The URL can be used to link to this page

Home My WebLink About2001-264b \Our OotummYWAlnencu"OIN"Tblll AbOrru-1 OM Pin" &' ORDINANCE NO AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE A TAX ABATEMENT AGREEMENT WITH PETERBILT MOTORS COMPANY, A DIVISION OF PACCAR INC SETTING FORTH ALL THE REQUIRED TERMS OF THE TAX ABATEMENT AGREE- MENT IN ACCORDANCE WITH THE TERMS OF CHAPTER 312 OF THE TEXAS TAX CODE, SETTING FORTH THE VARIOUS CONDITIONS PRECEDENT TO PETERBILT MOTORS COMPANY, A DIVISION OF PACCAR INC RECEIVING THE TAX ABATE- MENT, PROVIDING FOR A SEVERABILITY CLAUSE, AND PROVIDING AN EFFEC- TIVE DATE WHEREAS, on the 3 1 " day of July, 2001, after a public hearing duly held in accordance with Tex Tax Code §312 201 (the "Act"), the City Council passed Ordinance No 2001-259 (the "Ordinance") establishing Reinvestment Zone No V, City of Denton, Texas as a commer- cial/industrial reinvestment zone for tax abatement (the "Zone"), as authorized by Title 3, Chap- ter 312, Subchapter B of the Act, and WHEREAS, on the 1"d day of June, 2001 Peterbilt Motors Company, a division of PAC - CAR Inc submitted an application for tax abatement with various attachments to the City con- cerning the contemplated use of certain property located within the Zone, and WHEREAS, the City Council finds that the contemplated use of the premises and the contemplated improvements to the premises, as indicated by Peterbilt Motors Company, a divi- sion of PACCAR Inc are consistent with encouraging the development of the Zone in accordance with the purposes for its creation and are in compliance with the Denton Tax Abatement Policy, and WHEREAS, the City Council deems it in the public interest to enter into a Tax Abate- ment Agreement with Peterbilt Motors Company, a division of PACCAR Inc, NOW, THERE- FORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 That the findings contained in the preamble to this ordinance are true and correct and are adopted as a part of the whole ordinance SECTION 2 That the City Council finds and determines the following 1 That the contemplated use of the premises and the contemplated improvements of the prem- ises, as indicated by Peterbilt Motors Company, a division of PACCAR Inc are consistent with encouraging the development of the Zone in accordance with the purposes of its crea- tion and are in compliance with the Denton Tax Abatement Policy 3 WurAb,laoam ON Pln,l&I 2 That the City Council finds that the improvements sought by Peterbilt Motors Company, a division of PACCAR Inc within the Zone are feasible and practical and would be a benefit to the land to be included in the Zone and to the City after the expiration of the Tax Abatement Agreement to be entered into with Peterbilt Motors Company, a division of PACCAR Inc 3 That the City Council finds that the Tax Abatement Agreement contains all the terms which are mandatonly required to be included in any tax abatement agreement under §312 205 of the Act 4 That, in accordance with §312 2041 of the Act, the City Council finds that not later than the date on which the City Council considered this ordinance, and not later than the seventh day before the date the City enters into a Tax Abatement Agreement with Peterbilt Motors Com- pany, a division of PACCAR Inc, that the City Manager, through the Director of Community Development, who are hereby designated and authorized by the City Council to give such notice, delivered to the presiding officer of the Denton Independent School District and Denton County a written notice that the City intends to enter into this Tax Abatement Agreement with Peterbilt Motors Company, a division of PACCAR Inc, and that this notice included a copy of the proposed Tax Abatement Agreement in substantially the form of the Tax Abatement Agreement attached to this ordinance 5 That before the passage of this ordinance, the City Council held a public hearing in accor- dance with §312 201 of the Act and created Reinvestment Zone No V 6 The City Council finds that the project within Reinvestment Zone No V is a redevelopment of an existing business as defined in the Tax Abatement Policy and requires additional incen- tives to promote economic development that generally satisfies the requirements of the policy and the City Council hereby waives the minimum threshold requirement within the policy for tax abatement and authorizes a tax abatement of 100% on the increased valuation of the im- provement in each year covered by the tax abatement agreement over the value of the prop- erty for the year in which the tax abatement agreement is executed as set fourth in the Agreement SECTION 3 That the Mayor, or in her absence, the Mayor Pro Tem, is hereby author- ized to execute a Tax Abatement Agreement with Peterbilt Motors Company, a division of PACCAR Inc, substantially in the form of the Tax Abatement Agreement which is attached to and made a part of this ordinance for all purposes as if written word for word herein SECTION 4 That the City Council hereby instructs and authorizes the City Manager to inspect, audit, and evaluate the progress of Peterbilt Motors Company, a division of PACCAR Inc to determine if it has met all of the conditions of the attached Tax Abatement Agreement prior to the tax abatement going into effect SECTION 5 That if any section, subsection, paragraph, sentence, clause, phrase, or word in this ordinance, or application thereof to any person or circumstance is held invalid by Page 2 of 3 I I., MP .0M A.0C any court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this ordinance, the City Council of the City of Denton hereby declares that they would have enacted such remaining portions despite any such validity SECTION 6 That this ordinance shall become effective immediately upon its passage and approval PASSED AND APPROVED this the Nit day of , 2001 ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY ffn zaeC� /� 14 4- — El LINE BROCK, MAYOR Page 3 of 3 s w. nmmminconaxuw,vaaem M...1 AM' xmm a STATE OF TEXAS COUNTY OF DENTON CITY OF DENTON TAX ABATEMENT AGREEMENT BETWEEN THE CITY OF DENTON AND PETERBILT MOTORS COMPANY, A DIVISION OF PACCAR INC This Tax Abatement Agreement (the "Agreement') is entered into by and between the City of Denton, Texas (the "City"), duly acting herein by and through its Mayor, and Peterbilt Motors Company, a division of PACCAR Inc, a Delaware Corporation authorized to do business in the State of Texas (the "Owner"), duly acting herein by and through its authorized officers WHEREAS, the City has adopted a resolution stating that it elects to be eligible to par- ticipate in tax abatement and has adopted guidelines and criteria governing tax abatement agree- ments known as the Denton Tax Abatement Policy, and WHEREAS, on the 6`h day of June, 2000, the City Council of Denton, Texas (the City Council') adopted the Denton Tax Abatement Policy (the "Policy") through the passage of Reso- lution No 2000-028 which Policy was amended on the 161 day of May 2001, by Resolution No 2001-020, which states that the City elects to become eligible to participate in tax abatement, which is attached hereto and incorporated herein as Exhibit "A" and made a part of this Agree- ment for all purposes, and WHEREAS, the Policy constitutes appropriate "guidelines and criteria" governing tax abatement agreements to be entered into by the City as contemplated by Section 312 002 of the Texas Tax Code, as amended (the "Code"), and WHEREAS, on the 31" day of July 2001, the City Council passed Ordinance No &- (the "Ordinance") establishing Reinvestment Zone No V, City of Denton, Texas, as a commer- cialhndustnal reinvestment zone for tax abatement (the "Zone"), as authorized by Title 3, Chap- ter 312, Subchapter B of the Code (the "Act'), and WHEREAS, Owner owns certain real property being approximately 8 752 acres at or near 1700 Woodbrook within the corporate limits of the City of Denton, Texas as more particu- larly described in Exhibit "B" attached hereto and incorporated herein by reference and made a part of this Agreement for all purposes (the "Premises") located entirely within the Zone, and WHEREAS, on the 1" day of June, 2001, Owner submitted an application for tax abate- ment with various attachments to the City concerning the contemplated use of the Premises (the "Application for Tax Abatement'), attached hereto and incorporated herein as Exhibit "C" and made a part of this Agreement for all purposes, and WHEREAS, the City Council has found that the contemplated use of the Premises, the Contemplated Improvements (as hereinafter defined) to the Premises as set forth in tlus Agree- ment, and the other terms hereof are consistent with encouraging development of said Zone in accordance with the purposes for its creation and are in compliance with the Policy and the Ordi- nance and similar guidelines and criteria adopted by the City and all applicable law, and S W., AW...1 A1o1%n,1E WHEREAS, the City Council has found that the terms of this Agreement, and the Prem- ises and Contemplated Improvements, meet the applicable guidelines and criteria heretofore adopted by the City Council, which are set forth in the Policy, and WHEREAS, the City Council has found that the Project constitutes a redevelopment pro- ject of the itype which require additional incentives to promote economic development that gen- erally satisfy the requirements of the Policy, and the City Council has waived the minimum threshold and determined that it is necessary to exceed the maximum fifty percent (50%) in tax abatement to develop new construction in the form of an addition to the Owner's Division Head- quarters, and WHEREAS, written notice that the City intends to enter into this Agreement, along with a copy of this Agreement, has been furnished by the City, in the manner and by the time pre- scribed by the Code, to the presiding officers of the governing bodies of each of the taxing units in which the Premises is located, NOW, THEREFORE, the City and Owner for and in consideration of the premises and the promises contained herein do hereby contract, covenant, and agree as follows 1 CONDITIONS OF ABATEMENT A A condition of the Abatement (defined below) is that, by December 31, 2002 (subject to force majeure delays not to exceed 180 days), the Owner shall make a capital invest- ment of at least $5,000,000 in the Contemplated Improvements on the Premises, including reno- vation, reconstruction, and repairs of the existing building and improvements for the redevelop- ment and renovation of the facility for office use The kind, number, location and details of the Contemplated Improvements are described in the Application for Tax Abatement For the pur- poses of this section, capital investment with respect to construction, renovating and repairing the Contemplated Improvements shall include costs related to the development and improvement of the real estate, including without limitation, construction costs and design and engineering costs and such improvements and renovations made by lessees of Owner that constitute perma- nent real property improvements to the Premises For the purposes of this paragraph, the term "force maleure" shall mean any circumstance or any condition beyond the control of Owner, as set forth in Section 22 "Force Maleure" which makes it impossible to meet the above -mentioned threshold Provided, however, should Owner fail to make a capital investment in the Contem- plated Improvements of at least $5,000,000 on or before December 31, 2002 the Agreement will terminate and all tax abatements previously given will be refunded to the City by the Owner in accordance with Section ID hereof Provided, further that Owner shall only be entitled to Tax Abatements not to exceed the amount of capital investment which is made by Owner on the Premises which results in an increase in the value of real property improvements over the as- sessed value of the improvements on January 1, 2001 — the year in which this Agreement is exe- cuted No abatement will be given on any increase in the value of the land or personal property For example, if Owner spends $5,000,000 on real property improvements on the Premises in 2002, brit the appraised value of the improvements increases only $2,000,000 over the appraised Page 2 of 11 I Wm AW.M Alm FWId value in the 2001 base year, the tax abatement shall be limited to the $2,000,000 increase in the appraised value of the improvements B A condition of the abatement is that the Contemplated Improvements be con- structed, that the Owner maintain occupancy of the building for the full ten years of the Tax Abatement, and the Premises be used substantially in accordance with the description of the pro- ject set forth in the Application for Tax Abatement C A condition of this abatement is that throughout the Term of the Abatement, the Contemplated Improvements shall be operated and maintained for the purposes set forth herein — for office use — so that the uses of the Premises shall be consistent with the general purpose of encouraging development or redevelopment of the Zone, except as otherwise authorized or modified by this Agreement D If the total Contemplated Improvements constructed on the project do not meet the threshold value of $5,000,000 by December 31, 2002, this Agreement will be terminated and the Owner shall immediately refund all tax abatements granted under this agreement by City with interest at 7% per annum from the date the Owner received the abatement Such threshold being a condition precedent to receiving a tax abatement If the Owner receives an abatement in error, the Owner shall immediately, upon receiving notice from the City, remit the amount by which the tax abatement should be reduced with interest at Seven percent (7%) per annum from the date the Owner received the abatement E In consideration of the abatement granted herein Owner agrees to comply with all the terms and conditions set forth in this Agreement 2 GENERAL PROVISIONS A The City has concluded that it has adopted guidelines and criteria governing tax abatement agreements for the City to allow it to enter into this Agreement containing the terms set forth herein B The City has concluded that procedures followed by the City conform to the re- quirements of the Code and the Ordinance, and have been and will be undertaken in coordination with Owner's corporate, employee, and business relations requirements C The Premises are not in an improvement project financed by tax increment bonds D Neither the Premises nor any of the Improvements covered by this Agreement are owned or leased by any member of the City Council, any member of the Plamung and Zoning Commission of the City, or any member of the governing body of any taxing units Joining in or adopting this Agreement E In the event of any conflict between the City zoning ordinances, or other City or- dinances or regulations, and this Agreement, such ordinances or regulations shall control Page 3 of 11 9 ouroocumaou�CaveoNo,vetabm AWMM AM' Pond dou ABATEMENT TERMS AND CONDITIONS A In consideration of the Owner meeting all the terms and conditions of abatement set forth herein, the City hereby grants a tax abatement ("Abatement") (1) to Owner relative to all improvements to the Premises (the "Improvements"), such Abatement to be subject to the fol- lowing terms and conditions B The value of the Abatement on the Premises and the Improvements shall be the following portion of the increase in value of the Improvements on the premises over their value on January 1, 2001, the year in which this Agreement is executed in accordance with Section 312 204 of the Code ONE -HUNDRED (100%) OF THE INCREASE IN VALUE ON THE IM- PROVEMENTS TO THE LAND ONLY LAND, INVENTORY, EQUIPMENT AND BUSINESS PERSONAL PROPERTY VALUES, AND OTHER TANGI- BLE PERSONAL PROPERTY IMPROVEMENTS ARE NOT ELIGIBLE FOR ABATEMENT C. The real property's current value — the value as of January 1, 2001 — may not be abated D Owner shall have the right to protest and contest any or all appraisals or assess- ments of the Premises and/or Improvements If Owner is successful in obtaining a reduction in taxes based upon such protest or contest after a tax abatement for that year has been granted, it shall immediately notify the City, through its City Manager E The term of the Abatement (the "Term") shall begin on January 1, 2002 (the `Be- ginning Date") and, unless sooner terminated as herein provided, shall end on the December 3151 immediately preceding the 10t° anniversary of the Beginning Date or December 31, 2011 F If the capital investment requirements of the Improvements are not met, the tax abatement will not be granted 4 RECORDS AND EVALUATION OF PROJECT A The Owner shall provide access and authorize inspection of the property by City employees and allow sufficient inspection of financial information to insure that the improve- ments are made and the threshold has been met according to the specifications and conditions of this Agreement Such inspections shall be done in a way that will not interfere with Owner's business operations City shall annually (or such other times deemed appropriate by the City) evaluate the Project to ensure compliance with this Agreement Owner shall provide information to the City on a form provided by the City for the evaluation The information shall include, without limitation, an inventory listing the kind, number, and location of and the total investment Page 4 of 11 S WurO ummA nvrm 01~fllAbelmml ASmt WntlE value of all improvements to the property, including the value of all buildings and other struc- tures and permanent improvements installed, renovated, repaired or located on the Premises B On or before August 1, the City Manager shall make a decision and rule on the eligibility of the Project for tax abatement based on the certification furnished each year by the Owner on or before June 1 of the taxable year and shall so notify Owner, the Joint Committee on Tax Abatement, and the City Council If the Owner is dissatisfied with the City Manager's deci- sion, it can appeal his decision to the City Council The City Council's decision on the matter shall be binding, final, and not appealable, except for arbitrary and capricious acts and actions, gross negligence or willful misconduct Any appeal shall be under the substantial evidence rule, provided, however, that notwithstanding the foregoing, under no circumstances shall the City Manager or the City Council be authorized to terminate, reduce, or recapture the Abatement unless the conditions of the Abatement are not satisfied within the time frames specified herein C During normal office hours throughout the Term of this Agreement, providing reasonable notice is given to Owner, the City shall have access to the Premises by City employ- ees for the purpose of inspecting the Premises and the Improvements in accordance with para- graph 4(A) to ensure that the Improvements are being made in accordance with the specifications and conditions of this Agreement and to verify that the conditions of this Agreement are being complied with, provided that such inspections shall not interfere with Owner's normal business operations D The Owner shall annually make a certification in writing to the City Council, the Commissioners Court of Denton County, and the Board of Trustees of the Denton Independent School District, on or before June 18` of each year this Agreement is in effect, that certifies that the Owner is in compliance with each applicable term of this Agreement and any other tax abate- ment agreement it may have entered into with Denton County and the Denton Independent School District E Nothing in this Agreement shall preclude Denton County and the Denton Inde- pendent School District from entering into tax abatement agreements which contain different terms and conditions than this Agreement and different portions of abatement than shown in paragraph 3B and C of this Agreement, in accordance with Section 312 206(c) of the Act, Chap- ter 312, Subchapter B, of the Act, and all other applicable laws 5 FAILURE TO MEET CONDITIONS A In the event that (i) any of the conditions in Section 1 — "Conditions of Abate- ment" — are not met, or (u) Owner allows its ad valorem real property taxes with respect to the Premises or Improvements, or its ad valorem taxes with respect to any tangible personal prop- erty, if any, owned by the Owner which is located in the Improvements, owed the City to become delinquent and fails to timely and properly follow the legal procedures for protest and/or contest of any such ad valorem real property or tangible personal property taxes, or (iii) any other condi- tions of the Abatement Agreement are not met, then a "Condition Failure" shall be deemed to have occurred (it being understood that a Condition Failure relating to any condition set forth in Page 5 of 11 5 WurD mmuMuVeeuW1Ve kh AWu. Apo, Pmrl tlm paragraph 1 shall not be deemed to occur merely because at a particular time it cannot be deter- mined whether such condition will be met, but shall occur only if at a particular time it can be definitively determined that such condition will not be met) In the event that a Condition Fail- ure occurs, the City shall give Owner written notice of such Condition Failure and if the Condi- tion Failure has not been cured or satisfied within ninety (90) days of said written notice, the Abatement shall be terminated in accordance with paragraph 1 A and E and Owner shall remit the amount of the Abatement plus interest from the time the Owner received the Abatement for each year the Owner is out of compliance Provided, however, that if such Condition Failure is not reasonably susceptible of cure or satisfaction within such ninety (90) day period and Owner has commenced and is pursuing the cure or satisfaction of same, then after first advising City Coun- cil of efforts to cure or satisfy same, Owner may utilize an additional ninety (90) days Time in addition to the foregoing 180 days may be authorized by the City Council, and such authoriza- tion shall not be unreasonably withheld If a Condition Failure is not cured or satisfied after the expiration of the applicable notice and cure or satisfaction periods, the Abatement shall be termi- nated with respect to the year in which notice of the Condition Failure is given and for all future years It being understood that the Abatement with respect to any year prior to the year in which notice of the Condition Failure is given shall not be forfeited or recaptured except as indicated under Section 5B and other applicable sections hereof Notwithstanding any provision in this Agreement to the contrary, Owner shall refund to the City all tax abatements previously received with interest for the year in which the notice of Condition Failure is given B, If, however, the Owner fails to make any improvements to the existing facility by December 31, 2002, and if Owner fails to invest $5,000,000 in improvements by December 31, 2002, then the Agreement may be terminated by the City and the amount of the Abatement will be reduced to zero in accordance with Sections lA and D If the Owner falls to maintain its con- tractual obligations, including Owner's failure to maintain occupancy of the building for the full ten years of the Tax Abatement, , then this Agreement may be terminated by the City and the amount of the Abatement will be reduced to zero in accordance with Section IA and D In this event, Owner shall refund to the City all tax abatements previously granted and received under this Agreement with interest on the amount to be refunded at seven percent (7%) per annum C That in the event of a condition failure by Owner which is not cured or satisfied as set forth herein, in addition to a partial or total recapture of the tax abatement, the City may can- cel or modify this Agreement 6 EFFECT OF SALE, ASSIGNMENT, OR LEASE OF PROPERTY A The Abatement with respect to the Project shall vest in Owner and shall be as- signable, with City approval, which shall not be unreasonably withheld, to any individual, part- nership,,oint venture, corporation, trust or other entity (irrespective of whether or not such as- signee is related to or affiliated with Owner) which acquires title to the Project Any assignee of Page 6ofII S W. Mb..t AS t0.0A Owner or any assignee of a direct or indirect assignee of Owner shall be treated as "Owner" un- der this agreement 7 NOTICE All notices called for or required by this Agreement shall be addressed to the following, or such other party or address as either party designated in writing, by certified mail postage pre- paid or by hand delivery J�1�1;7 CITY PACCAR Inc Michael A Conduff, City Manager 777 106' Avenue N E City of Denton Bellevue, WA 98004 215 East McKinney P O Box 1518 Denton, Texas 76201 Bellevue, WA 98009 Attn B Robert Crowley Director — Domestic and International Tax 8 CITY COUNCIL AUTHORIZATION This Agreement was authorized by the City Council by passage of an enabling ordinance at its meeting on the 31` day of July, 2001, authorizing the Mayor to execute this Agreement on behalf of the City, a copy of which is attached hereto and incorporated herein as if written word for word herein BOARD OF DIRECTORS AUTHORIZATION This Agreement was entered into by Owner, pursuant to authority granted by the Peterbilt Motors Company, a division of PACCAR Inc Evidence, which must be satisfactory to the City, that the person signing this Agreement is authorized to bind Owner to all the terms and condi- tions of the Agreement is attached hereto and incorporated herein as Exhibit "D" as if written word for word herein 10 SEVERABILITY In the event any section, subsection, paragraph, sentence, phrase or word is held invalid, illegal or unconstitutional, the balance of this Agreement shall stand, shall be enforceable and shall be read as if the parties intended at all times to delete said invalid section, subsection, para- graph, sentence, phrase, or word In the event that (i) the term of the Abatement with respect to any property is longer than allowed by law, or (u) the Abatement applies to a broader classifica- Page 7 of 11 5 Wur DocemmuMuwmN0lUbimbill AWCMM Apm Pmvl Jot lion of property than is allowed by law, then the Abatement shall be valid with respect to the classification of property abated hereunder, and the portion of the term, that is allowed by law 11 ESTOPPEL CERTIFICATE Any party hereto may request an estoppel certificate from another party hereto so long as the certificate is requested in connection with a bona fide business purpose The certificate, which if requested will be addressed to the Owner, shall include, but not necessarily be limited to, statements that this Agreement is in full force and effect without default (or if default exists the nature of default and curative action, which should be undertaken to cure same), the remain- ing term of this Agreement, the levels and rematmng term of the Abatement in effect, and such other matters reasonably requested by the party(ies) to receive the certificates 12 OWNER STANDING Owner, as a party to this Agreement, shall be deemed a proper and necessary party in any litigation questioning or challenging the validity of this Agreement or any of the underlying or- dinances, resolutions, or City Council actions authorizing same and Owner shall be entitled to intervene in said litigation 13 APPLICABLE LAW This Agreement shall be construed under the laws of the State of Texas Venue for any action under this Agreement shall be the State District Court of Denton County, Texas This Agreement is performable in Denton County, Texas 14 RECORDATION OF AGREEMENT A certified copy of this Agreement in recordable form shall be recorded in the Deed Re- cords of Denton County, Texas 15 MUTUAL ASSISTANCE City and Owner agree to do all things necessary or appropriate to carry out the terms and provisions of this Agreement and to aid and assist each other in carrying out such terms and pro- visions Owner and City agree at any time, and from time to time, to execute any and all docu- ments reasonably requested by the other party to carry out the intent of tlus Agreement 16 ENTIRE AGREEMENT Page 8ofII 5 rOar Mcmncna�onINCYWIWel4rLnl Abnrnmnl Alan Final Gac This instrument with the attached exhibits contains the entire agreement between the par- ties with respect to the transaction contemplated in this Agreement 17 BINDING This Agreement shall be binding on the parties and the respective successors, assigns, heirs, and legal representatives 18 COUNTERPARTS This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument 19 SECTION AND OTHER HEADINGS Section or other headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement 20 NO JOINT VENTURE Nothing contained in this Agreement is intended by the parties to create a partnership or joint venture between the parties, and any implication to the contrary is hereby disavowed 21 AMENDMENT This Agreement may be modified by the parties hereto to include other provisions which could have originally been included in this Agreement or to delete provisions that were not originally necessary to this Agreement pursuant to the procedures set forth in Title 3, Chapter 312 of the Code 22 FORCE MAJEURE If, because of flood, fire, explosions, civil disturbances, strikes, war, acts of God, or other causes beyond the control of either party, either party is not able to perform any or all of its obli- gations under this Agreement, then the respective party's obligations hereunder shall be sus- pended during such period but for no longer than such period of time when the party is unable to perform Page 9 of 11 C\TEM PBABA'I MWI&C That this Agreement was EXECUTED this 0day of 2001, by duly authorized officials of the City and by Peterbilt Mot4m*p division of PACCAR Inc, a Delaware corporation being authorized and in good standbusiness in the State of Texas ATTEST JENNIFER WALTERS, CITY SECRETARY BY jaj�b AP OVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNFyY ATTEST CITY OF DENTON, TEXAS 2,!A, AC�t EULINE BROCK, MAYOR PETERBILT MOTORS COMPANY, A DIVISION OF PACCAR, INC By B O ERT ROWLEY, D OR DOMESTIC & INTERNATIONAL TAX Page 10 of 11 C UFM BABAnFINWI&I STATE OF TEXAS COUNTY OF DENTON Before me, the undersigned authority, a Notary Public in and for said State of Texas, on this day personally appeared Euhne Brock, Mayor for the City of Denton, known to me to be the person who signed and executed the foregoing instrument, and acknowledged to me that this in- strument was executed for the purposes and consideration therein expressed Given under my hand and seal of office this the day of 2001 A ANN FORSYTHE • Notary Public State pi sexes My Canmlalon Expires L a a0,••� MAY 9, 2002 STATE OF WASHINGTON § COUNTY OF KING § State of Texas My Commission Expires Before me, the undersigned authority, a Notary Public in and for said State of Washing- ton, on this day personally appeared B Robert Crowley, on behalf of Peterbilt Motors Company, a division of PACCAR Inc, known to me to be the Director of Domestic and International Tax for PACCAR Inc and to be the person who signed and executed the foregoing instrument, and acknowledged to me that this instrument was executed for the purposes and consideration therein expressed Y2. Given under my hand and seal of office this the 02 q day of 3l®® 2001 Notary ublic m and for the State of Washington My Commission Expires 11 do A000� AJe SE A7A- g$Oa7 Page 11 of 11 S bin �mmWn.mluff M RTm Mo mml Polirydx EXHIBIT "A" RESOLUTION NO O 'O A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, AMENDING THE POLICY FOR TAX ABATEMENT FOR THE CITY OF DENTON TO ESTABLISH GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS TO ALLOW WAIVER OF THE FIVE MILLION DOLLAR THRESHOLD AND THE MAXIMUM TAX ABATEMENT PERCENTAGE, TO DEFINE PROFESSIONAL POSITIONS, TO MAKE OTHER CHANGES AS SET FORTH IN THE AMENDED POLICY, AND DECLARING AN EFFECTIVE DATE WHEREAS, on June 6, 2000, the City Council adopted guidelines and criteria, known as the Denton Policy for Tax Abatement (sometimes referred to as "Tax Abatement Policy"), passing by Resolution No R2000-028, and WHEREAS, the City Council desires to promote economic development within Denton, and WHEREAS, providing tax abatement and other economic development incentives within the City and its extraterritorial jurisdiction will likely contribute to the economic development of Denton by encouraging major investment and the creation of jobs, and WHEREAS, the Property Development and Tax Abatement Act, Chapter 312 of the Tex Tax Code, allows the city to establish its own cntena for tax abatement and the City has previously adopted guidelines for tax abatement and resolutions No R90-018, R98-004 and R2000-028, and WHEREAS, the Joint Committee on Tax Abatement, composed of representatives of the City of Denton, the Denton Independent School District, and Denton County have recommended amendments to Section III "Value of Incentives" of the Tax Abatement Policy to allow waiver of the five million dollar threshold and the maximum tax abatement percentage and to define professional positions, which is attached hereto as the amendment to the Tax Abatement Policy, and WHEREAS, any amendment to the Tax Abatement Policy requires an affirmative vote of three -fourths of the members of the City Council (six affirmative votes) in accordance with Section 312 002(e) of the Tax Code, and WHEREAS, the City Council deems it in the public interest to continue to be eligible for participation in tax abatement and to amend the new policies, guidelines and criteria governing tax abatement agreements to be known as the Tax Abatement Policy, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES s wo.00.�awmmmmonr.. Aeeiammt eomy ax SECTION 1 That the polices, guidelines and criteria found in the Denton Policy for Tax Abatement are hereby amended by amending Section III "Value of Incentives" to allow a waiver of the five million dollar threshold and the maximum tax abatement percentage on a case -by -case basis, to define professional positions, and to make other changes set forth in the amended policy in accordance with the amendment that is attached to this Resolution as Exhibit A and made a part of this Resolution for all purposes From and after the effective date of this Resolution, the amended Tax Abatement Policy shall constitute policy guidelines and criteria governing tax abatement agreements for the City of Denton in accordance with Chapter 312 of the Tax Code SECTION 2 That the City Council hereby reasserts its decision to become eligible to participate in tax abatement The City Council provides certain tax incentives applicable to business enterprises in various reinvestment zones which are established in the City, in accordance with the applicable provisions of Chapter 312 of the Tex Tax Code and in accordance with the guidelines and criteria established in the attached Exhibit A and in the amended Tax Abatement Policy SECTION 3 That save and except as amended hereby, all the remaining sections, sentences, clauses, paragraphs and phrases of the Denton Policy for Tax Abatement shall remain in full force and effect SECTION 4 That this resolution shall become effective immediately upon its passage and approval at the regular meeting of the City Council of the City of Denton, Texas, on the I" day of May, 2001, at which meeting a quorum was present and which meeting was held in accordance with the provisions of Tex Gov't Code _§551 001, et seq PASSED AND APPROVED this the �`� day of 2001 ATTEST JENNIFER WALTERS, CITY SECRETARY BY APP OVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY EULINE BROCK, MAYOR Page 2 of 2 EXHIBIT A SECTION III DENTON POLICY FOR TAX ABATEMENT III VALUE OF INCENTIVES The criteria outlined in the Application will be used by the Joint Committee on Tax Abatement in determining whether or not it is in the best interests of the affected taxing entities to recommend that tax abatement be offered to a particular project Specific considerations will include the degree to which the individual project furthers the goals and objectives of the community as described in the Denton Comprehensive Plan, as well as the relative impact of the project New, expanding and modernizing businesses may be considered for abatement if the minimum threshold, as described in Table 1 below, is met Once a determination has been made that tax abatement should be offered, the value and term of the abatement may be determined by referencing the following table TABLE 1 Establishes a framework for considering the length of abatement according to assessed real property value of improvements and of tangible personal property located on the real property VALUE OF STRUCTURE AND PERSONAL PROPERTY IN MILLION DOLLARS YEARS OF ABATEMENT PERCENTAGE OF ABATEMENT 100 10 15- 25% 80 9 15- 25% 65 8 15- 25% 50 7 15- 25% 35 6 15- 25% 20 5 15- 25% 15 4 15- 25% 10 3 15-25% 5 2 15-25% To qualify, companies must meet the minimum threshold of the policy in the first 24 months from the execution of the agreement or as specified in the tax abatement agreement If upon initial application a project qualifies for tax abatement under the guidelines set forth in this policy, the taxing entities may consider granting an additional 5% abatement for each one of the following factors provided, however, that the total tax abatement does not exceed -1- 50% annually or continue for a period of more than ten years No applicant may receive credit for more than five of the following factors ■ The project w111 occupy a building that has been vacant for at least two years, ■ The project will create high -skilled, high -paying jobs as documented by the applicant, (A breakdown of number of jobs per job classification and entry level wage per classification will be used to determine eligibility), ■ The project will involve a significant relationship with one of the two universities in Denton, ■ At least 25% of the new jobs created by the project will be filled by Denton residents, ■ The project will provide knowledge -based jobs (at least 25 percent of jobs require college bachelors degree at entry level), ■ The project will donate significant public art to the community (To qualify, donation must be approved by Greater Denton Arts Council and City Council), ■ The project will donate significant materials/equipment to the public schools (To qualify, donation must be approved by DISD and City Council ), ■ The project will create improvements to the Denton Central Business District, ■ The project will result in the formation of a business park, ■ The project is an international or national headquarters facility The total tax abatement may not exceed 50% annually for ten years All abatements are subject to final approval of the City Council and DISD Board of Trustees, or the County Commissioner's Court Even though a project may meet the criteria asset forth in this policy, an application may be denied at the discretion of the City Council and/or DISD Board of Trustees Tax abatement shall not apply to any portion of the land value of the project The thresholds as described in Table 1 are considered guidelines for establishing the Tax Abatement Agreement terms However, the City and DISD may determine that a lower or higher percentage and/or a shorter or longer term of abatement may be more appropriate for an individual project If abatement is approved, the City and DISD may consider applying all or a portion of the abatement in the first year or during any shorter period within the term of the tax abatement agreement For example, an approved abatement of 25 percent for four years may be applied as 100 percent abatement for one year When the City of Denton and Denton Independent School District determine that incentives are required to retain existing businesses which propose to improve or redevelop property within the City limits, the Denton City Council and Denton Independent School District Board may consider these "special projects" on a case -by -case basis and reserve the right to waive the minimum threshold and/or exceed fifty percent (50%) in tax abatement The City of Denton and Denton Independent School District may also take into consideration as "special projects" the expansion/redevelopmentof existing businesses that create new or additional professional jobs Abatement hereunder will only apply to the increased valuation of the improvements over the appraised value of the property prior to such improvements as same is established by the Denton Central Appraisal District the year in which the tax abatement agreement is executed The City of Denton and Denton Independent School District may also consider other tax incentives authorized bylaw -2- Professionallobs are defined as "occupations which require specialized and theoretical knowledge which is usually acquired through college training or through work experience and other training which provides comparable knowledge, a calling requiring specialized knowledge and often long and intensive academic preparation, requires some research, analysis, report writing and presentations Special licensing, certification, or registration may be required to perform the job task, the work of professional positions is creative, analytical, evaluative, or interpretive, and is characterized by personal responsibility to keep abreast of and exercise judgment and broad perspective in the application of an organized body of knowledge that is constantly studied to make new discoveries and interpretations or to improve the data, materials and methods, may involve some supervision and budgeting/planning " When the City of Denton and Denton Independent School District determine that abandoned property may require additional incentives to promote economic development that generally satisfies the requirements of this policy, the taxing entities may waive the minimum threshold and/or exceed fifty percent (50%) in tax abatement, or consider other tax incentives for special projects to redevelop abandoned buildings consistent with existing law For the purpose of this policy, an abandoned building is defined as a building that has been identified as being suitable for commercial or industrial development, has been vacant for a minimum of five years or has substantially declined in appraised value Abatement would only be considered on the increased valuation of the improvements in each year covered by the tax abatement agreement over the value of the property for the year in which the tax abatement agreement is executed The City of Denton and Denton Independent School District may also consider other tax incentives authorized by law -3- p �w OPLWw ppwwwtlVlewlulio�Tw AbKmwl PoYry Ew RESOLUTION NO / 064 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, REPLACING A POLICY FOR TAX ABATEMENT FOR THE CITY OF DENTON TO ESTABLISH GUIDELINES AND CRITERIA GOVERNING TAX ABATEMENT AGREEMENTS, AND DECLARING AN EFFECTIVE DATE WHEREAS, on January 21, 1998, the City Council adopted guidelines and criteria, known as the Denton Policy for Tax Abatement, passing Resolution No R98-004, and WHEREAS, that Tax Abatement Policy has now expired, and WHEREAS, the City Council desires to promote economic development within Denton, and WHEREAS, providing tax abatement and other economic development incentives within the City and its extraterritorial Jurisdiction will likely contribute to the economic development of Denton by encouraging major investment and the creation of lobs, and WHEREAS, the Property Development and Tax Abatement Act, Chapter 312 of the Tex Tax Code, allows the city to establish its own cntena for tax abatement and the City has previously adopted guidelines for tax abatement and resolutions No R90-018 and R98-004, and WHEREAS, the Joint Committee on Tax Abatement, composed of representatives of the City of Denton, the Denton Independent School District, and Denton County have recommended a new Tax Abatement Policy to replace the expired policy, which is attached hereto as the Denton Policy for Tax Abatement, and WHEREAS, the City Council deems it in the public interest to continue to be eligible for participation in tax abatement and to adopt the new policies, guidelines and criteria governing tax abatement agreements to be known as the Denton Policy for Tax Abatement, NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES SECTION 1 That the polices, guidelines and criteria found in the Denton Policy for Tax Abatement, attached hereto is Exhibit A and made a part of this Resolution and incorporated herein for all purposes, are in all things approved and adopted From and after the effective date of this Resolution, the attached Denton Policy for Tax Abatement shall constitute policy guidelines and criteria governing tax abatement agreements for the City of Denton in accordance with Chapter 312 of the Tex Tax Code P rah+MNgxLLOL`9o, DwvmeuMmlutbvM�lTa Abu®m, Iolkr � SECTION 2 That pursuant to Tex Tax Code Section 312 002(c) the guidelines and criteria adopted herem shall be effective for two (2) years, during which time the guidelines may be amended or repealed by a vote of 3/a of the members of the Council SECTION 3 That the City Council hereby reasserts its decision to become eligible to participate in tax abatement The City Council provides certain tax incentives applicable to business enterprises in various reinvestment zones which are established in the City, in accordance with the applicable provisions in Chapter 312 of the Tex Tax Code and in accordance with the guidelines and criteria established in the attached Exhibit A SECTION 4 That this resolution shall become effective immediately upon its passage and approval at the regular meeting of the City Council of the City of Denton, Texas, on the 6`s day of June, 2000, at which meeting a quorum was present and which meeting was held in accordance with the provisions of Tex Gov 't Code §551 001, et eq PASSED AND APPROVED this the day of 2000 ATTEST JENNIFER WALTERS, CITY SECRETARY :9 �� %�l1,m. I, _� ,, APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY BY EULINE BROCK, MAYOR Page 2 of 2 EXHIBIT A DENTON POLICY FOR TAX ABATEMENT I GENERAL PURPOSE AND OBJECTIVES The City of Denton (City) and the Denton Independent School District (DISD) are committed to the promotion of high quality development in all parts of the city and to an ongoing improvement in the quality of life for its citizens Insofar as these objectives are generally served by the enhancement and expansion of the local economy, the City and DISD will, on a case -by -case basis, give consideration to providing tax abatement as a stimulus for economic development in Denton It is the policy of the City and DISD that said consideration will be provided in accordance with the procedures and criteria outlined in this document Nothing herein shall imply or suggest that the City or DISD are under any obligation to provide tax abatement to any applicant Denton County ad valorem taxes also may be abated, however, applications will be considered separately under the guidelines of the Denton County tax abatement policy All applicants shall be considered on a case -by -case basis Abatements will be considered only as inducements to generate development that otherwise would not occur Abatements will not be considered if construction of a project already has begun Tax abatements, as described in this policy, will be available for new and/or existing facilities and structures and for businesses wanting to locate, expand or modernize bask industries, corporate office headquarters or distribution centers, except as this policy may be limited for property described in Section 312 211(a) of the Texas Property Tax Code (V emons Texas Civil Statutes Annotated, hereinafter referred to as "Tax Code ") 1 S \TAX ABATEMENnTAX ABATEMENT POLICY 20W FINAL DRAFT d. II. JOINT TAX ABATEMENT COMMITTEE Requests for tax abatement shall be reviewed by the Joint Committee on Tax Abatement, said Committee being comprised of two elected officials each from the City, the DISD and Denton County One additional staff person from each Jurisdiction shall be appointed to serve as a nonvoting, ex officio member of the committee The Joint Committee on Tax Abatement serves as a recommending body to the taxing entities regarding whether economic development incentives should be offered in each individual case Its recommendation shall be based upon an evaluation of information submitted in the tax abatement application and any additional information requested by the Committee or presented to the Committee The Tax Abatement Application is presented as Exhibit A of this policy All meetings of the Joint Committee shall be held in compliance with the Texas Open Meetings Act, Chapter 551 of the Texas Government Code III VALUE OF INCENTIVES The criteria outlined in the Application will be used by the Joint Committee on Tax Abatement in determining whether or not it is in the best interests of the affected taxing entities to recommend that tax abatement be offered to a particular project Specific considerations will include the degree to which the individual project furthers the goals and objectives of the community as described in the Denton Comprehensive Plan, as well as the relative impact of the project New, expanding and modernizing businesses may be considered for abatement if the minimum threshold, as described in Table 1 below, is met Once a determination has been made that tax abatement should be offered, the value and term of the abatement may be determined by referencing the following table 2 S \TAX AIIATEMENT\TAX ABATEWNT POLICY 2000 FMAL DRAFT d. TABLE 1 Establishes a framework for considering the length of abatement according to assessed real property value of improvements and of tangible personal property located on the real property VALUE OF STRUCTURE AND PERSONAL PROPERTY YEARS OF PERCENTAGE OF IN MILLION DOLLARS ABATEMENT ABATEMENT 10 15- 25% 100 9 15- 25% 80 8 15- 25% 65 15- 25% 50 6 15- 25% 35 5 15- 25% 20 4 15- 25% 15 3 15- 25% 10 15-25% To qualify, companies must meet the minimum threshold of the policy in the first 24 months from the execution of the agreement or as specified in the tax abatement agreement If upon initial application a project qualifies for tax abatement under the guidelines set forth in this policy, the taxing entities may consider granting an additional 5% abatement for each one of the following factors provided, however, that the total tax abatement does not exceed 50% annually or continue for a period of more than ten years No applicant may receive credit for more than five of the following factors ■ The project will occupy a building that has been vacant for at least two years, ■ The project will create high -skilled, high -paying jobs as documented by the applicant, (A breakdown of number of jobs per job classification and entry level wage per classification will be used to determine eligibility), The project will involve a significant relationship with one of the two universities in Denton, 5 \TAX ARAntaNTTAX ABATEWNT POLICY 2000 FINAL DRAFT do. ■ At least 25% of the new jobs created by the project will be filled by Denton residents, ■ The project will provide knowledge -based jobs (at least 25 percent of jobs require college bachelors degree at entry level), ■ The project will donate significant public art to the community (To qualify, donation must be approved by Greater Denton Arts Council and City Council), ■ The project will donate significant materials/equipment to the public schools (To qualify, donation must be approved by DISD and City Council ), ■ The project will create improvements to the Denton Central Business District, ■ The project will result in the formation of a business park, ■ The project is an international or national headquarters facility The total tax abatement may not exceed 50% annually for ten years All abatements are subject to final approval of the City Council and DISD Board of Trustees, or the County Commissioner's Court Even though a project may meet the criteria as set forth in this policy, an application may be denied at the discretion of the City Council and/or DISD Board of Trustees Tait abatement shall not apply to any portion of ti ,t `L/11 ofthe project The thresholds as described in Table 1 are considered guidelines for establishing the Tax Abatement Agreement terms However, the City and DISD may determine that a lower or higher percentage and/or a shorter or longer term of abatement may be more appropriate for an individual project If abatement is approved, the City and DISD may consider applying all or a portion of the abatement in the first year or during any shorter period within the term of the tax abatement agreement For example, an approved abatement of 25 percent for four years may be applied as 100 percent abatement for one year To receive tax abatement from the City, the owner of the project must enter into a contract with 4 S ITAX AEATEW"TAX AEATENMNT POLICY 20M FINAL DRAFT d., M Denton Municipal Electric Utilities to provide electric service for a period of not less than five years and maintain performance of contractual obligations for the full period of the contract, unless located in an area in which the Denton Municipal Electric Utilities is not certified to serve Upon recommendation of Denton Municipal Electric Utilities, this requirement may be waived ,When the City of Denton,=4 DcntWndependeot S'boo, District determine that abandoned property may requite a d ii nai>t d tti f trtttid w condmi� devdlopmentthat generally satisfies the requirements of thus policy,,, � t� paay °the minir'npm threshold and/or exceed fifty percent (50°l0) to tax abateFrient,or�cd��idriltititietfiiiqfsi special projects td tedevelol}abandonedbuildings consistent With existing;14, 4, pQSe=off { q' tliby 'an abandoned building is defined as a building that has pTur been identifiiOO A btfiza sit; Dior co i'al-Of Industrial ddvelopment,has been vacant for a mmunum of five ye ;fix has dub tantialij' tslhac dd appraised value, Abatement would only be considered on the increased valoliti±dk6f * itti rdvements it.eaeh year covered by the tax abatement agreement over the value of the prope "j eft thq',yearJix which theJax abatement agreement is executed The City of Denton and Denton Inde pdimj,§0�601 Dili foray also consider other tax incentives authorized bylaw Preliminary Application IV PROCEDURAL GUIDELINES Any person, organization or corporation desiring that the City or DISD consider providing tax abatement to encourage location or expansion of facilities within the limits of the jurisdictions shall be required to comply with the following procedural guidelines Nothing within these guidelines shall imply or suggest that either the City or DISD is under any obligation to provide tax abatement to any applicant. A Applicant shall complete the attached "Application for Tax Abatement " 5 \TAX ABATEM NT\TAX ABATEMENT POLICY 2OW FINAL OBAFT dw B Applicant shall prepare a map or other documents providing the following ■ precise location of the property and all roadways within 500 feet of the site ■ existing uses and conditions of real property ■ proposed improvements and uses • any proposed changes in zoning ■ compatibility with the Denton Comprehensive Plan and applicable building codes and City ordinances all be provided Applicant shall complete all forms and C A complete legal description sh information detailed in the Application and submit all information to the City Manager, City of Denton, 215E McKinney, Denton, TX 76201 D All Information in the application package detailed above will be reviewed for completeness and accuracy Additional Information maybe requested as needed E The application will be distributed to the appropriate City and DISD departments for internal review and comments Additional information maybe requested as needed F Copies of the complete application package and staff comments will be provided to the Joint Committee on Tax Abatement D and County will review the application for comments and G Fiscal agents of the City, DIS recommendation Additional information maybe requested as needed Consideration of the Apphcatwn H The Joint Committee on Tax Abatement will consider the application at a regular or called meeting(s) Additional information maybe requested as needed i The recommendation of the Joint Committee on Tax Abatement will be forwarded, with all C9 S \TAX ABATEMBNnTAX ABATENMNT POLICY 2000 FMAL DRAFT do relevant materials, to the chief administrative officer of each taxing entity If the City Council of Denton decides to grant a tax abatement, it shall call a public hearing to consider establishment of a tax reinvestment zone in accordance with Section 312 201 of the Tax Code The reinvestment zone must meet one or more of the criteria of Section 312 202 of the Tax Code K The City Council of Denton shall hold a public hearing and determine whether the project is "feasible and practical and would be of benefit to the land to be included within the zone and City after the expiration of the tax abatement agreement in accordance with Section 312 201 " Special consideration shall be given to policies noted in the Denton Comprehensive Plan when designating a tax reinvestment zone L The City Council of Denton may consider adoption of an ordinance designating the area described in the legal description of the proposed project as a commercial/industrial tax abatement zone M The City Council may consider adoption of an ordinance or resolution approving the terms and conditions of a contract between the City and the applicant governing the provision of the tax abatement and the commitments of the applicant, including all the terms required by Section 312 205 of the Tax Code and such other terms and conditions as the City Council may require Should the commitments subsequently not be satisfied, the tax abatement shall be null and void (unless the tax abatement agreement provides for a recapture of the property tax revenue lost proportionate to a partial failure to meet the minimum thresholds set forth in the agreement) and all abated taxes shall be paid immediately to the City of Denton and all other taxing jurisdictions participating in the tax abatement agreement Provisions to this effect shall WA 5 \TAX ABATENMNnTAX ABATEMENT POLICY 2M FINAL DRAFT d.c be incorporated into the agreement N The governing bodies of Denton County and DISD may consider ratification of and participation in the tax abatement agreement between the City of Denton and the applicant O The City and DISD reserve the authority to enter into tax abatement agreements at differing percentages and/or terms as set forth in the guidelines of this policy, consistent with the requirements of the Tax Code Any tax abatement agreement will address various issues, includingbut not limited to, the following General description of the project, 2 Amount of the tax abatement and percent of value to be abated each year, Method of calculating the value of the abatement, Duration of the abatement, including commencement date and termination date, 5 Legal description of the property, 6 Kind, number, location and timetable of planned improvements, 7 Specific terms and conditions to be met by applicant, g The proposed use of the facility and nature of construction, 9 Contractual obligations in the event of default, violation of terms or conditions, delinquent taxes, recapture, administration and assignment Annual Evaluation Upon completion of construction, the Joint Committee on Tax Abatement shall receive from the City Manager an annual evaluation of each abatement to insure compliance with the agreement and to report possible violations of the agreement to the taxing entities After new tax base numbers are received in July 5 \TAX ABATEM NT\TAX ABATEMENT POLICY 2000 FINAL DRAFT &C of each year, the City Manager and his staff will have ninety (90) days to review and prepare a breakdown of those figures Transfer or Assignment A contract for tax abatement may be transferred or assigned by the original applicant to a new owner upon approval by the various taxing jurisdictions after such a recommendation is made by the Joint Committee on Tax Abatement Local Busuae850 and Minun Business Enterprise In performing this Agreement, OWNEM ague to use diligent efforts to purchase all goods and services from Denton businesses whenever such goods and services are comparable in availability, quality and price As a matter of policy with respect to CITY' projects and procurements, CITY also eacoiar'agcs the use, if applicable, of qualified contractors, subcontractors and suppliers where at least fifty-one percent (51 D/o) of the Ownership of such contractor, subcontractor or supplier is vested in racial or ethnic minorities or women, In the selection of subcontractors, suppliers or other persons or organizations proposed for work on this Agreement, the OWNERS agree to consider this policy and to use their reasonable and best efforts to select and employ such companies and persons for work on thus Agreement Job Recruitin from Low -Moderate income Census Tracts OWNER, lessee or assignee of OWNER agrees it will endeavor to make available, or endeavor to cause lessees or assignees to make available, full-time or part-time employment with on-the-job training for Denton citizens In this effort, OWNER, lessee or assignee agrees to recruit from the low -moderate income Census tracts as further defined in the Concentration of Low/Mod Income by Block Groups shown below 5 \TAX ABATEMENTTAX ABATEMNT POLICY 2000 FINAL DMFT doe EXHIBIT A The City of Denton Tax Abatement Applica About the Application The Tax Abatement Application provides the City with specific information on the project The information requested in the Application is designed to address the criteria developed within he City of Denton's Tax or fiscal analysis and e aluation isprovided tto C untnciil tMmbers and serves aassaf source document during City 1Counciltevaluation This deliberations o The Application And The Agreement Specific information from the Application (like value of new investment and employment commitments) is incorporated into the Abatement Agreement In fact, the h uestioion is an n on theaappllicat on bto e answered en fullacethe ndas agreement is a binding contract, it is important that each q PP realistically as possible Simply put, the application is part of the process from start to finish so you'll want to make sure you're comfortable with the contents When Is The Application Finah The answer to this question is very simple When you tell us, "It's final " It is not uncommon for a property owner(s) to submit numerous Applications as drafts for informational and evaluative purposes only As conversations continue, the property owner will submit a finalized version of the Application that includes all of the commitments agreed to during the discussions What About Confidentuthty 9 Section 312 003 of the Texas Tax Code makes confidential information provided to the City as a part of this application that describes the specific processes or business activities to be conducted or the equipment or other property to be located on the property This information is not subject to public disclosure until the tax abatement agreement is executed Section 522 131 of the Texas Government Code (Texas Public Information Act) makes confidential reformation which relates to economic development negotiations between the City and a business prospethat the City seeks to have locate, stay or expand in or near the territory of the City The information must prospect relate ct a trade secret of the business prospect, commercial or financial information which he business prospect can demonstrate based on specific factual evidence that disclosure would cause substantial competitive harm to the person from whom the information was obtained or information about a financial or other incentive being offered to the business prospect by the City or by another person Information about a financial or other incentive being offered to the business prospect is required to be disclosed when an agreement is made with a business prospect The City is subject to disclosing most records and documents upon request under the Public Information Act Accordingly, please clearly indicate and mark any information you consider proprietary This would include anything in your application which you consider a trade secret, commercial or financial information which you can demonstrate by specific factual evidence that would cause substantial competitive harms if disclosed, information which describes the specific processes or business activities to be conducted or the equipment or other property for which the tax abatement is sought, any financial or other incentive you may be seeking from the City or any other information you deem to be confidential under the law Who is Authorized To Sign the Application an Because div Application itself is non -binding, the person to sign on behalf of he propertytgnii ownerneHowever, if an Agreement ised not be the property rreached, or nthe Application will be an attachment to the Agreement and its contents will be binding through the authorized signature required on the Agreement 11 S \TAX ABATEMNMAX ABATEWNT POLICY 2000 FINAL DRAFT d.c �anan� 0or a� 06 �o V po 4 pp O Q t7 C • 4. °on°c0000p�� City of Denton Tax Abatement Application City of Denton City Manager's Office Denton, Texas 76201 (940)349-8307 (940) 349-8596 FAX 12 s\TAX ABATEMEIMTAX"AnE NT POLICY 2000 FMAL DIWFT doo 1 2 3 APPLICATION FOR TAX ABATEMENT CITY OF DENTON, TEXAS or a chronology of plant openings, closing and relocations over the past 15 years a record of mergers and imancial restructuring during the past 15 years q Will the occupants of the project be owner or existing? are occupancy commitments 5 Is the project a relocation of existing facility or anew facility to expand operauons9 current location 13 1 \TAX ABATEFIENT\TAX ABAM ENT POLICY 20M FINAL DRAFT d., give 6 If an existing Denton business, will project result in abandonment of existing facility" it so, me ve existing facility will be subtracted from the value of the new facility to arrive at total project value 7 Attach a copy of the legal descrtptton detatltng property's metes ano bounas Attach map of project including all roadways, land use and zoning within500 feet of site g Current Value Attach copy of iatest prupcny LaA ,......•_ w - District (include both real and personal property) 9 10 Denton _ _=_. a-,,.e...o.,r and m,mher of vears requested tot eacn taxing vll—. ._...... a...vo ♦h,e nrN P.Ct 1 ] Grve a brief description of the acnvmes to be performed at this location, including a to be produced and/or services to be provided 14 S \TAX ABATEMENTTAX ABATEMENT POLICY 2WO FINAL ABAFT doc 12 contractors or sub -contractors costs C Describe -'any infrastructure requirements Drainage S ITAX ARATEMNTTAX ABATEMENT POLICY 2000 FINAL DRAFT doc 15 contractors 13 Project Operation Phase Provide employment information for the number of years tax abatement Is requested _ :1 Existing Start Date At Term of Employment Information Operation (mo/yr) Abatement (if applicable) _/_ permanent jobs (A ) Is (A minus permanent, F Types of lobs created List the job titles and number of positions in each category that will be employed at the facility Provide average wage for each category usage for project 14 Describe any other direct benefits to the City of Denton as a resin project elements identified in Tax Abatement Policy, Section 11I) 16 S \TAX ABATnhfNTTAX ABATEM1IENT POLICY 2000 FINAL DRAFT doe project (e g , sales tax revenue or 15 Is property zon Current zoning variances 16 Is property project Will replattmg be necessary r es 17 Discuss any environmental impacts created by the project A List any permits for which applicant must apply Applicant will be required to provide City wtth copies of all applications for environmental permits upon completion of application(s) to all environmental regulations for the past Live years assistance Is Provide specific detail of any from the requesting company 19 Provide descnption of any historically significant area mcluded within the projectVs area as determined by the Historic preservation officer If any, give detail of how the historically significant area will be preserved 20 Justification for Tax Abatement Request Substantiate and more -........... - request Include the amount of the abatement requested and show how it will contribute to the financial viability of the project Submit attachments if necessary 17 S \TAX ABATEMENT\TAX ABATEMENT POLICY 2WO FINAL DRAFT doc 21 List addntonal abatement factors to be considered for this project as outlined on pages 3 and 4 of the tax abatement policy 22 Financial Information Attach a copy of the latest audited financial statement or, in the case of a new project, a business plan This tax abatement application is submitted with the acknowledgement that additional certified financial information may be required Authorized Signature Date M S \TAX ABATE.¢NTTAX ABATEAgNT poLICY 2000 FINAL DRAFT do EXHIBIT "B" Legal Description of Peterbilt Motors Company property BEING all that certain tract or parcel of land lying and being situated in the R H Hopkins Survey, Abstract No 1694 and the J McGowan Survey, Abstract No 797, Denton County, Texas, and being a part of a called 1 447 acre tract, described in a deed to the Synod of Texas, Presbyterian Foundation of the United Presbyterian Church, USA, a Texas Corporation, recorded in Volume 458, Page 224, Deed Records, Denton County, Texas, and a part of a 31 715 acre tract, described in a deed to the Synod of Texas, Presbyterian Foundation of the United Presbyterian Church, U S A, a Texas Corporation, recorded in Volume 485, Page 97, Deed Records, Denton County, Texas, and being more particularly described as follows BEGINNING at a wood right-of-way post at the northwest corner of said 1 447 acre tract, being the northeast corner of lot 1, of the replat of block 2, Southridge Center, recorded in volume 6, page 8 plat records, Denton County, Texas, and being on the south right-of-way line of Interstate Highway 35 East (a variable width right-of-way), THENCE south 73 degrees 43 minutes 46 seconds east, with the north line of said 1 447 acre tract and the said south right-of-way line, a distance of 166 40 feet to a % inch iron pin set with a yellow plastic cap stamped H&N 1849, THENCE south 78 degrees 35 minutes 00 seconds east, with the north line of said 1 447 acre tract and the said south right-of-way line, a distance of 342 58 feet to a'h inch iron pin set with a yellow plastic cap stamped H&N 1849 at the intersection of the said south nght-of-way line and the west nght-of-way line of Southridge Drive (a 60 foot right-of-way), THENCE south 01 degrees 00 minutes 33 seconds east, with said west nght-of-way line, a distance of 307 79 feet to a found iron pin at the northeast corner of lot 6, block 3, Southridge Center, recorded in Volume 3, Page 51 Plat Records, Denton County, Texas, THENCE north 89 degrees 43 minutes 58 seconds west, with the northhne of said block 3, a distance of 497 59 feet to a '/2 inch iron pin set with a yellow plastic cap stamped H&N 1849 at the northwest corner of lot 3, block 3, and being on the east line of lot 2, of said block 2, Southridge Center, THENCE north 00 degrees 27 minutes 40 seconds west, with the east line of said block 2, a distance of 419 87 feet to the point of beginning, and containing in all 4 086 acre of land 4 486 ACRE TRACT Block 1, of Southridge, an addition to the City Of Denton, as shown by the plat thereof, recorded in Volume 3, Page 51 Plat Records, Denton County, Texas BOTH TRACTS TOTALING 8 752 ACRES OF LAND 5 Wur Wcumw"'O lw OJTWRIT APO At EXHIBIT �,.... 01 0i City of Denton Tax Abatement Application City of Denton City Manager's Office Denton, Texas 76201 (940) 349-8307 (940) 349-8596 FAX Tax Abatement Policy May 2001 - 9 1 APPLICATION FOR TAX ABATEMENT CITY OF DENTON, TEXAS Property Owner Peterbtlt Motors Company Company or Project Name Division Headquarters Mailing Address 1700 Woodbrook Street Denton, TX 76205 Telephone (940) 591 4000 Fax No (940) 591-4260 Contact Name Jim Fykes Title Division Operations Manager Mailing Address 1700 Woo -brook Street Denton, TX 76205 Telephone (940) 591 4004 Fax No (940) 591-4130 2 Provide aichronology of plant openings, closing and relocations over the past 15 years Petertlt relocated its division headquarters from Newark, CA to Denton, TX in 1993 In addition, several b Peterbtlt suppliers have relocated to, or opened facilities in, Denton 3 Provide a record of mergers and financial restmcturing during the past 15 years No changes in corporate/financial structure have occurred in the last 15 years 4 Will the occupants of the project be owner or lessee? If lessee, are occupancy commitments already existing9 Occupants will include both current owners and employee transfers from a sister division currently locate( Dallas County 5 Is the project a relocation of existing facility or a new facility to expand operations9 If relocation, give current location Project is expansion of existing facilities for current owners, and relocation for sister division employees Sister division is currently leasing a Dallas county rental property In addition, the project will provide for future expansion of existing operations Tax Abatement Policy May 2001 - 1 0 - m 06/14/01 o8 59 FAX 425 468 8232 FACCAR DMC BVIM G rig If an exuDenton business, will project result in abandonment of existing facilityO If so, the vi t existing facthty will be subtracted from the value of the new facility to arrive at total project value Na, existixtg 4'acilides wilt still be utilized 7 property Description - Attach a copy of the legal descnption detailing propertyIs metes and bounds - Attach map of project including all roadways, land use and zoning within 500 feet of site Blue Frints/Maps Attached 11 9 t0 11 Cuncnt Value Attach copy of latest property tax statement Tram tau District. (include both real and personal property) $2,798,521 per the attachedpfoperty appraisals TrtnrPASed Value/Estmiated ionu Cost Of project County Of the Indicate amount of tax sbstement and nturber of years requested for each taxing entity 100 % 10 years City of Denton 10 years Denton Independent School Dismat 100 % 10 years Denton County 100 % Lust any other financial mccntives this project willrequesr/receive Estimated Freeport Exeniphan $0 Estmated Electnc ijtihty Industral DevelopmentRider $0 So Estimated Water/Wastewater Infrastfucrure Assistance Give a brief description of the activirtes to be performed at this location, including a description aP product; to be produced and/or services to be provided. Cutreat operations will continue to function as the diviswn headquarters For Peterbtlt Motors Company, including administration, finance, aalah, marketing, and related services related to the production of heavy duty tricks of the project will include finaucng/leasng acnvings as tamed out by the Activities transferred as a result sister division. _ Tax Abuwment Policy May 2001 11 12 Project Construction Phase A Estimate percentage of project development and construction dollars to be spent with Denton based contractors or subcontractors Construction costs $ 6,100,000 Percentage local contractors 25% B Construction Employment Estimates Start Date (Mo/Yr) 08/01/2001 Completion Date (Mo/Yr) 04/O1/2002 No of Construction Jobs 100 Estimated Total Construction Payroll $2,000,000 C Describe any off -site infrastructure requirements Water No New Wastewater No New Streets No New Drainage No New Other New 2" Electrical Service Tax Abatement Policy May 2001 13 Project Operation Phase Provide employment information for the number of years tax abatement is requested At Project Existing Start Date At Term of Employment Information Operation (mo/yr) Abatement (if applicable) A Total number of permanent, full-time jobs 149 149 184 B Employees transferred from outside Denton 35 C Net permanent full-time jobs (A minus B ) 149 149 149 E Total annual payroll for all permanent, full-time $11,427,400 $11,427,400 $13,521,800 jobs (A) F Types of jobs created List the job titles and number of positrons in each category that will be employed at the facility Provide average wage for each category Management 3 positrons Average Salary = $134,000 Credit Managers 3 positrons Average Salary = $96,000 Sales 4 positions Average Salary = $63,000 Credit Analyst 9 positrons Average Salary = $53,000 Collection 7 positrons Average Salary = $51,000 Administration 9 positrons Average Salary = $35,000 Total Positrons 35 positrons Average Salary = $60,000 In addition, as the truck market strengthens, the existing operation will increase staff as build rate increases G Estimate annual utility usage for project Electric $63,000 Water $2,500 Wastewater $5,500 Gas $4,000 (Indicates annual utility usage of new facilities only) 14 Describe any other direct benefits to the City of Denton as a result of this project (e g , sales tax revenue or project elements identified in Tax Abatement Policy, Section III) The transferring sister division will create sales tax revenues as a result of their day to day operations, including the purchase of supplies, meals and entertainment expenses, lodging, etc Tax Abatement Policy May 2001 - 13 - 15 Is property zoned appropriately? © No Current zoning Commercial/Office Zoning required for proposed project No change required Anticipated variances None anticipated at this time 16 Is property platted es No Will replattmg be necessary Yes 17 Discuss any environmental impacts created by the project A List any permits for which applicant must apply Applicant will be required to provide City with copies of all applications for environmental permits upon completion of application(s) Office building construction will have minimal impact to environment New construction will be similar to existing facilities and will comply to current landscape and storm water requirements B Provide record of compliance to all environmental regulations for the past five years Peterbilt has complied with all regulations with no violations 18 Provide specific detail of any businesses/residents that will be displaced and assistance that will be available from the requesting company No displacement will occur In addition, Peterbilt will provide an aesthetically pleasing architectural design and landscape plan that will compliment the existing neighborhood 19 Provide description of any historically significant area included within the project's area as determined by the Historic preservation Officer If any, give detail of how the historically significant area will be preserved None to our knowledge 20 Justification for Tax Abatement Request Substantiate and more fully describe the Justification for this request Include the amount of the abatement requested and show how it will contribute to the financial viability of the project Submit attachments if necessary See attached justification information Tax Abatement Policy May 2001 - 14 - 21 List additional abatement factors to be considered for this project as outlined on pages 3 and 4 of the tax abatement policy There will be potential relocation of permanent residence of current and future individuals employed by the sister division, as well as revenues created from the daily activities of all Peterbilt employees traveling to and working in Denton Additionally, it increases energy consumption at this location, which is provided by Denton utility companies Peterbilt's total operations will continue to be a contributor to the economic development and growth of the city through additional expansion, by both Peterbilt and Peterbilt suppliers, and through charitable contributions such as the United Way With that growth will be increased employment by people living in the city of Denton and in Denton county 22 Financial Information Attach a copy of the latest audited financial statement or, in the case of a new project, a business plan Please see attached PACCAR Inc audited Financial Statements for 2000 In 2000, Peterbilt represented 33% of PACCAR Inc 's total revenues, and 41% of PACCAR Inc 's total net income This tax abatement application is submitted with the acknowledgement that additional certified financial information may be required du2thoMized Signature Date �//AI Tax Abatement Policy May 2001 - 15 - 20 Justification for Tax Abatement Request Peterbilt Motors Company is currently considering a $6 1 million expansion project that would increase the size of our existing Division office by approximately 31,700 square feet This expansion would allow one of our sister divisions, PACCAR Financial, to transfer their operations to Denton It would also allow us to grow our existing business, and establish Denton as a consolidated office location for PACCAR Inc that could potentially attract other PACCAR Inc divisions, and/or division branches, to Denton To help Justify this expansion project, Peterbilt is applying for 100% property tax abatement for 10 years As an existing business, we realize that under anew amendment to the tax code we are potentially eligible for 100% tax abatement We feel that 100% tax abatement is reasonable in the light of Peterbilt's current level of investment in Denton Peterbilt would save approximately $56K per year in property taxes for the first ten years, which makes this expansion substantially more appealing to PACCAR Inc when it chooses how to allocate capital funds After the ten-year abatement period tax revenue will increase by 83K This is, of course, in addition to the $73K of taxes that Peterbilt currently pays for its Division office and adjacent land Attachment 20A and 20B illustrate the current tax situation, and the proposed tax scenario with 100% tax abatement In addition, it must be noted that this scenario conservatively assumes that the tax rates will remain constant However, we estimated an annual 4% increase in assessed value for the ten-year period This increase will vary with the changes in real estate market value Peterbilt Motors Company has been an economic and social partner with the City of Denton for 20 years and looks forward to continuing that relationship well into the future Peterbilt has provided both financial and non -financial support to many organizations within Denton and Denton County — Denton Adult Daycare Center — Denton Arts Council — Denton Benefit League — Denton Black Chamber of Commerce — Denton Chamber of Commerce — Denton County Friends of the Family — Denton Festival Foundation — Denton High School — Denton Holiday Festival Association — Denton Main Street Mardi Gras — Denton Parks Foundation — Denton Police Association — Denton Senior Center — Keep Denton Beautiful — North Central Texas College — North Texas State Fair — Special Olympics — Spirit of Christmas — Texas Woman's University — University of North Texas Peterbilt and its employees have been major contributors to the Denton County United Way Peterbilt employees also serve on boards and committees — Denton Chamber of Commerce — Denton County United Way — UNT Advisory Board for Community Services — Support UNT School of Business Executive Development Program The expansion project we are proposing will serve to brighten our future in Denton, and help promote the continuous development of Denton as a growing center for business in North Texas The expansion will benefit City of Denton, Denton County, and Denton ISD by increasing sales and property tax revenues, and spur additional consumer spending as high level professional employees travel to and relocate into Denton In summary, the property tax abatement we are requesting will help turn this expansion project proposal into an approved expansion project that will strengthen Peterbilt and PACCAR Inc, and improve the quality of life for the citizens and businesses of Denton (k \ a Cl) LO 2] - 6-1 / CD CD CD CD 0 `0600 C� \ \ Kc � + Iq // � _ \ e �-LO _ _ CD co 00 2a/ \\\ k( N r- � `$ )) k cm Cl) » /\\ § (0 cn /( j Cl) 00 r _ \ k i / r) J ® z ke0 U-j =R ) j\k «§CD ( [■� ƒ)k oo� 0 01 ^ §§2�w ) »� �ItCL « § 2 c �[Lu S§§§ / C. k00 * N v N m N N N O O O N 0 w T LO U) 'OV_ LO W co 4) h O M r O 4) m O co m r CO M m d /A H 6% 1 fA (A , r� 06 T r L T L ) O m a O m O N r r O In fA N O N 0) ` N m M O M m r M M (0 O O (D V) N f- O 4) 00 } /A H A M,C11 f } /A 1 I m mN6% c 00) f9 V o m (00 T h 0) 00N r m L 04 N CN rn 00 It M• fro vOi 000 CD W f` M O cO V 0 O L 107 i } fH 64 6% 6% M fH f` r W� frcpp N M O co r A L M m N 't M W M W N m O N cN 7 N N O IT r M It O m C rW 0) O W m cmO y O N 06 f17 00 N a0 y 00 } M• � } co N M 0 M- a N r m lO (0 O M M c0 Cl) 't Cl) m N n ON c0 M 4) 0 6., M M OM v It N V It V N 04 M m M t0 V a) co r W w W V) V� N co Cl) ClCl) W M ONO M• M N M N co 0) O O m m I m rl- } NIh 0 m N f—O m m N N M cM0 c07 m M� 0) N ONE ��M• i- NN } x o co o 0) o o 0) m r m V> r N 00 r m N w fo m M m L6 co co } t9 6 fn » � 6 } w t» x F c0 M O m N N N m O V o O Z C m O 6% m O O m 0) O O O C fA 00 m N M c0 m N m 4) z Q F 0)N Ih fV c0 V �n� N I,- N co O co t a � Q U Q V V IL 2 a N v, H w ate E m O O O H 4) Y 7 O W W f0 M st N m F co O a 0 W L M r, N N d O 6. am � �ao� IL LU oZ� m w =a � �ga Qa N N k?oI ) a o a F- FT a m N N C N U fa a DENTON APPRAISAL DISTRICT PO BOX 2816 3911 MORSE ST DENTON, TX 76202-2816 940-566-0904 FAX 940-387-4824 METRO 972-434-2602,, A PACCAR INC (27860) PETERBILT MOTORS 3200 AIRPORT RD DENTON, TX 76207-2108 Ili 111911 hill 1111 Ill l l Ill Ill l ll 1111111111 ll llll Ill 11111111111 Dear Property Owner NOTICE OF APPRAISED VALUE This isNOTaTaxBill Date 05/11/2001 Account # (Refer to this A when inquiring about your property) R27313 Street Address 1700 WOODBROOK Property Description SOUTHRIDGE, BLOCK 1, LOT 1 Overlapping County Information We have appraised the property listed above for the 2001 tax year Based on the appraisal date of January 1 of this year the appraisal is as follows IAppralsalInformation Last Year Proposed This Year Land's Market Value 596,946 596,946 Agricultural or Timber Market Value 0 0 Agricultural or Timber Productivity Value 0 0 Improvements (Buildings) Appraised Value 1,886,083 1,933,540 Personal Property Appraised Value 0 0 Mineral Interest Appraised Value 0 0 Total Market Value of this Property 2,483,029 2,530,486 Total Appraised Value (with Homestead Limit) 2,483,029 2,530,486 Exemptions Rost Y"rlq Taxing Emits " P'roposed proposed k+rnPasad Taxable Last Yearn Proposed Tax Taxable s > �Appta(sed Rxemptio»s 2Less€xemPtfons} Tax Rate estimate 2,483,029 )ENTOR COUNTY ENTON ISD 1,,486 2,530,486 0 2,530,486 1.844000 46,662.16 2,483,029 ZITY OF DENTON 2,530,486 0 2,530,486 0.528150 13,364.76 OTAL 65,895.88 The above tax estimates use last years tax rates for the taxing units The governing body of each unit school board county commissioners and so on decides whether property taxes Increase The appraisal district only determines your property s value The taxing units will set tax rates later this year The Texas Legislature does not set the amount of your local taxes Your property tax burden is decided by your locally elected officials and all inquiries concerning your taxes should be directed to those officials If you are 65 or older and received the $10 000 school lax exemption on your home last year from the school listed above your school taxes for this year will not be higher than when you first received the exemption on this home If you improved your property (by adding rooms or buildings) your school tax ceiling may increase for improvements If you area surviving spouse age 55 or older you may retain the school tax ceiling Contact the appraisal office If you disagree with this years proposed value for your property or if you have any problems with the property description or address information If the problem cannot be resolved you have a right to schedule a hearing with the appraisal review board (ARB) by filing a WRITTEN protest with the Board You may either use the provided form or prepare a letter (including your name your property s description and any appraisal office actions with which you disagree) Your protest must be delivered by mail to the above address or In person at the appraisal district office before the protest deadline Normal office hours are 8 00 AM to 5 00 PM Monday through Friday In addition the Denton CAD office will be open 8 OOAM to 8 00 PM Tuesdays and Thursdays starting May 29 2001 through June 14 2001 If you have other questions or need more information please contact the appraisal office at the phone number or addresses listed above Sincerely, Chief Appraiser Joe Rogers Enclosures Denton Appraisal District Protest Deadline ARB Hearings Begin Location of ARB Hearings June 11, 2001 May 31, 2001 3911 Morse St Denton, TX 76208 nrAD05 FRM 514/01 MAY-31-2001 14 19 FROM DENTON CRD 940-387-4824 TO 940 591 4110 P 0021002 DMN CN APPTi XMM DISMCT PO BCgt 2816 3911 HINM 8T MWTCK, = 76202-2816 940-566-0904 FM 940-387-4824 mEmm 972-434-2602 PACC AR INC (443109) 777 106M AVE M EVZZ17 1 431, 98004 NOTICE OF APPRAISED VALUE nst /1'Ji'FAAAVOT a Tax BIII nt fi (Refer to fide a when Inquiring about your poverty) 7A dress Proper �3sc olon A0797A 7 M7 MW, TRACT TRACT 15, ALgF.S 1 001 CM D= TR 2,(A1694 TR 1D) Overlapping Courtly Information Dear Property Owner We have appraised the property listed above for the2001 tax year Based on the appraisal date of January t of this year, Lana a Marxat value Agricultural or Timber Market Value Agricultural or Timber Productivity Value Improvements (Buildings) Appraised Value Personal Property Appraised Value Mineral Interest Appraised Value Total Market Value of this Property Total Appraised Value (with Homestead um1) el 34, j c4i7iI Ye pM • • w 1081900 1081900 0 0 0 0 159,141 163,856 0 0 0 0 2681041 272,756 268,041 272,756 272,756 10 231930 632 60 272,756 11 844000 5,029 62 272,756 0 52WO 1,440 56 71102 78 The above tax estimates use last years tax rates for the taxing units The governing body of each unit school board, county commissioners and so on -- decides whether property taxes Increase The appraisal district only determines your property's value The taxing units wall set tax rates later this year The Texas Legislature does not set the amount of your local taxes. Your property tax burden is decided by your locally elected oniciale, and all inquires conceminq your taxes should be directed to those officials It you are 6$ or older and received the $10,000 school tax exemption on your home last year from the school listed above your school taxes for this year will not be higher than when you first received the exemption on this home If you improved your properly(by adding rooms or buildings) your school tax ceiling may Increase for improvements If you are a surviving spouse age 55 or older, you may retain the school tax ceiling Contact the appraisal office if yaw disagree with this years proposed value for your property or it you have any problems with the property description or address information If the problem cannot be resolved, you a right to schedule a hearing with the appraisal review board (ARB) by filing a WRITTEN protest with the Board You may either use the provided force or prepare a letter including your name, your property$ description, and any appraisal office actions with which you disagree) Your pretest must be delivered by mail to the above address or in person at the appraisal district office before the protest deadline Normal office hours are 8 00 AM to 5 00 PM Monday through Friday In addition, the Denton CAD office will be open 8 00 AM to 8 00 phi Tuesdays and Thurdays starting May 28, 2001 through June 14 2001 If you have any other questions or need more Information please contact the appraisal office at the phone numbers or addresses Ilstod above Protest Deadline sincerey, ARB Hearings Begin �Y 31, 2001 JT�oe s CDestttarfn aisal District 3911nMrseeH��rings Enclosures Denton, = 76208 T �I�I�I•y'g g � I �1 � � � Igo a e�e� baaab E j�ye�y�ite�@@ IdE313i�1ii393d �t4 Ai 4i 3�. SS ae�E gi1g�11E1g1 1 11111 1 1 F FYbti�x�lbbeigRy�F4 F K^ — ~n n n ilq._ .EHHBtle BE.aEtl3Ht6 H wi 111111191�1 li 11a111}11 1 I.n A.F616 f.tl Fnb Fblk'F A " _p RxsRgppxC •>••__ gasp €€ €€i ax _ a 6 ail, it Pi iE E I aR e GS1' s a F9E Ei y�a $ ai i95. yg°g�a� �ddi �9;$4 1gip S$Gda iSg�ey� E@ji §1 �g � �ci �Ie.dpg� id�%�� #gai€ &dte� FeB SEE Ee EE 3pjE�`E,�' 1 SEEyya Ex K a�ad,1 ti$ BEE q aR HaQa aal e" 3S `!3 iieE�E �t4:iil� � S��i� {ES �ES E iaiag 1§3E �ei 5A °6a E Sl�s YTQi a H}QdbQiEav qi ES CH°Ra °ieay e AA° C"pp^ °&SS tQgg¢ yy/Fp5 Y' {pE 6'$ S Y y €� iyyBbB �a1pa iiE R 114 5,14 1 b¢} 1: 7 �33 g€g@ 5€9kE : liR6ICE? 3 lF�@RFjb& IEa €€gill Rixllq €€SAS 'b6s te(,.a ASS E } BeiE� y3■ AE °a~~gaAg PyVby°y� epAeap@d4� y6tA7 g41ESbn q1 ! 7 5 Iry EiI GIs %103ib fill ICh IN 3 LE a E 941 : a 4 S F n N � i y 'S E Iyy Z�£ C o i E N�J 4 v F — I ' 9 I °Y"��CCS'e05 6 gg W Q U 1 YE13�� 8 �b R¢ CgRCg2� C5 ¢�� 'g p 6■�9 I� $M �` b E � G Z - - - BE! vfSWTjP � �a EC YiBB � $�g asa 2p75(dyyy � 8§�p� � �$$ dd b CpI � pq�' ID6�5 IT p6pqE gg¢ qI �$y�T P, F— U- �} �aY�Y w Y$�o d¢ W G Z+, a�Y 6a8� 3 Y �,I _ Vim, »/xnL_ — 1d3os A S c c a a CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31 TRUCE AND OTHER: Net sales Costs and Expenses Cost of sales Selling, general and administrative Interest and other, net Truck and Other Income Before Income Taxes FINANCIAL SERVICES, Revenues Costs and Expenses Interest and other Selling, general and administrative Provision for losses on receivables Financial Services Income Before Income Taxes Gam on sale of subsidiary Investment Income Total Income Before Income Taxes Income taxes Net Income 2000 1999 1998 (millions except per share data) $7,437 0 $8,648 2 $7,577 7 6,4973 7,282 4 6,431 0 395 3 582 5 580 3 (9 4) 91 88 6,883 2 7,874 0 7,020 I 553 8 774 2 557 6 482 4 372 8 317 1 3037 2199 1783 599 544 626 424 207 140 406 0 295 0 254 9 764 77 8 62 2 33 2 34 9 38 0 33 3 665 1 923 2 653 1 223 3 339 6 236 3 $ 441 8 $ 583 6 $ 416 8 Net Income Per Share Basic $ 576 $ 746 $ 5 34 Diluted $ 573 $ 741 $ 5 30 Weighted average number of common shares outstanding 767 78 2 78 1 See notes to consolidated financial statements PACCAR Inc and Subsidiaries CONSOLIDATED BALANCE SHEETS ASSETS Lo December 31 TRUCK AND OTHER: Current Assets Cash and cash equivalents Trade and other receivables, net of allowance for losses (2000 - $22 8 and 1999 - $35 7) Marketable securities Inventories Deferred taxes and other current assets Total Truck and Other Current Assets Equipment on lease, goodwill and other Property, plant and equipment, net Total Truck and Other Assets FINANCIAL SERVICES Cash and cash equivalents Finance and other receivables, net of allowance for losses (2000 - $104 6 and 1999 - $81 3) Less unearned interest Equipment on operating leases, net Other assets Total Financial Services Assets 2000 1999 (millions of dollars) $ 515 0 $ 511 5 530 8 570 2 394 7 530 7 303 1 384 5 117 7 122 1 1,861 3 2,1190 412 8 356 2 8826 _ 875 3 _ 3,156 7 3,350 5 217 169 5,268 3 4,7665 (363 8) (326 3) 4,9045 4,4402 139 0 91 2 49 0 34 2 5,1142 4,582 5 $8,270 9 $ 7,933 0 �a LIABILITIES AND STOCKHOLDERS EQUITY December 31 _ - — 2000 1999 ---- -- _ — - - _- (millions of dollars) TRUCE AND OTHER Current Liabilities Accounts payable and accrued expenses $1,097 7 $1,259 5 Current portion of long-term debt and commercial paper 691 70 1 Dividend payable 764 125 3 Income taxes 25 2 78 9 Total Truck and Other Current Liabilities 1,2684 1,533 8 Long-term debt 1247 182 2 Other, including deferred taxes _ 5120 395 7 Total Truck and Other Liabilities 1,905 1 2,111 7 FINANCIAL SERVICES Accounts payable, accrued expenses and other 922 114 9 Commercial paper and bank loans 2,2737 2,113 4 Term debt 1,5302 1,292 3 Deferred Income taxes and other 220 6 190 1 Total Financial Services Liabilities 4,1167 3,710 7 STOCKHOLDERS EQUITY Preferred stock, no par value — authorized 10 million shares, none issued Common stock, $1 par value — authorized 200 0 million shares, 78 8 million shares issued (including 2 4 million treasury shares) 78 8 78 3 Additional paid -in capital 643 0 626 9 Retained earnings 1,854 1 1,580 9 Less treasury shares — at cost (105 8) Accumulated other comprehensive income (loss) (221 0) (175 5) Total Stockholders' Equity 2,249 1 2,110 6 $8,270 9 $7,933 0 See notes to consolidated financial statements 3' PACCAR Inc and Subsidiaries REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS 46 Board of Directors and Stockholders PACCAR Inc We have audited the accompanying consolidated balance sheets of PACCAR Inc and subsidiaries as of December 31, 2000 and 1999, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2000 These financial statements are the responsibility of the Company's management Our responsibility is to express an opinion on these finan- cial statements based on our audits We conducted our audits in accordance with auditing standards generally accepted in the United States Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation We believe that our audits provide a reasonable basis for our opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the consoli dated financial positron of PACCAR Inc and subsidiaries at December 31, 2000 and 1999, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States Seattle, Washington February 19,2001 jg� -f f"I_ 4LP 02 July g2001 DELEGATION OF AUTHORITY I hereby authorize B Robert Crowley, Tax Director of PACCAR Inc (the "Company"), in the name and on behalf of the Company, to execute the tax abatement agreement, and all related documents, between the Company and the City, County and School District of Denton, Texas Mark C Pigott ( ) Chairman and �,/ Chief Executive Officer