Obligations will be initially registered and delivered only to Cede & Co., the nominee of DTC pursuant to the Book -Entry -Only System described herein. Beneficial ownership of the Obligations may be acquired in denominations of $5,000 or integral multiples thereof within a maturity. No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Obligations will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Obligations (see "The Obligations - Book -Entry -Only System"). PAYMENT RECORD ........................ The City has never defaulted on the payment of its tax -supported indebtedness. SELECTED FINANCIAL INFORMATION Net Net Ratio Net Fiscal Net Taxable Tax Debt Per Capita Tax Debt to Year Taxable Assessed Outstanding Net Funded Net Taxable % of Ended Estimated Assessed Valuation at End of Tax Assessed Total Tax 9/30 Population (1) Valuation (2) Per Capita Fiscal Year (8) Debt Valuation Collections 2013 117,397 $ 6,706,462,587 (3) 57,126 $120,375,588 1,025 1.79% 99.74% 2014 119,158 6,962,293,178 (4) 58,429 123,827,115 1,039 1.78% 99.73% 2015 120,945 7,761,202,411 (5) 64,171 135,879,058 1,123 1.75% 99.61% 2016 122,759 8,424,062,606 68,623 144,036,173 1,173 1.71% 99.40% 2017 124,988 9,117,506,344 (7) 72,947 167,907,663 (9) 1,343 1.84% 96.72% �10� (1) Source: City Officials. (2) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District to the State Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District updates records. Source: Denton Central Appraisal District as of July 22, 2016. (3) Includes tax incremental value of approximately $10,248,781 that is not available for the City's general obligations and debt of City. (4) Includes tax incremental value of approximately $16,931,096 that is not available for the City's general obligations and debt of City. (5) Includes tax incremental value of approximately $35,975,197 that is not available for the City's general obligations and debt of City. (6) Includes tax incremental value of approximately $39,084,154 that is not available for the City's general obligations and debt of City. (7) Includes tax incremental value of approximately $54,744,149 that is not available for the City's general obligations and debt of City. (8) Excludes self -supported general obligation debt. (9) Includes aportion of the Bonds and aportion of the Certificates. Excludes the Refunded Obligations. Preliminary, subject to change. (10) Collections for part year only, through March 1, 2017. ELECTED OFFICIALS CITY OFFICIALS, STAFF AND CONSULTANTS Term City Council Expires Chris Watts May, 2018 Mayor Kevin Roden May, 2017 (i) Councilmember, District 1 Keely Briggs May, 2017 Councilmember, District 2 Kathleen Wazny May, 2017 (3) Councilmember, District 3 Joey Hawkins May, 2017 (3) Councilmember, District 4 Dalton Gregory May, 2018 Councilmember, At Large Place 5 Sara Bagheri May, 2018 Councilmember, At Large Place 6 (1) Term ends in May and may not run for re-election for District 1. (2) Running unopposed for the May 6, 2017 election. (3) Not running for re-election. SELECTED ADMINISTRATIVE STAFF CONSULTANTS AND ADVISORS Name Position Todd Hileman City Manager Bryan Langley Deputy City Manager Jon Fortune Assistant City Manager Chuck Springer Director of Finance Jennifer K. Walters City Secretary Aaron Leal Interim City Attorney Auditors............................................................................................................................................ Pattillo, Brown and Hill, L.L.P. Waco, Texas Bond Counsel............................................................................................................................. McCall, Parkhurst & Horton L.L.P. Dallas, Texas Financial Advisor.............................................................................................. FirstSouthwest, a Division of Hilltop Securities Inc. Fort Worth, Texas For additional information regarding the City, please contact Chuck Springer Laura Alexander Director of Finance David Medanich City of Denton FirstSouthwest, a Division of Hilltop Securities Inc. 215 E. McKinney Street or 777 Main Street, Suite 1200 Denton, Texas 76201 Fort Worth, Texas 76102 (940) 349-8224 (817) 332-9710 8 OFFICIAL STATEMENT RELATING TO CITY OF DENTON, TEXAS $29,220,000* $94,485,000* GENERAL OBLIGATION REFUNDING CERTIFICATES OF OBLIGATION, SERIES 2017 AND IMPROVEMENT BONDS, SERIES 2017 INTRODUCTION This Preliminary Official Statement, which includes the Schedule and Appendices hereto, provides certain information regarding the issuance of $29,220,000* City of Denton. Texas General Obligation Refunding and Improvement Bonds, Series 2017 (the "Bonds") and $94,485,000* City of Denton, Texas Certificates of Obligation, Series 2017 (the "Certificates"). The Bonds and the Certificates (collectively the "Obligations") are separate and distinct securities offerings being authorized for issuance under separate ordinances (the "Bond Ordinance" and the "Certificate Ordinance", respectively, each as defined below, and collectively the "Ordinances") adopted by the City Council of the City, but are being offered and sold pursuant to a common Official Statement, and while the Bonds and Certificates share certain common attributes, each issue is separate and apart from the other and should be reviewed and analyzed independently, including the kind and type of obligation being issued, its terms of payment, the security for its payment, the rights of the holders, the federal, state or local tax consequences of the purchase, ownership or disposition of the Obligations and the covenants and agreements made with respect thereto. The City Council adopted an ordinance on April 18, 2017 authorizing the issuance of the Bonds (the "Authorizing Bond Ordinance"). In the Authorizing Bond Ordinance, as permitted by the provisions of Chapters 1207 and 1371, Texas Government Code, as amended, the City Council delegated the authority to each of the City Manager, the Deputy City Manager and the Assistant City Manager to establish the terms and details of the Bonds and to effect the sale of the Bonds pursuant to a "Pricing Certificate" (the Authorizing Bond Ordinance and the Pricing Certificate for the Bonds are jointly referred to as the "Bond Ordinance"). The City Council adopted an ordinance on April 18, 2017 authorizing the issuance of the Certificates (the "Authorizing Certificate Ordinance"). In the Authorizing Certificate Ordinance, as permitted by the provisions of Chapters 1371, Texas Government Code, as amended, the City Council delegated the authority to each of the City Manager, the Deputy City Manager and the Assistant City Manager to establish the terms and details of the Certificates and to effect the sale of the Certificates pursuant to a "Pricing Certificate" (the Authorizing Certificate Ordinance and the Pricing Certificate for the Certificates are jointly referred to as the "Certificate Ordinance"). Capitalized terms used in this Preliminary Official Statement have the same meanings assigned to such terms in each respective Ordinance, except as otherwise indicated herein. There follows in this Preliminary Official Statement descriptions of the Obligations and certain information regarding the City and its finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document. Copies of such documents may be obtained from the City's Financial Advisor, FirstSouthwest, a Division of Hilltop Securities Inc., Fort Worth, Texas. DESCRIPTION of THE CITY ... The City of Denton, Texas (the "City") is a political subdivision located in Denton County operating as a home -rule city under the laws of the State of Texas and a charter approved by the voters in 1959. The City operates under the Council/Manager form of government where the Mayor and six Councilmembers are elected for staggered two-year terms. The City Council formulates operating policy for the City while the City Manager is the chief administrative officer. The City is approximately 97.411 square miles in area. PLAN OF FINANCING PURPOSE ... Proceeds of the Bonds are expected to be used (i) to refund certain outstanding obligations of the City described on Schedule I attached hereto (the "Refunded Obligations") for debt service savings; (ii) for street improvements and public safety facilities improvements, , and (iii) to pay the costs associated with the issuance of the Bonds. Proceeds from the sale of the Certificates will be used for (a) acquisition of vehicles and equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's solid waste disposal system; (b) renovations to, and equipping of, existing municipal buildings, including the acquisition and installation of replacement heating, venting and air conditioning equipment, roofing and flooring; (c) acquisition of vehicles and equipment for the fire, police, building inspections, community improvement services, animal services, streets and traffic control, facilities management, and parks and recreation departments; (d) acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to parking facilities; (e) constructing and improving streets, including landscaping, drainage, utility line relocations and the acquisition of land and rights-of-way therefor; ,(f) acquisition of equipment for, and acquiring, constructing, installing and equipping additions, extensions, renovations and improvements to, the City's electric light and power system; 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 projects and said Certificates. * Preliminary, subject to change. REFUNDED OBLIGATIONS ... The principal and interest due on the Refunded Obligations are to be paid on the scheduled redemption date of such Refunded Obligations, from funds to be deposited pursuant to an escrow agreement (the "Escrow Agreement") between the City and The Bank of New York Mellon Trust Company, N.A. (the "Escrow Agent"). The Bond Ordinance provides that from the proceeds of the sale of the Bonds received from the Initial Purchasers, together with other funds of the City, if any, the City will deposit with the Escrow Agent the amount necessary to accomplish the discharge and final payment of the Refunded Obligations on their redemption date as described in "Schedule I - Schedule of Refunded Obligations". Such funds will be held by the Escrow Agent in a separate special escrow account (the "Escrow Fund"). FirstSouthwest, acting as financial advisor to the City, will provide a sufficiency certificate (the "Sufficiency Certificate") as to the sufficiency of the funds to be deposited with the Escrow Agent for the redemption of the Refunded Obligations. Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the Refunded Obligations and amounts therein will not be available to pay the Obligations. By deposit of the cash with the Escrow Agent pursuant to the Escrow Agreement, the City will have effected the defeasance of all the Refunded Obligations in accordance with State law and in reliance upon the Sufficiency Certificate. It is the opinion of Bond Counsel that, as a result of such defeasance and in reliance upon the Sufficiency Certificate, the Refunded Obligations will be outstanding only for the purpose of receiving payments from the cash held for such purpose by the Escrow Agent and such Refunded Obligations will not be deemed as being outstanding obligations of the City payable from taxes nor for the purpose of applying any limitation on the issuance of debt, and the City will have no further responsibility with respect to amounts available in the Escrow Funds for the payment of the Refunded Obligations from time to time. THE OBLIGATIONS DESCRIPTION OF THE OBLIGATIONS ... The Obligations are dated May 1, 2017, and mature on February 15 in each of the years and in the amounts shown on page 2 and page 4 hereof. Interest will accrue from the date of initial delivery thereof (the "Delivery Date"), will be computed on the basis of a 360 -day year of twelve 30 -day months, and will be payable on August 15 and February 15 of each year, commencing August 15, 2017 for the Bonds and commencing February 15, 2018 for the Certificates, until maturity or prior redemption. The definitive Obligations will be issued only in fully registered form in any integral multiple of $5,000 for any one maturity and will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book -Entry -Only System described herein. No physical delivery of the Obligations will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Obligations will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Obligations. See "The Obligations - Book -Entry -Only System" herein. AUTHORITY FOR ISSUANCE ... The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Chapters 1207, 1371 and 1331, Texas Government Code, as amended, and the Bond Ordinance. The Certificates are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Subchapter C of Chapter 271, Texas Local Government Code, as amended, and Texas Government Code, Chapter 1371, as amended, and the Certificate Ordinance. SECURITY AND SOURCE OF PAYMENT The Bonds ... The Bonds constitute direct obligations of the City and the principal thereof and interest thereon are payable from an annual ad valorem tax levied by the City, within the limits prescribed by law, upon all taxable property in the City, as provided in the Bond Ordinance. The Certificates ... The Certificates constitute direct obligations of the City, payable from a combination of (i) a direct annual ad valorem tax levied, within the limits prescribed by law, on all taxable property within the City, and (ii) a limited pledge (not to exceed $1,000) of surplus net revenues of the City's Utility System (consisting of the electric system and the waterworks and sewer system). TAx RATE LIMITATION ... All taxable property within the City is subject to the assessment, levy and collection by the City of a continuing, direct annual ad valorem tax sufficient to provide for the payment of principal of and interest on all ad valorem tax debt, including the Obligations, within the limits prescribed by law. Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits its maximum ad valorem tax rate to $2.50 per $100 Taxable Assessed Valuation for all City purposes. The Home Rule Charter of the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 Taxable Assessed Valuation. Administratively, the Attorney General of the State of Texas will permit allocation of $1.50 of the $2.50 maximum tax rate for all general obligation debt, as calculated at the time of issuance and based on 90% tax collection factor. OPTIONAL REDEMPTION ... The City reserves the right, at its option, to redeem the Obligations having stated maturities on and after February 15, 2028 in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2027 or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. If less than all of the Bonds or Certificates are to be redeemed, the City may select the maturities of Bonds or Certificates, as the case may be, to be redeemed. If less than all the Bonds or Certificates of any maturity are to be redeemed, the Paying Agent/Registrar (or DTC while the Bonds 10 or Certificates, as the case may be, are in Book -Entry -Only form) shall determine by lot the Bonds or Certificates, or portions thereof, within such maturity to be redeemed. If a Bond or Certificate (or any portion of the principal sum thereof) shall have been called for redemption and notice of such redemption shall have been given, such Bond or Certificate (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date. With respect to any optional redemption of the Bonds or Certificates, as the case may be, unless certain prerequisites to such redemption required by the respective Ordinance have been met and money sufficient to pay the principal of and premium, if any, and interest on the Bonds or Certificates, as the case may be, to be redeemed will have been received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice may state that said redemption will, at the option of the City, be conditional upon the satisfaction of such prerequisites and receipt of such money by the Paying Agent/Registrar on or prior to the date fixed for such redemption or upon any prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given and such prerequisites to the redemption are not fulfilled, such notice will be of no force and effect, the City will not redeem such Bonds or Certificates, as the case may be, and the Paying Agent/Registrar will give notice in the manner in which the notice of redemption was given, to the effect that the Bonds or Certificates, as the case may be, have not been redeemed. NOTICE of REDEMPTION ... Not less than 30 days prior to a redemption date for the Obligations, the City shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Obligations to be redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN WHETHER OR NOT THE REGISTERED OWNER RECEIVES SUCH NOTICE. IF AN OBLIGATION (OR ANY PORTION OF ITS PRINCIPAL SUM) SHALL HAVE BEEN DULY CALLED FOR REDEMPTION AND NOTICE OF SUCH REDEMPTION DULY GIVEN, THEN UPON THE REDEMPTION DATE SUCH OBLIGATION (OR THE PORTION OF ITS PRINCIPAL SUM TO BE REDEEMED) SHALL BECOME DUE AND PAYABLE, AND, IF MONIES FOR THE PAYMENT OF THE REDEMPTION PRICE ARE HELD FOR THE PURPOSE OF SUCH PAYMENT BY THE PAYING AGENT/REGISTRAR AND ALL OTHER CONDITIONS TO REDEMPTION ARE SATISFIED, INTEREST SHALL CEASE TO ACCRUE AND BE PAYABLE FROM AND AFTER THE REDEMPTION DATE ON THE PRINCIPAL AMOUNT REDEEMED. DEFEASANCE ... The Ordinances provide that any Obligation and the interest thereon shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Obligation") within the meaning of such Ordinance when payment of the principal of such Obligation, plus interest thereon to the due date either (i) shall have been made or caused to be made in accordance 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 City with the Paying Agent/Registrar for the payment of its services until all Defeased Obligations shall have become due and payable, and thereafter the City will have no further responsibility with respect to amounts available to such paying agent (or other financial institution permitted by applicable law) for the payment of such defeased bonds, including any insufficiency therein caused by the failure of such paying agent (or other financial institution permitted by applicable law) to receive payment when due on the Government Obligations. At such time as an Obligation shall be deemed to be a Defeased Obligation hereunder, as aforesaid, such Obligation and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and pledged as provided in the Ordinance, and such principal and interest shall be payable solely from such money or Government Obligations. Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the City also be invested in Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from such Government Obligations received by the Paying Agent/Registrar which is not required for the payment of the Obligations and interest thereon, with respect to which such money has been so deposited, shall be turned over to the City, or deposited as directed in writing to the City. The Ordinances provide that "Government Obligations" means (a) direct, noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (b) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the City Council approves such defeasance, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, (c) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the City Council approves such defeasance, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent and (d) any other then authorized securities or obligations under applicable Texas state law that may be used to defease obligations such as the Obligations. There is no assurance that the current law will not be changed in a manner which would permit investments other than those described above to be made with amounts deposited to defease the Obligations. Because the Ordinances do not contractually limit such investments, registered owners will be deemed to have consented to defeasance with such other investments, notwithstanding the fact that such investments may not be of the same investment quality as those currently permitted under State law. There is no assurance that any particular rating for U.S. Treasury securities used as Government Obligations or the rating for any other Government Obligations will be maintained at any particular rating category. 11 Upon such deposit as described above, such Defeased Obligations shall no longer be regarded to be outstanding obligations payable from ad valorem taxes levied by the City or from the other revenues pledged to their payment in the Ordinances, but will be payable only from the funds and Government Obligations deposited in escrow and will not be considered debt of the City for any purpose. After firm banking and financial arrangements for the discharge and final payment or redemption of the Obligations have been made as described above, all rights of the City to initiate proceedings to call the Obligations for redemption or take any other action amending the terms of the Obligations are extinguished; provided, however, that the right to call the Obligations for redemption is not extinguished if the City: (i) in the proceedings providing for the firm banking and financial arrangements, expressly reserves the right to call the Obligations for redemption; and (ii) gives notice of the reservation of that right to the owners of the Obligations immediately following the making of the firm banking and financial arrangements; (iii) directs that notice of the reservation be included in any redemption notices that it authorizes. Boox-ENTRY-ONLY SYSTEM ... This section describes how ownership of the Obligations is to be transferred and how the principal of, premium, if any, and interest on the Obligations are to be paid to and accredited by DTC while the Obligations are registered in its nominee name. The information in this section concerning DTC and the Book -Entry -Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The City believes the source of such information to be reliable, but takes no responsibility for the accuracy or completeness thereof. The City cannot and does not give any assurance that (1) DTC will distribute payments of debt service on the Obligations, or redemption or other notices, to DTC Participants, (2) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Obligations), or redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or (3) DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC. DTC will act as securities depository for the Obligations. The Obligations will be issued as fully -registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered security certificate will be issued for each maturity of the Obligations in the aggregate principal amount thereof and will be deposited with DTC. DTC, the world's largest securities depository, is a limited -purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor's rating of "AA+". The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc,com and www.dtc.M. Purchases of Obligations under the DTC system must be made by or through Direct Participants, which will receive a credit for the Obligations on DTC's records. The ownership interest of each actual purchaser of each Obligation ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transactions, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owners entered into the transaction. Transfers of ownership interest in the Obligations are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Obligations, except in the event that use of the book -entry system for the Obligations is discontinued. To facilitate subsequent transfers, all Obligations deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Obligations with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Obligations; DTC's records reflect only the identity of the Direct Participant to whose account such Obligations are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. 12 Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Obligations may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Obligations, such as redemptions, tenders, defaults, and proposed amendments to the Obligation documents. For example, Beneficial Owners of Obligations may wish to ascertain that the nominee holding the Obligations for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Obligations within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Obligations unless authorized by a Direct Participant in accordance with DTC's procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Obligations are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payments on the Obligations will be made to DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from the City or the Paying Agent/Registrar on payable dates in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as in the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Paying Agent/Registrar or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment to DTC is the responsibility of the City, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Obligations at any time by giving reasonable notice to the City and the Paying Agent/Registrar. Under such circumstances, in the event that a successor securities depository is not obtained, Obligation certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, Obligations will be printed and delivered. Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that while the Obligations are in the Book -Entry -Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Obligations, but (i) all rights of ownership must be exercised through DTC and the Book -Entry -Only System, and (ii) except as described above, notices that are to be given to registered owners under the Ordinances will be given only to DTC. Information concerning DTC and the Book -Entry -Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the City, the Financial Advisor or the Initial Purchasers. EFFECT OF TERMINATION OF BooK-ENTRY-ONLY SYSTEM ... In the event that the Book -Entry -Only System is discontinued by DTC or the use of the Book -Entry -Only System is discontinued by the City, printed Obligations will be issued to the holders and the Obligations will be subject to transfer, exchange and registration provisions as set forth in the Ordinances and summarized under "The Obligations - Transfer, Exchange and Registration" below. PAYING AGENT/REGISTRAR ... The initial Paying Agent/Registrar for the Bonds and the Certificates is BOKF, NA, Dallas, Texas. In the Ordinances, the City retains the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying Agent/Registrar at all times until the Bonds and Certificates are duly paid and any successor Paying Agent/Registrar shall be a commercial bank, trust company, financial institution or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Bonds and Certificates. Upon any change in the Paying Agent/Registrar for the Bonds and Certificates, the City agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds and Certificates, as applicable, by United States mail, first class, postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. In the event the use of the Book -Entry -Only system is discontinued, principal of the Bonds and Certificates is payable to the registered holder appearing on the registration books of the Paying Agent/Registrar (the "Registered Owner") at the designated corporate trust office of the Paying Agent/Registrar upon surrender of the Bonds and Certificates for payment; provided, however, that so long as Cede & Co. (or other DTC nominee) is the registered owner of the Obligations, all payments will be made as described under "The Obligations - Book -Entry -Only System" herein. Interest on the Bonds and Certificates is payable to the Register Owners appearing on the registration books of the Paying Agent/Registrar at the close of business on the Record Date (identified below) and such interest shall be paid by the Paying Agent/Registrar by check mailed, first class postage prepaid, to the Register Owner or by such other arrangement, acceptable to the Paying Agent/Registrar, requested by and at the risk and 13 expense of the Registered Owner. If the date for the payment of the principal of or interest on the Bonds and Certificates shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the designated corporate office of the Paying Agent/Registrar is located is authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. TRANSFER, EXCHANGE AND REGISTRATION . . . In the event the Book -Entry -Only System should be discontinued, printed Obligations will be delivered to the Registered Owners and thereafter the Obligations may be transferred and exchanged on the registration books of the Paying Agent/Registrar only upon presentation and surrender of such printed Obligations to the Paying Agent/Registrar and such transfer or exchange shall be without expense or service charge to the Registered Owner, except for any tax or other governmental charges required to be paid with respect to such registration, exchange and transfer. Obligations may be assigned by the execution of an assignment form on the Obligations or by other instrument of transfer and assignment acceptable to the Paying Agent/Registrar. New Obligations will be delivered by the Paying Agent/Registrar, in lieu of the Obligations being transferred or exchanged, at the designated office of the Paying Agent/Registrar, or sent by United States mail, first class, postage prepaid, to the new Registered Owner or his designee. To the extent possible, new Obligations issued in an exchange or transfer of Obligations will be delivered to the Registered Owner or assignee of the Registered Owner in not more than three business days after the receipt of the Obligations to be canceled, and the written instrument of transfer or request for exchange duly executed by the Registered Owner or his duly authorized agent, in form satisfactory to the Paying Agent/Registrar. New Obligations registered and delivered in an exchange or transfer shall be in any integral multiple of $5,000 for any one maturity and for a like aggregate principal amount as the Obligations surrendered for exchange or transfer. See "The Obligations—Book-Entry-Only System" herein for a description of the system to be utilized initially in regard to ownership and transferability of the Obligations. Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange any Obligation called for redemption, in whole or in part, within 45 days of the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the Registered Owner of the uncalled balance of an Obligation. RECORD DATE FOR INTEREST PAYMENT ... The record date ("Record Date") for the interest payable on the Bonds and Certificates on any interest payment date means the close of business on the last business day of the month next preceding such interest payment date. In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Registered Owner of a Bond and Certificate appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. AMENDMENTS ... In each Ordinance, the City has reserved the right to amend the Ordinance without the consent of any holder of the respective Obligation for the purpose of amending or supplementing the Ordinance to (i) cure any ambiguity, defect or omission therein that does not materially adversely affect the interests of the holders, (ii) grant additional rights or security for the benefit of the holders, (iii) add events of default as shall not be inconsistent with the provisions of the Ordinance that do not materially adversely affect the interests of the holders, (iv) qualify the Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time in effect or (v) make such other provisions in regard to matters or questions arising under the Ordinance that are not inconsistent with the provisions thereof and which, in the opinion of Bond Counsel for the City, do not materially adversely affect the interests of the holders. Each Ordinance further provides that the holders of the Bonds or Certificates, as applicable, aggregating in principal amount a majority of the outstanding Bonds or Certificates, as the case may be, shall have the right from time to time to approve any amendment not described above to the applicable Ordinance if it is deemed necessary or desirable by the City; provided, however, that without the consent of 100% of the holders in original principal amount of the then outstanding Bonds or Certificates so affected, no amendment may be made for the purpose of. (i) making any change in the maturity of any of the outstanding Bonds or Certificates; (ii) reducing the rate of interest borne by any of the outstanding Bonds or Certificates; (iii) reducing the amount of the principal of, or redemption premium, if any, payable on any outstanding Bonds or Certificates; (iv) modifying the terms of payment of principal or of interest or redemption premium on outstanding Bonds or Certificates, or imposing any condition with respect to such payment; or (v) changing the minimum percentage of the principal amount of the Bonds or Certificates necessary for consent to such amendment. Reference is made to the Ordinances for further provisions relating to the amendment thereof. REMEDIES ... Each Ordinance establishes specific events of default with respect to the respective series of Obligations. If the City defaults in the payment of the principal of or interest on the Bonds or Certificates when due or the City defaults in the observance or performance of any of the covenants, conditions, or obligations of the City, the failure to perform which materially, adversely affects the rights of the owners thereof, including but not limited to, their prospect or ability to be repaid in accordance with the respective Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by any owner to the City, each Ordinance provides that any registered owner of a respective Obligation is entitled to seek a writ of mandamus from a court of proper jurisdiction requiring the City to make such payment or observe and perform such covenants, obligations, or conditions. The issuance of a writ of mandamus may be sought if there is no other available remedy at 14 law to compel performance of the respective Obligations or Ordinance and the City's obligations are not uncertain or disputed. The remedy of mandamus is controlled by equitable principles, so rests with the discretion of the court, but may not be arbitrarily refused. There is no acceleration of maturity of the Obligations in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to year. The Ordinances do not provide for the appointment of a trustee to represent the interest of the owners of the respective Obligations upon any failure of the City to perform in accordance with the terms of the Ordinances, or upon any other condition and accordingly all legal actions to enforce such remedies would have to be undertaken at the initiative of, and be financed by, the Registered Owners. The Texas Supreme Court has ruled in Tooke v. City of Mexia 197 S.W.3d 325 (Tex. 2006) that a waiver of sovereign immunity in a contractual dispute must be provided for by statute in "clear and unambiguous" language. Because it is unclear whether the Texas legislature has effectively waived the City's sovereign immunity from a suit for money damages, owners of Obligations may not be able to bring such a suit against the City for breach of the Obligations or Ordinance covenants in the absence of City action. Chapter 1371, Texas Government Code ("Chapter 1371"), which pertains to the issuance of public securities by issuers such as the City, permits the City to waive sovereign immunity in the proceedings authorizing its debt, but in connection with the issuance of the Obligations, the City has not waived sovereign immunity. Even if a judgment against the City could be obtained, it could not be enforced by direct levy and execution against the City's property. Further, the Registered Owners cannot themselves foreclose on property within the City or sell property within the City to enforce the tax lien on taxable property to pay the principal of and interest on the Bonds or the Certificates. Furthermore, the City is eligible to seek relief from its creditors under Chapter 9 of the U.S. Bankruptcy Code ("Chapter 9"). Although Chapter 9 provides for the recognition of a security interest represented by a specifically pledged source of revenues, the pledge of ad valorem taxes in support of a general obligation of a bankrupt entity is not specifically recognized as a security interest under Chapter 9. Chapter 9 also includes an automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or Obligationholders of an entity which has sought protection under Chapter 9. Therefore, should the City avail itself of Chapter 9 protection from creditors, the ability to enforce would be subject to the approval of the Bankruptcy Court (which could require that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The opinions of Bond Counsel will note that all opinions relative to the enforceability of the Obligations are qualified with respect to the customary rights of debtors relative to their creditors, by principles of governmental immunity, and by general principles of equity which permit the exercise of judicial discretion. Initially, the only Registered Owner of the Bonds and Certificates will be Cede & Co., as DTC's nominee. See "The Obligations - Book -Entry -Only System" herein for a description of the duties of DTC with regard to ownership of the Bonds and Certificates. 15 TAX INFORMATION An VALOREM TAx LAW ... The appraisal of property within the City is the responsibility of the Denton Central Appraisal District (the "Appraisal District"). Excluding agricultural and open -space land, which may be taxed on the basis of productive capacity, the Appraisal District is required under V.T.C.A., Title I, Tax Code, as amended (the "Property Tax Code") to appraise all property within the Appraisal District on the basis of 100% of its market value and is prohibited from applying any assessment ratios. In determining the market value of property, different methods of appraisal may be used, including the cost method of appraisal, the income method of appraisal and the market data comparison method of appraisal, and the method considered most appropriate by the chief appraiser is to be used. State law requires the appraised value of a residence homestead to be based solely on the property's value as a residence homestead, regardless of whether residential use is considered to be the highest and best use of the property. State law further limits the appraised value of a residence homestead for a tax year to an amount that would not exceed the lesser of (1) the market value of the property for the most recent tax year that the market value was determined by the appraisal office or (2) the sum of (a) 10% of the property's appraised value in the preceding tax year, plus (b) the property's appraised value in the preceding tax year, plus (c) the market value of all new improvements to the property. The value placed upon property within the Appraisal District is subject to review by an Appraisal Review Board, consisting of members appointed by the Board of Directors of the Appraisal District. The Appraisal District is required to review the value of property within the Appraisal District at least every three years. The City may require annual review at its own expense, and is entitled to challenge the determination of appraised value of property within the City by petition filed with the Appraisal Review Board. Reference is made to the Property Tax Code, for identification of property subject to taxation; property exempt or which may be exempted from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the procedures and limitations applicable to the levy and collection of ad valorem taxes. Article VIII of the State Constitution ("Article VIII") and State law provide for certain exemptions from property taxes, the valuation of agricultural and open -space lands at productivity value, and the exemption of certain personal property from ad valorem taxation. Under Section 1-b, Article VIII, and State law, the governing body of a political subdivision, at its option, may grant an exemption of not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older and the disabled from all ad valorem taxes thereafter levied by the political subdivision. Once authorized, such exemption may be repealed or decreased or increased in amount (i) by the governing body of the political subdivision or (ii) by a favorable vote of a majority of the qualified voters at an election called by the governing body of the political subdivision, which election must be called upon receipt of a petition signed by at least 20% of the number of qualified voters who voted in the preceding election of the political subdivision. In the case of a decrease, the amount of the exemption may not be reduced to less than $3,000 of the market value. The surviving spouse of an individual who qualifies for the foregoing exemption for the residence homestead of a person 65 or older (but not the disabled) is entitled to an exemption for the same property in an amount equal to that of the exemption for which the deceased spouse qualified if (i) the deceased spouse died in a year in which the deceased spouse qualified for the exemption, (ii) the surviving spouse was at least 55 years of age at the time of the death of the individual's spouse and (iii) the property was the residence homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse. In addition to any other exemptions provided by the Property Tax Code, the governing body of a political subdivision, at its option, may grant an exemption of up to 20% of the market value of residence homesteads, with a minimum exemption of $5,000. In the case of residence homestead exemptions granted under Section 1-b, Article VIII, ad valorem taxes may continue to be levied against the value of homesteads exempted where ad valorem taxes have previously been pledged for the payment of debt if cessation of the levy would impair the obligation of the contract by which the debt was created. Under Article VIII and State law, the governing body of a county, municipality or junior college district may provide for a freeze on total amount of ad valorem taxes levied on the residence homestead of a disabled person or persons 65 years of age or older above the amount of tax imposed in the year such residence qualified for such exemption. Also, upon receipt of a petition signed by five percent of the registered voters of the county, municipality or junior college district, an election must be held to determine by majority vote whether to establish such a limitation on taxes paid on residence homesteads of persons 65 years of age or who are disabled. Upon providing for such exemption, the total amount of taxes imposed on such homestead cannot be increased except for improvements (other than maintenance, repairs or improvements required to comply with governmental requirements) and such freeze is transferable to a different residence homestead. Also, a surviving spouse of a taxpayer who qualifies for the freeze on ad valorem taxes is entitled to the same exemption so long as the property was the residence homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse and the spouse was at least 55 years of age at the time of the death of the individual's spouse. Once established such freeze cannot be repealed or rescinded. 16 State law and Section 2, Article VIII, mandate an additional property tax exemption for disabled veterans or the surviving spouse or children of a deceased veteran who died while on active duty in the armed forces; the exemption applies to either real or personal property with the amount of assessed valuation exempted ranging from $5,000 to a maximum of $12,000, dependent upon the degree of disability or whether the exemption is applicable to a surviving spouse or children; provided, however, that beginning in the 2009 tax year, a disabled veteran who receives from the United States Department of Veterans Affairs or its successor 100 percent disability compensation due to a service -connected disability and a rating of 100 percent disabled or of individual unemployability is entitled to an exemption from taxation of the total appraised value of the veteran's residence homestead. In addition, effective January 1, 2012, and subject to certain conditions, surviving spouses of a deceased veteran who had received a disability rating of 100% will be entitled to receive a residential homestead exemption equal to the exemption received by the deceased spouse until such surviving spouse remarries. Article VIII provides that eligible owners of both agricultural land (Section 1-d) and open -space land (Section 1-d-1), including open -space land devoted to farm or ranch purposes or open -space land devoted to timber production, may elect to have such property appraised for property taxation on the basis of its productive capacity. The same land may not be qualified under both Section 1-d and 1-d-1. Nonbusiness personal property, such as automobiles or light trucks, are exempt from ad valorem taxation unless the governing body of a political subdivision elects to tax this property. Boats owned as nonbusiness property are exempt from ad valorem taxation. Article VIII, Section 1-j, provides for "freeport property" to be exempted from ad valorem taxation. Freeport property is defined as goods detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication. Notwithstanding such exemption, counties, school districts, junior college districts and cities may tax such tangible personal property provided official action to tax the same was taken before April 1, 1990. Decisions to continue to tax may be reversed in the future; decisions to exempt freeport property are not subject to reversal. Article VIII, Section 1-n of the Texas Constitution provides for the exemption from taxation of "goods -in -transit." "Goods -in - transit" is defined by Section 11.253 of the Property Tax Code, as personal property acquired or imported into Texas and transported to another location in the State or outside of the State within 175 days of the date the property was acquired or imported into Texas. The exemption excludes oil, natural gas, petroleum products, aircraft and special inventory, including motor vehicle, vessel and out -board motor, heavy equipment and manufactured housing inventory. Section 11.253 permits local governmental entities, on a local option basis, to take official action by January 1 of the year preceding a tax year, after holding a public hearing, to tax "goods -in -transit" during the following tax year. After taking such official action, the goods -in -transit remain subject to taxation by the local governmental entity until the governing body of the governmental entity rescinds or repeals its previous actions to tax goods -in -transit. A taxpayer may only receive either the freeport exemption or the "goods -in - transit" exemption for items of personal property. The City or Denton County may create one or more tax increment financing districts ("TIF") within the City or Denton County, as applicable, and freeze the taxable values of property in the TIF at the value at the time of its creation. Other overlapping taxing units levying taxes in the TIF may agree to contribute all or part of future ad valorem taxes levied and collected against the value of property in the TIF in excess of the "frozen values" to pay or finance the costs of certain public improvements in the TIF. Taxes levied by the City against the values of real property in the TIF in excess of the "frozen" value are not available for general city use but are restricted to paying or financing "project costs" within the TIF. The City also may enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct certain improvements on its property. The City in turn agrees not to levy a tax on all or part of the increased value attributable to the improvements until the expiration of the agreement. The abatement agreement could last for a period of up to 10 years. The City has active reinvestment zones for tax abatements and tax increment financing zones for tax increment financing purposes. See "Tax Information - Tax Abatement Policy" and "- Tax Increment Financing" and "Table 1 - Valuation, Exemptions and General Obligation Debt". The City is also authorized, pursuant to Chapter 380, Texas Local Government Code, as amended ("Chapter 380"), to establish programs to promote state or local economic development and to stimulate business and commercial activity in the City. In accordance with a program established pursuant to Chapter 380, the City may make loans or grants of public funds for economic development purposes, however no obligations secured by ad valorem taxes may be issued for such purposes unless approved by voters of the City. The City has entered into several Chapter 380 Agreements. See "Tax Information - Chapter 380 Agreements". EFFECTIVE TAx RATE AND ROLLBACK TAx RATE ... Under the current Property Tax Code a governing body of a taxing unit is required to adopt its annual tax rate per $100 taxable value for the unit before the later of September 30 or the 60th day after the date the certified appraisal roll is received by the taxing unit, and a failure to adopt a tax rate by such required date will result in the tax rate for the taxing unit for the tax year to be the lower of the effective tax rate calculated for that tax year or the tax rate adopted by the taxing unit for the preceding tax year. By each September 1 or as soon thereafter as practicable, the City Council adopts a tax rate per $100 taxable value for the current year. The tax rate consists of two components: (1) a rate for funding of maintenance and operation expenditures, and (2) a rate for debt service. 17 Under the Property Tax Code, the City must annually calculate and publicize its "effective tax rate" and "rollback tax rate". The City Council may not adopt a tax rate that exceeds the lower of the effective tax rate or the rollback tax rate until it has held two public hearings on the proposed increase following notice to the taxpayers and otherwise complied with the Property Tax Code. If the adopted tax rate exceeds the rollback tax rate the qualified voters of the City by petition may require that an election be held to determine whether or not to reduce the tax rate adopted for the current year to the rollback tax rate. "Effective tax rate" means the rate that will produce last year's total tax levy (adjusted) from this year's total taxable values (adjusted). "Adjusted" means lost values are not included in the calculation of last year's taxes and new values are not included in this year's taxable values. "Rollback tax rate" means the rate that will produce last year's maintenance and operation tax levy (adjusted) from this year's values (adjusted) multiplied by 1.08 plus a rate that will produce this year's debt service from this year's values (unadjusted) divided by the anticipated tax collection rate. The Property Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize an additional one-half cent sales tax on retail sales of taxable items. If the additional tax is levied, the effective tax rate and the rollback tax rate calculations are required to be offset by the revenue that will be generated by the sales tax in the current year. Reference is made to the Property Tax Code for definitive requirements for the levy and collection of ad valorem taxes and the calculation of the various defined tax rates. PROPERTY ASSESSMENT AND TAX PAYMENT ... Property within the City is generally assessed as of January I of each year. Business inventory may, at the option of the taxpayer, be assessed as of September 1. Oil and gas reserves are assessed on the basis of a valuation process that uses pricing information contained in the most recently published Early Release Overview of the Annual Energy Outlook published by the United States Energy Information Administration, as well as appraisal formulas developed by the State Comptroller of Public Accounts. Taxes become due October 1 of the same year, and become delinquent on February 1 of the following year. Taxpayers 65 years old or older are permitted by State law to pay taxes on homesteads in four installments with the first due on February 1 of each year and the final installment due on August 1. PENALTIES AND INTEREST ... Charges for penalty and interest on the unpaid balance of delinquent taxes are made as follows: After July, the penalty remains at 12%, and interest accrues at a rate of one percent (1%) for each month or portion of a month the tax remains unpaid. A delinquent tax continues to incur the penalty interest as long as the tax remains unpaid, regardless of whether a judgment for the delinquent tax has been rendered. The purpose of imposing such interest is to compensate the taxing unit for revenue lost because of the delinquency. In addition, if an account is delinquent in July, an attorney's collection fee of up to 20% may be added to the total tax penalty and interest charge. Under certain circumstances, taxes which become delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of 8% per annum with no additional penalties or interest assessed. In general, property subject to the City's lien may be sold, in whole or in parcels, pursuant to court order to collect the amounts due. Federal law does not allow for the collection of penalty and interest against an estate in bankruptcy. Federal bankruptcy law provides that an automatic stay of action by creditors and other entities, including governmental units, goes into effect with the filing of any petition in bankruptcy. The automatic stay prevents governmental units from foreclosing on property and prevents liens for post-petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In many cases post-petition taxes are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court. PENDING LEGISLATION ... The Texas Legislature is currently in session for its 85th Regular Session (the "Regular Session"), which ends on May 29, 2017. While in session, the Texas Legislature may consider bills which could have a direct impact on the City and its operations, including the levying and collection of ad valorem taxes by the City. The City makes no representations or predictions concerning the substance or effect of any legislation that may be proposed and ultimately passed in the Regular Session or any special session that may convene after the end of the Regular Session, or how any such legislation would affect the financial condition of the City or its operations. 18 Cumulative Cumulative Month Penalty Interest Total February 6% 1% 7% March 7 2 9 April 8 3 11 May 9 4 13 June 10 5 15 July 12 6 18 After July, the penalty remains at 12%, and interest accrues at a rate of one percent (1%) for each month or portion of a month the tax remains unpaid. A delinquent tax continues to incur the penalty interest as long as the tax remains unpaid, regardless of whether a judgment for the delinquent tax has been rendered. The purpose of imposing such interest is to compensate the taxing unit for revenue lost because of the delinquency. In addition, if an account is delinquent in July, an attorney's collection fee of up to 20% may be added to the total tax penalty and interest charge. Under certain circumstances, taxes which become delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of 8% per annum with no additional penalties or interest assessed. In general, property subject to the City's lien may be sold, in whole or in parcels, pursuant to court order to collect the amounts due. Federal law does not allow for the collection of penalty and interest against an estate in bankruptcy. Federal bankruptcy law provides that an automatic stay of action by creditors and other entities, including governmental units, goes into effect with the filing of any petition in bankruptcy. The automatic stay prevents governmental units from foreclosing on property and prevents liens for post-petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In many cases post-petition taxes are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court. PENDING LEGISLATION ... The Texas Legislature is currently in session for its 85th Regular Session (the "Regular Session"), which ends on May 29, 2017. While in session, the Texas Legislature may consider bills which could have a direct impact on the City and its operations, including the levying and collection of ad valorem taxes by the City. The City makes no representations or predictions concerning the substance or effect of any legislation that may be proposed and ultimately passed in the Regular Session or any special session that may convene after the end of the Regular Session, or how any such legislation would affect the financial condition of the City or its operations. 18 CITY APPLICATION OF TAX CODE ... The City grants an exemption to the market value of the residence homestead of persons 65 years of age or older of $50,000. Disabled taxpayers also receive a $50,000 exemption. The City grants an additional one-half of one percent, or a minimum of $5,000 exemption of the market value of residence homesteads. See Table 1 for a listing of the amounts of the exemptions described above. Ad valorem taxes are not levied by the City against the exempt value of residence homesteads for the payment of debt. The City does not tax nonbusiness personal property. Denton County began collecting taxes for the City during the fiscal year 2006-07. The City does not allow split payments, and discounts are not allowed. The City does not tax freeport property. The City collects the additional one-half cent sales tax for reduction of ad valorem taxes. The City does tax "goods -in -transit". The City has not adopted the tax freeze for citizens who are disabled or are 65 years of age or older. However, the City has received a qualifying petition of the registered voters of the City which requires the City to hold an election to determine by majority vote whether to establish such a limitation on taxes paid on residence homesteads of disabled persons or persons 65 years of age or older. Such election will be held May 6, 2017. The City has adopted a tax abatement policy. The City participates in two tax increment reinvestment zones, which were created in 2010 and 2012. TAX INCREMENT FINANCING ... The City created Tax Increment Reinvestment Zone Number One (known as the Downtown TIF) in 2010. The TIF will expire in 2039 and reflects only the City's participation of: 100% for years 1-5; 95% for years 6-10; 90% for years 11-20; and 85% for years 21-30. According to Denton Central Appraisal District "DCAD" supplemental figures, the 2016 total appraised valuation of taxable real property in TIRZ Number One was $150.0 million. This represents a $22.8 million increase from the 2015 supplemental value of $127.2 million. Since its inception, the value of the TIRZ has increased $56.7 million, which represents a 71.4% increase in valuation. The City created Tax Increment Reinvestment Zone Number Two (known as the Westpark TIRZ) in 2012 to provide the public infrastructure necessary to encourage development in the largest industrially zoned area (Westpark) in the City. The 2012 certified base value of Westpark TIRZ, according to the Denton Central Appraisal District, is $119,458. The estimated revenue to be generated by the TIRZ is approximately $14.3 million over a 25 year period for infrastructure improvements. The City will contribute $10.1 million and Denton County will contribute $4.2 million into the Westpark TIRZ fund. According to DCAD supplemental figures, the 2016 total appraised valuation of taxable real property in TIRZ Number Two was $2.4 million. This is a $2.3 million increase from the 2012 base value of 119,458. PUBLIC IMPROVEMENT DISTRICTS ... The City created Rayzor Ranch Public Improvement District No. 1 (the "District") in 2014 for the undertaking and financing of public improvements authorized by Chapter 372 of the Texas Local Government Code. The project is located on the City's northern sector, east of Interstate 35, and encompasses approximately 229.693 contiguous acres. The estimated cost of the proposed public improvements total $40 million, which may be paid for with special assessments levied on property within the District. The authorized improvement costs will be apportioned 100% to the District. The method of assessment will impose equal shares of the cost of the proposed public improvements on parcels that are similarly benefited. No City property will be assessed, and the City will not be obligated to pay any assessments. TAX ABATEMENT POLICY ... The City has a tax abatement and incentive policy; the most recent version was adopted in 2016. In 1990, the City council adopted a resolution setting guidelines and criteria for granting abatements in reinvestment zones created within the City. These guidelines specifically note that incentives are limited to companies which create new wealth and do not adversely affect existing businesses operating within the City. The City Council has approved the following tax abatement agreements: • In 2010, a 65% tax abatement agreement for a term of five years was granted to Target Corporation for its 400,000 square foot frozen and refrigerated food distribution center. Target opened in March 2013 and employs 115 to 150 area residents. • In 2011, a 40% tax abatement agreement for a term of five years was granted to Peerless Manufacturing for its 80,000 square foot, $16 million manufacturing facility. Peerless is an existing Denton business that consolidated other 19 manufacturing operations to Denton. They completed construction of an 80,000 square foot manufacturing facility in October 2013. CECO Environmental purchased Peerless in late 2015. CECO leases all of its global manufacturing facilities, preferring 5 -7 -year leases to facility ownership and keeping its equity active in the production process. Consistent with its structure, CECO completed the sale of its Denton Peerless facility in June 2016. Consequently, the Tax Abatement with Peerless Manufacturing was terminated in 2016. In 2013, a 65% tax abatement agreement for a term of four years was granted to Tetra Pak Materials LP for expanding their facility and relocating their corporate headquarter operations from Chicago to Denton. The company manufactures, processes, packages and distributes liquid foods all over the globe. The current facility comprises approximately 220,000 square feet. The increase in real and business personal property valuation of the proposed project expansion is estimated at $10.7 million. Tetra Pak Materials expects to create a total of thirty new jobs with this expansion. The company received their Certificate of Occupancy in February 2015. In 2015, a 70% tax abatement for a term of eight years was granted to Peterbilt Motors for a 17,500 square foot expansion of their current facility to improve material flow from trucks into the expanded metering center. Peterbilt's growth in 2014 has resulted in a 20% increase in employment and a 32% increase in production levels. These increases have also been the driving force behind similar growth of other businesses in Denton that support Peterbilt. This project received its Certificate of Occupancy for the expansion in February 2016. The final phase of this project included a storage and retrieval system for painted parts to help balance the product flow from paint to cab trim; it was completed in October 2016. Also, in 2016, the existing Agreement was amended to add the construction and equipping of a 102,000 square -foot stand-alone building north of the existing plant. This $30 million dollar investment will provide space for a new cab product and will improve operational efficiencies; the building received its CO in December 2016. In 2016, West Gate Business Park received a 60% tax abatement for 10 years on improvements only to include Buildings 2 and 3 in the business park, which brings new Class A industrial/manufacturing space to Denton. West Gate could receive an additional 10% abatement for the location of a supplier to an existing primary industry and/or an additional 5% for the location of a national headquarters for a total abatement of up to 75%. The abatement will initiate the year following the year in which building 2 receives a CO. CHAPTER 380 AGREEMENTS ... The City has also entered into several Chapter 380 agreements. Each agreement is based on the project's contribution in either sales or property tax revenue. The City Council has approved the following Chapter 380 agreements: • In 2001, an agreement was approved for the 450,000 square foot, $50 million Denton Crossing retail center. The grantee receives one-third of the City sales tax generated by the project for a maximum of fifteen years as reimbursement for public improvement costs related to the project. The project was completed and the Chapter 380 Grant was initiated in 2005. The agreement will terminate in the spring of 2020. • In 2004, an agreement was approved for Teasley Partners for an urban style mixed-use development. The grantee may receive one-third of the City sales tax generated by the project for a maximum of fifteen years as reimbursement for public improvement costs related to the project. The project has not been completed. Although a new hotel and some residential units have been completed, no qualifying retail has been constructed. • In 2004, an agreement was approved for Unicorn Lake, an urban style mixed-use development. The grantee receives one-third of the City sales tax generated by the project for a maximum of fifteen years as reimbursement for public improvement costs related to the project. BJs Restaurant, Blue Ginger Japanese Bistro, Rising Sun Cafe, Chuy's and Bone Daddy's represent some of the businesses that have located in the development. Urban Square Apartments completed construction last fall and features 205 units. The agreement will terminate in 2024. • In 2007, an agreement was approved for Allegiance Hillview for the Rayzor Ranch mixed-use development. The 410 - acre project will have over 1 million square feet of retail and will be built in two phases. The agreement provides a sales tax reimbursement of 50% of the City sales taxes generated by the project for public improvement costs, which include the widening of a state highway that bisects the project. The grantee will receive a maximum of $20 million over a 15 year term for phase one and a maximum of $48 million over a term of 20 years for phase two. Rayzor Ranch Marketplace (north side of the development) has completed approximately 600,000 square feet of retail and commercial space. Some of the stores in the development include: Guitar Center and Taco Cabana. In 2016, Rayzor Ranch Marketplace was sold to FidCal/Fidelis Realty Partners (Rayzor Ranch 380 Associates). Construction is underway for the Rayzor Ranch Town Center located on the south side of the development. Heritage Trail Boulevard has been constructed to allow access to the next phases. Chili's, Raising Cane,WinCo Foods, In -N - Out Burger, Chipotle, and Firehouse Subs are now open. An 11 -story, 318 -room Embassy Suites hotel and 70,000 square foot Convention Center are planned to open in November 2017. An additional 15% sales tax rebate on the Rayzor Ranch Town Center and Marketplace have been added to offset the hotel and convention center until $5 million is reached. • In 2010, an agreement was approved for Grand Mesa, contractor for Schlumberger, equal to 50% of new property tax revenue generated for their 150,000 square foot regional maintenance facility. The agreement was assigned to Schlumberger Technology Corporation in 2012. Agreement thresholds require maintaining $5 million in real property improvements and business personal property valuation and the creation of 80 jobs with average wage of $45,000. The term of the agreement is seven years and will terminate in 2017. • In 2011, an agreement was approved for a major renovation of the Golden Triangle Mall. A threshold of a minimum $45 million must be invested into the property for the new owners to receive a 50% share of the sales tax resulting from 20 the renovations. The amended agreement allowed Golden Triangle Mall until October 1, 2015 to reach its investment threshold, which it did. The term of the agreement will terminate in 20 years. Exterior entrance updates, a new food court, pylon signs and wayfinding have been constructed as part of the second phase of the redevelopment. The Golden Triangle Mall J.C. Penney was one of the sites selected to include a Sephora and the Disney Store within the department store. An international retailer, H&M, and Francesca's opened in 2015. Bath and Body Works and Victoria's Secret expanded within the mall in 2016. In 2012, an agreement was approved for Mayday Manufacturing/Tailwind Technologies. The company manufactures precision bushings, sleeves, pins, and other machine parts used in the aerospace industry. Mayday subsidiary, High Tech Metal Refinishing is collocated with Mayday and provides metal finishing processes for Mayday products and for additional customers. The company purchased an 80,000 square foot facility in 2012 and completed the 15,000 square foot expansion of the facility at the close of 2013. The company received a 75%, ten-year tax rebate on increased valuation of at least $3 million over the base value. In 2015, an agreement was granted to West Gate Business Park (WGBP). The industrial development received a 70% rebate of City ad valorem taxes attributable to Improvements only for a period of ten years. The grant also included a one-time payment in the amount of $50,000 An amendment in 2016 applies the rebate to Building 1 only, while the planned Buildings 2 and 3 will be covered under a tax abatement. In 2015, a grant agreement was awarded to Business Air. The grant is equal to 70% of the increase in property tax revenues on the improvements to the building and new business personal property up to a maximum of $9.5 million in increased valuation for a period of two years. The company may extend the length of this grant by attracting additional investment in the form business aircraft based at its facilities at the Denton Enterprise Airport by specified date and investment level thresholds. In addition to a grant extension, Business Air would receive five percent of the increase in taxable valuation attributable to these new business aircraft for the duration of the grant extension. Business Air is a full service FBO and certified FAR 135 Air Carrier providing fuel, hangar, charter, and aircraft management services to corporate and private clients at the Denton Enterprise Airport. The company is expanding with plans to build a new 24,000 square foot hangar with an additional 4,000 square feet of office space. The hangar space should allow the addition of 10 corporate aircraft with values ranging from $1.5 to $10 million per aircraft. In addition to the hangar, Business Air will be purchasing a corporate aircraft to be based at the airport for the exclusive use of providing air taxi service to the area. In 2015, an agreement was approved for Victor Technologies, a global manufacturer of gas control and specialty welding solutions. The original San Francisco manufacturing operations were relocated to their new headquarters in Denton in the mid-1960s. Victor Technologies has expanded its existing facility, including approximately 30,000 square feet of new Research and Development space Along with a new 185,400 square foot warehouse and remodeled parking lots. Victor has approximately 500 employees at the facility. Over the next three years, Victor is expected to create an additional 100 new jobs. Victor Technologies received an incentive equal to 65% of the increase in the City's ad valorem taxes for seven years while maintaining a minimum of 85 percent of new jobs created with an average wage of $28.81 per hour. In 2015, an incentive was awarded to WinCo Foods for a $135 million, 800,000+/- square foot distribution facility located on approximately 77 acres in the Westpark TIRZ. The project received its CO in January 2017 and is expected to create 165 jobs with an annual payroll of around $7.2 million. The Agreement accomplishes two objectives: (1) full reimbursement of the cost of Phase 1 improvements using a combination of funding mechanisms; and (2) after full reimbursement, an economic development incentive of 60% of the City's ad valorem tax revenue for a period of four years following full reimbursement of Phase 1 improvements. It is anticipated that full reimbursement will occur in approximately four years and will be an approximately $6.5 million. The first year after full reimbursement, the second term of the grant agreement shall commence, and will include the following: a 60% rebate of the City's ad valorem revenue for a period of four years, for an estimated total incentive of $1.7 million. In 2015, an agreement was granted to the Railyard downtown project that is located in the Downtown TIF, Downtown Implementation Plan "DTIP" and Transit Oriented Development "TOD" areas. Rail Yard Partners, LTD. renovated an existing 28,000 square foot building as a part of a larger transit -oriented catalyst project. They invested an initial $12 million in the co -working and mixed-use space and will receive a total incentive of $380,000 over five years from the Downtown TIF revenue. The project involves a Commercial Lease Agreement with Rail Yard Partners, LTD for Stoke Denton, a 9,000 square foot entrepreneur center that provides coworking and office space, education and mentorship, and community for Denton's technology focused businesses The Commercial Lease Agreement is a five year lease at $9.75 per square foot for year one, with an approximate 3.7% increase in the cost annually thereafter, in addition to operating expenses including the City's pro rata share of real estate taxes, insurance, common area maintenance, and operating expenses. In 2015 an incentive was awarded to Buc-ee's Travel Center that will include an approximately 53,000 square foot retail store, fuel stations, car wash and peripheral development along I -35E. The incentive reimburses the developer for public infrastructure improvements and other neighborhood/public amenities. The proposed development has resulted in the Texas Department of Transportation "TxDOT" advancing several mobility improvements to the intersections of Loop 288/Lillian Miller and I -35E, Mayhill Road and I -35E, and Brinker Road and I -35E. These improvements will enhance mobility and address traffic congestion and will be completed in the spring of 2018. In order to facilitate these improvements, TxDOT requires a local funding match of $2 million. The developer will fund the $2 million, to be reimbursed as a part of the incentive agreement. Additionally, the developer will incur 21 approximately $5.2 million in public infrastructure costs, including water, wastewater, storm sewer, right-of-way dedication, and constructing a new city street. The City has granted an incentive of 50% sales tax rebate for 25 years, on the Buc-ee's parcel as well as the outparcels. The first phase consists of 50% for 5 years for infrastructure improvements. The second phase grants a 50% sales tax rebate for the Buc-ee's travel center, retail and sit down restaurants; and 25% on remaining fast food and service. In 2015 an incentive was awarded to O'Reilly Hotel Partners Denton's "OHPD" for a convention center and hotel. Development plans include the construction of a 318 -room Embassy Suites hotel, an approximately 70,000 square foot convention center, and a Houlihan's restaurant. The anticipated convention center meeting space is approximately 37,850 square feet and would accommodate conventions with up to 650 participants with a Grand Banquet room that will hold up to 1,750 people for banquet -style events. The hotel and convention center will be managed by O'Reilly Hospitality Management "OHM". The convention center and hotel will be located in the Rayzor Ranch Town Center. As a major anchor for the Town Center, the convention center and hotel can capitalize on the synergy associated with the planned shopping, entertainment, and restaurants located nearby. The facility is under construction and scheduled to open in November 2017. The agreement includes a 100% rebate of the ad valorem tax, hotel occupancy tax, and sales tax generated by the project. The term is for a maximum of 25 years or until the combined principal amount of $28 million and interest payment of $26 million, for a total aggregate amount of $54 million, is reached, whichever comes first. The incentive also includes 100% of the construction sales and use tax up to $850,000, at which time the grant will be reduced to 50%. In 2015, US Aviation Group was awarded a three-year, 70% incentive on the increment of improvements and new business personal property to support the expansion of its commercial pilot and Defense Department contract pilot training activities. USAG invested about $10.7 million in an expansion of its existing flight simulation training space as well as the purchase of additional simulation equipment and aircraft. In 2016, Sally Beauty Supply, LLC was awarded a three-year, 50% incentive on the increment of improvements to its facility at 3900 Morse Street in Denton. Sally's international corporate headquarters has been located in Denton since 1982, and the company has more than 5,000 stores and 10 distribution centers worldwide. The improvements at Morse Street will allow Sally Beauty to house 80 new or relocated employees. 22 TABLE 1 - VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT 2016/17 Market Valuation Established by Denton Central Appraisal District Less Exemptions/Reductions at 100% Market Value: Residence Homestead Exemptions $ 88,848,080 Over 65 Exemptions 327,388,062 Disabled Persons Exemptions 2,444,485 Disabled Veterans Exemptions 48,047,888 Agricultural Land Use Productivity 304,254,344 Historical/Other Exemptions 4,502,078 Freeport Exemptions 208,186,573 Abatement Exemptions 131,784,454 Police Patrol Vehicle Exemptions 233,221 Pollution Exemptions 17,907,977 Homestead Cap Adjustment 96,808,909 2016/17 Taxable Assessed Valuation (as of 7-22-2016) 2016/17 Incremental Taxable Assessed Value of Real Property within Reinvestment Zones 2016/17 Net Taxable Assessed Valuation available for General Obligations and Debt of City (as of 7-22-16) City Funded Debt Payable from Ad Valorem Taxes General Obligation Bonds (as of 3-1-17) $ 216,840,000 (1) Certificates of Obligation (as of 3-1-17) 389,670,000 Tax and Utility System Revenue Debt (as of 3-1-17) 36,435,000 The Bonds 29,220,000 (2) The Certificates 94,485,000 (2) Funded Debt Payable from Ad Valorem Taxes Less Self -Supporting General Obligation Debt (3) $10,402,656,564 1,230,406,071 $ 9,172,250,493 (54,744,149) $ 9,117,506,344 $ 766,650,000 Solid Waste System General Obligation Debt $ 56,202,337 (4) Utility System General Obligation Debt 542,540,000 (4) 598,742,337 Net Tax Supported Debt Payable from Ad Valorem Taxes $ 167,907,663 Interest and Sinking Fund as of 3-1-17 (estimated) $ 7,628,324 Ratio Total Funded Debt to Net Taxable Assessed Valuation ........................................... 8.41% Ratio Net Funded Debt to Net Taxable Assessed Valuation ............................................ 1.84% 2017 Estimated Population - 124,988 Per Capita Net Taxable Assessed Valuation - $72,947 Per Capita Total Funded Debt - $6,134 Per Capita Net Funded Debt - $1,343 (1) Excludes the Refunded Obligations. Preliminary, subject to change. (2) Preliminary, subject to change. (3) As a matter of policy, the City pays debt service on its general obligation debt issued to fund improvements to its Utility System and Solid Waste System from surplus revenues of these Systems (see "Table 7 — General Obligation Debt Service Requirements" and "Table 9 — Computation of Self -Supporting Debt"). This policy may be subject to change in the future. The City's Utility System is comprised of the City's entire existing electric, light and power system and the waterworks and sewer system. Drainage is managed under the waterworks and wastewater system. The City's Utility System General Obligation Debt has been issued to finance or refinance Utility System improvements and contractual obligations and is paid, or is expected to be paid, from Utility System revenues. In addition, the City has $214,890,000 Utility System Revenue Bonds outstanding payable from a pledge of Utility System revenues. The City's Solid Waste System General Obligation Debt has been issued to finance or refinance Solid Waste System improvements and is paid, or is expected to be paid, from Solid Waste System revenues. The City has no outstanding Solid Waste System Revenue Bonds. (4) Includes aportion of the Bonds and aportion of the Certificates. Preliminary, subject to change. 23 TABLE 2 - TAXABLE ASSESSED VALUATIONS BY CATEGORY in Category Real, Residential, Single Family Real, Residential, Multi -Family Real, VacantLots/Tracts Real, Acreage (Land Only) Real, Farm and Ranch Improvements Real, Commercial and Industrial Real, Oil, Gas, and Other Mineral Reserves Real and Tangible Personal, Utilities Tangible Personal, Commercial and Industrial Tangible Personal, Other Real Property, Inventory Total Appraised Value Before Exemptions Less: Total Exemptions/Reductions Less: Tax Increment Value Net Taxable Assessed Value Amount $ 3,720,193,268 924,229,117 150,027,306 274,941,322 80,481,975 1,621,678,792 78,106,929 91,097,444 943,996,533 15,167,604 62,732,470 % of Total 35.76% 8.88% 1.44% 2.64% 0.77% 15.59% 0.75% 0.88% 9.07% 0.15% 0.60% Amount $ 3,633,577,302 816,319,292 125,343,528 338,412,791 37,671,587 1,520,034,393 107,460,964 90,748,500 884,681,448 16,249,794 50.894.577 $ 7,962,652,760 76.54% $7,621,394,176 Taxable Appraised Value for Fiscal Year Ended September 30, (904,682,808) (16,931,096) 2017 $ 6,962,293,178 2016 2015 % of % of % of Category Amount Total Amount Total Amount Total Real, Residential, Single Family $ 5,050,316,875 48.55% $ 4,455,409,227 46.50% $ 4,062,947,070 45.57% Real, Residential, Multi -Family 1,247,987,048 12.00% 1,242,659,794 12.97% 1,089,958,543 12.23% Real, VacantLots/Tracts 183,550,766 1.76% 200,531,094 2.09% 180,886,051 2.03% Real, Acreage (Land Only) 313,050,791 3.01% 299,567,590 3.13% 299,966,303 3.36% Real, Farm and Ranch Improvements 119,724,601 1.15% 111,308,374 1.16% 95,625,308 1.07% Real, Commercial and Industrial 2,023,976,712 19.46% 1,932,405,225 20.17% 1,829,135,437 20.52% Real, Oil, Gas, and Other Mineral Reserves 60,792,028 0.58% 127,737,402 1.33% 93,196,666 1.05% Real and Tangible Personal, Utilities 64,350,693 0.62% 64,179,367 0.67% 91,139,063 1.02% Tangible Personal, Commercial and Industrial 1,236,965,926 11.89% 1,075,139,088 11.22% 1,091,736,374 12.25% Tangible Personal, Other 22,215,017 0.21% 21,987,482 0.23% 21,761,614 0.24% Real and Special Property, Inventory 79,726,107 0.77% 51,485,367 0.54% 58,971,257 0.66% Total Appraised Value Before Exemptions $ 10,402,656,564 100.00% $ 9,582,410,010 100.00% $ 8,915,323,686 100.00% Less: Total Exemptions/Reductions (1,230,406,071) (1,119,263,250) (1,118,146,078) Less: Tax Increment Value (54,744,149) (39,084,154) (35,975,197) Net Taxable Assessed Value $ 9,117,506,344 $ 8,424,062,606 $ 7,761,202,411 Taxable Appraised Value for Fiscal Year Ended September 30, 2014 2013 Category Real, Residential, Single Family Real, Residential, Multi -Family Real, VacantLots/Tracts Real, Acreage (Land Only) Real, Farm and Ranch Improvements Real, Commercial and Industrial Real, Oil, Gas, and Other Mineral Reserves Real and Tangible Personal, Utilities Tangible Personal, Commercial and Industrial Tangible Personal, Other Real Property, Inventory Total Appraised Value Before Exemptions Less: Total Exemptions/Reductions Less: Tax Increment Value Net Taxable Assessed Value Amount $ 3,720,193,268 924,229,117 150,027,306 274,941,322 80,481,975 1,621,678,792 78,106,929 91,097,444 943,996,533 15,167,604 62,732,470 % of Total 35.76% 8.88% 1.44% 2.64% 0.77% 15.59% 0.75% 0.88% 9.07% 0.15% 0.60% Amount $ 3,633,577,302 816,319,292 125,343,528 338,412,791 37,671,587 1,520,034,393 107,460,964 90,748,500 884,681,448 16,249,794 50.894.577 $ 7,962,652,760 76.54% $7,621,394,176 (983,428,486) (904,682,808) (16,931,096) (10,248,781) $ 6,962,293,178 $6,706,462,587 % of Total 47.68% 10.71% 1.64% 4.44% 0.49% 19.94% 1.41% 1.19% 11.61% 0.21% 0.67% 100.00% (1) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District to the State Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District updates records. For the Fiscal Year ended 2017, the values were reported on July 22, 2016 based on information as of January 1, 2016. 24 TABLE 3 - VALUATION AND GENERAL OBLIGATION DEBT HISTORY Ratio Net Net Tax Debt Net Fiscal Outstanding Net Taxable Year Assessed Taxable Assessed Ended Estimated Assessed Valuation 9/30 Population (1) Valuation (Z) Per Capita 2013 117,397 $ 6,706,462,587 (3) $ 57,126 2014 119,158 6,962,293,178 (') 58,429 2015 120,945 7,761,202,411 (5) 64,171 2016 122,759 8,424,062,606 (6) 68,623 2017 124,988 9,117,506,344 (7) 72,947 Net Ratio Net Net Tax Debt Tax Debt to Funded Tax Outstanding Net Taxable Debt at End Assessed Per of Year (8) Valuation Capita $ 120,375,588 1.79% $ 1,025 123,827,115 1.78% 1,039 135,879,058 1.75% 1,123 144,036,173 1.71% 1,173 167,907,663 (9) 1.84% 1,343 (1) Source: City Officials. (2) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District to the State Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District updates records. Source: Denton Central Appraisal District as of July 22, 2016. (3) Excludes tax incremental value of approximately $10,248,781 that is not available for the City's general obligations and debt of City. (4) Excludes tax incremental value of approximately $16,931,096 that is not available for the City's general obligations and debt of City. (5) Excludes tax incremental value of approximately $35,975,197 that is not available for the City's general obligations and debt of City. (6) Excludes tax incremental value of approximately $39,084,154 that is not available for the City's general obligations and debt of City. (7) Excludes tax incremental value of approximately $54,744,149 that is not available for the City's general obligations and debt of City. (8) Excludes self -supported general obligation debt. (9) Projected. Includes a portion of the Bonds and Certificates. Excludes the Refunded Obligations. Preliminary, subject to change. TABLE 4 - TAX RATE, LEVY AND COLLECTION HISTORY Fiscal % of Total Taxable Taxable Assessed Assessed Valuation Year $152,349,530 Distribution 101,024,543 1.10% 86,120,882 Ended Tax General Interest and 0.57% % Current % Total 9/30 Rate Fund Sinking Fund Tax Levy (1) Collections Collections 2013 $ 0.68975 0.47088 $ 0.21887 $ 46,984,330 99.26% 99.74% 2014 0.68975 0.47480 0.21495 48,436,040 99.27% 99.73% 2015 0.68975 0.48119 0.20856 53,661,933 99.70% 99.61% 2016 0.68975 0.47456 0.21519 58,634,172 99.40% 99.40% 2017 0.68334 0.46674 0.21660 62,606,588 96.72% (2) 96.72% (2) (1) Tax levy for the year 2017 is based on the adjusted certified value. Prior years represent adjusted values that include all supplements through September 30, 2016. Includes tax incremental reinvestment zone revenues. (2) Collections through March 1, 2017 (partial year). TABLE 5 - TEN LARGEST TAXPAYERS (I) Name of Taxpayer Well Services Division of STC Paccar Inc. Columbia Medical Center of Denton Inland Western Denton Crossing Ltd PS Cypress Denton Station LTD Timber Links Apts. LP Razor Ranch Market Place LP HRA University Courtyard LLC GTM Development LTD GTE Southwest, Inc. Nature of Property Services/ Manufacturing Diesel Truck Manufacturing Hospital/Professional Building Real Estate Development Residential Multifamily Apartment Complexes Shopping Center Apartments Shopping Center Telephone Utility (1) Source: Denton Central Appraisal District. 25 2016/17 % of Total Taxable Taxable Assessed Assessed Valuation Valuation $152,349,530 1.66% 101,024,543 1.10% 86,120,882 0.94% 52,782,340 0.58% 52,416,833 0.57% 43,509,314 0.47% 40,220,266 0.44% 34,935,824 0.38% 30,446,286 0.33% 29,347,570 0.32% $ 623,153,388 6.79% GENERAL OBLIGATION DEBT LIMITATION ... No general obligation debt limitation is imposed on the City under current State law or the City's Home Rule Charter (see "The Obligations — Tax Rate Limitation" for a description of the limitations on ad valorem tax rates). TABLE 6 - ESTIMATED OVERLAPPING TAX DEBT Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such entities on properties within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures. This statement of direct and estimated overlapping ad valorem tax debt ("Tax Debt") was developed from information contained in "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for the amounts relating to the City, the City has not independently verified the accuracy or completeness of such information, and no person should rely upon such information as being accurate or complete. Furthermore, certain entities listed may have issued additional Tax Debt since the date hereof, and such entities may have programs requiring the issuance of substantial amounts of additional Tax Debt, the amount of which cannot be determined. The following table reflects the estimated share of overlapping Tax Debt of the City. Authorized But Unissued Debt As Of 3-1-17 $ 53,785,000 (3) 118,408,296 50,000 (1) Includes tax incremental value of approximately $54,744,149 that is not available for the City's general obligations and debt of City. (2) Includes a portion of the Obligations. Excludes the Refunded Obligations and self-supporting debt. See Tables 1 and 9 herein for more detailed information on the City's general obligation self-supporting debt. Preliminary, subject to change. (3) Reflects remaining authorization after the issuance of the Bonds. 26 2016/17 City's Taxable 2016/17 Total Estimated Overlapping Assessed Tax Funded % Funded Debt Taxing Jurisdiction Value Rate Debt Applicable As of 3-1-17 City of Denton $9,172,250,493 CL) $ 0.68334 $ 167,907,663 (Z) 100.00% $ 167,907,663 CZ) Denton Independent School District 12,758,213,322 1.54000 862,652,256 63.71% 549,595,753 Denton County 78,259,024,841 0.24840 608,895,000 12.48% 75,990,096 Argyle Independent School District 1,360,020,910 1.57000 88,840,743 11.72% 10,412,135 Aubrey Independent School District 741,069,420 1.51000 49,189,229 0.13% 63,946 Krum Independent School District 669,310,010 1.54000 43,987,751 5.95% 2,617,271 Pilot Point Independent School District 556,020,211 1.37000 17,805,000 0.15% 26,708 Ponder Independent School District 555,657,742 1.46780 21,395,000 1.39% 297,391 Sanger Independent School District 849,493,050 1.37210 22,093,438 0.53% 117,095 Total Direct and Overlapping Funded Debt $ 807,028,057 Ratio of Direct and Overlapping Funded Debt to Taxable Assessed Valuation ............................................. 8.80% Per Capita Overlapping Funded Debt............................................................................................. $ 5,738.76 Authorized But Unissued Debt As Of 3-1-17 $ 53,785,000 (3) 118,408,296 50,000 (1) Includes tax incremental value of approximately $54,744,149 that is not available for the City's general obligations and debt of City. (2) Includes a portion of the Obligations. Excludes the Refunded Obligations and self-supporting debt. See Tables 1 and 9 herein for more detailed information on the City's general obligation self-supporting debt. Preliminary, subject to change. (3) Reflects remaining authorization after the issuance of the Bonds. 26 DEBT INFORMATION 00 M O- M N O v� l— W O M r- W v) M O\ O O O M W O\ N M --i Vl M �O �O M M 00 W l- O Oq M r- � W l� M 00 O M V1 M SO OO N OO �o �o M O o � co C:) co co ,� i " N co co ay av co o N m o m M M W O\ O\ O\ Vl N Vl ,--i Vl Vl Vl r- Vl Vl M r- O\ O rHO\ 00 0 00 00 O � � W O 0 00 � Vl Vl M �O '7t Vl Vl ,--i CO M CO M M O\ W Q E!j E!j W O Vl l— C� ,--i 00 Vl M 00 �O N 00 �O OO\ 00 Vl 00 l— y, O N Vl v1 W N N O CO N00 O O 00 N �c OO M �O Vl OO O N �O OO ,--i O\ M OO OO O v1 v1 O Vl l— r- r- N N N W l— O\ W 0 W O\ O\ 00 r- Vl M M M N N N N N ,--i — ,--i — ,--i O\ �O M 'o O\ M 'o 'o N V1 N M M O\ M '7t '7t V1 00 vl W Z O\ W r- 7t O M Op N 00 N 00 M r- 00 rH,--i �_ O\ l— O O\ M l— 00 N M m � W O\ O\ O l— �. 00 M y O M O M Vl O �O O M M ,--i M M W l— 00 O\ O\ W vl O --i l— Nm O p N vl W vl N--� ,--i ,--i vl W 00 l- O r- ,--i ,--i ,--i O � 00 ,--i O y M N 0O C, W ,--i 00 M r- O l— M Vl M O OO OO N O l— M CO Vl M M M M M M M O 0 r- W 00 00 l— M M M M (fi E!j r- r- O r- O OO ^ O , r- r- � Vl M m Vl o N O W m M M N O 00 �O -7t O r- W vv� Y W 00 �c M W M N--� O W N O M M M M N N N N N N N N — ——— ————— �p U � � w N vi O V1 vi O V1 vi O O O O O O_ V1 O O V1 O V1 O O O O O O O O O O V1 00 N l� N l� r- � 00 O N �O M vl O vl vl vl ,--i 00 l— O\ O ,--i M M Vl W O ,--i M Vl r- W O\ ,--i N M Vl a M F Vl Vl Vl ,--i N N N N N N N N N N M M M M N N N N N N M M M M f V)M_ M 00 00 M M M 00 M 00 M 00 O V) M_ �O V) M_ O M M IO 00 M IO IO IO 00 IO 00 IO 00 O N O l— V) IO V1 M 00 O ,--i r- MW O Vl O\ N M N O Vl 00 O O O M N M ,--i W 'O '1- 00 'O M C:) � Ef3 EA O O O O O O O O O O O O O O O O O O O O O ' .. ' ' ' ' ' ' O O O O O O O O O O O O O O O O O O O O O O o O O Vi o 0 o l0 l— Vi O vi O Vi o 0 0 0 o Ic O O O W 00 00 M Vl O N Vl O M CO O\ M N l- l- l- 00 00 00 00 C, C, C, C, O O N (fi � N_ �O 00 �O ,--i --i ,--i --i ,--i W O\ W r - W N l— l— 00 g O O Vl M 00 M 00 00 M O 00 M M O M M M ,--i Ic CO O\ O\ IO M M ,--i W N N � ` � M O\ --i ,--i � �--i V) M �O O ` vU y l-� 00 O\ r- M V) N O O V1 V1 N N C, , Ni O\ �6 W 00 'O O\ r- V1 c W i. 00 l— O 4 � r- W 00 N --� �O �O M O V1 V1 V1 l� N_ N V1 kn 00 C, ,--i 00 �, O O M O 00 l� 00 �O M O O O O N V1 V1 W V1 N N W V) N O O\ 00 l— 'O Vl M M M N N N ,--i — ,--i � CL O O O O O vi O O vi vi vi vi vi vi vi O Vi O vi vi vi O O Vi Vi r- O O vi O\ 00 '1-N '1-Vl 'O l- O\ g m M O n W Vl M lc N nO M 10 O\ O\ 00 C� � N W l— � r- r- Vl g C, r- r- r- W 00 00 C, C, �6 N W 0 a M M M N N N N N N --i ,--i--i ,--i 00 (fi E!j cd O l� 00 O N M V) IO l— 00 O\ C:) N M I- V) IO l— 00 O\ O N M I- V) IO l— w W o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N 27 N M 7t l— '7t O\ N O O W v) v) r- N 7t 7t W W �) v) M O rUj �O M M �O 00 O -7t r- O M N � N r- r- N --� V1 y O 00 00 l— 00 M l- N r- ll� ,--i Vl W l- :� V1 M Vl 00 �O O Vl ,--i 00 O O M N � W --i M M �O Vl N Vl �O r- l� � M r- W v) M O\ O O O M W O\ N M --i Vl M �O �O M M 00 W l- O Oq M r- � W l� M 00 O M V1 M SO OO N OO �o �o M O o � co C:) co co ,� i " N co co ay av co o N m o m M M W O\ O\ O\ Vl N Vl ,--i Vl Vl Vl r- Vl Vl M r- O\ O rHO\ 00 0 00 00 O � � W O 0 00 � Vl Vl M �O '7t Vl Vl ,--i CO M CO M M O\ W Q E!j E!j W O Vl l— C� ,--i 00 Vl M 00 �O N 00 �O OO\ 00 Vl 00 l— y, O N Vl v1 W N N O CO N00 O O 00 N �c OO M �O Vl OO O N �O OO ,--i O\ M OO OO O v1 v1 O Vl l— r- r- N N N W l— O\ W 0 W O\ O\ 00 r- Vl M M M N N N N N ,--i — ,--i — ,--i O\ �O M 'o O\ M 'o 'o N V1 N M M O\ M '7t '7t V1 00 vl W Z O\ W r- 7t O M Op N 00 N 00 M r- 00 rH,--i �_ O\ l— O O\ M l— 00 N M m � W O\ O\ O l— �. 00 M y O M O M Vl O �O O M M ,--i M M W l— 00 O\ O\ W vl O --i l— Nm O p N vl W vl N--� ,--i ,--i vl W 00 l- O r- ,--i ,--i ,--i O � 00 ,--i O y M N 0O C, W ,--i 00 M r- O l— M Vl M O OO OO N O l— M CO Vl M M M M M M M O 0 r- W 00 00 l— M M M M (fi E!j r- r- O r- O OO ^ O , r- r- � Vl M m Vl o N O W m M M N O 00 �O -7t O r- W vv� Y W 00 �c M W M N--� O W N O M M M M N N N N N N N N — ——— ————— �p U � � w N vi O V1 vi O V1 vi O O O O O O_ V1 O O V1 O V1 O O O O O O O O O O V1 00 N l� N l� r- � 00 O N �O M vl O vl vl vl ,--i 00 l— O\ O ,--i M M Vl W O ,--i M Vl r- W O\ ,--i N M Vl a M F Vl Vl Vl ,--i N N N N N N N N N N M M M M N N N N N N M M M M f V)M_ M 00 00 M M M 00 M 00 M 00 O V) M_ �O V) M_ O M M IO 00 M IO IO IO 00 IO 00 IO 00 O N O l— V) IO V1 M 00 O ,--i r- MW O Vl O\ N M N O Vl 00 O O O M N M ,--i W 'O '1- 00 'O M C:) � Ef3 EA O O O O O O O O O O O O O O O O O O O O O ' .. ' ' ' ' ' ' O O O O O O O O O O O O O O O O O O O O O O o O O Vi o 0 o l0 l— Vi O vi O Vi o 0 0 0 o Ic O O O W 00 00 M Vl O N Vl O M CO O\ M N l- l- l- 00 00 00 00 C, C, C, C, O O N (fi � N_ �O 00 �O ,--i --i ,--i --i ,--i W O\ W r - W N l— l— 00 g O O Vl M 00 M 00 00 M O 00 M M O M M M ,--i Ic CO O\ O\ IO M M ,--i W N N � ` � M O\ --i ,--i � �--i V) M �O O ` vU y l-� 00 O\ r- M V) N O O V1 V1 N N C, , Ni O\ �6 W 00 'O O\ r- V1 c W i. 00 l— O 4 � r- W 00 N --� �O �O M O V1 V1 V1 l� N_ N V1 kn 00 C, ,--i 00 �, O O M O 00 l� 00 �O M O O O O N V1 V1 W V1 N N W V) N O O\ 00 l— 'O Vl M M M N N N ,--i — ,--i � CL O O O O O vi O O vi vi vi vi vi vi vi O Vi O vi vi vi O O Vi Vi r- O O vi O\ 00 '1-N '1-Vl 'O l- O\ g m M O n W Vl M lc N nO M 10 O\ O\ 00 C� � N W l— � r- r- Vl g C, r- r- r- W 00 00 C, C, �6 N W 0 a M M M N N N N N N --i ,--i--i ,--i 00 (fi E!j cd O l� 00 O N M V) IO l— 00 O\ C:) N M I- V) IO l— 00 O\ O N M I- V) IO l— w W o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N N 27 N M 7t TABLE 8 - INTEREST AND SINKING FUND BUDGET PROJECTION in Budgeted Tax Supported Debt Service Requirements and Fiscal Charges, Fiscal Year Ending 9/30/2017 ......... $ 75,559,790 Interest and Sinking Fund Balance as of 9/30/16 ...................................... $ 4,893,032 Interest and Sinking Fund Tax Levy ................................................ 19,748,519 From Revenue Supported Sources .................................................. 55,761,271 Interest Income................................................................ 50,000 80,452,822 Estimated Balance, 9/30/17...................................................................... $ 4,893,032 (1) Source: City's Annual Budget for Fiscal Year 2016/17. TABLE 9 - COMPUTATION OF SELF-SUPPORTING DEBT Net Revenue from Solid Waste System, Fiscal Year Ended 9-30-16 ........................................ $ 10,552,548 (i) Less: Solid Waste System Revenue Bond Requirements, 2017 Fiscal Year ................................... - Balance Available for Other Purposes................................................................ $ 10,552,548 Solid Waste System General Obligation Bond Requirements, 2017 Fiscal Year ............................... (8,056,056) Balance....................................................................................... $ 2,496,492 Net Revenue from Utility System, Fiscal Year Ended 9-30-16 ............................................ $ 91,780,472 (i) Less: Utility System Revenue Bond Requirements, 2017 Fiscal Year ....................................... (3,680,389) Balance Available for Other Purposes................................................................ $ 88,100,083 Utility System General Obligation Bond Requirements, 2017 Fiscal Year .................................... (46,914,293) Balance....................................................................................... $ 41,185,790 (1) Does not deduct franchise fees and/or return on investment paid to the General Fund. (2) Excludes a portion of the Refunded Obligations. Includes a portion of the Bonds. Prelminary, subject to change. TABLE 10 - AUTHORIZED BUT UNISSUED GENERAL OBLIGATION BONDS (1) Preliminary, subject to change. Unissued Balance 43,420,000 3,290,000 7,075,000 $ 53,785,000 ANTICIPATED ISSUANCE OF ADDITIONAL GENERAL OBLIGATION DEBT ... As shown in Table 10 above, after the issuance of the Bonds, the City will have $53,785,000 voted but unissued debt remaining to be issued from the November 4, 2014 authorization. The City may also issue tax -supported debt other than voter approved general obligation bonds to fund public improvements, such as certificates of obligation or tax anticipation notes, without submitting a measure to the voters, but in certain instances, subject to voter petition rights for a referendum. Further, the City may issue tax -supported debt other than voter approved general obligation bonds to refund bonds or other obligations not currently payable from or supported by ad valorem taxes, such as the City's Utility System revenue bonds. The City anticipates the issuance of approximately $33,700,000 in tax supported debt in the second quarter of 2018. 28 Amount Amount Date Amount Heretofore Being Purpose Authorized Authorized Issued Issued (')— Street 11/6/2012 $ 20,400,000 $ 16,400,000 $ 4,000,000 Street 11/4/2014 61,710,000 13,340,000 4,950,000 Public Safety 11/4/2014 16,565,000 8,355,000 8,210,000 Drainage 11/4/2014 8,545,000 5,255,000 - Parks 11/4/2014 11,355,000 4,280,000 - $ 118,575,000 $ 47,630,000 $ 17,160,000 (1) Preliminary, subject to change. Unissued Balance 43,420,000 3,290,000 7,075,000 $ 53,785,000 ANTICIPATED ISSUANCE OF ADDITIONAL GENERAL OBLIGATION DEBT ... As shown in Table 10 above, after the issuance of the Bonds, the City will have $53,785,000 voted but unissued debt remaining to be issued from the November 4, 2014 authorization. The City may also issue tax -supported debt other than voter approved general obligation bonds to fund public improvements, such as certificates of obligation or tax anticipation notes, without submitting a measure to the voters, but in certain instances, subject to voter petition rights for a referendum. Further, the City may issue tax -supported debt other than voter approved general obligation bonds to refund bonds or other obligations not currently payable from or supported by ad valorem taxes, such as the City's Utility System revenue bonds. The City anticipates the issuance of approximately $33,700,000 in tax supported debt in the second quarter of 2018. 28 TABLE 11 - OTHER OBLIGATIONS The City has entered into capital lease agreements. The following is a schedule of future minimum lease payments under these capital leases and the present value of the net minimum lease payments as of September 30, 2016: Year Annual Ending Lease 30 -Sep Payment 2017 $ 910,270 2018 505,054 2019 4,172 Total Minimum Lease Payment $ 1,419,496 Less: Amount Representing Interest 46,266 Present Value of Minimum Future Lease Payments $ 1,373,230 PENSION FUND ... The City participates as one of 866 plans in the nontraditional, joint contributory, hybrid defined benefit pension plan administered by the Texas Municipal Retirement System ("TMRS"). TMRS is an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the "TMRS Act") as an agent multiple -employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the TMRS with a six -member board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. TMRS's defined benefit pension plan is a tax -qualified plan under Section 401(a) of the Internal Revenue Code. TMRS issues a publicly -available comprehensive annual financial report obtainable at www.tmrs.com. All eligible employees of the city are required to participate in TMRS. Benefits Provided ... TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the City Council of the City, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the city -financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven payments options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member's deposits and interest. At the inception of the plan, the city granted monetary credits for service rendered before the plan began (or prior service credits) of a theoretical amount at least equal to two times what would have been contributed by the employee, with interest (3% annual), prior to establishment of the plan. Monetary credits for service since the plan began (or current service credits) are a percent (200%) of the employee's accumulated contributions. In addition, the City grants on an annually repeating basis, another type of monetary credit referred to as an updated service credit. This monetary credit is determined by hypothetically recomputing the member's account balance by assuming the current member deposit rate of the City (7%) has always been in effect. The computation also assumes the member's salary has always been the member's average salary — using a salary calculation based on the 36 -month period ending a year before the effective date of calculation. This hypothetical account balance is increased by 3% each year, and increased by the city match currently in effect (200%). The resulting sum is then compared to the member's actual account balance increased by the actual city match and actual interest credited. If the hypothetical calculation exceeds the actual calculation, the member is granted a monetary credit (or Updated Service Credit) equal to the difference between the hypothetical calculation and the actual calculation times the percentage adopted. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the city -financed monetary credits with interest were used to purchase an annuity. The plan provisions also include an annually repeating basis cost of living adjustments for retires equal to 70% of the change in the consumer price index. Members can retire at ages 60 and above with 5 or more years of service or with 20 years of service regardless of age. A member is vested after five years. Employees covered by benefit terms ... At the December 31, 2015 valuation and measurement date, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 498 Inactive Employees Entitled to But Not Yet Receiving Benefits 443 Active Employees 1,188 2,129 29 Contributions ... The contribution rates for employees in TMRS are either 5%, 6%, or 7% of employee gross earnings, and the city matching percentages are either 100%, 150%, or 200%, both as adopted by the City Council. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City were 17.76% and 17.23% in calendar years 2015 and 2016, respectively. The City's contributions to TMRS for the year ended September 30, 2016 were $14,435,639 and were equal to the required contributions. Net Pension Liability ... The City's Net Pension Liability ("NPL") was measured as of December 31, 2015, and the Total Pension Liability ("TPL") used to calculate the NPL was determined by an actuarial valuation as of that date. Actuarial Assumptions ... The TPL in the December 31, 2015 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% per year Overall payroll growth 3.00% per year Investment Rate of Return 6.75%, net of pension plan investment expense, including inflation Salary increases were based on a service -related table. Mortality rates for active members, retirees, and beneficiaries were based on the gender -distinct RP2000 Combined Healthy Mortality Tables with Blue Collar Adjustment, with male rates multiplied by 109% and female rates multiplied by 103%. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements. For disabled annuitants, the gender -distinct RP2000 Combined Healthy Mortality Tables with Blue Collar Adjustment are used with male rates multiplied by 109% and female rates multiplied by 103% with a 3 -year set - forward for both males and females. In addition, a 3% minimum mortality rate is applied to reflect the impairment for younger members who become disabled. The rates are projected on a fully generational basis by scale BB to account for future mortality improvements subject to the 3% floor. Actuarial assumptions used in the December 31, 2015, valuation were based on the results of actuarial experience studies. The experience study in TMRS was for the period December 31, 2010 through December 31, 2014. Healthy post-retirement mortality rates and annuity purchase rates were updated based on a Mortality Experience Investigation Study covering 2009 through 2011, and dated December 31, 2013. These assumptions were first used in the December 31, 2013 valuation, along with a change to the Entry Age Normal ("EAN") actuarial cost method. Assumptions are reviewed annually. No additional changes were made for the 2014 valuation. After the Asset Allocation Study analysis and experience investigation study, the Board amended the long-term expected rate of return on pension plan investments from 7% to 6.75%. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short- term and long-term funding needs of TMRS. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. In determining their best estimate of a recommended investment return assumption under the various alternative asset allocation portfolios, TMRS's actuary focused on the area between (1) arithmetic mean (aggressive) without an adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time (aggressive). At its meeting on July 30, 2015, the TMRS Board approved a new portfolio target allocation. The target allocation and best estimates of real rates of return for each major asset class are summarized in the following table: 30 Long -Term Expected Real Target Rate of Return Asset Class Allocation (Arithmetic) Domestic Equity 17.5% 4.55% International Equity 17.5% 6.10% Core Fixed Income 10.0% 1.00% None -Core Fixed Income 20.0% 3.65% Real Return 10.0% 4.03% Real Estate 10.0% 5.00% Absolute Return 10.0% 4.00% Private Equity 5.0% 8.00% Total 100.0% 30 Discount Rate ... The discount rate used to measure the TPL was 6.75%. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rates specified in statute. Based on that assumption, the pension plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the TPL. Changes in the Net Pension Liability Balance at 12/31/2014 Changes for the year: Service cost Interest Change of benefit terms Difference between expected and actual experience Changes of assumptions Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes Balance at 12/31/2015 Increase (Decrease) Total Plan Net Pension Fiduciary Pension Liability Net Position Liability (a) (b) (a) - (b) 7384,408,038 $ 318,166,193 $ 66,241,845 12,615,957 Current 12,615,957 26,905,700 Discount 26,905,700 (1,525,911) Rate (1,525,911) (428,789) - (428,789) actual investment earnings 13,615,410 (13,615,410) Contributions subsequent to the 5,365,231 (5,365,231) measurement date 469,530 (469,530) (12,697,735) (12,697,735) actual economic experience (285,957) 285,957 - (14,123) 14,123 24,869,222 6,452,356 18,416,866 $409,277,260 $ 324,618,549 $ 84,658,711 Sensitivity of the Net Pension Liability to changes in the Discount Rate ... The following presents the net pension liability of the City, calculated using the discount rate of 6.75%, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (5.75%) or 1 -percentage -point higher (7.75%) than the current rate: 1% Decrease Current 1% Increase in Discount Discount in Discount Rate Rate Rate City's Net Pension Liability $146,877,886 $84,658,711 $33,910,559 Pension Plan Fiduciary Net Position ... Detailed information about the pension plan's Fiduciary Net Position is available in a separately -issued TMRS financial report. That report may be obtained on the Internet at www.tmrs.com. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions ... For the year ended September 30, 2016, the City recognized pension expense of $16,873,960. This amount is included as part of personal services expenses. At September 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to TMRS pension from the following sources: Deferred Deferred Outflow of Inflows of Resources Resources Differences between projected and actual investment earnings $19,703,549 $ Contributions subsequent to the measurement date 10,660,116 Differences between expected and actual economic experience - (1,324,228) Difference in assumption changes - (342,859) Total $30,363,665 $(1,667,087) 31 $10,660,116 reported as deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability for the City's fiscal year ending September 30, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Measurement Year Ended December 31st 2016 $ 4,689,087 2017 4,689,087 2018 4,689,088 2019 3,969,200 2020 - Total $ 18,036,462 Supplemental Death Benefit Fund ... The City of Denton contributes to a cost-sharing multiple -employer defined benefit group - term life insurance plan known as the Supplemental Death Benefits Fund ("SDBF"). This is a separate trust administered by the TMRS Board of Trustees and is a voluntary program in which the City elected, by ordinance, to provide group term life insurance coverage to active and retired members. The City may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1st of any year to be effective the following January 1st. Payments from this fund are similar to group term life insurance benefits, and are paid to the designated beneficiaries upon the receipt of an approved application for payment. The death benefit for active employees provides a lump -sum payment approximately equal to the employee's annual salary (calculated based on the employee's actual earnings, for the 12 -month period preceding the month of death). The death benefit for retirees is considered an "other postemployment benefit" ("OPEB") and is a fixed amount of $7,500. The obligations of this plan are payable only from the SDBF and are not an obligation of, or claim against, the TMRS Pension Trust Fund. Contributions are made monthly based on the covered payroll of employee members of the City. The contractually required contribution rate is determined by an annual actuarial valuation and is based on the mortality and service experience of all employees covered by the SDBF and the demographics specific to the workforce of the City. There is a one-year delay between the actuarial valuation that serves as the basis for the employer contribution rate and the calendar year when the rate goes into effect. The contributions to the SDBF are pooled for investment purposes with those of the Pension Trust Fund described above. The TMRS Act requires the Pension Trust Fund to allocate investment income to the SDBF on an annual basis. The funding policy of the plan is to assure adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to prefund retiree term life insurance during employees' entire careers. As such, contributions are utilized to fund active member deaths on a pay-as-you-go basis; any excess contributions and investment income over payments then become net assets available for OPEB. The City's contributions to the TMRS SDBF for the fiscal years ended September 30, 2014, 2015, and 2016, were $118,782, $133,686, and $149,630, respectively, which equaled the required contributions each year. FIREMEN'S RELIEF AND RETIREMENT FUND Plan Description ... The City contributes to the retirement plan for firefighters in the Denton Fire Department known as the Denton Firemen's Relief and Retirement Fund (the "Fireman's Fund"). The Fireman's Fund is a single employer, contributory, defined benefit plan. The benefit provisions of the Fireman's Fund are authorized by the Texas Local Fire Fighters' Retirement Act ("TLFFRA"). TLFFRA provides the authority and procedure to amend benefit provisions. The plan is administered by the Board of Trustees of the Firemen's Fund. The City does not have access to nor can it utilize assets within the retirement plan trust. The Fireman's Fund issues a stand-alone report pursuant to GASB Statement No. 67, which may be obtained by writing the Denton Firemen's Relief and Retirement Fund at P.O. Box 2375, Denton, Texas 76202. See that report for all information about the plan fiduciary net position. Benefits Provided ... Firefighters in the Denton Fire Department are covered by the Fireman's Fund which provides service retirement, death, disability, and withdrawal benefits. These benefits fully vest after 20 years of credited service. Firefighters may retire at age 50 with 20 years of service. A partially -vested benefit is provided for firefighters who terminate employment with at least 10 but less than 20 years of service. If a terminated firefighter has a partially vested benefit, the firefighter may retire starting on the date they would have both completed 20 years of service if he had remained a Denton firefighter and attained age 50. As of the December 31, 2015 actuarial valuation date, the plan effective January 1, 2011 provided a monthly normal service retirement benefit, payable in a Joint and Two -Thirds to Spouse form of annuity, equal to 2.59% of Highest 36 - Month Average Salary for each year of service. 32 A retiring firefighter who is at least age 52 with at least 22 years of service has the option to elect the Retroactive Deferred Retirement Option Plan ("RETRO DROP") which will provide a lump sum benefit and a reduced monthly benefit. The reduced monthly benefit is based on the service and Highest 36 -Month Average Salary as if the firefighter had terminated employment on his selected RETRO DROP benefit calculation date, which is no earlier than the later of the date the firefighter meets the age 52 and 22 years of service requirements and the date four years prior to the date the firefighter actually retires. Upon retirement, the member will receive, in addition to the monthly retirement benefit, a lump sum equal to the sum of (1) the amount of monthly contributions the member has made to the Fireman's Fund after the RETRO DROP benefit calculation date plus (2) the total of the monthly retirement benefits the member would have received between the RETRO DROP benefit calculation date and the date retired under the plan. There are no account balances. The lump sum is calculated at the time of retirement and distributed as soon as administratively possible. There is no provision for automatic postretirement benefit increases. The Fireman's Fund has the authority to provide, and has periodically in the past provided, ad hoc postretirement benefit increases. Employees Covered by Benefit Terms ... In the December 31, 2015 actuarial valuation, the following numbers of members were covered by the Fireman's Fund: Inactive Employees or Beneficiaries Currently Receiving Benefits 84 Inactive Employees Entitled to But Not Yet Receiving Benefits 2 Active Employees 176 262 Contributions ... The contribution provisions of the Fireman's Fund are authorized by TLFFRA. TLFFRA provides the authority and procedure to change the amount of contributions determined as a percentage of pay by each firefighter and a percentage of payroll by the City. The funding policy of the Fireman's Fund requires contributions equal to 12.6% of pay by the firefighters, the rate elected by the firefighters according to TLFFRA. The City currently contributes according to a City ordinance the same percentage of payroll the City contributes to the TMRS for other employees each calendar year. The City contribution rate was 17.94% in calendar year 2015 and 17.41% in calendar year 2016. The December 31, 2015 actuarial valuation includes the assumption that the city contribution rate will average 15.5% over the plan's unfunded actuarial accrued liability ("UAAL") amortization period. The costs of administering the plan are paid from the Fireman's Fund assets. The City's contributions to the Fireman's Fund for the year ended September 30, 2016 were $2,819,046. Ultimately, the funding policy also depends upon the total return of the Fireman's Fund's assets, which varies from year to year. Investment policy decisions are established and maintained by the board of trustees. The board selects investments and employs investment managers with the advice of their investment consultant who is completely independent of the investment managers. For the calendar year ending December 31, 2015, the money -weighted rate of return on pension plan investments was -4.62%. This measurement of the investment performance is net of investment -related expenses, reflecting the effect of the timing of the contributions received and the benefits paid during the year. While the contribution requirements are not actuarially determined, state law requires that each change in plan benefits adopted by the Fireman's Fund must first be approved by an eligible actuary, certifying the contribution commitment by the firefighters and the assumed city contribution rate together provide an adequate contribution arrangement. Using the entry age actuarial cost method, the plan's normal cost contribution rate is determined as a percentage of payroll. The excess of the total contribution rate over the normal cost contribution rate is used to amortize the plan's UAAL. The number of years needed to amortize the plan's UAAL is actuarially determined using an open, level percentage of payroll method. Net Pension Liability ... The City's net pension liability for the Fireman's Fund was measured as of December 31, 2015, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2015. Actuarial Assumptions ... The total pension liability for the Fireman's Fund in the December 31, 2015 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.50% per year Overall payroll growth 3.00% per year, plus promotion, step and longevity increases that vary by service Investment Rate of Return 6.75%, net of pension plan investment expense, including inflation Mortality rates were based on the RP -2000 Combined Healthy Mortality Tables for males and for females (sex distinct) projected to 2024 by scale AA. 33 The long-term expected rate of return on the Fireman's Fund pension plan investments is reviewed for each biennial actuarial valuation and was determined using a building-block method in which expected future net real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These components are combined to produce the long-term expected rate of return by weighting the expected future net real rates of return by the target asset allocation percentage (currently resulting in 5.00%) and by adding expected inflation (2.50%). In addition, the final 6.75% assumption was selected by "rounding down" and thereby reflects a reduction of 0.75% for adverse deviation. The target allocation and expected arithmetic net real rates of return for each major asset class are summarized in the following table: Asset Class Equities Long -Term Expected Real Target Rate of Return Allocation (Arithmetic) Large Cap Domestic 40.0% 5.90% Small/Mid Cap Domestic 10.0% 6.40% International Developed 10.0% 6.40% Alternatives $71,018,518 $13,868,816 Master Limited Partnerships 8.0% 7.90% Real Estate 15.0% 4.40% Fixed Income 10.0% 0.90% Cash 7.0% 0.00% Total 100.0% (2,567,219) Discount Rate ... The discount rate used to measure the total pension liability for the Fireman's Fund was 6.75%. No projection of cash flows was used to determine the discount rate because the December 31, 2015 actuarial valuation showed expected contributions would pay the normal cost and amortize the UAAL in 32 years. Because of the 32 -year amortization period of the UAAL, the pension plan's fiduciary net position is expected to be available to make all projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments of 6.75% was applied to all periods of projected benefit payments as the discount rate to determine the total pension liability. Changes in Net Pension Liability Balance at 12/31/2014 Changes for the year: Service cost Interest Change of benefit terms Difference between expected and actual experience Changes of assumptions Contributions - employer Contributions - employee Net investment income Benefit payments, including refunds of employee contributions Administrative expense Other changes Net changes Balance at 12/31/2015 34 Increase (Decrease) Total Plan Net Pension Fiduciary Pension Liability Net Position Liability $84,887,334 $71,018,518 $13,868,816 2,836,263 2,836,263 5,998,959 5,998,959 (2,063,421) (2,063,421) 2,331,908 - 2,331,908 - 2,567,219 (2,567,219) 1,803,064 (1,803,064) (3,287,188) 3,287,188 (4,048,358) (4,048,358) - (76,538) 76,538 5,055,351 (3,041,801) 8,097,152 $89,942,685 $67,976,717 $21,965,968 Sensitivity of the Net Pension Liability to Changes in the Discount Rate ... The following presents the net pension liability of the City for the Fireman's Fund, calculated using the discount rate of 6.75%, as well as what the city's net pension liability would be if it were calculated using a discount rate that is 1 -percentage -point lower (5.75%) or 1 -percentage -point higher (7.75%) than the current rate: 1% Decrease Current 1% Increase in Discount Discount in Discount Rate Rate Rate City's Net Pension Liability $33,465,927 $21,965,968 $12,286,613 Pension Plan Fiduciary Net Position ... The plan fiduciary net position reported above is the same as reported by the Fireman's Fund. Detailed information about the plan fiduciary net position is available in the Fireman's Fund's separately issued audited financial statements, which are reported using the economic resources measurement focus and the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. Investments are reported at fair value, the price that would be recognized to sell an asset in an orderly transaction between market participants at the measurement date. Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions ... For the year ended September 30, 2016, the City recognized pension expense of $3,858,602 for the Fireman's Fund. Amounts recognized in the fiscal year represent changes between the current and prior year measurement dates. This amount is included as part of personal services expenses. At September 30, 2016, the City reported deferred outflows of resources and deferred inflows of resources related to the Fireman's Fund from the following sources: Deferred Deferred Outflow of Inflows of Resources Resources Differences between projected and actual investment earnings $ 6,760,431 Contributions subsequent to the measurement date 2,098,808 Differences between expected and actual economic experience - (1,852,437) Difference in assumption changes 2,093,472 Total $ 10,952,711 $(1,852,437) Deferred outflows of resources related to pensions resulting from contributions subsequent to the measurement date of $2,098,808 will be recognized as a reduction of the net pension liability for the measurement year ending December 31, 2016 and the City's fiscal year ending September 30, 2017. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Measurement Year Ended December 31st 2016 $ 1,729,791 2017 1,729,791 2018 1,729,791 2019 1,680,866 2020 27,452 Thereafter 103,775 Total $ 7,001,466 OTHER POST EMPLOYMENT BENEFITS . . . The cost of post -employment healthcare benefits, from an accrual accounting perspective, similar to the cost of pension benefits, should be associated with the periods in which the cost occurs, rather than in the future year when it will be paid. According to the requirements of GASB Statement No. 45 for the fiscal year ended September 30, 2016, the City recognizes the cost of post -employment healthcare in the year the employee services are received, reports the accumulated liability from prior years, and provides information useful in assessing potential demands on the City's future cash flows. Recognition of the liability accumulated from prior years will be amortized over 30 years, the first period commencing with the fiscal year ending September 30, 2008. 35 Plan Description ... The City provides post -employment medical care, which is also an OPEB, for retired employees through a single -employer defined benefit medical plan. The plan provides medical benefits for eligible retirees, their spouses and dependents though the City's group health insurance plans, which covers both active and retired members. The benefits, benefit levels, and contribution rates are recommended annually by the City management as part of the budget process. Any changes in rate subsidies for retirees are approved by the City Council. Since an irrevocable trust has not been established, the plan is not accounted for as a trust fund. The plan does not issue a separate financial report. Benefits Provided ... The City provides post -employment medical, dental, and vision care benefits to its retirees. To be eligible for benefits, an employee must qualify for retirement under the TMRS or the Firemen's Fund. Retirees must make a one-time irrevocable decision to choose benefits at the time of retirement, after that their eligibility for the benefits ceases. However, retirees can move between plans and can add and drop dependents based on qualifying events. All medical care benefits are provided through the City's self-insured health plan. The benefit levels are the same as those afforded to active employees. Funding Policy ... The plan premium rates are recommended annually by City management and approved by the City Council as part of the annual budget. The retiree's contribution is the full amount of the actuarially determined blended premium rate less a subsidy dependent upon years of service at retirement. By providing retirees with access to the City's healthcare plans based on the same rates it charges to active employees, the City is in effect providing a subsidy to retirees. This implied subsidy exists because, on average, retiree health care costs are higher than active employee healthcare costs. By the City not contributing anything toward this plan in advance, the City employs a pay-as-you-go method through paying the higher rate for active employees each year. The City contributes $40 per month for each five-year increment of service, up to $200 per month, toward the cost of retiree coverage. The full cost for dental and vision is paid by the retiree. Retirees are required to enroll in Medicare Part B once eligible (age 65) and are moved into a fully -insured Medicare Supplement plan at that time. The same City contribution level applies to the supplement. Annual OPEB Costs and Net OPEB Obligation ... The City's OPEB cost for post -employment medical care is calculated based on the annual required contribution of the City (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of accrual that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The City's annual OPEB cost for post -employment medical care for the current year and the related information are as follows at September 30, 2016: Annual required contribution $ 3,438,549 Interest on prior year net OPEB obligation 227,953 Adjustment to annual required contribution (386,669) Annual OPEB cost 3,279,833 Contributions made (630,522) Increase in net OPEB obligation 2,649,311 Net OPEB obligation - beginning of year 5,698,824 Net OPEB obligation - end of year $ 8,348,135 Percentage of OPEB costs contributed 19.2% Funded Status and Funding Progress ... The funded status of the plan as of the actuarial measurement date of December 31, 2015 was as follows: Actuarial accrued liability $ 25,361,327 Actuarial value of plan assets - Unfunded actuarial accrued liability $ 25,361,327 Funded ratio 0.0% Covered payroll $ 98,668,427 Unfunded actuarial accrued liability as a percentage of covered payroll 25.7% 36 Three -Year Trend Information for OPEB Funding Fiscal Year Ended September 30, 2016 2015 2014 Annual OPEB Costs $ 3,279,833 $ 1,716,639 $ 1,735,204 Actual Contributions $ 630,522 $ 671,072 $ 909,288 Percent Contributed 19.2% 39.1% 52.4% Net OPEB Obligations $ 8,348,135 $ 5,698,824 $ 4,653,257 The schedule of funding progress, presented as "Required Supplementary Information" (Exhibit XIII) following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability of benefits. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the status of the plan and the annual required contributions of the City's retiree health care plan are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Actuarial Methods and Assumptions ... The Projected Unit Credit actuarial cost method is used to calculate the GASB ARC for the City's retiree health care plan. Using the plan benefits, the present health premiums and a set of actuarial assumptions, the anticipated future payments are projected. The Projected Unit Credit method then provides for a systematic funding for these anticipated payments. The yearly ARC is computed to cover the cost of benefits being earned by covered members as well as to amortize a portion of the unfunded accrued liability. Projections of benefits are based on the substantive plan (the plan understood by the employer and plan members) and include the type of benefits in force at the valuation date and the pattern of sharing benefits between the City and the plan members at that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions designed to reduce short- term volatility in actuarial accrued liabilities and the actuarial value of assets. Significant method and assumptions used for this fiscal year valuation as shown on the following page were as follows: Actuarial cost method Amortization method Amortization period Asset valuation method Investment rate of return Inflation rate Payroll growth Healthcare inflation rate Actuarial Assumptions 12/31/15 Projected unit credit Level dollar 22 years, closed N/A 4.0%, net of expenses 2.5% N/A Initial rate of 7.50% declining to an ultimate rate of 4.25% after 15 years Medical Reimbursements ... The federal government may provide the city subsidy per the Medicare Part D Prescription Drug Subsidy Program for providing healthcare for Medicare eligible employees. As the City does not participate in these subsidies, any current and future year subsidies are not recognized as a reduction to the actuarial accrued liability. 37 FINANCIAL INFORMATION TABLE 12 - CHANGES IN NET POSITION OF GOVERNMENTAL FUNDS (1) Represents a net adjustment due to GASB 68, "Accounting and Financial Reporting for Pensions" and GASB 71, "Pension Transition for Contributions Made Subsequent to the Measurement Date". (2) Unrestricted net position, that part of the net position that may be used to meet the City's ongoing obligations, was ($3,620,580) as of September 30, 2016. This table refers to governmental activities only and does not include enterprise funds such as solid waste or utility activities. 38 Fiscal Year Ended September 30, Revenues: 2016 2015 2014 2013 2012 Program Revenue: Charges for Services $ 21,841,254 $ 18,274,498 $ 18,428,832 $ 17,091,719 $ 15,980,821 Operating Grants and Contributions 2,855,501 3,380,119 4,788,149 3,118,105 2,598,157 Capital Grants and Contributions 5,885,033 10,443,220 11,127,695 14,671,571 4,292,468 General Revenue: Property Tax 58,788,255 54,174,965 48,833,077 47,275,552 45,174,160 Sales Tax 32,624,297 30,601,965 27,764,114 26,522,473 25,886,940 Other Taxes/Fees 25,518,472 24,746,463 23,424,250 22,578,639 21,839,818 Miscellaneous 2,605,363 2,687,360 2,543,781 1,428,907 1,390,398 Total Revenue $150,118,175 $144,308,590 $136,909,898 $132,686,966 $117,162,762 Expenditures: General Government $ 33,847,052 $ 31,260,126 $ 30,476,840 $ 27,686,735 $ 29,421,275 Public Safety 63,118,516 58,132,146 56,893,859 52,906,985 52,496,010 Public Works 24,557,482 20,331,934 16,950,280 18,663,884 18,662,029 Parks and Recreation 16,043,697 14,982,742 14,543,461 13,714,245 12,968,426 Interest on Long -Term Debt 4,664,608 4,384,973 4,339,154 4,464,309 4,755,938 Total Expenses $142,231,355 $129,091,921 $123,203,594 $117,436,158 $118,303,678 Increase in Net Position before Transfers $ 7,886,820 $ 15,216,669 $ 13,706,304 $ 15,250,808 $ (1,140,916) Transfers 1,184,433 1,140,938 876,525 (101,707) 887,287 Increase (Decrease) in Net Position $ 9,071,253 $ 16,357,607 $ 14,582,829 $ 15,149,101 $ (253,629) Prior Period Adjustment - (39,247,319) (i) (737,505) - - Net Position at Beginning of Year 146,354,778 169,244,490 155,399,166 140,250,065 140,503,694 Net Position at End of Year 155,426,031 $146,354,778 $169,244,490 $155,399,166 $140,250,065 (1) Represents a net adjustment due to GASB 68, "Accounting and Financial Reporting for Pensions" and GASB 71, "Pension Transition for Contributions Made Subsequent to the Measurement Date". (2) Unrestricted net position, that part of the net position that may be used to meet the City's ongoing obligations, was ($3,620,580) as of September 30, 2016. This table refers to governmental activities only and does not include enterprise funds such as solid waste or utility activities. 38 TABLE 12A -GENERAL FUND REVENUES AND EXPENDITURE i$STORY Revenues: Taxes Licenses and Permits Franchise Fee Fines and Forfeitures Fees for Service Interest Revenue Intergovernmental Miscellaneous Total Revenues Expenditures: General Government Public Safety Public Works Parks and Recreation Capital Outlay Debt Service: Principal Retirement Total Expenditures Fiscal Year Ended September 30, 2016 2015 2014 2013 2012 $ 73,316,697 $68,844,155 $61,779,192 $59,278,152 $57,148,330 3,106,162 2,782,395 1,978,421 1,446,580 1,436,215 13,246,765 12,969,628 13,889,670 13,597,253 13,751,615 3,767,796 3,721,677 4,539,209 4,229,107 4,241,395 7,432,481 6,039,221 5,913,566 5,631,829 5,666,413 293,616 221,867 172,684 141,734 187,527 969,898 1,051,630 1,383,267 1,021,581 949,422 168,732 141,090 120,680 84,929 255,035 $102,302,147 $95,771,663 $89,776,689 $85,431,165 $83,635,952 $ 26,651,405 $24,694,516 $23,337,639 $21,067,238 $20,951,203 55,724,427 52,739,309 50,949,715 49,622,237 46,797,417 2,869,618 3,306,507 2,854,761 2,816,923 2,591,517 11,875,804 11,209,486 10,891,862 10,579,066 9,704,075 519,325 572,876 573,903 616,199 712,055 45,880 - - - 78,092 $ 97,686,459 $92,522,694 $88,607,880 $84,701,663 $80,834,359 Excess (Deficiency) ofRevenues Over Expenditures $ 4,615,688 $ 3,248,969 $ 1,168,809 $ 729,502 $ 2,801,593 Other Financing Sources (Uses): Transfers In $ (3,981,877) $ 250 $ $ 2,600 $ 14,301 Sale of Capital Assets 170,869 117,763 85,059 137,417 153,127 Transfers (Out) - (1,840,096) (1,170,764) (950,421) (1,556,944) Total Other Financing Sources (Uses) $ (3,811,008) $ (1,722,083) $ (1,085,705) $ (810,404) $ (1,389,516) Net Changes in Fund Balances $ 804,680 $ 1,526,886 $ 83,104 $ (80,902) $ 1,412,077 Fund Balances at Beginning of Year 27,365,168 25,838,282 25,755,178 25,836,080 24,424,003 Fund Balances at End of Year $ 28,169,848 $27,365,168 $25,838,282 $25,755,178 $25,836,080 39 TABLE 13 - MUNICIPAL SALES TAX HISTORY The City has adopted the Municipal Sales and Use Tax Act, Texas Tax Code, Chapter 321, which grants the City the power to impose and levy a 1% Local Sales and Use Tax within the City; the proceeds are credited to the General Fund and are not pledged to the payment of the Obligations. Collections and enforcements are effected through the offices of the Comptroller of Public Accounts, State of Texas, who remits the proceeds of the tax, after deduction of a 2% service fee, to the City monthly. In January 1994, the voters of the City approved the imposition of an additional one-half of one percent (% of 1%) for property tax reduction. In September 2003, the voters of the City approved the imposition of an additional one-half of one percent (% of 1%) for the Denton County Transportation Authority. The implementation of this tax began January 2004, and is allocated directly to the Denton County Transportation Authority. Fiscal 0.50¢ Denton County Transportation Authority 0.50¢ City Sales & Use Tax Year State Sales & Use Tax % of Equivalent of 8.250 Ended Total Ad Valorem Ad Valorem Per 9/30 Collected (1) Tax Levy Tax Rate Capita 2013 $ 26,522,473 56.45% $ 0.3955 $ 226 2014 27,764,114 57.32% 0.3988 233 2015 30,601,965 57.03% 0.3943 253 2016 32,624,299 55.64% 0.3873 266 2017 12,090,118 19.31% 0.1326 97 (1) Source: City of Denton Annual Program of Services. (2) Collections through March 1, 2017. The sales tax breakdown for the City is as follows: Property Tax Relief 0.50¢ Denton County Transportation Authority 0.50¢ City Sales & Use Tax 1.00¢ State Sales & Use Tax 6.25¢ Total 8.250 FINANCIAL POLICIES Basis of Accounting ... The accounting policies of the City conform to generally accepted accounting principles of the Governmental Accounting Standards Board and program standards adopted by the Government Finance Officers Association of the United States and Canada. The GFOA has awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Denton for each fiscal year since 1983. The City's current report will be submitted to GFOA to determine its eligibility for another Certificate. The City has also received the GFOA's award for Distinguished Budget Presentation each year since 1986. The measurement focuses for the Enterprise Funds, Internal Service Funds and Nonexpendable Trust Funds are income determination and cost of service, respectively. Accordingly, the accrual basis, whereby revenues and expenses are identified in the accounting period in which they are earned and incurred and net income, is utilized for these funds. The modified accrual basis, whereby revenues are recognized when they become both measurable and available for use during the year and expenditures are recognized when the related fund liability is incurred, is used for all other funds. Budgetary Procedures ... As prescribed by City Charter, the City Manager, within the time period required by law, submits to the City Council a proposed budget for the fiscal year beginning the following October 1. The budget includes proposed expenditures and revenues required to fund the expenditures. Following Council considerations, amendments and refinements, a public hearing is ordered and conducted for the purpose of obtaining taxpayer comments. The budget is finally approved and adopted by passage of an ordinance by the City Council prior to the beginning of the fiscal year. The budget is adopted on a basis consistent with generally accepted accounting principles. It is the goal of the City to achieve and maintain an unassigned fund balance in the general fund equal to 20% of budgeted expenditures. An additional 5% resiliency reserve (25% combined total) may be maintained to safeguard against unusual financial circumstances and/or economic downturns. 40 INVESTMENTS The City invests its investable funds in investments authorized by Texas law in accordance with investment policies approved by the City Council. Both Texas law and the City's investment policies are subject to change. LEGAL INVESTMENTS ... Under Texas law, the City is authorized to invest in (1) obligations, including letter of credit, of the United States or its agencies and instrumentalities, (2) direct obligations of the State of Texas or its agencies and instrumentalities; (3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States; (4) other obligations, the principal and interest of which is guaranteed or insured by or backed by the full faith and credit of, the State of Texas or the United States or their respective agencies and instrumentalities, including obligations that are fully guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United States; (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent; (6) bonds issued, assumed or guaranteed by the State of Israel; (7) certificates of deposit and share certificates meeting the requirements of the Texas Public Funds Investment Act (Chapter 2256, Texas Government Code, as amended (the "PFIA")) that are issued by or through an institution that either has its main office or a branch office in Texas, and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by obligations described in clauses (1) through (6) or in any other manner and amount provided by law for City deposits, or are invested by the City through a depository institution that has its main office or a branch office in the State of Texas and otherwise meet the requirements of the PFIA, (8) fully collateralized repurchase agreements that have a defined termination date, are fully secured a combination of cash and obligations described in clause (1) which are pledged to the City, held in the City's name, and deposited at the time the investment is made with the City or with a third party selected and approved by the City and are placed through a primary government securities dealer, as defined by the Federal Reserve, or a financial institution doing business in the State, (9) certain bankers' acceptances with the remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated at least A-1 or P-1 or the equivalent by at least one nationally recognized credit rating agency, (10) commercial paper with a stated maturity of 270 days or less that is rated at least A-1 or P-1 or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank, (11) no-load money market mutual funds registered with and regulated by the Securities and Exchange Commission that have a dollar weighted average stated maturity of 90 days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share, and (12) no-load mutual funds registered with the Securities and Exchange Commission that have an average weighted maturity of less than two years, invest exclusively in obligations described in this paragraph, and are continuously rated as to investment quality by at least one nationally recognized investment rating firm of not less than AAA or its equivalent. If specifically authorized in the authorizing document, bond proceeds may be invested in guaranteed investment contracts that have a defined termination date and are secured by obligations of the United States or its agencies and instrumentalities in an amount at least equal to the amount of bond proceeds invested under such contract, other than the prohibited obligations described in the next succeeding paragraph. The City may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than AAA or AAA -m or an equivalent by at least one nationally recognized rating service. The City may also contract with an investment management firm registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities Board to provide for the investment and management of its public funds or other funds under its control for a term up to two years, but the City retains ultimate responsibility as fiduciary of its assets. In order to renew or extend such a contract, the City must do so by order, ordinance, or resolution. The City is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security and bears no interest; (3) collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index. Political subdivisions such as the City are authorized to implement securities lending programs if (i) the securities loaned under the program are 100% collateralized, a loan made under the program allows for termination at any time and a loan made under the program is either secured by (a) obligations that are described in clauses (1) through (6) of the first paragraph under this subcaption, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm not less than "A" or its equivalent, or (c) cash invested in obligations that are described in clauses (1) through (6) and (10) through (12) of the first paragraph under this subcaption, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the governmental body, held in the name of the governmental body and deposited at the time the investment is made with the City or a third party designated by the City; (iii) a loan made under the program is placed through either a primary government securities dealer or a financial institution doing business in the State of Texas; and (iv) the agreement to lend securities has a term of one year or less. INVESTMENT POLICIES ... Under Texas law, the City is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that includes a list of authorized investments for City funds, maximum allowable stated maturity of any individual investment, the maximum average dollar -weighted maturity allowed for pooled fund groups, methods to monitor the market price of investments acquired with public funds, a requirement for settlement of all transactions, except investment pool 41 funds and mutual funds, on a delivery versus payment basis, and procedures to monitor rating changes in investments acquired with public funds and the liquidation of such investments consistent with the Public Funds Investment Act. All City funds must be invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each funds' investment. Each Investment Strategy Statement will describe its objectives concerning: (1) suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield. Under Texas law, City investments must be made "with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived." At least quarterly the investment officers of the City shall submit an investment report detailing: (1) the investment position of the City, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, the ending market value and the fully accrued interest during the reporting period of each pooled fund group, (4) the book value and market value of each separately listed asset at the end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council. ADDITIONAL PROVISIONS ... Under Texas law the City is additionally required to: (1) annually review its adopted policies and strategies; (2) adopt a rule, order, ordinance or resolution stating that it has reviewed its investment policy and investment strategies and records any changes made to either its investment policy or investment strategy in the respective rule, order, ordinance or resolution; (3) require any investment officers with personal business relationships or relatives with firms seeking to sell securities to the City to disclose the relationship and file a statement with the Texas Ethics Commission and the City Council; (4) require the registered principal of firms seeking to sell securities to the City to: (a) receive and review the City's investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to preclude investment transactions conducted between the City and the business organization that are not authorized by the City's investment policy (except to the extent that this authorization is dependent on an analysis of the makeup of the City's entire portfolio or requires an interpretation of subjective investment standards), and (c) deliver a written statement attesting to these requirements; (5) perform an annual audit of the management controls on investments and adherence to the City's investment policy; (6) provide specific investment training for the Treasurer, Chief Financial Officer and investment officers; (7) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase agreement funds to no greater than the term of the reverse repurchase agreement; (8) restrict the investment in no-load mutual funds in the aggregate to no more than 15% of the entity's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service; (9) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements; and (10) at least annually review, revise, and adopt a list of qualified brokers that are authorized to engage in investment transactions with the City. TABLE 14- CURRENT INVESTMENTS (1) As of March 1, 2017, the City's available funds were invested as follows: (1) There are no City funds invested in derivative securities, i.e., securities whose rate of return is determined by reference to some other instrument, index or commodity. (2) Fully insured by FDIC. (3) Insured up to the FDIC limit with uninsured amounts backed by a Federal Home Loan Bank standby letter of credit. (4) Insured up to the FDIC limit with uninsured amounts collateralized by U.S. federal agency securities at a minimum of 102% of principal plus accrued interest. 42 Market Value Market Book Description Percent Value Value Treasury Securities - Coupon 5.93% $ 44,415,155 $ 44,357,162 Federal Agency Issues - Coupon 30.97% 232,035,287 232,312,432 Federal Agency Issues - Callable 1.31% 9,849,875 9,999,204 Municipal Bonds - Coupon 4.69% 35,142,861 35,254,616 CDs - CDARS (2) 7.34% 55,000,000 55,000,000 CDS - SLOC (3) 12.68% 95,000,000 95,000,000 Commercial Paper Disc. - Amortizing 7.58% 56,823,600 56,813,529 Local Government Inv. Pool-TexSTAR 29.04% 217,564,298 217,564,298 Demand Deposits/Wells Fargo (4) 0.46% 3,420,592 3,420,592 100.00% $ 749,251,668 $ 749,721,833 (1) There are no City funds invested in derivative securities, i.e., securities whose rate of return is determined by reference to some other instrument, index or commodity. (2) Fully insured by FDIC. (3) Insured up to the FDIC limit with uninsured amounts backed by a Federal Home Loan Bank standby letter of credit. (4) Insured up to the FDIC limit with uninsured amounts collateralized by U.S. federal agency securities at a minimum of 102% of principal plus accrued interest. 42 TAX MATTERS OPINIONS The Bonds ... On the date of initial delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel to the City, will render its opinion that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof ("Existing Law"), (1) interest on the Bonds for federal income tax purposes will be excludable from the "gross income" of the holders thereof and (2) the Bonds will not be treated as "specified private activity bonds" the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Internal Revenue Code of 1986 (the "Code"). Except as stated above, Bond Counsel to the City will express no opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Bonds. See Appendix C — Forms of Bond Counsel's Opinions. The Certificates ... On the date of initial delivery of the Certificates, Bond Counsel to the City will render its opinion that, in accordance with Existing Law, (1) interest on the Certificates for federal income tax purposes will be excludable from the "gross income" of the holders thereof and (2) the Certificates will not be treated as "specified private activity bonds" the interest on which would be included as an alternative minimum tax preference item under section 57(a)(5) of the Code. Except as stated above, Bond Counsel to the City will express no opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Certificates. See Appendix C — Forms of Bond Counsel's Opinions. In rendering each of the foregoing opinions, Bond Counsel to the City will rely upon (a) certain information and representations of the City, including information and representations contained in the City's federal tax certificate with respect to each Obligation issue, (b) covenants of the City contained in the Obligation documents relating to certain matters, including arbitrage and the use of the proceeds of the Obligations and the Refunded Obligations and the property financed or refinanced therewith and (c) with respect to the Bonds, the sufficiency certificate prepared by FirstSouthwest. Failure by the City to observe the aforementioned representations or covenants could cause the interest on the Obligations to become taxable retroactively to the date of issuance. The Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied subsequent to the issuance of the Obligations in order for interest on the Obligations to be, and to remain, excludable from gross income for federal income tax purposes. Failure to comply with such requirements may cause interest on the Obligations to be included in gross income retroactively to the date of issuance of the Obligations. The opinion of Bond Counsel to the City is conditioned on compliance by the City with such requirements, and Bond Counsel to the City has not been retained to monitor compliance with these requirements subsequent to the issuance of the Obligations. Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law and the reliance on the aforementioned information, representations and covenants. Bond Counsel's opinion is not a guarantee of a result. The Existing Law is subject to change by the Congress and to subsequent judicial and administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that such Existing Law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or disposition of the Obligations. A ruling was not sought from the Internal Revenue Service by the City with respect to the Obligations or the projects being financed or refinanced therewith. Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law and the representations of the City that it deems relevant to render such opinion and is not a guarantee of a result. No assurances can be given as to whether or not the Internal Revenue Service will commence an audit of the Obligations, or as to whether the Internal Revenue Service would agree with the opinion of Bond Counsel. If an audit is commenced, under current procedures the Internal Revenue Service is likely to treat the City as the taxpayer and the holders of the Obligations may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability. FEDERAL INCOME TAX ACCOUNTING TREATMENT OF ORIGINAL ISSUE DISCOUNT The initial public offering price to be paid for one or more maturities of the Obligations may be less than the principal amount thereof or one or more periods for the payment of interest on the Obligations may not be equal to the accrual period or be in excess of one year (the "Original Issue Discount Bonds"). In such event, the difference between (i) the "stated redemption price at maturity" of each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount Bond would constitute original issue discount. The "stated redemption price at maturity" means the sum of all payments to be made on the Obligations less the amount of all periodic interest payments. Periodic interest payments are payments which are made during equal accrual periods (or during any unequal period if it is the initial or final period) and which are made during accrual periods which do not exceed one year. Under Existing Law, any owner who has purchased such Original Issue Discount Bond in the initial public offering is entitled to exclude from gross income (as defined in section 61 of the Code) an amount of income with respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see discussion set forth below. 43 In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue Discount Bond was held by such initial owner) is includable in gross income. Under existing law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity thereof (in amounts calculated as described below for each six-month period ending on the date before the semiannual anniversary dates of the date of the Obligations and ratably within each such six-month period) and the accrued amount is added to an initial owner's basis for such Original Issue Discount Bond for purposes of determining the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the issue price and the amount of original issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such Original Issue Discount Bond. The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. All owners of Original Issue Discount Bonds should consult their own tax advisors with respect to the determination for federal, state and local income tax purposes of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Bonds and with respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale or other disposition of such Original Issue Discount Bonds. COLLATERAL FEDERAL INCOME TAX CONSEQUENCES The following discussion is a summary of certain collateral federal income tax consequences resulting from the purchase, ownership or disposition of the Obligations. This discussion is based on existing statutes, regulations, published rulings and court decisions, all of which are subject to change or modification, retroactively. The following discussion is applicable to investors, other than those who are subject to special provisions of the Code, such as financial institutions, property and casualty insurance companies, life insurance companies, individual recipients of Social Security or Railroad Retirement benefits, individuals allowed an earned income credit, certain S corporations with subchapter C earnings and profits, foreign corporations subject to the branch profits tax, taxpayers qualifying for the health insurance premium assistance credit, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase tax-exempt obligations. THE DISCUSSION CONTAINED HEREIN MAY NOT BE EXHAUSTIVE. INVESTORS, INCLUDING THOSE WHO ARE SUBJECT TO SPECIAL PROVISIONS OF THE CODE, SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX-EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE OBLGATIONS. Interest on the Obligations will be includable as an adjustment for "adjusted current earnings" to calculate the alternative minimum tax imposed on corporations by section 55 of the Code. Under section 6012 of the Code, holders of tax-exempt obligations, such as the Obligations, may be required to disclose interest received or accrued during each taxable year on their returns of federal income taxation. Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of a tax-exempt obligation, such as the Obligations, if such obligation was acquired at a "market discount" and if the fixed maturity of such obligation is equal to, or exceeds, one year from the date of issue. Such treatment applies to "market discount bonds" to the extent such gain does not exceed the accrued market discount of such bonds; although for this purpose, a de minimis amount of market discount is ignored. A "market discount bond" is one which is acquired by the holder at a purchase price which is less than the stated redemption price at maturity or, in the case of a bond issued at an original issue discount, the "revised issue price" (i.e., the issue price plus accrued original issue discount). The "accrued market discount" is the amount which bears the same ratio to the market discount as the number of days during which the holder holds the obligation bears to the number of days between the acquisition date and the final maturity date. STATE, LOCAL AND FOREIGN TAXES Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership or disposition of the Obligations under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax consequences unique to investors who are not United States persons. 44 INFORMATION REPORTING AND BACKUP WITHHOLDING Subject to certain exceptions, information reports describing interest income, including original issue discount, with respect to the Obligations will be sent to each registered holder and to the Internal Revenue Service. Payments of interest and principal may be subject to backup withholding under section 3406 of the Code if a recipient of the payments fails to furnish to the payor such owner's social security number or other taxpayer identification number ("TIN"), furnishes an incorrect TIN, or otherwise fails to establish an exemption from the backup withholding tax. Any amounts so withheld would be allowed as a credit against the recipient's federal income tax. Special rules apply to partnerships, estates and trusts, and in certain circumstances, and in respect of Non -U.S. Holders, certifications as to foreign status and other matters may be required to be provided by partners and beneficiaries thereof. FUTURE AND PROPOSED LEGISLATION Tax legislation, administrative actions taken by tax authorities, or court decisions, whether at the Federal or state level, may adversely affect the tax-exempt status of interest on the Obligations under Federal or state law and could affect the market price or marketability of the Obligations. Any such proposal could limit the value of certain deductions and exclusions, including the exclusion for tax-exempt interest. The likelihood of any such proposal being enacted cannot be predicted. Prospective purchasers of the Obligations should consult their own tax advisors regarding the foregoing matters. CONTINUING DISCLOSURE OF INFORMATION In each of the Ordinances, the City has made the following agreement for the benefit of the holders and beneficial owners of the respective series of Obligations. The City is required to observe each agreement while it remains obligated to advance funds to pay such Obligations. Under each agreement, the City will be obligated to provide certain updated financial information and operating data annually, and the timely notice of specified events to the Municipal Securities Rulemaking Board ("MSRB"). This information will be available free of charge from the MSRB via the Electronic Municipal Market Access ("EMMA") system at www.enima.msrb.orQ. ANNUAL REPORTS ... The City shall provide annually to the MSRB, in the electronic format prescribed by the MSRB, financial information and operating data (the "Annual Operating Report") with respect to the City of the general type included in this Official Statement under Tables numbered I through 5 and 7 through 14. The City will additionally provide financial statements of the City (the "Financial Statements"), that will be (i) prepared in accordance with the accounting principles described in the City's annual audited financial statements or such other accounting principles as the City may be required to employ from time to time pursuant to State law or regulation and shall be in substantially the form included in this Official Statement and (ii) audited, if the City commissions an audit of such Financial Statements and the audit is completed within the period during which they must be provided. The City will update and provide the Annual Operating Report within six months after the end of each fiscal year and the Financial Statements within 12 months of the end of each fiscal year, in each case beginning with the fiscal year ending in and after 2016. The City may provide the Financial Statements earlier, including at the time it provides its Annual Operating Report, but if the audit of such Financial Statements is not complete within 12 months after any such fiscal year end, then the City shall file unaudited Financial Statements within such 12 -month period and audited Financial Statements for the applicable fiscal year, when and if the audit report on such Financial Statements becomes available. The financial information and operating data to be provided may be set forth in full in one or more documents or may be included by specific reference to any document available to the public on the MSRB's Internet Web site or filed with the United States Securities and Exchange Commission (the "SEC"), as permitted by SEC Rule 15c2-12 (the "Rule"). The City's current fiscal year end is September 30. Accordingly, it must provide the Annual Operating Report by March 31 in each year, unless the City changes its fiscal year. If the City changes its fiscal year, it will notify the MSRB of the change. NOTICE OF CERTAIN EVENTS ... The City will also provide timely notices of certain events to the MSRB. The City will provide notice of any of the following events with respect to the Obligations to the MSRB in a timely manner (but not in excess of ten business days after the occurrence of the event): (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (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, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material notices or determinations with respect to the tax status of the Obligations, or other material events affecting the tax status of the Obligations; (7) modifications to rights of holders of the Obligations, if material; (8) Obligation calls, if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Obligations, if material; (11) rating changes; (12) bankruptcy, insolvency, receivership, or similar event of the City, which shall occur as described below; (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of its assets, other than in the ordinary course of business, the entry into of a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee or the change of name of a trustee, if material. In addition, the City will provide timely notice of any failure by the City to provide annual financial information in accordance with their agreement described above under "Annual Reports". 45 For these purposes, any event described in (12) in the immediately preceding paragraph is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. LIMITATIONS AND AMENDMENTS ... The City has agreed to update information and to provide notices of specified events only as described above. The City has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above. The City makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Obligations at any future date. The City disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders of Obligations may seek a writ of mandamus to compel the City to comply with its agreement. The City may amend its continuing disclosure agreement for either or both of the Bonds and Certificates from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, if (i) the agreement, as amended, would have permitted an underwriter to purchase or sell Bonds or Certificates, as the case may be, in the offering described herein in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal amount of the outstanding Bonds or Certificates, as the case may be, consent to the amendment or (b) any person unaffiliated with the City (such as nationally recognized bond counsel) determines that the amendment will not materially impair the interests of the holders and beneficial owners of the Bonds or Certificates, as the case may be. The City may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provisions of the 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 Obligations in the primary offering of the Obligations. If the City so amends the agreement, it has agreed to include with the next financial information and operating data provided in accordance with its agreement described above under "Annual Reports" an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information and operating data so provided. COMPLIANCE WITH PRIOR UNDERTAKINGS ... During the last five years, the City believes it has complied in all material respects with all continuing disclosure agreements made by it in accordance with SEC Rule 15c2-12. However, there was one instance in 2014 where a bond insurer's credit rating was upgraded above the underlying rating on the insured bonds, and the City did not file a Notice of Material Event for the rating change until 94 days after the bond insurer's rating change. OTHER INFORMATION RATINGS The Obligations and the presently outstanding tax supported debt of the City are rated " " by Fitch and " " by S&P. An explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only the respective views of such organizations and the City makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, or either of them, may have an adverse effect on the market price of the Obligations. LITIGATION It is the opinion of the City Attorney and City Staff that there is no pending, or to their knowledge threatened, litigation or other proceeding against the City that could have a material adverse financial impact upon the City or its operations over and above those already disclosed in the City's Comprehensive Annual Financial Report, see Appendix B, Notes V.F. and V.G., page 73. At the time of the initial delivery of the Obligations, the City will provide the Initial Purchasers with a certificate to the effect that no litigation of any nature has been filed or is then pending challenging the issuance of the Obligations or that affects the payment and security of the Obligations or in any other manner questioning the issuance, sale or delivery of the Obligations. REGISTRATION AND QUALIFICATION OF OBLIGATIONS FOR SALE The sale of the Obligations has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(a)(2); and the Obligations have not been qualified under the Securities Act of Texas 46 in reliance upon various exemptions contained therein; nor have the Bonds or Certificates been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Bonds or Certificates under the securities laws of any jurisdiction in which the Obligations may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Obligations shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS The Obligations. Section 1201.041 of the Public Security Procedures Act (Chapter 1201, Texas Government Code) provides that the Obligations are negotiable instruments, investment securities governed by Chapter 8, Texas Business and Commerce Code, and are legal and authorized investments for insurance companies, fiduciaries, and trustees, and for the sinking funds of municipalities or other political subdivisions or public agencies of the State of Texas. In addition, various provisions of the Texas Finance Code provide that, subject to a prudent investor standard, the Obligations are legal investments for state banks, savings banks, trust companies with at least $1 million of capital, and savings and loan associations. The Certificates. Section 271.051, Texas Local Government Code, provides that the Certificates are legal and authorized investments for banks, savings banks, trust companies, savings and loan associations, insurance companies, fiduciaries, trustees and guardians, and for the sinking funds of municipalities, school districts, and other political subdivisions or public agencies of the State of Texas. The Certificates are eligible to secure deposits of any public funds of the State, municipalities, school districts, and other political subdivisions of the State, and are legal security for those deposits to the extent of their market value. General Considerations. For political subdivisions in Texas that have adopted investment policies and guidelines in accordance with the Public Funds Investment Act (Texas Government Code, Chapter 2256), the Obligations may have to be assigned a rating of at least "A" or its equivalent as to investment quality by a national rating agency before such obligations are eligible investments for sinking funds and other public funds. The City has made no investigation of other laws, rules, regulations, or investment criteria which might apply to such institutions or entities or which might limit the suitability of the Obligations for any of the foregoing purposes or limit the authority of such institutions or entities to purchase or invest in the Obligations for such purposes. The City has made no review of laws in other states to determine whether the Obligations are legal investments for various institutions in those states. LEGAL OPINIONS AND NO -LITIGATION CERTIFICATE The City will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds and of the Certificates, including the unqualified approving legal opinions of the Attorney General of Texas approving the Initial Bond and the Initial Certificate and to the effect that the Bonds and the Certificates are valid and legally binding obligations of the City, and based upon examination of such transcript of proceedings, the approving legal opinions of Bond Counsel, to like effect and to the effect that the interest on the Bonds and the Certificates will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax on corporations. The customary closing papers, including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Obligations, or which would affect the provision made for their payment or security or in any manner questioning the validity of said Obligations will also be furnished. Though it represents the Financial Advisor and purchasers of debt from governmental issuers from time to time in matters unrelated to the issuance of the Obligations, Bond Counsel has been engaged by and only represents the City in connection with the issuance of the Obligations. Bond Counsel was not requested to participate, and did not take part, in the preparation of the Notice of Sale and Bidding Instructions, the Official Bid Form and the Official Statement, and such firm has not assumed any responsibility with respect thereto or undertaken independently to verify any of the information contained therein, except that, in its capacity as Bond Counsel, such firm has reviewed the information describing the Obligations in the Official Statement to verify that such description conforms to the provisions of the Bond Ordinance and the Certificate Ordinance. The legal fee to be paid Bond Counsel for services rendered in connection with the issuance of the Obligations is contingent on the sale and delivery of the Obligations. The legal opinion will accompany the Obligations deposited with DTC or will be printed on the Obligations in the event of the discontinuance of the Book -Entry -Only System. The legal opinions to be delivered concurrently with the delivery of the Obligations express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of that expression of professional judgment, of the transaction opined upon, or of the future performance of the parties to the transaction. Nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION The financial data and other information contained herein have been obtained from City records, audited financial statements, and other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will be realized. All of the summaries of the statutes, documents, and ordinances contained in this Official Statement are made subject to all of the provisions of such statutes, documents, and ordinances. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further information. Reference is made to original documents in all respects. 47 FINANCIAL ADVISOR FirstSouthwest, a Division of Hilltop Securities Inc., ("FirstSouthwest") is employed as Financial Advisor to the City in connection with the issuance of the Obligations. The Financial Advisor's fee for services rendered with respect to the sale of the Obligations is contingent upon the issuance and delivery of the Obligations. FirstSouthwest, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not assume any responsibility for the information, covenants, and representations contained in any of the legal documents with respect to the federal income tax status of the Obligations, or the possible impact of any present, pending, or future actions taken by any legislative or judicial bodies. The Financial Advisor to the City has provided the following sentence for inclusion in this Official Statement. The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the City and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information. INITIAL PURCHASER OF THE BONDS After requesting competitive bids for the Bonds, the City accepted the bid of (the "Initial Purchaser of the Bonds") to purchase the Bonds at the interest rates shown on page 4 of the Official Statement at a price of par plus a cash premium of $ The Initial Purchaser of the Bonds can give no assurance that any trading market will be developed for the Bonds after their sale by the City to the Initial Purchaser of the Bonds. The City has no control over the price at which the Bonds are subsequently sold and the initial yield at which the Bonds will be priced and reoffered will be established by and will be the sole responsibility of the Initial Purchaser of the Bonds. INITIAL PURCHASER OF THE CERTIFICATES After requesting competitive bids for the Certificates, the City accepted the bid of (the "Initial Purchaser of the Certificates") to purchase the Certificates at the interest rates shown on page 2 of the Official Statement at a price of par plus a cash premium of $ . The Initial Purchaser of the Certificates can give no assurance that any trading market will be developed for the Certificates after their sale by the City to the Initial Purchaser of the Certificates. The City has no control over the price at which the Certificates are subsequently sold and the initial yield at which the Certificates will be priced and reoffered will be established by and will be the sole responsibility of the Initial Purchaser of the Certificates. The Initial Purchaser of the Bonds and the Initial Purchaser of the Certificates are herein collectively referred to as the "Initial Purchasers". CERTIFICATION OF THE OFFICIAL STATEMENT At the time of payment for and delivery of the Obligations, the City will furnish to the Initial Purchasers a certificate, executed by a proper City officer, acting in such officer's official capacity, to the effect that to the best of such officer's knowledge and belief: (a) the descriptions and statements of or pertaining to the City contained in the Official Statement, and any addenda, supplement, or amendment thereto, on the date of the Official Statement, on the date of sale of the Obligations, and the acceptance of the best bid therefor, and on the date of the delivery, were and are true and correct in all material respects; (b) insofar as the City and its affairs, including its financial affairs, are concerned, the Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (c) insofar as the descriptions and statements, including financial data, of or pertaining to entities, other than the City, and their activities contained in the Official Statement are concerned, such statements and data have been obtained from sources which the City believes to be reliable and the City has no reason to believe that they are untrue in any material respect; and (d) there has been no material adverse change in the financial condition of the City since the date of the last audited financial statements of the City. FORWARD-LOOKING STATEMENTS DISCLAIMER The statements contained in this Official Statement, and in any other information provided by the City, that are not purely historical, are forward-looking statements, including statements regarding the City's expectations, hopes, intentions, or strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forward-looking statements included in this Official Statement are based on information available to the City on the date hereof, and the City assumes no obligation to update any such forward-looking statements. The City's actual results could differ materially from those discussed in such forward-looking statements. The forward-looking statements included herein are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal, and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and legislative, judicial, and other governmental authorities and officials. Assumptions 48 related to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the City. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Official Statement will prove to be accurate. Links To Websites The City has provided links to websites in this Official Statement to allow investors independent access to information or expertise that may be of value. INFORMATION ON SUCH WEBSITES IS NOT INCORPORATED INTO THIS OFFICIAL STATEMENT BY REFERENCE OR OTHERWISE. The inclusion of any links does not imply a recommendation or endorsement of the information or views expressed within a website. The City has not participated in the preparation, compilation or selection of information or views in any website referenced in this Official Statement, and assumes no responsibility or liability for the information or views, or accuracy or completeness thereof, in any website referenced herein. MISCELLANEOUS The Ordinances authorizing the issuance of the Obligations approved the form and content of this Official Statement, and any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Obligations by the Initial Purchasers. PRICING OFFICER City of Denton, Texas 49 Schedule I SCHEDULE OF REFUNDED OBLIGATIONS* General Obligation Refunding Bonds, Series 2007 $12,980,000 $ 12,980,000 The 2018 - 2022 maturities will be redeemed prior to original maturity on July 14, 2017, at par. Principal Principal Original Maturity Interest Amount Amount Dated Date Date Rate Outstanding Refunded 9/15/2007 2/15/2018 4.250% $ 800,000 $ 800,000 2/15/2018 5.000% 2,755,000 2,755,000 2/15/2019 5.000% 3,030,000 3,030,000 2/15/2020 5.250% 2,390,000 2,390,000 2/15/2021 4.250% 2,460,000 2,460,000 2/15/2022 4.250% 1,545,000 1,545,000 $12,980,000 $ 12,980,000 The 2018 - 2022 maturities will be redeemed prior to original maturity on July 14, 2017, at par. APPENDIX A GENERAL INFORMATION REGARDING THE CITY APPENDIX B EXCERPTS FROM THE CITY OF DENTON, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended September 30, 2016 The information contained in this Appendix consists of excerpts from the City of Denton, Texas Comprehensive Annual Financial Report for the Year Ended September 30, 2016, and is not intended to be a complete statement of the City's financial condition. Reference is made to the complete Report for further information. APPENDIX C FORMS OF BOND COUNSEL'S OPINIONS ORDINANCE NO. 2017 - AN ORDINANCE CONSIDERING ALL MATTERS INCIDENT AND RELATED TO THE ISSUANCE, SALE AND DELIVERY OF UP TO $30,700,000 IN PRINCIPAL AMOUNT OF "CITY OF DENTON GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BONDS, SERIES 2017"; AUTHORIZING THE ISSUANCE OF THE BONDS; DELEGATING THE AtTI'HORITY TO CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE BONDS; APPROVING AND AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID BONDS; ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, by virtue of elections held within the City of Denton, Texas (the "Issuer") on November 4, 2014 and November 6, 2012, this City Council became authorized to issue, sell and deliver the general obligation bonds of the Issuer, of which there are authorized to be issued by this Ordinance, and will remain authorized but unissued hereafter, as described in Schedule I attached hereto and incorporated herein; and WHEREAS, this City Council finds and determines that it is necessary and proper to order the issuance, sale and delivery of such voted bonds; and WHEREAS, the City has previously issued, and there are presently outstanding certificates of obligation which are secured by the full faith and credit of the Issuer and a pledge by the Issuer to levy ad valorem taxes sufficient to pay principal of and interest on the certificates of obligation as they become due and a pledge of surplus revenues to further secure the certificates of obligation; and WHEREAS, the Issuer now desires to refund all or part of the outstanding certificates of obligation described in Schedule II attached hereto and incorporated herein (collectively, the "Eligible Refunded Obligations"), and those Eligible Refunded Obligations designated by the Pricing Officer in the Pricing Certificate, each as defined below, to be refunded are herein referred to as the "Refunded Obligations"; and WHEREAS, Chapter 1207, Texas Government Code, as amended ("Chapter 1207') authorizes the Issuer to issue refunding bonds and to deposit the proceeds from the sale thereof, together with any other available funds or resources, directly with a paying agent for the Refunded Obligations or a trust company or commercial bank that does not act as a depository for the Issuer and is named in these proceedings, and such deposit, if made before the payment dates of the Refunded Obligations, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the Refunded Obligations; and WHEREAS, Chapter 1207 further authorizes the Issuer to enter into an escrow or similar agreement with such paying agent for the Refunded Obligations or trust company or commercial bank with respect to the safekeeping, investment, reinvestment, administration and disposition of any such deposit, upon such terms and conditions as the Issuer and such paying agent or trust company or commercial bank may agree; and WHEREAS, the City Council hereby finds and declares a public purpose and it is in the best interests of the Issuer to refund the Refunded Obligations in order to achieve a debt service savings, with such savings, among other information and terms to be included in a pricing certificate (the "Pricing Certificate") to be executed by the Pricing Officer (hereinafter designated), all in accordance with the provisions of Section 1207.007, Texas Government Code; and WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to maturity within 20 years of the date of the bonds hereinafter authorized; and WHEREAS, the Issuer is an "issuer" within the meaning of Section 1371.001(4)(P), Texas Government Code, having (i) a principal amount of at least $100 million in outstanding long-term indebtedness, in long-term indebtedness proposed to be issued, or in a combination of outstanding or proposed long-term indebtedness and (ii) some amount of long-term indebtedness outstanding or proposed to be issued that is rated in one of the four highest rating categories for long-term debt instruments by a nationally recognized rating agency for municipal securities, without regard to the effect of any credit agreement or other form of credit enhancement entered into in connection with the obligation; and WHEREAS, the bonds hereinafter authorized to be issued were voted and are to be issued, sold and delivered pursuant to the general laws of the State of Texas, including Texas Government Code Chapters 1207, 1331 and 1371, as amended, and the Issuer's Home Rule Charter; and WHEREAS, it is officially found, determined, and declared that the meeting at which this Ordinance has been adopted was open to the public and public notice of the time, place and subject matter of the public business to be considered and acted upon at said meeting, including this Ordinance, was given, all as required by the applicable provisions of Texas Government Code Chapter 551; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. RECITALS, AMOUNT, PURPOSE AND DESIGNATION OF THE BONDS. (a) The recitals set forth in the preamble hereof are incorporated herein and shall have the same force and effect as if set forth in this Section. (b) The term "Bonds" as used in this Ordinance shall mean and include collectively the bond initially issued and delivered pursuant to this Ordinance (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 "Bond" shall mean any of the Bonds. (c) The Bonds of the City of Denton, Texas (the "Issuer") are hereby authorized to be issued and delivered in the maximum aggregate principal amount of $30,700,000 (i) up to $13,540,000 for the public purpose of refunding the Refunded Obligations, (ii) for the purpose of the acquisition of property and making improvements for public purposes in said Issuer, to wit: (A) $8,950,000 for street improvements and (B) $8,210,000 for public safety facilities for police Page 2 and fire departments, all in accordance with and subject to the election propositions authorizing such bonds (the "Improvement Projects"), and (iii) to pay the costs associated with the issuance of the Bonds (collectively, the "Projects"). (d) Each bond issued pursuant to this Ordinance shall be designated: "CITY OF DENTON GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BOND, SERIES 2017," and initially there shall be issued, sold, and delivered hereunder fully registered bonds, without interest coupons, payable to the respective registered owners thereof (with the Initial Bond being made payable to the Purchaser as described in Section 10 hereof), or to the registered assignee or assignees of said Bonds or any portion or portions thereof (in each case, the "Registered Owner"). The Bonds shall be in the respective principal amounts, shall be numbered, shall mature and be payable on the date or dates in each of the years and in the principal amounts, and shall bear interest to their respective dates of maturity or redemption prior to maturity at the rates per annum, as set forth in the Pricing Certificate. SECTION 2. DELEGATION TO PRICING OFFICER. (a) As authorized by Sections 1207.007 and 1371.053, Texas Government Code, as amended, the City Manager, the Deputy City Manager or the Assistant City Manager (the "Pricing Officer") is hereby authorized to act on behalf of the Issuer in selling and delivering the Bonds, determining which of the Eligible Refunded Obligations shall be refunded and carrying out the other procedures specified in this Ordinance, including, determining the date of sale of the Bonds, the date of the Bonds, any additional or different designation or title by which the Bonds shall be known, the price at which the Bonds will be sold, the years in which the Bonds will mature, the principal amount to mature in each of such years, the rate of interest to be borne by each such maturity, the interest payment and record dates, the price and terms upon and at which the Bonds shall be subject to redemption prior to maturity at the option of the Issuer, as well as any mandatory sinking fund redemption provisions, and all other matters relating to the issuance, sale, and delivery of the Bonds and the refunding of the Refunded Obligations, including without limitation establishing the redemption date for and effecting the redemption of the Refunded Obligations and obtaining municipal bond insurance for all or any portion of the Bonds (including in connection therewith the execution of any commitment agreements, membership agreements in mutual insurance companies, and other similar agreements) and providing for the terms and provisions thereof applicable to the Bonds, all of which shall be specified in the Pricing Certificate; provided that: (i) the aggregate original principal amount of the Bonds shall not exceed $30,700,000, with up to $13,540,000 of such amount issued for the purposes described in Section 1(c)(i) and (iii) hereof, $8,950,000 of such amount to be issued for the purposes described in Section 1(c)(ii)(A) and (iii) hereof, and $8,210,000 of such amount to be issued for the purposes described in Section l (c)(ii)(B) and (iii) hereof; (ii) the maximum stated maturity of the Bonds shall not exceed February 15, 2037; Page 3 (iii) the Bonds shall bear interest at a fixed rate, and the net effective interest rate on the Bonds shall not exceed 3.50%; (iv) the refunding of the Refunded Bonds must produce present value debt service savings of at least 3.00%, net of any Issuer contribution; (v) the delegation made hereby shall expire if not exercised by the Pricing Officer through execution of the Pricing Certificate on or prior to October 18, 2017; and (vi) on or prior to delivery, the Bonds shall be rated by a nationally recognized rating agency for municipal securities in one of the four highest categories for long-term obligations. (b) In establishing the aggregate principal amount of the Bonds, the Pricing Officer shall establish an amount not exceeding the amount authorized in Subsection (a) hereof, which shall be sufficient in amount to provide for the purposes for which the Bonds are authorized and to pay costs of issuing the Bonds. The Bonds shall be sold with and subject to such terms as set forth in the Pricing Certificate. SECTION 3. CHARACTERISTICS OF THE BONDS. (a) Registration Transfer Conversion and Exchange-, Authentication. The Pricing Officer shall designate in the Pricing Certificate a bank to act as the paying agent/registrar for the Bonds (the "Paying Agent/Registrar"). The Issuer shall keep or cause to be kept at the principal corporate trust office of the Paying Agent/Registrar books or records for the registration of the transfer, conversion and exchange 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 registrations of transfers, conversions and exchanges under such reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations, transfers, conversions and exchanges as herein provided. The Paying Agent/Registrar shall obtain and record in the Registration Books the address 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. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such registration, transfer, conversion, exchange and delivery of a substitute Bond or Bonds. Registration of assignments, transfers, conversions and exchanges of Bonds shall be made in the manner provided and with the effect stated in the FORM OF BOND set forth in this Ordinance. Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond. Except as provided in Section 3(c) of this Ordinance, an authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Bond, date and manually sign said Page 4 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 paid Bonds and Bonds surrendered for conversion and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the governing body of the Issuer or any other body or person so as to accomplish the foregoing conversion and exchange of any Bond or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Bonds in the manner prescribed herein, and said Bonds shall be printed or typed on paper of customary weight and strength. Pursuant to Chapter 1201, Government Code, as amended, the duty of conversion and exchange of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Bond, the converted and exchanged Bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Bonds that initially were issued and delivered pursuant to this Ordinance, approved by the Attorney General of the State of Texas (the "Attorney General") and registered by the Comptroller of Public Accounts of the State of Texas (the "Comptroller"). (b) 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, 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 established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer. Notice of the past due interest shall be sent at least five (5) business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of each Registered Owner appearing on the Registration Books at the close of business on the last business day next preceding the date of mailing of such notice. (c) In General. The Bonds (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 or shall be redeemed prior to their scheduled maturities (notice of which shall be given to the Paying Agent/Registrar by the Issuer at least 45 days prior to any such redemption date), (iii) may be converted and exchanged for other Bonds, (iv) may be transferred and assigned, (v) shall have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of and interest on the Bonds shall be payable, and (viii) shall be administered and the Paying Agent/Registrar and the Issuer shall have certain duties and responsibilities with respect to the Bonds, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF BOND set forth in this Ordinance (as modified in the Pricing Certificate), The Initial Bond is not required to be, and shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in conversion of and exchange for any Bond or Bonds issued under this Ordinance the Paying Agent/Registrar shall execute the Paying Agent/Registrar's Authentication Certificate, in the form set forth in the FORM OF BOND. (d) Paying A ei_g_it/Registrar for the Bonds. 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 entity to act as Page 5 and perform the services of Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying Agent/Registrar will be a single entity. The Issuer reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not less than 60 days written notice to the Paying Agent/Registrar, to be effective not later than 60 days prior to the next principal or interest payment date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust company, 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 promptly shall 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. (e) Authentication. Except as provided below, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Paying Agent/Registrar's Authentication Certificate substantially in the form provided in this Ordinance, duly authenticated by manual execution of the Paying Agent/Registrar. It shall not be required that the same authorized representative of the Paying Agent/Registrar sign the Paying Agent/Registrar's Authentication Certificate on all of the Bonds. In lieu of the executed Paying Agent/Registrar's Authentication Certificate described above, the Initial Bond delivered on the closing date shall have attached thereto the Comptroller's Registration Certificate substantially in the form provided in this Ordinance, manually executed by the Comptroller or by her duly authorized agent, which certificate shall be evidence that the Initial Bond has been duly approved by the Attorney General and that it is a valid and binding obligation of the Issuer, and has been registered by the Comptroller. (f) Book -Entry -Only System. The Bonds issued in exchange for the Initial Bond shall be initially issued in the form of a separate single fully registered Bond for each of the maturities thereof. Upon initial issuance, the ownership of each such Bond shall be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), and except as provided in subsection (g) hereof, all of the outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC. With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the Issuer and the Paying Agent/Registrar shall have no responsibility or obligation to any securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created ("DTC Participant") to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the Issuer and the Paying Agent/Registrar shall have no responsibility or Page 6 obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than a Registered Owner of Bonds, as shown on the Registration Books, of any notice with respect to the Bonds, or (iii) the payment to any DTC Participant or any other person, other than a Registered Owner of Bonds, as shown in the Registration Books of any amount with respect to principal of or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the Issuer and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Registration Books as the absolute owner of such Bond for the purpose of payment of principal and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and interest on the Bonds only to or upon the order of the Registered Owners, as shown in the Registration Books as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the Issuer's obligations with respect to payment of principal of and interest on the Bonds to the extent of the sum or sums so paid. No person other than a Registered Owner, as shown in the Registration Books, shall receive a Bond evidencing the obligation of the Issuer to make payments of principal and interest pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in this Ordinance with respect to interest checks being mailed to the Registered Owner at the close of business on the Record Date, the words "Cede & Co." in this Ordinance shall refer to such new nominee of DTC. The previous execution and delivery of the Blanket Issuer Letter of Representations with respect to obligations of the Issuer is hereby ratified and confirmed; and the provisions thereof shall be fully applicable to the Bonds. (g) Successor Securities Depository; Transfers Outside Book -Entry -Only System. In the event that the Issuer determines that DTC is incapable of discharging its responsibilities described herein and in the Blanket Issuer Letter of Representations to DTC or that it is in the best interest of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the Issuer shall (i) appoint a successor securities depository, qualified to act as such under Section 17A of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or (ii) notify DTC and DTC Participants of the availability through DTC of Bonds and transfer one or more separate certificated Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Registration Books in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Registered Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance. (h) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of and interest on such Bond and all notices with respect to Page 7 such Bond shall be made and given, respectively, in the manner provided in the Blanket Issuer Letter of Representations to DTC. (i) Cancellation of Initial Bond. On the closing date, the Initial Bond, representing the entire principal amount of the Bonds, payable in stated installments to the purchaser designated in Section 10 or its designee, executed by manual or facsimile signature of the Mayor and City Secretary of the Issuer, approved by the Attorney General, and registered and manually signed by the Comptroller, will be delivered to such purchaser or its designee. Upon payment for the Initial Bond, the Paying Agent/Registrar shall cancel the Initial Bond and deliver to DTC on behalf of such purchaser one registered definitive Bond for each year of maturity of the Bonds, in the aggregate principal amount of all of the Bonds for such maturity. To the extent that the Paying Agent/Registrar is eligible to participate in DTC's FAST System, pursuant to an agreement between the Paying Agent/Registrar and DTC, the Paying Agent/Registrar shall hold the definitive Bonds in safekeeping for DTC. 0) Conditional Notice of Redemption. With respect to any optional redemption of the Bonds, unless the prerequisites to such redemption required by this Ordinance have been met and moneys sufficient to pay the principal of and premium, if any, and interest on the Bonds to be redeemed shall have been received by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice shall state that said redemption may, at the option of the Issuer, be conditional upon the satisfaction of such prerequisites and receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for such redemption, or upon any prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given and such prerequisites to the redemption and sufficient moneys are not received, such notice shall be of no force and effect, the Issuer shall not redeem such Bonds and the Paying Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to the effect that the Bonds have not been redeemed. SECTION 4. FORM OF BONDS. The form of the Bonds, including the form of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Comptroller's Registration Certificate to be attached to the Bonds initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as follows, with such appropriate variations, omissions or insertions as are permitted or required by this Ordinance, and with the Form of Bond to be modified pursuant to, and completed with information set forth in, the Pricing Certificate. (a) [Form of Bond] NO. R- UNITED STAPES OF AMERICA PRINCIPAL STATE OF TEXAS AMOUNT CITY OF DENTON $ GENERAL OBLIGATION REFUNDING AND IMPROVEMENT BOND SERIES 2017 Page 8 Interest Rate Dated Date Maturity Date CUSIP No. , 20 February 15, REGISTERED OWNER: PRINCIPAL, AMOUNT: DOLLARS ON THE MATURITY DATE specified above, the City of Denton, in Denton County, Texas (the "Issuer"), being a political subdivision and municipal corporation of the State of Texas, hereby promises to pay to the Registered Owner specified above, or registered assigns (hereinafter called the "Registered Owner"), on the Maturity Date specified above, the Principal Amount specified above. The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360 -day year of twelve 30 -day months) from _, 2017 at the Interest Rate per annum specified above. Interest is payable on _, 20 and semiannually on each and thereafter to the Maturity Date specified above, or the date of redemption prior to maturity; except, if this Bond is required to be authenticated and the date of its authentication is later than the first Record Date (hereinafter defined), such Principal Amount shall bear interest from the interest payment date next preceding the date of authentication, unless such date of authentication is after any Record Date but on or before the next following interest payment date, in which case such principal amount shall bear interest from such next following interest payment date; provided, however, that if on the date of authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being exchanged is due but has not been paid, then this Bond shall bear interest from the date to which such interest has been paid in full. THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the United States of America, without exchange or collection charges. The principal of this Bond shall be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity, or upon the date fixed for its redemption prior to maturity, at the principal corporate trust office of , 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 or draft, 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 this Bond (the "Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment date, to the Registered Owner hereof, at its address as it appeared on the last business day of the month preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. In addition, interest may be paid by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the Registered Owner. In the event of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special 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 (which shall be 15 days Page 9 after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first-class postage prepaid, to the address of each Registered Owner of a Bond appearing on the Registration Books at the close of business on the last business day next preceding the date of mailing of such notice. ANY ACCRUED INTEREST due at maturity or upon the redemption of this Bond prior to maturity as provided herein shall be paid to the Registered Owner upon presentation and surrender of this Bond for redemption and payment at the principal corporate trust office of the Paying Agent/Registrar. The Issuer covenants with the Registered Owner of this Bond that on or before each principal payment date, interest 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. IF THE DATE for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, a legal holiday or a day on which banking institutions in the city where the principal corporate trust office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day that is not such a Saturday, Sunday, legal holiday or day on which banking institutions are 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 a series of Bonds dated _, 2017, authorized in accordance with the Constitution and laws of the State of Texas in the principal amount of $ (i) $ for the public purpose of refunding the Refunded Obligations, (ii) for the purpose of the acquisition of property and making improvements for public purposes in the Issuer, to wit: (a) $8,950,000 for street improvements, and (b) $8,210,000 for public safety facilities for police and fire departments, all in accordance with and subject to the election propositions authorizing such bonds; and (iii) to pay the costs associated with the issuance of the Bonds. ON , 20_, or on any date thereafter, the Bonds 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 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 a redemption price equal to the principal amount to be redeemed plus accrued interest to the date fixed for redemption. [THE BONDS scheduled to mature on in the years and ( the "Term Bonds") are subject to scheduled mandatory redemption by the Paying Agent/Registrar by lot, or by any other customary method that results in a random selection, at a price equal to the principal amount thereof, plus accrued interest to the redemption date, out of moneys available for such purpose in the interest and sinking fund for the Bonds, on the dates and in the respective principal amounts, set forth in the following schedule: Term Bond Page 10 Term Bond Maturity: February 15, 20 Maturity: February 15,20_ Principal Principal Mandatory Redemption Amount Mandatory Redemption Amount Date Date February 15,20 $ February 15,20 $ February 15,20 February 15,20 February 15,20_ February 15,20 February 15,20_ (maturity) February 15,20 (maturity) The principal amount of Term Bonds of a stated maturity required to be redeemed on any mandatory redemption date pursuant to the operation of the mandatory sinking fund redemption provisions shall be reduced, at the option of the Issuer, by the principal amount of any Term Bonds of the same maturity which, at least 50 days prior to a mandatory redemption date (1) shall have been acquired by the Issuer at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, (2) shall have been purchased and canceled by the Paying Agent/Registrar at the request of the Issuer at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase, or (3) shall have been redeemed pursuant to the optional redemption provisions and not theretofore credited against a mandatory redemption requirement.] 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 of the Registered Owner to receive such notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the redemption of any 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 that are to be so redeemed. If such written notice of redemption is sent and if due provision for such payment is made, all as provided above, the Bonds or portions thereof that are to be so redeemed 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 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. IF AT THE TIME OF MAILING of notice of optional redemption there shall not have either been deposited with the Paying Agent/Registrar or legally authorized escrow agent immediately available funds sufficient to redeem all the Bonds called for redemption, such notice Page 11 may state that it is conditional, and is subject to the deposit of the redemption moneys with the Paying Agent/Registrar or legally authorized escrow agent at or prior to the redemption date or any prerequisite set forth in such notice of redemption. If such redemption is not effectuated, the Paying Agent/Registrar shall, within five days thereafter, give notice in the manner in which the notice of redemption was given that such moneys were not so received or such prerequisites were not met and shall rescind the redemption. ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without interest coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond Ordinance, this Bond may, at the request of the Registered Owner or the assignee or assignees hereof, be assigned, transferred, converted into and exchanged for a like aggregate principal amount of fully registered Bonds, without interest coupons, payable to the appropriate Registered Owner, assignee or assignees, as the case may be, having the same 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. 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 registered. The Form of Assignment printed or endorsed on this Bond may be executed by the Registered Owner to evidence the assignment hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Bond or any portion or portions hereof from time to time by the Registered Owner. The Paying Agent/Registrar's reasonable standard or customary fees and charges for assigning, transferring, converting and exchanging any Bond or portion thereof will be paid by the Issuer. In any circumstance, any taxes or governmental charges required to be paid with respect thereto shall be paid by the one requesting such assignment, transfer, conversion or exchange, as a condition precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be required to make any such transfer, conversion, or exchange (i) during the period 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. 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 cause written notice thereof to be mailed to the Registered Owners of the Bonds. IT IS HEREBY certified, recited and covenanted that this Bond 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 Bond have been performed, existed and been done in accordance with law; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond, Page 12 as such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in said Issuer, and have been pledged for such payment, within the limit prescribed by law. THE ISSUER HAS RESERVED THE RIGHT to amend the Bond Ordinance as provided therein, and under some (but not all) circumstances amendments thereto must be approved by the Registered Owners of a majority in aggregate principal amount of the outstanding Bonds. BY BECOMING the Registered Owner of this Bond, the Registered Owner thereby acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such terms and provisions, acknowledges that the Bond Ordinance is duly 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 (or in the Mayor's absence, of the Mayor Pro -Tem) and countersigned with the manual or facsimile signature of the City Secretary of said Issuer, and has caused the official seal of the Issuer to be duly impressed, or placed in facsimile, on this Bond. (signature) (signature___ City Secretary Mayor (SEAL) [INSERT BOND INSURANCE LEGEND, IF ANY] Page 13 (b) [Form of Paying Agent/Registrar's Authentication Certificate] PAYING AGENT/REGISTRAR'S AUTHENTICAfION CERTIFICATE (To be executed if this Bond is not accompanied by an executed Comptroller's Registration Certificate) It is hereby certified that this Bond has been issued under the provisions of the Bond Ordinance described in the text of this Bond; and that this Bond has been issued in conversion or replacement of, or in exchange for, a bond, bonds, or a portion of a bond or bonds of a series that originally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas. Dated: (c) [Form of Assignment] Paying Agent/Registrar By: Authorized Representative ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto Please insert Social Security or Taxpayer Identification Number of Transferee (Please print or typewrite name and address, including zip code, of Transferee.) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to register the transfer of the within Bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: Page 14 NOTICE: Signature(s) must be guaranteed NOTICE: The signature above must by an eligible guarantor institution correspond with the name of the Registered participating in a securities transfer Owner as it appears upon the front of this association recognized signature guarantee bond in every particular, without alteration or program. enlargement or any change whatsoever. (d) [Form of Comptroller's Registration Certificate] COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller of Public Accounts of the State of Texas. Witness my signature and seal this Comptroller of Public Accounts of the State of Texas (COMPTROLLER'S SEAL) (e) [Initial Bond Insertions] (i) The Initial Bond shall be in the form set forth in paragraph (a) of this Section, except that: A. immediately under the name of the Bond, the headings "Interest Rate" and "Maturity Date" shall both be completed with the words "As shown below" and "CUSIP No. " shall be deleted. B. the first paragraph shall be deleted and the following will be inserted: "THE CITY OF DENTON, "TEXAS, in Denton County, Texas (the "Issuer"), being a political subdivision and municipal corporation of the State of Texas, hereby promises to pay to the Registered Owner specified above, or registered assigns (hereinafter called the "Registered Owner"), on February 15 in each of the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule: Years Principal Amounts Interest Rates (Information from Pricing Certificate to be inserted) The Issuer promises to pay interest on the unpaid principal amount hereof (calculated on the basis of a 360 -day year of twelve 30 -day months) from , 2017 at the respective Interest Rate Page 15 per annum specified above. Interest is payable on _, 20_, and semiannually on each and thereafter to the date of payment of the principal installment specified above, or the date of redemption prior to maturity; except, that if this Bond is required to be authenticated and the date of its authentication is later than the first Record Date (hereinafter defined), such Principal Amount shall bear interest from the interest payment date next preceding the date of authentication, unless such date of authentication is after any Record Date but on or before the next following interest payment date, in which case such principal amount shall bear interest from such next following interest payment date; provided, however, that if on the date of authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being exchanged is due but has not been paid, then this Bond shall bear interest from the date to which such interest has been paid in full." C. The Initial Bond shall be numbered "7-1." SECTION 5. INTEREST AND SINKING FUND. (a) 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 accrued interest received upon 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 or is scheduled for redemption (but never less than 2% of the original principal amount of the Bonds as a sinking fund each year). Said tax shall be based on the latest approval tax rolls of the Issuer, with full 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 or is scheduled for redemption, are hereby pledged for such payment, within the limit prescribed by law. Notwithstanding the requirements of this Section, if Surplus Revenues or other lawfully available moneys of the Issuer are actually on deposit or budgeted and appropriated to be deposited in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes that otherwise would have been required to be levied pursuant to this Section may be reduced to the extent and by the amount of the Surplus Revenues or other lawfully available funds then on deposit or budgeted and appropriated to be deposited in the Interest and Sinking Fund. For purposes of this Section, "Surplus Revenues" means revenues derived by the Issuer from the ownership and operation of the Issuer's Utility System (consisting of its combined waterworks system, sanitary sewer system, and electric light and power system) that remain after the payment of all Page 16 maintenance and operation expenses thereof, and all debt service, reserve and other requirements in connection with all of the Issuer's revenue obligations (now or hereafter outstanding) or contractual obligations (now or hereafter existing) which are payable from all or any part of the net revenues of the Issuer's Utility System. If Surplus Revenues are budgeted and appropriated for deposit into the Interest and Sinking Fund, the Issuer: (i) shall transfer and deposit in the Interest and Sinking Fund each month an amount of not less than 1/12th of the annual debt service on the Bonds to be paid from Surplus Revenues until the amount on deposit in the Interest and Sinking Fund equals the amount required for annual debt service on the Bonds; (ii) shall establish, adopt and maintain an annual budget that provides for either the monthly deposit of sufficient Surplus Revenues and/or tax revenues, the monthly deposit of any other legally available funds on hand at the time of the adoption of the annual budget, or a combination thereof, into the Interest and Sinking Fund for the repayment of the Bonds; and (iii) shall at all times maintain and collect sufficient Utility System rates and charges in conjunction with any other legally available funds that, after payment of the costs of operating and maintaining the Utility System, produce revenues in an amount not less than the debt service requirements of all outstanding Utility System revenue bonds of the Issuer and other obligations of the Issuer which are secured in whole or in part by a pledge of revenues of the Utility System and for which the Issuer is budgeting the repayment of such obligations from the revenues of the Utility System, or the Issuer shall provide documentation which evidences the levy of an ad valorem tax rate dedicated to the Interest and Sinking Fund, in conjunction with any other legally available funds except Utility System rates and charges, sufficient for the repayment of Utility System debt service requirements. (b) Chapter 1208, Texas Government Code, applies to the issuance of the Bonds and the pledge of the taxes granted by the Issuer under this Section and Section 9, respectively, and is therefore valid, effective, and perfected. Should Texas law be amended at any time while the Bonds are outstanding and unpaid, the result of such amendment being that the pledge of the taxes granted by the Issuer under this Section is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, in order to preserve to the Registered Owners of the Bonds a security interest in said pledge, the Issuer agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code and enable a filing of a security interest in said pledge to occur. SECTION 6. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased Bond") within the meaning of this Ordinance, except to the extent provided in subsection (d) of this Section, when payment of the principal of such Bond, plus interest thereon to the due date (whether such due date be by reason of maturity or otherwise) 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 Page 17 available to the Paying Agent/Registrar in accordance with an escrow agreement or other instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Government Obligations that mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to provide for such payment, and when proper 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. Notwithstanding any other provision of this Ordinance to the contrary, it is hereby provided that any determination not to redeem Defeased Bonds that is made in conjunction with the payment arrangements specified in Subsection (a)(i) or (ii) of this Section shall not be irrevocable, provided that: (1) in the proceedings providing for such payment arrangements, the Issuer expressly reserves the right to call the Defeased Bonds for redemption; (2) gives notice of the reservation of that right to the Registered Owners of the Defeased Bonds immediately following the making of the payment arrangements; and (3) directs that notice of the reservation be included in any redemption notices that it authorizes. (b) Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the Issuer 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 that is not required for the payment of the Bonds and interest thereon, with respect to which such money has been so deposited, shall be turned over to the Issuer, or deposited as directed in writing by the Issuer. Any Future Escrow Agreement pursuant to which the money and/or Government Obligations are held for the payment of Defeased Bonds may contain provisions permitting the investment or reinvestment of such moneys in Government Obligations or the substitution of other Government Obligations upon the satisfaction of the requirements specified in Subsection (a)(i) or (ii) of this Section. All income from such Government Obligations received by the Paying Agent/Registrar which is not required for the payment of the Defeased Bonds, with respect to which such money has been so deposited, shall be remitted to the Issuer or deposited as directed in writing by the Issuer. (c) The term "Government Obligations" means any securities and obligations now or hereafter authorized by state law that are eligible to discharge obligations such as the Bonds, including (i) direct, noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the governing body of the Issuer adopts or approves the proceedings authorizing the financial arrangements, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the governing body of the Issuer adopts or approves the proceedings authorizing the financial arrangements, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. Page 18 (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. (e) In the event that the Issuer elects to defease less than all of the principal amount of Bonds of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount of Bonds by such random method as it deems fair and appropriate. SECTION 7. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED 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 to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft or destruction of such Bond, as the case may be. In every case of damage or mutilation of a Bond, the Registered Owner shall surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated. (c) No Default Occurred. Notwithstanding the foregoing provisions of this Ordinance, in the event any such Bond shall have matured, and no default has occurred that is then continuing in the payment of the principal of, redemption premium, if any, or interest on the Bond, the Issuer may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of issuing a replacement Bond, provided security 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 Sec. 1206.022, Government Code, this Section 7 of this Ordinance shall constitute authority for the issuance of Page 19 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 3(a) of this Ordinance for Bonds issued in conversion and exchange for other Bonds. SECTION 8. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION, IF OBTAINED; ENGAGEMENT OF BOND COUNSEL. (a) The Mayor of the Issuer is hereby authorized to have control of the Initial Bond and all necessary records and proceedings pertaining to the Bonds pending its delivery and its investigation, examination, and approval by the Attorney General, and its registration by the Comptroller. Upon registration of the Initial Bond said Comptroller (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate attached to such Bond, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such Bond. The approving legal opinion of the Issuer's Bond Counsel and the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Bonds issued and delivered under this Ordinance, but neither shall have any legal effect, and shall be solely for the convenience and information of the Registered Owners of the Bonds. In addition, if bond insurance is obtained, the Bonds may bear an appropriate legend as provided by the insurer. (b) The obligation of the Purchaser to accept delivery of the Bonds is subject to the Purchaser being furnished with the final, approving opinion of McCall, Parkhurst & Horton L.L.P., bond counsel to the Issuer, which opinion shall be dated as of and delivered on the date of initial delivery of the Bonds to the Purchaser. The engagement of such firm as bond counsel to the Issuer in connection with the issuance, sale and delivery of the Bonds is hereby approved and confirmed. The execution and delivery of an engagement letter between the Issuer and such firm, with respect to such services as bond counsel, is hereby authorized in such form as may be approved by the Mayor, and the Mayor is hereby authorized to execute such engagement letter. SECTION 9. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE BONDS. (a) Covenants. The Issuer covenants to take any action necessary to assure, or refrain from any action that 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 (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 or refinanced therewith are so used, such amounts, whether or not received by the Issuer, with respect to such private business use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for Page 20 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" that 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 that is greater than the lesser of $5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is directly or indirectly used to 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 that 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 result 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 that were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) that 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 rules and regulations of the United States Department of the Treasury ("Treasury Regulations"), and (C) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed 10 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 Page 21 percent of the amount then required to be paid as a result of Excess Earnings under section 148(f) of the Code. (b) Rebate Fund. In order to facilitate compliance with the above covenant (a)(8), a "Rebate Fund" is hereby established by the Issuer for the sole benefit of the United States of America, and such Rebate 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. (c) Use of Proceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), the Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of issuance of the 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 United States Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated that 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 that impose additional requirements 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 or Pricing Officer to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the Issuer, that may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. (d) Allocation of and Limitation on Expenditures for the Projects. The Issuer covenants to account for the expenditure of sale proceeds and investment earnings to be used for the construction and acquisition of the Improvement Projects on its books and records by allocating proceeds to expenditures within 18 months of the later of the date that (1) the expenditure is made, or (2) the Improvement Projects are completed. The foregoing notwithstanding, the Issuer shall not expend proceeds of the sale of the Bonds or investment earnings thereon more than 60 days after the earlier of (1) the fifth anniversary of the delivery of the Bonds, or (2) the date the Bonds are retired, unless the Issuer obtains an opinion of nationally -recognized bond counsel that such expenditure will not adversely affect the status, for federal income tax purposes, of the Bonds or the interest thereon. 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. (e) Disposition of Projects. The Issuer covenants that the Projects and the projects refinanced by the Bonds will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of 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 of the foregoing, the portion of the property Page 22 comprising personal property and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains a legal opinion that such failure to comply will not adversely affect the excludability for federal income tax proposes from gross income of the interest. (f) Reimbursement. This Ordinance is intended to satisfy the official intent requirements set forth in section 1.150-2 of the Treasury Regulations. SECTION 10. SALE OF BONDS AND APPROVAL OF OFFICIAL STATEMENT; FURTHER PROCEDURES. (a) The Bonds shall be sold and delivered subject to the provisions of Section 1 and Section 2 hereof through a negotiated sale, competitive sale or private placement and pursuant to the terms and provisions of a purchase contract or a notice of sale and official bid form (in either case, the "Purchase Agreement"), the terms and provisions of which are to be determined by the Pricing Officer in accordance with Section 2 hereof, and in which the purchaser or purchasers of the Bonds (the "Purchaser") shall be designated. The Pricing Officer is hereby authorized to execute and deliver the Purchase Agreement for and on behalf of the Issuer. The Bonds shall initially be registered in the name of the Purchaser or its designee. (b) The Issuer hereby approves the form and content of the draft preliminary official statement relating to the Bonds and any addenda, supplement or amendment thereto, and approves the distribution of such preliminary official statement in the reoffering of the Bonds by the Purchaser in final form, with such changes therein or additions thereto as the Pricing Officer may deem advisable. The Pricing Officer is hereby authorized, in the name and on behalf of the Issuer, to approve, distribute, and deliver a final preliminary official statement and a final official statement relating to the Bonds to be used by the Purchaser in the marketing of the Bonds. (c) The Pricing Officer is authorized, in connection with effecting the sale of the Bonds, to obtain from a municipal bond insurance company so designated in the Pricing Certificate (the "Insurer") a municipal bond insurance policy (the "Insurance Policy") in support of the Bonds. To that end, should the Pricing Officer exercise such authority and commit the Issuer to obtain a municipal bond insurance policy, for so long as the Insurance Policy is in effect, the requirements of the Insurer relating to the issuance of the Insurance Policy as set forth in the Pricing Certificate are incorporated by reference into this Ordinance and made a part hereof for all purposes, notwithstanding any other provision of this Ordinance to the contrary. The Pricing Officer shall have the authority to execute any documents to effect the issuance of the Insurance Policy by the Insurer, including commitment agreements, membership agreements in mutual insurance companies and other similar agreements. (d) The Mayor and Mayor Pro Tem, the City Manager, Pricing Officer and City Secretary and all other officers, employees and agents of the Issuer, and each of them, shall be and they are hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the Issuer a Paying Agent/Registrar Agreement with the Paying Page 23 Agent/Registrar and all other 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 Pricing Certificate, the Bonds, the sale of the Bonds, any Purchase Agreement and the Official Statement. 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 11. INTEREST EARNINGS ON BOND PROCEEDS. Interest earnings derived from the investment of proceeds from the sale of the Bonds issued for the Improvement Projects shall be used along with other Bond proceeds for the Improvement Projects; provided that after completion of such purpose, if any of such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and Sinking Fund. It is further provided, however, that any interest earnings on Bond proceeds that are required to be rebated to the United States of America pursuant to Section 9 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 12. CONSTRUCTION FUND OR ACCOUNT; INVESTMENT. (a) The proceeds of sale of the Bonds, excluding any accrued interest received from the initial purchaser of the Bonds and any other amounts to be deposited into the Interest and Sinking Fund, any amounts to be deposited into the escrow fund under the escrow agreement approved in Section 16 of this Ordinance and amounts to pay costs of issuance of the Bonds, shall be deposited in one or more construction funds or accounts for use, along with any investment earnings thereon, by the Issuer for payment of all lawful costs associated with the acquisition and construction of the Improvement Projects as hereinbefore provided. Upon payment of all such costs, any moneys remaining on deposit in said funds or accounts, including investment earnings, shall be transferred to the Interest and Sinking fund. Amounts so deposited to the Interest and Sinking Fund shall be used in the manner described in Section 5 of this Ordinance. (b) The Issuer may invest proceeds of the Bonds (including investment earnings thereon) issued for Improvement Projects and amounts deposited into the Interest and Sinking Fund in investments authorized by the Public Funds Investment Act, Chapter 2256, Texas Government Code, as amended; provided, however, that the Issuer hereby covenants that the proceeds of the sale of the Bonds will be used as soon as practicable for the purposes for which the Bonds are issued. (e) All deposits authorized or required by this Ordinance shall be secured to the fullest extent required by law for the security of public funds. SECTION 13. COMPLIANCE WITH RULE 15c2-12. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. Page 24 "Rule" means SEC Rule 15c2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. (b) Annual Reports. (i) The Issuer shall provide annually to the MSRB, in the electronic format prescribed by the MSRB, financial information and operating data (the "Annual Operating Report") with respect to the Issuer of the general type included in the final Official Statement authorized by this Ordinance, being the information described in the Pricing Certificate. The Issuer will additionally provide financial statements of the Issuer (the "Financial Statements"), that will be (i) prepared in accordance with the accounting principles described in the Pricing Certificate or such other accounting principles as the Issuer may be required to employ from time to time pursuant to State law or regulation and shall be in substantially the form included in the final Official Statement and (ii) audited, if the Issuer commissions an audit of such Financial Statements and the audit is completed within the period during which they must be provided. The Issuer will update and provide the Annual Operating Report within six months after the end of each fiscal year and the Financial Statements within 12 months of the end of each fiscal year, in each case beginning with the fiscal year ending in and after 2017. The Issuer may provide the Financial Statements earlier, including at the time it provides its Annual Operating Report, but if the audit of such Financial Statements is not complete within 12 months after any such fiscal year end, then the Issuer shall file unaudited Financial Statements within such 12 -month period and audited Financial Statements for the applicable fiscal year, when and if the audit report on such Financial Statements becomes available. All documents provided to the MSRB, pursuant to this Section shall be accompanied by identifying information as prescribed by the MSRB. (ii) If the Issuer changes its fiscal year, it will notify the MSRB of the change (and of the date of the new fiscal year end) prior to the next date by which the Issuer otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to the MSRB or filed with the SEC. (c) Event Notices. (i) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a timely manner (but not in excess of ten business days after the occurrence of the event) of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: I . Non-payment related defaults; 2. Modifications to rights of holders of the Bonds; 3. Bond calls; 4. Release, substitution, or sale of property securing repayment of the Bonds; Page 25 5. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms; 6. Appointment of a successor or additional trustee or the change of name of a trustee. (ii) The Issuer shall notify the MSRB in an electronic format as prescribed by the MSRB, in a timely manner (but not in excess of ten business days after the occurrence of the event) of any of the following events with respect to the Bonds, without regard to whether such event is considered material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Unscheduled draws on debt service reserves reflecting financial difficulties; 3. Unscheduled draws on credit enhancements reflecting financial difficulties; 4. Substitution of credit or liquidity providers, or their failure to perform; 5. Adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 BTEB) or other material notices or determinations with respect to the tax-exempt status of the Bonds, or other material events affecting the tax-exempt status of the Bonds; 6. Tender offers; 7. Defeasances; 8. Rating changes; 9. Bankruptcy, insolvency, receivership or similar event of an obligated person (iii) The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such subsection. (d) Limitations Disclaimers and 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 notice of any deposit made in accordance with this Ordinance or applicable law that causes the Bonds no longer to be outstanding. (ii) The provisions of this Section are for the sole benefit of the Registered Owners and beneficial owners of the 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 financial information, 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 Page 26 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 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 this 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 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. 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. If the Issuer so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) of this 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. (e) Amendment of the Rule. The provisions of this Section shall be revised by the Pricing Officer to reflect the requirements of the Rule if the Rule is amended after the adoption of this Ordinance but prior to the delivery of the Bonds so as to permit an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule. Any such revisions shall Page 27 be set forth in the Pricing Certificate and are incorporated by reference into this Ordinance and made a part hereof for all purposes, notwithstanding any other provision of this Ordinance to the contrary. SECTION 14. METHOD OF AMENDMENT, The Issuer hereby reserves the right to amend this Ordinance subject to the following terms and conditions, to -wit: (a) The Issuer may from time to time, without the consent of any holder, except as otherwise required by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any ambiguity, defect or omission in this Ordinance that does not materially adversely affect the interests of the holders, (ii) grant additional rights or security for the benefit of the holders, (iii) add events of default as shall not be inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the interests of the holders, (iv) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time in effect, or (v) make such other provisions in regard to matters or questions arising under this Ordinance as shall not be inconsistent with the provisions of this Ordinance and that shall not in the opinion of the Issuer's Bond Counsel materially adversely affect the interests of the holders. (b) Except as provided in paragraph (a) above, the holders of Bonds aggregating in principal amount a majority of the aggregate principal amount of then outstanding Bonds that are the subject of a proposed amendment shall have the right from time to time to approve any amendment hereto that may be deemed necessary or desirable by the Issuer; provided, however, that without the consent of 100% of the holders in aggregate principal amount of the then outstanding Bonds, nothing herein contained shall permit or be construed to permit amendment of the terms and conditions of this Ordinance or in any of the Bonds so as to: (1) Make any change in the maturity of any of the outstanding Bonds; (2) Reduce the rate of interest borne by any of the outstanding Bonds; (3) Reduce the amount of the principal of, or redemption premium, if any, payable on any outstanding Bonds; (4) Modify the terms of payment of principal or of interest or redemption premium on outstanding Bonds or any of them or impose any condition with respect to such payment; or (5) Change the minimum percentage of the principal amount of Bonds necessary for consent to such amendment. (c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the Issuer shall send by U.S. mail to each Registered Owner of the affected Bonds a copy of the proposed amendment and cause notice of the proposed amendment to be published at least once in a financial publication published in The City of New York, New York or in the State of Texas. Page 28 Such published notice shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the office of the Issuer for inspection by all holders of such Bonds. (d) Whenever at any time within one year from the date of publication of such notice the Issuer shall receive an instrument or instruments executed by the holders of at least a majority in aggregate principal amount of all of the Bonds then outstanding that are required for the amendment, which instrument or instruments shall refer to the proposed amendment and that shall specifically consent to and approve such amendment, the Issuer may adopt the amendment in substantially the same form. (e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this Section, this Ordinance shall be deemed to be modified and amended in accordance with such amendatory Ordinance, and the respective rights, duties, and obligations of the Issuer and all holders of such affected Bonds shall thereafter be determined, exercised, and enforced, subject in all respects to such amendment. (f) Any consent given by the holder of a Bond pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of the publication of the notice provided for in this Section, and shall be conclusive and binding upon all future holders of the same Bond during such period. Such consent may be revoked at any time after six months from the date of the publication of said notice by the holder who gave such consent, or by a successor in title, by filing notice with the Issuer, but such revocation shall not be effective if the holders of a majority in aggregate principal amount of the affected Bonds then outstanding, have, prior to the attempted revocation, consented to and approved the amendment. For the purposes of establishing ownership of the Bonds, the Issuer shall rely solely upon the registration of the ownership of such Bonds on the Registration Books kept by the Paying Agent/Registrar. SECTION 15. DEFAULT AND REMEDIES. (a) Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of or interest on any of the Bonds when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement or obligation of the Issuer, the failure to perform which materially, adversely affects the rights of the Registered Owners of the Bonds, including, but not limited to, their prospect or ability to be repaid in accordance with this Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by any Registered Owner to the Issuer. (b) Remedies for Default. Page 29 (i) Upon the happening of any Event of Default, then and in every case, any Registered Owner or an authorized representative thereof, including, but not limited to, a trustee or trustees therefor, may proceed against the Issuer for the purpose of protecting and enforcing the rights of the Registered Owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Registered Owners hereunder or any combination of such remedies. (ii) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Registered Owners of Bonds then outstanding. (c) Remedies Not Exclusive. (i) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance. (ii) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. (iii) By accepting the delivery of a Bond authorized under this Ordinance, such Registered Owner agrees that the certifications required to effectuate any covenants or representations contained in this Ordinance do not and shall never constitute or give rise to a personal or pecuniary liability or charge against the officers, employees or agents of the Issuer or the members of its governing body. SECTION 16. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS. In furtherance of authority granted by Section 1207.007(b), Texas Government Code, the Mayor or a Pricing Officer are further authorized to enter into and execute on behalf of the Issuer with the escrow agent named therein, an escrow or similar agreement, in the form and substance as shall be approved by the Pricing Officer, which agreement will provide for the payment in full of the Refunded Obligations. In addition, the Mayor, Pricing Officer or other officer of the Issuer is authorized to purchase such securities, to execute such subscriptions for the purchase of the Escrowed Securities, (as defined in the agreement), if any, and to authorize such contributions to the escrow fund as provided in the agreement. SEC"TION 17. REDEMPTION OF REFUNDED OBLIGATIONS. (a) Subject to the execution and delivery of the Purchase Agreement with the Purchaser, the Issuer hereby directs that the Refunded Obligations be called for redemption on the dates and at such prices as set forth in the Pricing Certificate. The Pricing Officer is hereby authorized and directed to issue or cause to be issued the Notices of Redemption of the Refunded Obligations in Page 30 substantially the form set forth in Exhibit A attached hereto, completed with information from the Pricing Certificate, to the paying agent/registrar(s) for the Refunded Obligations. (b) In addition, the paying agent/registrar(s) for the Refunded Obligations is hereby directed to provide the appropriate notices of redemption and defeasance as specified by the ordinances authorizing the issuance of the Refunded Obligations and is hereby directed to make appropriate arrangements so that the Refunded Obligations may be redeemed on their respective redemption dates. The Refunded Obligations shall be presented for redemption at the paying agent/registrar therefore, and shall not bear interest after the date fixed for redemption. (c) If the redemption of the Refunded Obligations results in the partial refunding of any maturity of the Refunded Obligations, the Pricing Officer shall direct the paying agent/registrar(s) for the Refunded Obligations to designate at random and by lot which of the Refunded Obligations will be payable from and secured solely from ad valorem taxes of the Issuer pursuant to the ordinance of the Issuer authorizing the issuance of such Refunded Obligations (the "Refunded Obligation Ordinance"). The paying agent/registrar(s) shall notify by first-class mail all registered owners of all affected obligations of such maturities that: (i) a portion of such obligations have been refunded and are secured until final maturity solely with cash and investments maintained by the escrow agent in the escrow fund, (ii) the principal amount of all affected obligations of such maturities registered in the name of such registered owner that have been refunded and are payable solely from cash and investments in the Escrow Fund and the remaining principal amount of all affected obligations of such maturities registered in the name of such registered owner, if any, have not been refunded and are payable and secured solely from ad valorem taxes of the Issuer described in the Refunded Obligation Ordinance, (iii) the registered owner is required to submit his or her Refunded Obligations to the paying agent/registrar(s), for the purposes of re -registering such registered owner's obligations and assigning new CUSIP numbers in order to distinguish the source of payment for the principal and interest on such obligations, and (iv) payment of principal of and interest on such obligations may, in some circumstances, be delayed until such obligations have been re -registered and new CUSIP numbers have been assigned as required by (iii) above. (d) The source of funds for payment of the principal of and interest on the Refunded Obligations on their respective maturity or redemption dates shall be from the funds placed in escrow with the escrow agent, pursuant to an escrow agreement approved in Section 16 of this Ordinance. SECTION 18, APPROPRIATION. To pay the debt service coming due on the Bonds, if any, prior to receipt of the taxes levied to pay such debt service, there is hereby appropriated from current funds on hand, which are hereby certified to be on hand and available for such purpose, an amount, which together with capitalized interest received from the sale of the Bonds, if any, will be sufficient to pay such debt service, and such amount shall be used for no other purpose. SECTION 19. EFFECTIVE DATE. In accordance with the provisions of Texas Government Code Section 1201.028, this Ordinance shall be effective immediately upon its adoption by the City Council. Page 31 SECTION 20. SEVERABILITY. If any section, article, paragraph, sentence, clause, phrase or word in this Ordinance, or application thereof to any persons or circumstances is held invalid or unconstitutional by a court of competent jurisdiction, such holding shall not affect the validity of the remaining portion of this Ordinance, despite such invalidity, which remaining portions shall remain in full force and effect. [Signature page follows] Page 32 PASSED, APPROVED AND EFFECTIVE this day of , 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY: Page 33 SCHEDULEI November 4, 2014 Election Voted Bonds Purpose Street Improvements Police and Fire Public Safety Facilities Stormwater Drainage and Flood Control Improvements Park System Improvements $8,545,000 $5,255,000 $3,290,000 $11,355,000 $4,280,000 $7,075,000 * Includes principal and premium November 6, 2012 Election Voted Bonds Amount Amount Previously Unissued Purpose Authorized Issued* Balance Street Improvements $20,400,000 $16,400,000 $4,000,000 * Includes principal and premium S-1 $0 $0 Amount Being Issued* $4,000,000 $3,2.90,000 $7,075,000 Remaining Balance $0 Amount Amount Amount Previously Unissued Being Remaining Authorized Issued* Balance Issued* Balance $61,710,000 $13,340,000 $48,370,000 $4,950,000 $43,420,000 $16,565,000 $8,355,000 $8,210,000 $8,210,000 $0 Purpose Street Improvements Police and Fire Public Safety Facilities Stormwater Drainage and Flood Control Improvements Park System Improvements $8,545,000 $5,255,000 $3,290,000 $11,355,000 $4,280,000 $7,075,000 * Includes principal and premium November 6, 2012 Election Voted Bonds Amount Amount Previously Unissued Purpose Authorized Issued* Balance Street Improvements $20,400,000 $16,400,000 $4,000,000 * Includes principal and premium S-1 $0 $0 Amount Being Issued* $4,000,000 $3,2.90,000 $7,075,000 Remaining Balance $0 SCHEDULE II Schedule of Eligible Refunded Bonds City of Denton Certificates of Obligation, Series 2007A Maturity Date 2/15/2018 2/15/2018 2/15/2019 2/15/2020 2/15/2021 2/15/2022 Total S-1 Principal Amount Outstanding $800,000 2,755,000 3,030,000 2,390,000 2,460,000 1,545,000 $12,980,000 EXHIBIT A Notice of Redemption NOTICE IS HEREBY GIVEN that the City of Denton, Texas has called for redemption the outstanding Certificates of Obligation of the City described as follows: City of Denton Certificates of Obligation, Series 2007, dated September 15, 2007, scheduled to mature on February 15, 20_ through February 15 20_, aggregating $ (and being all of the outstanding bonds of said series scheduled to mature on and after February 15, 20); Call date: -20 ; redeemable at a redemption price of par plus accrued interest at the principal corporate offices of The Bank of New York Mellon Trust Company, N.A., only upon presentation by the owner thereof. If moneys sufficient for the payment of such redemption price are held by or on behalf of the paying agent, the described Certificates of Obligation shall become due and payable on the redemption date specified, and the interest thereon shall cease to accrue from and after the redemption date. In compliance with section 3406 of the Internal Revenue Code of 1986, payors making certain payments due on debt securities may be obligated to deduct and withhold 30 percent of such payment from the remittance to any payee who has failed to provide such payor with a valid taxpayer identification number. To avoid the imposition of the withholding of tax, such payees should submit a taxpayer identification number when surrendering the bonds for redemption. NOTICE IS FURTHER GIVEN that all Bonds should be submitted to one of the following address: First Class/Registered/ Express Delivery Certified Mail The Bank of New York Mellon Trust Company, N.A Global Corporate Trust P.O. Box 396 East Syracuse, New York 13057 Dated: Im The Bank of New York Mellon Trust Company, N.A. Global Corporate Trust 111 Sanders Creek Parkway East Syracuse, New York 13057 Hand Delivery The Bank of New York Mellon Trust Company, N.A. Global Corporate Trust Corporate Trust Window 101 Barclay Street Is'r Floor East New York, New York 10286 By: The Bank of New York Mellon Trust Company, National Association A-1 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: Al 7-0002a, Version: 1 Legislation Text AGENDA INFORMATION SHEET DEPARTMENT: Department of Development Services CM/ACM: Todd Hileman DATE: April 18, 2017 SUBJECT Conduct the first of two readings of an ordinance to annex approximately 16 acres generally located on the north side of Barthold Road, approximately 340 feet west of the I-35 Southbound Service Road (A17-0002). BACKGROUND On February 21, 2017, the City Council approved a rezoning request by Blue Beacon Truck Wash for approximately 5.3 acres located at the northwest corner of I-35 and Barthold Road. According to the applicant, the intent of the rezoning was to facilitate development of the site with a triple -bay truck wash. As conceptual designs of the development have progressed, it has been determined that the proposal must expand into the adjacent 16 acres to the west in order to provide adequate access along Barthold Road. This adjacent 16 acres is located in the City of Denton's Extraterritorial Jurisdiction (ETJ) which is subject to a Non -Annexation Agreement (NAA), executed on March 16, 2016. In order to comply with the NAA, the property owner must maintain farm, ranch, and single-family uses on the property. Any development inconsistent with these uses would terminate the NAA, and the property would be subject to annexation. Since platting and development of the 16 acre site is contemplated, the owner of the property, Joseph O'Brion, President of H3H, L.L.C., submitted a voluntary petition for annexation of the subject property in writing on March 9, 2017. The tentative schedule for annexation is as follows: April 18, 2017 - City Council considers institution of annexation proceedings and holds the First Reading of the Annexation Ordinance. June 6, 2017 - Second Reading of the Annexation Ordinance. PRIOR ACTION/REVIEW (Council, Boards, Commissions) A public hearing for the voluntary annexation petition and public comment of the subject property was held at the April 4, 2017 City Council meeting. STRATEGIC PLAN RELATIONSHIP City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: Al 7-0002a, Version: 1 The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Economic Development Related Goal: 3.4 Encourage development, redevelopment, recruitment, and retention EXHIBITS 1. Site Location/Aerial Map 2. Annexation Petition 3. Presentation 4. Draft Ordinance Respectfully submitted: Munal Mauladad Director of Development Services Prepared by: Julie Wyatt Senior Planner City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, Al 7-0002 Site Location 0 180 360 720 SITE �� C 0 D Feet R' E Parcels ETJ of °fry NAA 8/1/20 nea DENTON Roads I:oevelopi7iestt SerAcesRGIS I f D- 3/23/2011 theThe eCit YoffDento�n and his prepared maps a daPabentonthe se,' Ubchbasedron the PUbiCmnPormfathon Atct ThUe Cty of Denton) mskeseeveey eff rt Topeoduceesnd or the mostpc�u reent aridtaccu for in form atPonr possbeh No warPantiesthexpressetd or IImpIIeoY are provided for the data herein, Its use, or Its Interpretation. Utilization ofthis map Indicates understanding and acceptance of th is statement. I 215 E. McKinney St., Denton, Texas 76201 PETITION REQUESTING ANNEXATION BY LANDOWNER TO THE HONORABLE MAYOR AND CITY COUNCIL MEMBERS OF THE CITY OF DENTON, TEXAS: H3H, LLC., owner of the hereinafter described tract or parcel of land ("Property") hereby voluntarily petitions the City Council of the City of Denton, Texas, to annex the Property and extend the present city limits and extraterritorial jurisdiction so as to include as part of the City of Denton, Texas, the Property, containing approximately 16 acres of land, described as follows: A legal description of the Property is attached hereto as Exhibit A and is incorporated herein by reference. A map showing the location of the Property is attached hereto as Exhibit B and is incorporated herein by reference. I/we certify that the above-described Property is contiguous and adjacent to the City of Denton, Texas, and that this petition is signed and duly acknowledged by each and every person, corporation, or entity having an ownership interest in said Property. F«hi"71 ACKNOWLEDGEMENT STATE OF TEXAS COUNTY OF DENTON BEFORE ME, the undersigned authority, on this day personally appeared Joseph D. O'Brien, III, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he/she executed the same for the purposes and consideration therein expressed. Given under my hand and seal of office this day of , 2017. (SEAL)NOTARY *B .IC in and for the STATE OF TEXAS ._... _... _... _.., _�........... w.,M ftA t P- E31 F.. Printed Name d..K My commission expires: EXHIBIT "A" ANNEXATION EXHIBIT 15.737 ACRES BEING all that certain lot, tract, or parcel of land situated in the S. L. Johnson Survey Abstract Number 683 in the City of Denton, Denton County, Texas, being a part of that certain "21.000 Acre Tract" of land conveyed by deed from HLHTE-Lydia Hill Trust et al to H3H, LLC recorded under Document Number 2011-22008, Real Property Records, Denton County, Texas and being more particularly described as follows: COMMENCING at an iron rod marked "KHA" found for comer in the west line of Interstate Highway Number 35, a public roadway having a variable width right-of-way, said point being the southeast comer of that certain tract of land conveyed by deed from New Farms, LLC to Phase 17 Investments, LP recorded under Document Number 2011-104771, Real Property Records, Denton County, Texas; THENCE N 89° 48'47" W, 325.09 feet with the south line of said Phase 17 Investments tract to a point in the Denton City Limit Line for PLACE OF BEGINNING; THENCE S 01 ° 09'06" E, 722.71 feet with said City Limit Line to a point for comer in Barthold Road, a public roadway and in the north line of the B.B.B. and C.R.R. Company Survey Abstract Number 141; THENCE N 89° 48'26" W, 955.92 feet with said Barthold Road and with said north line of said B.B.B. and C.R.R. Company Survey to a P.K. nail set for comer, said point being the southeast comer of that certain "Tract 3" of land conveyed by deed from Ellouise McDonnell to Harlan Properties, Inc. recorded in Volume 4296, Page 1426, Real Property Records, Denton County, Texas; THENCE N 00° 01'43" W, 722.42 feet the east line of said Harlan Properties tract to an iron rod marked "KHA" found for comer, said point being the southwest corner of said Phase 17 Investments tract; THENCE S 890 48'47" E, 941.75 feet with the south line of said Phase 17 Investments tract to the PLACE OF BEGINNING and containing 15.737 acres of land. NEW FARMS, LLC. TO PHASE 17 INVESTMENTS, LP DOC. #2011-104771 F.I.R R.P.R.D.C.T. (KHA) S 89'48'47' E Q4? 7s' *TRACT 3' '21.000 ACRE TRACT" ELLOUISE McOONNELL TO HLHTE-LYDA HILL TRUST ET AL HARLAN PROPERTIES, TO INCH3H, LLC, VOL. 4296, PG. 1246 DOC #2011-22008 R.P.R.O.C.T. . . R.P.R,D.C.T. SOO C, 15.737 ACRES SET LINE IV 89 4826 W--70.7- PK NAIL BARTHOLD ROAD B.B.B. & C.R.R. Co. SURVEY A-141 OF 7 �' �' � RM. EXHIBIT'T" AAWEXATIONEXHIBIT 15-73 7 A CRES EV THE S.L. JODNSONSURVEYA-683 CITY OF DENTON DENTON COUNTy TEXA, 4238 1-35 NORTH DENTON, TEXAS 76207 (940) 382-4016 SURVEYORS, LLC. FAX (940) 387-9784 TX FIRM REGISTRATION \O. 10098600 DP-A\XI-N BY. -BTI -I SCALE; 1"=200' .-157A—TE.- 06 MARCH,— POINT OF COMMENCIH G -\ll VIA 89'48'47" If '(KHA) Lu m 5 9 :m Ii LLJ Ld 3: > 325.0--! OF 7 �' �' � RM. EXHIBIT'T" AAWEXATIONEXHIBIT 15-73 7 A CRES EV THE S.L. JODNSONSURVEYA-683 CITY OF DENTON DENTON COUNTy TEXA, 4238 1-35 NORTH DENTON, TEXAS 76207 (940) 382-4016 SURVEYORS, LLC. FAX (940) 387-9784 TX FIRM REGISTRATION \O. 10098600 DP-A\XI-N BY. -BTI -I SCALE; 1"=200' .-157A—TE.- 06 MARCH,— S:ALegaROur Documents\Ordinances\17\A17-0002 Ordinance 041117.doex ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON ANNEXING APPROXIMATELY 16 ACRES GENERALLY LOCATED ON THE NORTH SIDE OF BARTHOLD ROAD, APPROXIMATELY 340 FEEI' WEST OF THE I-35 SOUTHBOUND SERVICE ROAD., MORE SPECIFICALLY DESCRIBED IN EXHIBIT "A" AND ILLUSTRATED IN EXHIBIT "B", WHICH AREA ABUTS AND IS ADJACENT TO THE CITY LIMITS SO AS TO INCLUDE THE PROPERTY WITHIN THE CITY LIMITS; GRANTING TO ALL THE INHABITANTS OF THE PROPERTY ALL THE RIGHTS AND PRIVILEGES OF OTHER CITIZENS, AND BINDING THE INHABITANTS TO ALL OF THE ORDINANCES, RESOLUTIONS, ACTS, AND REGULATIONS OF THE CITY; PROVIDING FOR A CORRECTION TO THE CITY MAP TO INCLUDE THE ANNEXED LANDS; PROVIDING FOR A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE (A17-0002). WHEREAS, pursuant to Section 43.028, Texas Local Government Code (the "Statute"), a home rule city is authorized to annex sparsely occupied areas on petition of area landowners; and WHEREAS, petitioner H3H, LLC ("Petitioner") owns approximately 16 acres of land in the extraterritorial jurisdiction of the City of Denton, Texas, generally located on the north side of Barthold Road, approximately 340 feet west of the I-35 Southbound Service Road, and is more particularly described in Exhibit A and illustrated in Exhibit B both attached hereto and incorporated by reference herein ("Property"); and WHEREAS, the Property is one-half miles or less in width, is contiguous to the City, and is vacant and without residents pursuant to Sec. 43.028 (a) of the Statute; and WHEREAS, the Petitioner submitted a Petition Requesting Annexation by Landowner to the City on March 9, 2017, for the purposes of requesting that the Property be annexed, attached as Exhibit C, and WHEREAS, a public hearing was held with the City Council on April 4, 2019, which was noticed in accordance with the Statute; and WHEREAS, annexation proceedings were instituted for the Property described herein at the first reading of the ordinance conducted at the City Council meeting on April 18, 2017; and WHEREAS, this ordinance has been published in full one time in the official newspaper of the City of Denton after annexation proceedings were instituted and thirty days prior to City Council taking final action, as required by the City Charter; and WHEREAS, a second reading of the ordinance was conducted at the City Council meeting on June 6, 2017, and the City Council finds that annexing the Property is in the best interest of the citizens of the City of Denton and will allow the City to ensure development consistent with the Denton Plan as it is now written or as it may be modified by the City from time to time, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this Ordinance are incorporated by reference herein. SECTION 2. The City hereby ANNEXES the land described and depicted in Exhibit A and Exhibit B, attached hereto and incorporated herein by reference. SECTION 3. The newly annexed property shall be included within the corporate limits of the City of Denton, Texas, thereby extending the City's corporate limits and granting to all the inhabitants of the newly annexed property all of the rights and privileges of other citizens and binding the inhabitants to all of the ordinances, resolutions, acts, and regulations of the City. A copy of this Ordinance shall be filed in the real property records of the Denton County Clerk and with the Denton County Appraisal District. SECTION 4. The City Manager is hereby authorized and directed to immediately correct the map of the City of Denton by adding thereto the additional territory annexed by this Ordinance, indicating on the map the date of annexation and the number of this Ordinance, and the ETJ resulting from such boundary extensions. SECTION 5. Should any paragraph, section, sentence, phrase, clause, or word of this Ordinance be declared unconstitutional or invalid for any reason, the remainder of this Ordinance shall not be affected thereby. SECTION 6. This ordinance shall be effective immediately upon its passage by the City Council, and it is accordingly so ordained. PASSED AND APPROVED this the day of , 2017. CHRIS WATTS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY: EXHIBIT "A" w, ACRES .737 BEING all that certain lot, tract, or parcel of land situated in the S. L. Johnson Survey Abstract Number 683 in the City of Denton, Denton County, Texas, being a part of that certain °21.000 Acre Tract" of land conveyed by deed from HLHTE-Lydia Hill Trust et al to H3H, LLC recorded under Document Number 2011-22008, Real Property Records, Denton County, Texas and being more particularly described as follows: COMMENCING at an iron rod marked "KHA" found for comer in the west line of Interstate Highway Number 35, a public roadway having a variable width right-of-way, said point being the southeast comer of that certain tract of land conveyed by deed from New Farms, LLC to Phase 17 Investments, LP recorded under Document Number 2011-104771, Real Property Records, Denton County, Texas; THENCE N 89° 48'47" W, 325.09 feet with the south line of said Phase 17 Investments tract to a point in the Denton City Limit Line for PUCE OF BEGINNING; THENCE S 01 ° 09'06" E, 722.71 feet with said City Limit Line to a point for corner in Barthold Road, a public roadway and in the north line of the B.B.B. and C.R.R. Company Survey Abstract Number 141; THENCE N 89° 48' 26" W, 955.92 feet with said Barthold Road and with said north tine of said B.B.B. and C.R.R. Company Survey to a P.K. nail set for comer, said point being the southeast comer of that certain "Tract 3n of land conveyed by deed from Ellouise McDonnell to Harlan Properties, Inc. recorded in Volume 4296, Page 1426, Real Property Records, Denton County, Texas; THENCE N 000 01'43"W, 722.42 feet the east line of said Harlan Properties tract to an iron rod marked "KHA" found for comer, said point being the southwest corner of said phase 17 Investments tract; THENCE S 89° 48'47" E, 941.75 feet with the south line of said Phase 17 Investments tract to the PLACE OF BEGINNING and containing 15.737 acres of land. NEW FARMS, LLC. TO PHASE 17 INVESTMENTS, LP DOC. #2011-104771 F.I.R i R.P.R.D.C.T. (KHA) a,__.._.._ _ _ S 89'4847" E 947.75' `TRACT 3' "21.000 ACRE TRACT" ELOUISE McDONNELL HLHTE-LYRA HILL TRUST ET AL TO TO HARLAN PROPERTIES, INC. H3H, LLC. VOL. 4236, PG. 1246 DOC. #2011-22008 R.P.R.D.C.T. R.P.R.D.C.T. N g3 N S�R�l Pr6 � JpN�spl� 15.737 ACRES 0 SET LINE N 89'48 25 PK NAIL BAFM-fOLD ROAD B.B.B. & C.R.R. CO. SURVEY A-141 POINT OF COMMENCING IF.LR W '(KHA) J25- 0.9 0 EXHIBIT "B'7 ANNEXATIONEXHIBIT 15.73 7 A ORES IN NIE S.L. JOHNSON SUR VEYA-683 CITY OF DENTON, DENTON COUNTY, TEXAS 42381-35 NORTH D DENTON, TEXAS 76207 (940) 382-4016 SURVEYORS, LLC. FAX (940) 387-9784 TX FIRM REGISTRATION NO. 10098600 « BY: BTI I SCALE: 1 "-200' DATE: 06 MARCH, 201 Exhibit C 215 E. McKinney St., Denton, 'Texas 76201 1; o ; 1 ' TO THE HONORABLE MAYOR AND CITY COUNCIL MEMBERS OF THE CITY OF DENTON, TEXAS: H3H, LLC., owner of the hereinafter described tract or parcel of land ("Property") hereby voluntarily petitions the City Council of the City of Denton, Texas, to annex the Property and extend the present city limits and extraterritorial jurisdiction so as to include as part of the City of Denton, Texas, the Property, containing approximately 16 acres of land, described as follows: A legal description of the Property is attached hereto as Exhibit A and is incorporated herein by reference. A map showing the location of the Property is attached hereto as Exhibit B and is incorporated herein by reference. Uwe certify that the above-described Property is contiguous and adjacent to the City of Denton, Texas, and that this petition is signed and duly acknowledged by each and every person, corporation, or entity having an ownership interest in said Property. I STATE OF TEXAS COUNTY OF DENTON BEFORE ME, the undersigned authority, on this day personally appeared Joseph D. O'Brien, III, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he/she executed the same for the purposes and consideration therein expressed. Given under my hand and seal of office this ,=� q day of , 2017. 1\l a I (SEAL) _ NOTARY ;B IC in and for the STATE OF TEXAS MAY tr F €ii y EXP May 1 2018 fi Printed Name My commission expires: E EXHIBIT 15.737 ACRES BEING all that certain lot, tract, or parcel of land situated in the S. L. Johnson Survey Abstract Number 683 in the City of Denton, Denton County, Texas, being a part of that certain "21.000 Acre Tract" of land conveyed by deed from HLHTE-Lydia Hill Trust et al to H3H, LLC recorded under Document Number 2011-22008, Real Property Records, Denton County, Texas and being more particularly described as follows: COMMENCING at an iron rod marked "PCNA" found for comer in the west line of Interstate Highway Number 35, a public roadway having a variable width right-of-way, said point being the southeast comer of that certain tract of land conveyed by deed from New Farms, LLC to Phase 17 Investments, LP recorded under Document Number 2011-104771, Real Property Records, Denton County, Texas; THENCE N 89* 48'47" W, 325.09 feet with the south line of said Phase 17 Investments tract to a point in the Denton City Limit Line for PLACE OF BEGINNING; THENCE S 01 0 09'06" E, 722.71 feet with said City Limit Line to a pointfor comer in Barthold Road, a public roadway and in the north line of the B.B.B. and C.R.R. Company Survey Abstract Number 141; THENCE N 8910 4826" W, 955.92 feet with said Barthold Road and with said north line of said B.B.B. and C.R.R. Company Survey to a P.K. nail set for comer, said point being the southeast comer of that certain "Tract 3" of land conveyed by deed from Ellouise McDonnell to Harlan Properties, Inc. recorded in Volume 4296, Page 1426, Real Property Records, Denton County, Texas; THENCE N 000 01'43"W, 722.42 feet the east line of said Harlan Properties tract to an iron rod marked "KHA" found for comer, said point being the southwest comer of said Phase 17 Investments tract; THENCE S 89" 48'47" E, 941.75 feet with the south line of said Phase 17 Investments tract to the PLACE OF BEGINNING and containing 15.737 acres of land. tit OF rpt iU9t;-4- N S A N 4861 SET PK NAIL BAFMiOLD ROAD S.B.S. ge C.R.R. CO. SURVEY A-141 OF 411 .,a 4561 -- 1�6;ESsk'10'e 4-/-J8 I -J.) NUKIH DENTON, TEXAS 76207 "D (940) 382-4016 SURVEYORS. LLC. FAX (940) 387-9784 TX F1 RM REG) S'I'RATfON NO. 10098600[-5K ��VN BV--- .!ITI-1 SCALE:T'1 "--260' DATE; '66 NEW FARMS, LLC. TO PHASE 17 INVESTMENTS, LP DOC. #2011-104771 POINT OF F.I.R R.P.R.D.C.T, POB---\ COMMENCING (FIR (KHA) 325. R *TRACT 3' ELLOUISE MCDONNELL "21.000 ACRE TRACT" HLHTE-LPDA HILL TRUST ET AL I TO HARLAN PROPERTIES, INC. TO H3H, LLC. d z VOL. 4296, PG. 124.6 R.P.R.D.C.T. 2011-22008 DOC. R%R.D,C.T. >- < r 4.� lc'ol pS�' 15.737 ACRES o---__.325.0--, SET PK NAIL BAFMiOLD ROAD S.B.S. ge C.R.R. CO. SURVEY A-141 OF 411 .,a 4561 -- 1�6;ESsk'10'e 4-/-J8 I -J.) NUKIH DENTON, TEXAS 76207 "D (940) 382-4016 SURVEYORS. LLC. FAX (940) 387-9784 TX F1 RM REG) S'I'RATfON NO. 10098600[-5K ��VN BV--- .!ITI-1 SCALE:T'1 "--260' DATE; '66 City Hall City of Denton 215 E. McKinney St. - Denton, Texas 76201 www.cityofdenton.com , DENTON File #: ID 17-435, Version: 1 Legislation Text AGENDA INFORMATION SHEET AGENDA DATE: April 18, 2017 DEPARTMENT: Parks and Recreation DCM: Brian Langley SUBJECT Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, adopting Standards of Care for Youth/Teen Programs administered by Denton's Parks and Recreation Department pursuant to Texas Human Resources Code Section 42.041 (b) (14); and providing an effective date. The Parks, Recreation and Beautification Board recommends approval (5-0). BACKGROUND The Parks and Recreation Department has been directed by Texas Department of Regulatory Services to adopt an ordinance approving the Standards of Care, which are requirements that either meet or exceed the current State Day Care requirements. The Standards of Care are intended to be minimum standards by which the City of Denton Parks and Recreation Department will operate the City's Youth/Teen Programs. The programs operated by the City under the Standards of Care are recreational in nature and are not day care programs. Senate Bill 212 was approved by the Texas Legislature during the 74' Legislative Session exempting recreation programs from day care licensing as long as a Standards of Care is adopted. In order to be exempt, an elementary -age (ages 5-13) recreation program may be operated by the municipality provided: the governing body of the municipality annually adopts standards of care by ordinance after a public hearing for such programs, that such standards are provided to the parents of each program participant, and that the ordinances shall include, at a minimum, staffing ratios, minimum staff qualifications, minimum facility, health and safety standards, and mechanisms for monitoring and enforcing the adopted local standards; and further provided that parents be informed that the program is not licensed by the state and the program may not be advertised as a child care facility. The initial Public Hearing was held on October 5, 1999, and the first Standards of Care was adopted by the City Council through Ordinance 99-365. The State changed the exemption certification to include the adoption of a new ordinance each year for the Standards of Care in order to continue the exemption status. The Youth/Teen Services division of the Parks and Recreation Department made revisions/updates to the original Standards of Care, held a public hearing, and presented them to Council for consideration. The revisions/updates of the original Standards of Care were adopted by the City Council through Ordinance 2010-272, on October 19, 2010. Additional revisions/updates were approved by the Park Board on April 4, 2012, and adopted by Council after a Public Hearing on April 17, 2012. The following changes were made to the 2017-18 Standards of Care and are listed below: City of Denton Page 1 of 2 Printed on 4/14/2017 povveied by I_egivt9i IN File #: ID 17-435, Version: 1 1. Due to the City Compensation Study in 2016, job names/descriptions were changed and amended in the Standards of Care to reflect this change (i.e., Coordinator and Recreation Specialist were re - categorized). 2. Specific names of programs are now listed that operate under the Standards of Care. The Parks, Recreation and Beautification Board reviewed and unanimously recommended the City Council adopt the Standards of Care on March 6, 2017. RECOMMENDATIONS Staff recommends the City Council approve the proposed ordinance as presented. PRIOR ACTION/REVIEW: The Parks, Recreation and Beautification Board reviewed the proposed Standards of Care on March 6, 2017, and recommended approval with a vote of 5-0. FISCAL INFORMATION This ordinance and Standards of Care require no additional City funding. STRATEGIC PLAN RELATIONSHIP The City of Denton's Strategic Plan is an action -oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family -Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal: Related Key Focus Area: Safe, Livable & Family -Friendly Community Related Goal: 4.1 Enhance public safety in the community EXHIBITS 1. Excerpt of Minutes dated March 6, 2017 - Park, Recreation and Beautification Board 2. Proposed Ordinance with incorporated 2017/2018 Standards of Care Respectfully submitted: Emerson Vorel, Director Parks and Recreation Department Prepared by: Kathy Schaeffer Program Area Manager City of Denton Page 2 of 2 Printed on 4/14/2017 povveied by I_egist9i I;, MINUTES PARKS, RECREATION AND BEAUTIFICATION BOARD March 6, 2017 Civic Center Community Conference Room After determining that a quorum of the City of Denton, Texas, Parks, Recreation and Beautification Board is present, the Chair of the Board thereafter convened into an open meeting on Monday, March 6, 2017, at 6:00 p.m. in the Denton Civic Center, 321 E. McKinney Street, Denton, Texas. Members Present: Russ Stukel, Chair; Paul Leslie, Kent Boring, Frances Punch, Johanna McDaniel Members Absent: Maria Renner, Gary Barber Staff present: Emerson Vorel, Julie Leal, D'Lee Williams, John Schubert, Jim Mays, Janie McLeod; Jim Mays and Kathy Schaeffer absent. OPEN MEETING ACTION ITEM: Consider making a recommendation to the Denton City Council on the following item: Approve and recommend the adoption of the City of Denton Parks and Recreation 2017-2018 Standards of Care: D'Lee Williams, Assistant Director of Parks and Recreation, summarized the Standards of Care as a set of operating procedures for summer camps, after school programs, and spring break camps. The City is exempt from childcare licensing via the State, so the Standards of Care is adopted by the City Council via Public Hearing on an annual basis. Williams presented the annual Standards of Care for review and recommendation. Due to the City's Compensation Study in 2016, some job names/descriptions were changed and revised in the Standards of Care (i.e., Coordinator and Recreation Specialist were re - categorized). In addition, names of programs that operate under the Standards of Care are now identified in the document. There being no other substantive changes, Williams responded to several clarity -based questions to the satisfaction of the Board, and the Chair asked for a motion. MOTION: Leslie made a motion to recommend approval; Boring seconded. The motion to approve passed with a unanimous vote of 5-0. s:Uegal\our documents\ordinances\1 7\parks standards of care.docx ORDINANCE NO. Exhibit 2 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, ADOPTING STANDARDS OF CARE FOR YOUTH/TEEN PROGRAMS ADMINISTERED BY DENTON'S PARKS AND RECREATION DEPARTMENT PURSUANT TO TEXAS HUMAN RESOURCES CODE SECTION 42.041 (b)(14); AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Denton, Texas, recognizes that many children of school age need an organized program for recreational activities after the end of the school day and for other non - school days; and WHEREAS, the City of Denton, Texas, through its Park and Recreation Department, proposes to operate After School Programs and Summer Camps for children to be operated at City Recreational Centers and schools of the Denton Independent School District; and WHEREAS, the City of Denton, Texas, needs to adopt Standards of Care for these recreational programs so licensing as a day care facility will not be necessary; and WHEREAS, the City of Denton, Texas, has formulated a Standards of Care that at a minimum includes staffing ratios, minimum staff qualifications, minimum facility, health and safety standards, and mechanisms for monitoring, and enforcing the local standards; and further provides for notifying parents that the program is not licensed by the state and that the program may not be advertised as a day care facility; and WHEREAS, on day of , 2017, the City of Denton held a public hearing on the above Standards of Care as required by Section 42 041 (b)(14) of the Texas Human Resources Code; NOW, THEREFORE, THE COUNCIL OF THE CITY DENTON HEREBY ORDAINS: SECTION 1. The City of Denton, Texas, adopts the Standards of Care for Youth/Teen Programs which is attached as Exhibit "A" and incorporated herein by reference as if written word for word pursuant to Section 42.041 (b)(14), Texas Human Resources Code. SECTION 2. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of 52017. CHRIS WATTS, MAYOR S AxpkOur Doamems:Ord(iwnccsV?iParks Standards oFC— d., ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: AARON LEAL, INTERIM CITY ATTORNEY BY J Page 2 ('11 -Y 'I1-Y tat` DENTON City of Denton Parks & RKN'� Nt]N1' C C Parks &Recreation Department City of Denton Parks and Recreation Standards of Care 2017-2018 TABLE OF CONTENTS Standards of Care General Administration 3 Organization 3 Definitions 4 Inspections 4 Enrollment 5 Suspected Abuse 6 Staffing - Responsibilities and Training 6 Youth/Teen/Center Supervisor Qualifications 6 Supervisor's Responsibilities 6 Coordinator's Qualifications 7 Program Coordinator's Responsibilities 7 Program Specialist & Leader Qualifications 7 Specialist and Leader Responsibilities 8 Training/Orientation 8 Operations 9 Staff -Participant Ratio 9 Discipline 9 Programming 9 Communication 10 Transportation 10 Facility Standards 11 Safety 11 Fire 11 Health 12 Toilet Facilities 13 Sanitation 13 *Programs include: After School Action Site, King Kids Camp, Camp Voyage, Camp Exploration, Super Kids, KDO's, Holiday Camps, Spring Break Camps, and Teen Camps Any questions related to Standards of Care should be addressed to the Youth -Teen Program Area Manager at 940-349-8731. 2 CITY OF DENTON PARKS AND RECREATION STANDARDS OF CARE The following Standards of Care have been adopted by the City Council of the City of Denton, Texas in order to comply with Senate Bill 212 as approved by the Texas Legislature during the 74th legislative session. The Standards of Care are intended to be minimum standards by which the City of Denton Parks and Recreation Department will operate the City's Youth Programs. The programs listed in this Standards of Care are recreational in nature and are not licensed day care programs. The City of Denton's recreational/camp programs are exempt from licensing under Texas Administrative Code 745.115(3). GENERAL ADMINISTRATION Organization A. The governing body of the City of Denton Parks and Recreation Programs is the City of Denton City Council. B. Implementation of the Youth/Teen Programs Standards of Care is the responsibility of the Parks and Recreation Department Director and Departmental employees. C. Youth/Teen Programs ("Program") to which these Standards of Care will apply are After School Action Site, Holiday Break Camps, Spring Break Camps, Kids Day Off, King Kids Camp, Camp Voyage, Camp Exploration, Super Kids, and Teen Summer Camp programs. D. Each Youth/Teen Program site will have available for public and staff review a current copy of the Standards of Care. E. Parents of participants will be provided the website address of where a current copy of the Standards of Care is located. F. Criminal background checks will be conducted on prospective staff. No person with conviction or who is under indictment for, or is the subject of an official criminal complaint alleging violation of any of the crimes listed in the Texas Department of Protective and Regulatory Service's Day Care Center Minimum Standards and Guidelines Appendix II as same may be amended or a felony violation of the Texas Controlled Substance Act may be present while children are in care. An example of current Appendix II is attached as Exhibit A. 2. Definitions A. City: City of Denton. B. City Council: City Council of the City of Denton. C. Department: Parks and Recreation Department of the City of Denton. D. Youth/Teen Programs or Program: City of Denton Youth/Teen Programs consisting of After School Action Site, Holiday Break Camps, Spring Break Camps, Kids Day Off, King Kids Camp, Camp Voyage, Camp Exploration, Super Kids, and Teen Summer Camp programs. E. Program Manual: Notebook of policies, procedures, required forms, and organizational and programming information relevant to City of Denton Programs. F. Director: City of Denton Parks and Recreation Department Director or his or her designee. G. Program Manager: City of Denton Parks and Recreation Department full-time Manager who has been assigned administrative responsibility for City of Denton Youth/Teen Programs. H Youth/Teen Supervisor or Center Supervisor: City of Denton Parks and Recreation Department full-time employee who has been assigned responsibility to implement the City's Youth/Teen Programs. L Program Site: Area and facilities where City of Denton Youth/Teen Programs are held consisting of Civic Center, Martin Luther King Recreation Center, Denia Recreation Center, North Lakes Recreation Center, and McMath Middle School. J. Participant: A youth/teen whose parent(s) have completed all required registration procedures and determined to be eligible for a City of Denton Youth/Teen Program. K. Parent(s): This term will be used to represent one or both parent(s) or adults who have legal custody and authority to enroll their child(ren)/teen(s) in City of Denton Youth/Teen Programs. L. Employee(s) or Staff. Term used to describe people who have been hired to work for the City of Denton and have assigned responsibility for managing, administering, or implementing some portion of the City of Denton Youth/Teen Programs. 3. Inspections/Monitoring/Enforcement A. A monthly inspection report will be initiated by the Supervisor or Coordinator of each Program to confirm the Standards of Care are being adhered to. (1) Inspection reports will be sent to the Program Manager for review and kept 0 on record for at least two years. (2) The Program Manager will review the report and establish deadlines and criteria for compliance with the Standards of Care. B. The Supervisor will make visual inspections of the Program based on the following schedule: (1) Each After School Program site will be inspected bimonthly; (2) The Holiday & Spring Break Camp Program will be inspected once during its holiday schedule; and (3) Camp Exploration, Camp Voyage, King Kids Camp, and Super Kids will be inspected twice during the summer break. (4) Teen Camp Program will be inspected once during the summer break; (5) The Kids Day Off will be inspected two times a year; C. Complaints regarding enforcement of the Standards of Care will be directed to the Supervisor. The Supervisor will be responsible to take the necessary steps to resolve the problems. Complaints regarding enforcement of the Standards of Care and their resolution will be recorded by the Coordinator or Specialist. Serious complaints regarding enforcement of the Standards of Care will be addressed by the Program Manager and the complaint and resolution will be noted. D. The Program Manager will make an annual report on the overall status of the Youth/Teen Programs and their operation relative to compliance with the Standards of Care. This can be provided to City Council by request. 4. Enrollment A. Before a child can be enrolled, a parent must sign registration forms that contain the child's: (1) name, address, home telephone number, email address; (2) name and address of parents and telephone number during Program hours; (3) the names of people to whom the child can be released; (4) a statement of the child's special problems or needs; (5) emergency medical authorization; (6) proof of residency when appropriate; and (7) a liability waiver. 5. Suspected Abuse Program employees will report suspected child abuse or neglect in accordance with the Texas Family Code. STAFFING - RESPONSIBILITIES AND TRAINING 6. Youth/Teen or Center Supervisor ("Supervisor") Qualifications A. Supervisor will be full-time, professional employees of the City of Denton Parks and Recreation Department and will be required to have all Program Leader or Coordinator qualifications as outlined in Section 10 of the document. B. Supervisor must be at least 21 years old. C. Supervisor must have a bachelor's degree from an accredited college or University or at least five (5) years of direct supervision of recreational activities related to children ages 4-15 years of age. Acceptable degrees include: (1) Recreation Administration or General Recreation; (2) Physical Education; and (3) Any other comparable degree plan that would lend itself to working in a public recreation environment. D. Supervisor must have five years experience planning and implementing recreational activities. E. Supervisor must pass a background investigation including testing for illegal substances. F. Supervisor must have successfully completed a course in first aid and Cardio Pulmonary Resuscitation (CPR) based on either American Heart Association or American Red Cross standards. Supervisor must also complete a course in Defensive Driving. G. Supervisor must complete 10 hours of child care training per calendar year. 7. Supervisor's Responsibilities A. Supervisor's are responsible to administer the Programs' daily operations in compliance with the adopted Standards of Care. B. Supervisor's are responsible to recommend for hire, supervise, and evaluate Specialist, Coordinators and Leaders. 701 C. Supervisor's are responsible to plan, implement, and evaluate programs. 8. Program Coordinator ("Coordinator") Qualifications A. Coordinator will be full-time, professional employees of the City of Denton Parks and Recreation Department and will be required to have all Program Leader or Specialist qualifications as outlined in Section 10 of the document except for section 10A. B. Coordinator must have two years of experience planning and implementing recreational activities. C. Coordinators must complete 8 hours of child care training per calendar year. Training must be completed prior to their start date of child care programs and completed on an annual basis. 9. Coordinator Responsibilities A. Coordinator's are responsible to assist in the administration of the Programs' daily operations in compliance with the adopted Standards of Care. B. Coordinator's are responsible to assist in the recommendation for hiring, supervising, and evaluating Specialist and Leaders. C. Coordinator's are responsible to assist in the planning, implementing, and evaluating programs. D. Coordinator's will be required to provide all Program Leader or Specialist responsibilities as outlined in Section 11 of the document. 10. Program Specialist ("Specialist"} and Leader ("Leader") Qualifications A. Specialists and Leaders will be part-time or temporary employees of the Parks and Recreation Department. B. Specialists and Leaders working with children must be age 18 or older. C. Specialists and Leaders should be able to consistently exhibit competency, good judgment, and self-control when working with children. D. Specialists and Leaders must relate to children with courtesy, respect, tolerance, and patience. E. Specialists and Leaders must have successfully completed a course in first aid, CPR, and AED training based on either American Heart Association or American Red Cross standards. An exception can be made for no more than one staff person at each site, and that person shall successfully complete a first aid and CPR course 7 within four weeks of starting work. F. Specialists and Leaders must pass a background investigation including testing for illegal substances. G. Specialists and Leaders must complete 8 hours of child care training per calendar year. Training must be completed prior to their start date of child care programs and completed on an annual basis. 11. Specialists and Leader Responsibilities A. Specialists and Leaders will be responsible to provide participants with an environment in which they can feel safe, can enjoy wholesome recreation activities, and can participate in appropriate social opportunities with their peers. B. Specialists and Leaders will be responsible to know and follow all City, Departmental, and Program standards, policies, and procedures that apply to City of Denton Youth/Teen Programs. C. Specialists and Leaders must ensure that participants are released only to a parent or an adult designated by the parent. All Program sites will have a copy of the Department approved plan to verify the identity of a person authorized to pick up a participant if that person is not known to the Specialist and Leader. 12. Training/Orientation A. The Department is responsible for providing training and orientation to Program Employee's in working with children and for specific job responsibilities. Supervisors will provide each Coordinator, Specialist, and Leader with a Program manual specific to each Youth/Teen Program. On-line child care training may be completed in lieu of departmental training for 3 hours of the required 8 hours per year. B. Program employees must be familiar with the Standards of Care for Youth/Teen Program operation as adopted by the City Council. C. Program employees must be familiar with the Program's policies including discipline, guidance, and release of participants as outlined in the Program Manual. D. Program employees will be trained in appropriate procedures to handle emergencies. E. Program employees will be trained in areas including City, Departmental, and Program policies and procedures, provision of recreation activities, safety issues, child development, and organization. F. Program employees will be required to sign an acknowledgment that they received the required training. OPERATIONS 13. Staff -Participant Ratio A. In a City of Denton Youth/Teen Program, the standard ratio of participants to Leaders will be 17 to 1. In the event a Leader is unable to report to the Program site, a replacement will be assigned. B. Each participant shall have a Program employee who is responsible for him or her and who is aware of the participant's habits, interests, and any special problems as identified by the participant's parent(s) during the registration process. 14. Discipline A. Program employees will implement discipline and guidance in a consistent manner based on the best interests of Program participants. B. There must be no cruel or harsh punishment or treatment. C. Program employees may use brief, supervised separation from the group if necessary. D. As necessary, Program employees will initiate discipline reports to the parent(s) of participants. Parents will be asked to sign discipline reports to indicate they have been advised about specific problems or incidents. E. A sufficient number and/or severe nature of discipline reports as detailed in the Program Manual may result in participant being suspended from the Program. F. In instances where there is a danger to participants or staff, offending participants will be removed from the Program site as soon as possible. 15. Programming A. Program employees will attempt to provide activities for each group according to the participants' ages, interests, and abilities. The activities must be appropriate to participants' health, safety, and well-being. The activities also must be flexible and promote the participants' emotional, social, and mental growth. B. Program employees will attempt to provide that indoor and outdoor times include: (1) alternating active and passive activities; (2) opportunity for individual and group activities; and (3) outdoor time each day weather permits. C. Program employees will be attentive and considerate of the participants' safety on I field trips and during any transportation provided by the Program. (1) During trips, Program employees supervising participants must have immediate access to emergency medical forms and emergency contact information for each participant. (2) Program employees must have a written list of the participants in the group and must check the roll frequently. (3) Program employees must have first aid supplies and a guide to first aid and emergency care available on field trips. 16. Communication A. Each Program employee will have the option to use their own cell phone device or use a city provided cell phone to allow the staff to be contacted by Parks and Recreation personnel, and for use in contacting the Supervisor, Coordinator, Specialist or making emergency calls. B. The Coordinator or Specialist will post the following telephone numbers adjacent to a telephone accessible to all Program employees at each site: (1) Denton ambulance or emergency medical services; (2) City of Denton Police Department; (3) City of Denton Fire Department; (4) Civic Center, Recreation Centers, and McMath; (5) Numbers at which parents may be reached; and (5) The telephone number for the site itself. 17. Transportation A. Before a participant may be transported to and from city sponsored activities, a City waiver form, completed by the parent of the participant, must be filed. B. First aid supplies will be available in all Program vehicles that transport children. C. All children must be securely seated in the appropriate safety seat/booster based on state child safety laws. D. All Program vehicles used for transporting participants must have available a 6 -BC portable fire extinguisher which will be installed in the passenger compartment of the vehicle and must be accessible to the adult occupants. FACILITY STANDARDS 10 18. Safety A. Program employees will inspect Program sites daily to detect sanitation and safety concerns that might affect the health and safety of the participants. A daily inspection report will be completed by Program employees and kept on file by the Supervisor. B. Buildings, grounds, and equipment on the Program site will be inspected, cleaned, repaired, and maintained to protect the health of the participants. C. Program equipment and supplies must be safe for the participants's use. D. Program employees must have first aid supplies readily available at each site, during transportation to an off-site activity, and for the duration of any off-site activity. E. Program air conditioners, electric fans, and heaters must be mounted out of participants' reach or have safeguards that keep participants from being injured. F. Program porches and platforms more than 30 inches above the ground must be equipped with railings participants can reach. G. All swing seats at Program sites must be constructed of durable, lightweight, relatively pliable material. H. Program employees must have first aid supplies readily available to staff in a designated location. 19. Fire A. In case of fire, danger of fire, explosion, or other emergency, Program employees' first priority is to evacuate the participants to a designated safe area. B. The Program site will have an annual fire inspection by the local Fire Marshal, and the resulting report will detail any safety concerns observed. The report will be forwarded to the Program Manager who will review and establish deadlines and criteria for compliance. Information from this report will be included in the Program Manager's annual report to the Council. C. Each Program site must have at least one fire extinguisher approved by the Fire Marshal readily available to all Program employees. The fire extinguisher is to be inspected monthly by the Leaders, and a monthly report will be forwarded to the Manager who will keep the report on file for a minimum of two years. All Program employees will be trained in the proper use of fire extinguishers. D. Fire drills will be initiated at Program sites based on the following schedule: (1) After School Program: A fire drill once every three months. 11 (2) Spring Break Camp and Holiday Camp: A fire drill once during the session. (3) Camp Exploration, Camp Voyage, King Kids Camp, and Super Kids: A fire drill twice during the session. (4) Teen Camp: A fire drill once during session 20. Health A. Illness or Injury (1) A participant who is considered to be health or safety concern to other participant's or employees will not be admitted to the Program. (2) Illnesses and injuries will be handled in a manner to protect the health of all participants and employees. (3) Program employees will follow plans to provide emergency care for injured participants with symptoms of an acute illness as specified in the Program manual. (4) Program employees will follow the recommendation of the Texas Department of Health concerning the admission or readmission of any participant after a communicable disease. B. Program employees will administer medication only if: (1) Parent(s) complete and sign a medication form that provides authorization for employee to dispense medication with details as to time and dosages. The form will include a hold harmless clause to protect the City. (2) Parent(s) complete and sign a medication form that provides authorization for employee to dispense medication with details as to time and dosages. The form will include a hold harmless clause to protect the City. (3) Prescription medications are in the original containers labeled with the child's name, a date, directions, and the physician's name. Program employees will administer the medication only as stated on the label. Program employees will not administer medication after the expired date. (4) Nonprescription medications are labeled with the child's name and the date the medication was brought to the Program. Nonprescription medication must be in the original container. Program employees will only administer nonprescription medications if a doctor's note is provided and only according to label direction. (5) Medication dispensed will be limited to routine oral ingestion not requiring 12 special knowledge or skills on the part of Program employees. (6) Program employees must ensure medications are inaccessible to participants or, if it is necessary to keep medications in the refrigerator (when available), medications will be kept separate from food. (7) Children who may require epi -pen injections due to severe allergic reactions must complete an Anaphylaxis Emergency Action Plan (AEAP) before their child starts the program. Staff will administer the epi -pen in case of emergency based on the instructions stated on the AEAP. C. Toilet Facilities (1) The Program site will have inside toilets located and equipped so children can use them independently and Program staff can supervise as needed. (2) There must be one (1) flush toilet for every 30 children. Urinals may be counted in the ratio of toilets to children, but they must not exceed 50% of the total number of toilets. (3) An appropriate and adequate number of lavatories will be provided. D. Sanitation (1) The Program facilities must have adequate light, ventilation, and heat. (2) The Program must have an adequate supply of water meeting the standards of the Texas Department of Health for drinking water and ensure that it will be supplied to the participants in a safe and sanitary manner. (3) Program employees must see that garbage is removed from buildings daily. 13