HomeMy WebLinkAbout06-24-19 Regular Meeting of the La Porte City CouncilLOUIS R. RIGBY
Mayor
BRANDONLUNSFORD
Councilmember At Large A
STEV E G I L L ETT
Councilmember At Large B
DANNY EARP
Councilmember District 1
CITY COUNCIL MEETING AGENDA
CHUCK ENGELKEN
Councilmember District 2
BILL BENTLEY
Mayor Pro -Tern
Councilmember District 3
THOMAS GARZA
Councilmember District 4
JAY MARTIN
Councilmember District 5
NANCY OJ EDA
Councilmember District 6
Notice is hereby given of a Regular Meeting of the La Porte City Council to be held June 24, 2019,
beginning at 6:00 pm in the City Hall Council Chambers, 604 W. Fairmont Parkway, La Porte, Texas,
for the purpose of considering the following agenda items. All agenda items are subject to action.
1. CALL TO ORDER
2. INVOCATION — The invocation will be given by Rev. Dee Spears, Fairmont Park Church.
PLEDGES —Will be led by Councilmember Thomas Garza.
U.S. Flag
Texas Flag: Honor the Texas Flag. I pledge allegiance to thee, Texas, one state, under God, one, and
indivisible.
3. PRESENTATIONS, PROCLAMATIONS, AND RECOGNITIONS
(a) Presentation of Certificate of Election to newly elected Councilperson Jay Martin. [Mayor Louis
R. Rigby]
4. PUBLIC COMMENTS (Limited to five minutes per person.)
5. CONSENT AGENDA (Approval of Consent Agenda items authorizes each to be implemented in accordance
wth staff recommendations provided. An item may be removed from the consent agenda and added to the
Statutory Agenda for full discussion upon request by a member of the Council present at this meeting.)
(a) Approve the minutes of the meeting held on June 10, 2019. [Mayor Louis R. Rigby]
6. AUTHORIZATIONS
(a) Presentation, discussion, and possible action to approve expenditure by the La Porte
Development Corporation in an amount not to exceed $700,000.00 in connection with Project
G, an incentive project granted to INEOS Styrolution America, LLC for development of a
styrene monomer manufacturing facility at 1230 Independence Parkway. [Ryan Cramer,
Economic Development Coordinator]
7. STATUTORY AGENDA
(a) Presentation, discussion and possible action regarding first reading of Ordinance 2019-3746,
for the purpose of granting franchise to CenterPoint Energy Resources Corp., to locate and
operate facilities for transmission of natural gas in public rights -of -way, for term of 10 years.
[Corby Alexander, City Manager]
(b) Presentation, discussion, and possible action regarding Ordinance 2019-3747, amending
Chapter 82, "Buildings and Building Regulations" - Appendix A "Fees" of the Code of
Ordinances of the City of La Porte, for the purpose of changing fees for city residential building
permits and residential mechanical permits. [Corby Alexander, City Manager]
8. REPORTS
(a) Receive report on the La Porte Development Corporation Board meeting. [Councilmember
Nancy Ojeda]
9. ADMINISTRATIVE REPORTS
• Zoning Board of Adjustment Meeting, Thursday, June 27,2019
• City Council Meeting, Monday, July 8, 2019
• Planning and Zoning Commission Meeting, Thursday, July 18, 2019
• City Council Meeting, Monday, July 22, 2019
• Zoning Board of Adjustment Meeting, Thursday, July 25, 2019
10. COUNCIL COMMENTS Hear announcements concerning matters appearing on the agenda; items
of community interest; and/or inquiries of staff regarding specific factual information or existing policy
from the Mayor, Councilmembers, and City staff, for which no formal action will be discussed or
taken.
11. ADJOURNMENT
If, during the course of the meeting and discussion of any items covered by this notice, City Council determines that a Closed or
Executive Session of the Council is required, then such closed meeting will be held as authorized by Texas Government Code,
Chapter 551, Section 551.071 - consultation with counsel on legal matters; Section 551.072 - deliberation regarding purchase,
exchange, lease or value of real property; Section 551.073 - deliberation regarding a prospective gift; Section 551.074 - personnel
matters regarding the appointment, employment, evaluation, reassignment, duties, discipline, or dismissal of a public officer or
employee; Section 551.076 - implementation of security personnel or devices; Section 551.087 - deliberation regarding economic
development negotiation; Section 551.089 - deliberation regarding security devices or security audits, and/or other matters as
authorized under the Texas Government Code. If a Closed or Executive Session is held in accordance with the Texas
Government Code as set out above, the City Council will reconvene in Open Session in order to take action, if necessary, on the
items addressed during Executive Session.
Persons with disabilities who plan to attend this meeting and who may need auxiliary aids or services are requested to contact
the City Secretary's office (281-470-5019), two working days prior to the meeting for appropriate arrangements.
CERTIFICATE
I, Lee Woodward, City Secretary, do hereby certify that a copy of the June 24, 2019, City Council agenda was posted on the City F-bll bulletin
board, a place convenient and readily accessible to the general public at all tirres, and to the City's website, www.LaWrteTXgov, in corrpliance
with Chapter 551, Texas Governrrent Code.
DATE OF POSTING
TIME OF POSTING
TAKEN DOWN
Lee Woodward, City Secretary
Council Agenda Item
June 24, 2019
1. CALL TO ORDER
2. INVOCATION — The invocation will be given by Rev. Dee Spears, Fairmont Park Church.
PLEDGES —Will be led by Councilmember Thomas Garza.
U.S. Flag
Texas Flag: Honor the Texas Flag. I pledge allegiance to thee, Texas, one state, under God, one, and
indivisible.
3. PRESENTATIONS, PROCLAMATIONS, AND RECOGNITIONS
(a) Presentation of Certificate of Election to newly elected Councilperson Jay Martin. [Mayor Louis
R. Rigby]
4. PUBLIC COMMENTS (Limited to five minutes per person.)
******************************************************************
Presentation to be made at the meeting
Council Agenda Item
June 24, 2019
5. CONSENT AGENDA (Approval of Consent Agenda items authorizes each to be implemented in accordance
wth staff recommendations provided. An item may be removed from the consent agenda and added to the
Statutory Agenda for full discussion upon request by a member of the Council present at this meeting.)
(a) Approve the minutes of the meeting held on June 10, 2019. [Mayor Louis R. Rigby]
******************************************************************
LOUIS RIGBY
Mayor
BRANDON LUNSFORD
Councilperson At Large A
STEVE GILLETT
Councilperson At Large B
DANNY EARP
Councilperson District 1
CHUCK ENGELKEN
Councilperson District 2
MINUTES OF THE REGULAR MEETING OF THE
CITY COUNCIL OF THE CITY OF LA PORTE
JUNE 10, 2019
BILL BENTLEY
Councilperson District 3
THOMAS GARZA
Councilperson District 4
JAY MARTIN
Councilperson District 5
NANCY OJEDA
Councilperson District 6
Mayor Pro-Tem
The City Council of the City of La Porte met in a regular meeting on Monday, June 10, 2019, at the City Hall
Council Chambers, 604 West Fairmont Parkway, La Porte, Texas, at 6:00 p.m., with the following in attendance:
Councilpersons present: Louis Rigby, Brandon Lunsford, Steve Gillett, Danny Earp, Bill Bentley, Thomas Garza,
Nancy Ojeda
Councilpersons absent: Chuck Engelken, Jay Martin
Council -appointed officers present: Corby Alexander, City Manager; Lee Woodward, City Secretary; Clark Askins,
Assistant City Attorney
1. CALL TO ORDER— Mayor Rigby called the meeting to order at 6:00 p.m.
2. INVOCATION — The invocation was given by Rev. Alan Neel, Life Community Church.
PLEDGES — The pledges of allegiance to the U.S. and Texas flags were led by Mayor Louis R. Rigby.
3. PRESENTATIONS, PROCLMATIONS, AND RECOGNITIONS
(a) Presentation of Oath of Office and Certificate of Election to newly elected Councilperson Jay Martin. [Mayor
Rigby] (Councilperson was not in attendance, this item was pulled.)
(b) Proclamation in recognition of June as Fair Housing Month in the City of La Porte. [Mayor Rigby]
(c) Proclamation in recognition of Ryan Schoppe Day. [Mayor Rigby]
4. PUBLIC COMMENTS (Limited to five minutes per person.) Chuck Rosa spoke about the fifth and fourteen
amendment due process clauses in reference to item 6e. David Janda congratulated Ryan Schoppe and offered
approval of item 6f as a member of the LPISD Board of Trustees. Kerri Taylor, Executive Director, UnBound
Houston, commented in support of items such as 6g to aid the fight against human trafficking.
5. CONSENT AGENDA (Approval of Consent Agenda items authorizes each to be implemented in accordance with
staff recommendations provided. An item may be removed from the Consent Agenda and added to the Statutory
Agenda for full discussion upon request by a member of the Council present at this meeting)
(a) Approve the minutes of the special meeting held on May 10, 2019, and the regular meeting held on May
13, 2019. [Lee Woodward, City Secretary]
(b) Award Bid #19010 to Greenscapes Six, LLC for the Annual Concrete Sidewalk Replacement Project and
authorize the City Manager to execute a construction contract, based on unit prices bid, in the amount
of annual budget amounts approved by City Council for sidewalk replacement and infill. [Don Pennell,
Public Works Director, Lorenzo Wingate, P.E., City Engineer]
(c) Adopt Resolution 2019-09 indicating the City's agreement to adopt the policies outlined within the
proposed resolution, in connection with the City's participation in federally funded Community
Development Block Grant (CDBG) Projects. [Lorenzo Wingate, P.E., City Engineer]
(d) Approve the nomination of Pat McCabe to an open position on the La Porte Zoning Board of
Adjustment. [Mayor Rigby and Councilperson Bentley]
(e) Approve the nomination of Mark Goodwin to an open position on the La Porte Tax Increment
Reinvestment Zone Number One (TIRZ) Board of Directors/La Porte Redevelopment Authority Board of
Directors. [Mayor Rigby]
Councilperson Gillett moved to approve consent agenda items; the motion was adopted, 7-0.
Page 1 of 3
June 10, 2019, Council Meeting Minutes
6. STATUTORY AGENDA
(a) Presentation, discussion, and possible action to include the South 7t" Street Improvements in the 2019-
2020 Capital Improvement Budget and authorize the City Manager to execute a contract with Cobb
Fendley for the survey phase of work at $45,770 and the preliminary engineering report phase at
$93,570. [Don Pennell, Public Works Director]
Councilperson Garza moved to include the South 7th Street Improvements in the 2019-2020 Capital
Improvement Budget and authorize the City Manager to execute a contract with Cobb Fendley for the survey
phase of work at $45,770 and the preliminary engineering report phase at $93,570; the motion was adopted,
6-1, Councilperson Earp voting against.
(b) Presentation, discussion and possible action to adopt Ordinance 2019-3745 electing a Mayor Pro Tem.
[Mayor Rigby]
Councilperson Garza nominated Councilperson Bentley. Councilperson Garza moved to adopt Ordinance
2019-3745 electing Councilmember Bentley as Mayor Pro Tem; the motion was adopted, 7-0.
(c) Presentation, discussion and possible action to appoint a Councilperson to serve on each of the
La Porte Animal Shelter Advisory Committee, the La Porte Drainage and Flooding Committee, and the
Fiscal Affairs Committee. [Mayor Rigby]
Councilperson Oieda moved to appoint Councilperson Lunsford to serve in an open position on the La Porte
Animal Shelter Advisory Committee; the motion was adopted, 7-0.
Councilperson Earp moved to appoint Councilperson Gillett to serve as the alternate to the La Porte Drainage
and Floodina Committee: the motion was adopted 7-0.
Councilperson Garza moved to appoint Councilperson Oieda to serve in an open position on the Fiscal Affairs
Committee: the motion was adopted. 7-0.
Councilperson Earp moved to appoint Councilperson Garza to serve as Alternate to the Fiscal Affairs
Committee; the motion was adopted, 7-0.
(d) Presentation, discussion, and possible action regarding the nomination of Councilmember Gillett to an
open position on the La Porte Fire Control, Prevention, and Emergency Medical Services District Board
of Directors. [Councilpersons Martin, Gillett, and Bentley]
Councilperson Earp moved to appoint Councilperson Gillett to the open position on the La Porte Fire Control,
Prevention. and Emeraencv Medical Services District Board of Directors: the motion was adopted. 7-0.
(e) Presentation, discussion, and possible action on proposed changes to city regulations pertaining to
construction of new warehouses and distribution centers in the City of La Porte. [Councilpersons
Garza, Lunsford, and Bentley]
Councilperson Earp moved to leave the relevant ordinance rOrdinance 2019-3736 amending Chapter 106,
"Zoning" of the City of La Porte Code of Ordinances in connection with a review and update to Chapter 106,
"Zoning."; April 8, 2019, City Council meetingl as it is; the motion was adopted, 6-1, Councilperson Garza voting
against.
(f) Presentation, discussion, and possible regarding a joint workshop between the La Porte City Council
and the LPISD Board of Trustees. [Councilpersons Garza, Lunsford, and Bentley]
Councilperson Garza moved to instruct City staff to coordinate a meeting of the Council with the Board of
Trustees with agenda items to be determined at a future date; the motion failed, 2-5, Councilpersons Garza
and Lunsford voting in support.
(g) Presentation, discussion, and possible action regarding proposed amendments to city massage
business regulations. [Councilpersons Garza, Lunsford, and Bentley]
Councilperson Earp moved to request staff consider what suggested items were not included in the proposed
document (especially signage about trafficking, preventing darkened windows, and banning ATMs) and return
an updated draft for consideration; the motion was adopted, 7-0.
Page 2 of 3
June 10, 2019, Council Meeting Minutes
(h) Presentation, discussion, and possible action regarding compensation rates for election judges and
clerks for elections conducted by the City of La Porte. [Lee Woodward, City Secretary]
Councilperson Bentley moved to fix the hourly rate of election workers at $15.00; the motion was adopted, 6-
1, Councilperson Oieda voting against.
7. REPORTS
(a) Receive a report on the Drainage and Flooding Committee Meeting. [Councilperson Martin]
The Drainage and Flooding Committee meeting was cancelled.
8. ADMINISTRATIVE REPORTS
• Planning and Zoning Commission Meeting, Thursday, June 20, 2019
• City Council Meeting, Monday, June 24, 2019
• Zoning Board of Adjustment Meeting, Thursday, June 27, 2019
City Manager Corby Alexander said there was no report.
9. COUNCIL COMMENTS regarding matters appearing on the agenda; recognition of community members,
city employees, and upcoming events; inquiry of staff regarding specific factual information or existing
policies.
Councilpersons congratulated Ryan Schoppe; encouraged acceptance of social media engagement; congratulated
appointees made during tonight's meeting and the Class of 2019; asked for a status report for fitness center
evaluation/study; a status report on the 6th Street/Madison to Main Streets project; further consideration of the
regulation of political signs on public property; thanked Parks and Roz Epting for clearing up poison ivy at Five
Points; noted pleasure with the operation of the City and the myriad ways in which the public can share concerns;
urged Councilpersons to understand the many ways in which the public can engage; said Parks did a great job at
the Seabreeze Park event; passed along very positive comments about La Porte from the Sylvan Beach Triathlon
organizers; gave kudos to Kristin Gauthier for her hurricane workshop; acknowledged the success of the Chamber's
State of the Restaurant Industry lunch; praised those who served on the USS Texas and were recognized by the
French Consul General for their service on D-Day; thanked Councilperson Ojeda for her service as Mayor Pro Tem;
asked the City Manager to report back on legislation that was signed this session; and took exception to comments
implying the Council was out of touch with the citizenry.
10. EXECUTIVE SESSION — City Council will meet in Executive Session pursuant to Texas Government Code,
Section 551.072 — consultation with counsel on legal matters - concerning value of real property in
industrial districts and negotiations with industry representatives for terms of new Industrial District
Agreements.
(Councilperson Earp has a conflict of interest affidavit on file for the IDA item, did not participate in the deliberation
for it, and left the meeting. The Council adjourned into executive session at 8:13 p.m.
11. RECONVENE into regular session and consider action, if any, on item(s) discussed in executive session.
The Council reconvened into open session at 8:40 p.m.
ADJOURN — Without objection, Mayor Rigby adjourned the meeting at 8:41 p.m.
Lee Woodward, City Secretary
Page 3 of 3
June 10, 2019, Council Meeting Minutes
REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: June 24, 2019
Requested By: R. Cramer, Econ. Dev. Coordinator
Department: CMO
Report �r Resolution Ordinance
Exhibits: Development Agreement, Payback Period, EDC Debt
Capacity, Incentive Application
Appropriation
Source of Funds: Special Programs
Account Number: 038-6030-565-9997
Amount Budgeted:
Amount Requested: $700,000
Budgeted Item: ir Yes i; No
SUMMARY & RECOMMENDATION
Project G, a styrene monomer plant project from INEOS, at 1230 Independence Parkway, was first brought to
the Board in executive session on February 25, 2019, where the Board declared it a project.
On March 25, 2019, the Board approved an incentive amount not to exceed $700,000, opening the 60-day
public comment window, and the basic outline of a development agreement. Once the development agreement
was typed up, the Board submitted recommendations including: removing payments before work has started,
making the three separate payments equal or closer to equal in size, increasing the required investment, and
putting a hard number on the term substantial completion. Staff took those comments back to the applicant
and arrived at the following outline:
1) Total cash grant of $700,000 with following payment schedule: three payments of $250k, $250k, and
$200k,
a) first payment 30 days after receiving permits, start of construction beyond land clearing, and
execution of IDA (confirmed by letter from company's EPC contractor stating such)
b) second payment at substantial completion of construction (80% - confirmed by letter from company's
project engineer stating such)
c) third payment when company reaches 85 full-time jobs (confirmed by documentation from company
stating such).
2) Grant based on the following:
a) company building a new styrene monomer plant in La Porte with a total gross capital investment of
$750 million
b) company adding additional $330 million in appraised value at the La Porte site and maintained for a
period of 2 years after final/3rd payment
c) company creating 85 additional full-time jobs with an average wage of $100,000; maintaining for 2
years after final/3rd payment
d) completion of project within 4 years of the first payment.
There are also clawback provisions in Article IV of the development agreement if the project is not completed
in four years or required metrics are not met.
CATEGORY
TOTAL NEW INVESTMENT
Cost of Land : $ -
Cost of Building/Structures (Real Property): $ 5,000,000
Cost of Machinery & Equipment (please describe): $ 326,000,000
Cost of Engineering: $ 83,000,000
Cost of Construction: $ 397,000,000
Other (catalyst, misc. chemicals, start-up costs): $ 29,000,000
TOTAL $ 840,000,000
Above is a snapshot from the incentives application provided by the applicant, you will see their total projected
cost is $840 million, while our development agreement only asks them to spend $750 million. The reason for this
is based on our incentive matrix. The metric most valued by our incentive matrix is tax money coming back to
the City over 10 years, total investment is not actually considered in the incentive matrix. To get a conservative
number for this, staff only used the cost of building/structures and the cost of machinery/equipment to come to
a $331 million projected valuation. The yearly value to the City is reflected in this packet on the payback schedule
exhibit. To make sure future valuation, the most important number to the City was cemented into the development
agreement, the applicant wanted some flexibility in their required capital investment, which is how the number in
the development agreement came to be $750 million.
Staff received no comments from the public during the 60-day window.
ACTION REQUIRED BY COUNCIL
Move to approve the Development Agreement for Project G, an incentive for a styrene monomer facility
not to exceed $700,000.
Approved for the City Council meeting agenda
Corby D. Alexander, City Manager Date
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ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT BETWEEN THE LA PORTE
DEVELOPMENT CORPORATION, AND INEOS STYROLUTION AMERICA LLC, A DELAWARE
LIMITED LIABILITY COMPANY, FOR USE OF TYPE B DEVELOPMENT CORPORATION SALES
TAX FUNDS
THIS AGREEMENT made by and entered into this day of , 2019 between the La
Porte Development Corporation, a Type B non-profit corporation operating under authority of Texas
Local Government Code Chapters 501 and 505, hereinafter "LPDC", and INEOS STYROLUTION
AMERICA LLC, a Delaware limited liability company, hereinafter "Recipient".
WITNESSETH:
WHEREAS, the voters of the City of La Porte authorized the levying of additional sales tax within
the City for promotion of economic development and the LPDC is authorized to use such tax revenues
for certain qualifying projects and other economic development related purposes; and
WHEREAS, Recipient is a business that manufactures industrial goods and which employs
positions classified as primary jobs, as the term "primary jobs" is defined in Chapter 501 of the Texas
Local Government Code; and
WHEREAS, Recipient wishes to expand its current business operation at its affiliate's industrial
complex at 1230 Independence Parkway in the Battleground Industrial District, located adjacent to the
northern corporate limits of the City of La Porte, Texas (hereinafter, "Battleground Manufacturing
Complex"), by constructing and operating a styrene monomer manufacturing facility at a minimum
capital investment cost of $750,000,000.00 and which after five (5) years is anticipated to employ up to
85 additional personnel (hereinafter, "Styrene Monomer Project"); and
WHEREAS, LPDC and Recipient anticipate that the construction of the facilities for the Styrene
Monomer Project will be substantially complete by December 31, 2024; and
WHEREAS, Texas Local Government Code section 501.159 authorizes a Type B corporation to
undertake a project in another jurisdiction in the state if the governing body of the other jurisdiction
requests the corporation to exercise its powers within its jurisdiction; and whereas Harris County, Texas
has requested and authorized the LPDC to undertake the projects described in this Agreement at the
Battleground Manufacturing Complex; and
WHEREAS, Recipient has requested that LPDC provide financial incentives to promote the
expansion of the Battleground Manufacturing Complex for the Styrene Monomer Project, as a qualifying
project of the LPDC for the development of new or expended business enterprises that create and
retain primary jobs, as authorized by Texas Local Government Code Chapters 501 and 505, and it is
the desire of LPDC to assist in the funding of same, finding that such expenditures will contribute to 1)
the development of new or expended business enterprises that create and retain primary jobs, and 2)
will be suitable for the development, retention, or expansion of manufacturing and industrial facilities
and in furtherance of the promotion of economic growth and development in the City; and
WHEREAS, Texas law and the by-laws of the LPDC require that certain expenditures and
projects by the LPDC be approved by the governing body of the City; and whereas the LPDC Board
has duly approved such projects and the expenditures for same have been authorized by the La Porte
City Council; and
WHEREAS, publication of notice for public hearing required under Texas Local Government
Code Section 505.160 for expenditure of Type B funds on a proposed project was made and there was
no petition filed with the City registering a protest to the proposed grant.
NOW THEREFORE, in consideration of the covenants and conditions stated herein, and in
consideration of the mutual benefits that will accrue to each of the parties hereof, as well as to the
citizens of the City of La Porte, Texas, the parties have agreed and do hereby agree as follows:
ARTICLE I
A. In consideration of Recipient locating its proposed styrene monomer manufacturing facility at the
Battleground Manufacturing Complex, as specifically described in that certain public hearing
authorizing the proposed project and expenditure of LPDC funds for the creation and retention of
primary jobs and the development, retention, or expansion of manufacturing and industrial facilities,
held before the LPDC on , 2019 (hereinafter, "Public Hearing"), LPDC agrees to provide
Recipient an incentive package consisting of cash payments in the cumulative amount of $700,000.00,
according to the schedule outlined in this Article I and the retention of said payment being conditioned
upon Recipient's satisfaction of certain minimum construction related capital investment costs and
additional permanent direct jobs as provided in this Article I.
The cash incentives herein described shall be distributed as follows-
1) a cash incentive payment in the amount of $250,000.00 for the Styrene Monomer
Project will be distributed to Recipient after execution of this Agreement and no later
than thirty (30) days after receipt and acceptance by LPDC of a) letter from Recipient
evidencing Recipient's initiation of construction of the Styrene Monomer Project at the
Battleground Manufacturing Complex, which for purposes of this Agreement shall
mean the first physical action of Recipient's EPC contractor at the construction site
following the receipt by Recipient of all permits and other governmental approvals
required to proceed with construction (other than land clearing activities) and b) proof
of execution by Recipient of an Industrial District Agreement between Recipient and
the City of La Porte, Texas applicable to the property utilized for the Styrene Monomer
Project.
In the case that written proof of initiation of construction and execution of an Industrial
District Agreement is presented to LPDC in accordance with paragraph (1)
immediately above, the LPDC shall convene a meeting of the LPDC Board of Directors
for a date no later than thirty (30) days after receipt of proof of said items from
Recipient. Upon verification of the requirement, as reflected by formal vote of the
LPDC Board of Directors that Recipient has satisfied the requirements of this
paragraph, LPDC will then remit the $250,000.00 to Recipient within a period not to
exceed thirty (30) days.
2) a cash incentive payment in an amount equal to $250,000.00 will be distributed to
Recipient by LPDC, upon receipt by LPDC of documentation evidencing the
substantial completion of the Styrene Monomer Project, but in no event will such
documentation be accepted or the $250,000.00 incentive payment remitted, if such
documentation is not submitted on or before December 31, 2024. For purposes of this
agreement "substantial completion" shall be defined as that point in which construction
of the Styrene Monomer Project is eighty (80) percent complete, as certified in writing
by the project's engineer.
In the case that written proof of substantial completion is presented to LPDC by the
December 31, 2024 deadline, the LPDC shall convene a meeting of the LPDC Board
of Directors for a date no later than forty-five (45) days after receipt of proof of said
item, from Recipient. Upon verification of the requirement, as reflected by formal vote
of the LPDC Board of Directors that Recipient has satisfied the requirements of this
paragraph, LPDC will then remit the $250,000.00 to Recipient within a period not to
exceed thirty (30) days.
3) a cash incentive payment in the amount of $200,000.00 for the Styrene Monomer
Project will be distributed to Recipient one (1) year after payment of the $250,000.00
incentive payment under subparagraph (2) immediately above, upon submittal to the
LPDC of documentation evidencing attainment of the following performance
thresholds:
a) Total taxable value of the Styrene Monomer Project site is assessed at a minimum
value of $330,000,000.00 by the Harris County Appraisal District.
b) Total capital investment for construction of the Styrene Monomer Project of a minimum
cost of $750,000,000.00.
c) Proof of employment of at least eighty-five (85) full-time employees at the Styrene
Monomer Project site with an average total annual compensation per additional full-
time employee of $100,000.00, which shall be established by submission to LPDC of
the following:
Copies of Recipient's 941 Report to the Internal Revenue Service and C3
Report to the Texas Workforce Commission for each employee (but with
social security numbers of each employee redacted), and
ii. A signed and notarized statement executed by any authorized officer or
director of Recipient affirming that eighty-five (85) full time employees are
employed by Recipient for positions permanently located at the Styrene
Monomer Project site.
In the case that written proof of all aforementioned items are presented to LPDC no later
than one year after payment of the second of the two (2) $250,000.00 incentive payments,
the LPDC shall convene a meeting of the LPDC Board of Directors for a date no later
than forty-five (45) days after receipt of proof of said items outlined in this Paragraph 3,
from Recipient. Upon verification of the completion of all the aforementioned items, as
reflected by formal vote of the LPDC Board of Directors that Recipient has satisfied the
requirements of this paragraph, LPDC will then remit the $200,000.00 to Recipient within
a period not to exceed thirty (30) days.
B. As a condition for the receipt and retention of each of the referenced cash incentive payments
as provided in this Article I, and as required by Texas Local Government Code section 501.158,
Recipient shall provide to LPDC verification that it has satisfied the performance thresholds outlined in
Paragraph 3(a-c) above.
C. Recipient will expend the cash incentive payments only towards the construction and completion
of the Styrene Monomer Project and other related purposes authorized by Texas Local Government
Code Chapters 501 and 505.
ARTICLE II
Disbursement and/or retention of the cash incentive payments identified in Article I of this
Agreement shall be subject to the satisfaction of the conditions precedent or conditions subsequent
contained within Article I of this Agreement as applicable for each project. LPDC's obligation to
Recipient shall not exceed $700,000.00 for the Styrene Monomer Project.
ARTICLE III
Recipient understands that the funds paid to Recipient by the LPDC are derived from tax
revenues collected under Texas Local Government Code 505.252, and that LPDC has estimated the
tax revenues to be collected during the term of this Agreement. Recipient further understands,
acknowledges, and agrees that if the tax revenue actually collected is less than 80% of the estimated
tax revenues to be collected in any 2 of 3 successive fiscal years during the term of this Agreement
and prior to the year Recipient is otherwise entitle to receive a cash incentive payment pursuant to this
Agreement, LPDC will be entitled to terminate all further payments to Recipient during or after the fiscal
year for which there is a revenue shortfall; provided, Recipients obligations with respect to the project
so affected shall likewise be terminated.
ARTICLE IV
LPDC may determine Recipient to be in default if Recipient fails to 1) achieve substantial
completion of the Styrene Monomer Project by December 31, 2024, 2) meet any of the capital
investment or job creation thresholds outlined in the schedule contained in Article I of this Agreement
for the Styrene Monomer Project, or 3) fails to maintain a minimum $330,000,000 million HCAD
valuation for the Styrene Monomer Project site and eighty-five (85) additional full-time employees for
two (2) years following payment of the third and final incentive payment in the amount of $200,000.00.
Should LPDC determine the Recipient to be in default of this Agreement, LPDC shall notify the
Recipient in writing, and if such default is not cured within sixty (60) days from the date of such notice
("Cure Period"), then LPDC shall have the right to reclaim and recapture all or a portion of the cash
incentive payments previously disbursed to Recipient with respect to the Styrene Monomer Project;
provided, however, that in the case of a default that for causes beyond Recipient's reasonable control
cannot with due diligence be cured within such sixty-day period, the Cure Period shall be deemed
extended if Recipient (i) shall immediately, upon the receipt of such notice, advise the LPDC of
Recipient's intention to institute all steps necessary to cure such default and (ii) shall institute and
thereafter prosecute to completion with reasonable dispatch all steps necessary to cure same. LPDC
shall have the right to reclaim and recapture all or a portion of the cash incentive payments previously
disbursed to Recipient with respect to the Project, whether or not such disbursements have been spent
by Recipient at the time of the reclamation by the LPDC. For purposes of this Agreement, LPDC's right
of recapture shall apply to the full amount of the initial $250,000.00 incentive payment if Recipient fails
to achieve substantial completion of the Project by December 31, 2024. Additionally, LPDC's right of
recapture shall apply to the percentage of the capital investment and/or job creation targets not met by
Recipient for the Project. In each such case, the applicable percentage of the previously paid cash
payment or payments for the Styrene Monomer Project shall be remitted to the LPDC within sixty (60)
days of receipt of written demand for same following the Cure Period. The applicable percentage of the
capital investment and/or job creation target not met by Recipient shall be mutually agreed by the
Parties; provided however, should the Parties fail to agree on such the Dispute Resolution clause in
Article XV shall apply.
In the event of a material breach by Recipient hereunder, including, but not limited to, use of the
funds provided herein for purposes other than those stated in Article I of this Agreement, LPDC may
cease all future payments hereunder and terminate this Agreement; and, furthermore, LPDC shall have
the right to reclaim and recapture, and Recipient shall refund, any funds that are not spent in
accordance with the terms of this Agreement, and any unspent and unobligated LPDC funds previously
paid to Recipient but not yet paid or pledged by Recipient to third parties. In each such case, Recipient
shall remit payments to the LPDC within sixty (60) of receipt of written demand for same.
ARTICLE V
The term of this Agreement is for a period beginning on the date of approval by LPDC and ending
two (2) years from the date of the final payment by the LPDC of the proposed cash incentive to Recipient
made pursuant to Article 1 of this Agreement.
ARTICLE VI
During the term of this Agreement, Recipient shall provide to the LPDC by December 31St of
each calendar year following each payment made pursuant to Article 1 of this Agreement, a report and
documentation in reasonable detail (hereinafter "Expenditure Report") showing expenditures made by
Recipient pursuant to this Agreement and a demonstration that the funds were used only for the
purposes authorized by this Agreement. Recipient shall maintain books of account with correct entries
of all expenditures that are made according to the terms of this Agreement and of any funds from other
sources. Any and all books of account of Recipient shall be open to the inspection of LPDC or any its
officers or duly authorized agents on reasonable prior notice during normal working hours; provided,
however, that LPDC shall not conduct more than two such inspections in any calendar year. Any such
inspection shall be conducted in a manner that will not unreasonable disrupt Recipient's operations.
Upon such inspection and with appropriate measures to protect Recipient's confidential business
information, LPDC, or its officers or agents shall be afforded the opportunity to make photographic
copies of any and all documentation of books of account, including but not limited to statements of
account relating to the disposition of funds provided by LPDC under this Agreement and any funds from
other sources. Recipient shall maintain such books of account in Texas for a period of three (3) years
following receipt of the last cash incentive disbursement by the LPDC, pursuant to Article I of this
Agreement. Notwithstanding Article 1, above, the LPDC shall be under no obligation to make any fund
disbursements if Recipient fails to provide an Expenditure Report.
ARTICLE VII
Recipient also acknowledges that LPDC may seek a lien against the property owned or leased
by Recipient made the subject of this Agreement and located at 1230 Independence Parkway, in the
Battleground Industrial District, to secure repayment, if necessary, and may enforce this Agreement by
any and all other remedies available in law and equity.
ARTICLE VIII
This Agreement does not create any joint venture, partnership, or agency relationship between
the LPDC and Recipient. Recipient shall have exclusive control of, and the exclusive right to control
the details of, the work to be performed by Recipient hereunder and all personnel performing same,
and shall be solely responsible for the acts and omissions of its officers, members, agents, servants,
employees, subcontractors, program participants, volunteers, licensees, and invitees. In no event shall
any person participating in or performing any of Recipient's duties or responsibilities hereunder be
considered an officer, agent, servant, or employee of the LPDC.
ARTICLE IX
Recipient agrees to assume and does hereby assume all responsibility and liability for damages
sustained by persons or property, whether real or asserted, by or from the carrying on of work by
Recipient or in the performance of services performed and to be performed by Recipient hereunder.
Recipient covenants and agrees to, and does hereby indemnify, defend, and hold harmless LPDC and
all their respective officers, agents, and employees from all suits, actions, claims, and expenses of any
character, including attorney's fees, brought for or incurred on account of any injuries or damages,
whether real or asserted, sustained by any person or property by or in consequence of any intentional
or negligent act, omission, or conduct of Recipient, its agents, servants or employees and in the course
of performance by LPDC and Recipient under this Agreement.
ARTICLE X
This Agreement may be amended by the mutual agreement of the parties hereto in a writing that
specifically refers to this Agreement and indicates it is an amendment hereof.
ARTICLE XI
Recipient shall adhere to all local, state, and federal laws and regulations that may affect its
actions made pursuant to this Agreement, and shall maintain in effect during the term of this Agreement
any and all federal, state, and local licenses and permits which may be required of recipients generally.
ARTICLE XII
Recipient may not assign this Agreement without the written consent of LPDC, which consent
will not be unreasonably delayed, conditioned, or denied; provided, however, the foregoing
notwithstanding, Recipient may assign this Agreement, in whole or on a Project -by -Project basis, to an
entity acquiring all or substantially all of its interest in the Styrene Monomer Project
ARTICLE XIII
The waiver by either party hereto of any breach of any term, condition, or covenant herein
contained shall not be deemed a waiver of any subsequent breach of the same, or any other term,
condition, or covenant.
ARTICLE XIV
The obligations of the parties to this Agreement are performable in Harris County, Texas and if
legal action is necessary to enforce same, venue shall lie in Harris County, Texas.
ARTICLE XV
The parties' representatives will meet as needed to implement the terms of this Agreement and
shall make a good faith attempt to informally resolve any disputes.
Except to prevent irreparable harm for which there is no adequate remedy at law, neither party
hereto shall file suit to enforce this Agreement without first submitting the dispute to confidential, non-
binding mediation before a mediator mutually agreed upon by the parties.
Texas
This Agreement shall be governed by and construed in accordance with the laws of the State of
ARTICLE XVI
This Agreement may be executed in triplicate, each of which shall be deemed an original and
constitute one and the same instrument. A signature of a party transmitted to the other party by
facsimile, PDF or other electronic means shall constitute the original signature of such party for all
purposes.
ARTICLE XVII
Neither LPDC nor Recipient shall be required to perform any term, condition, or covenant in this
Agreement so long as such performance is delayed or prevented by force majeure. As used in this
Article XVII, force majeure means any cause not reasonably within the control of a party hereto, and
which by the exercise of due diligence LPDC or Recipient is unable, wholly or in part, to prevent or
overcome, such party is unable, wholly or in part, to prevent or overcome, including, but not limited to,
physical events such as acts of God, landslides, lightning, earthquakes, fires, storms or storm warnings,
such as hurricanes resulting in evacuation, floods, washouts, explosions, machinery malfunctions or
breakdowns, inability to obtain fuel, power, or materials necessary for production, deficient
transportation, electric power outages, strikes, lockouts, or other industrial disturbances, acts of a public
enemy, sabotage, wars, blockades, insurrections, riots, acts of terror, and compliance with any law,
order, rule, or regulation of any governmental agency. In the case of an event of force majeure, all time
limitations contained herein shall be extended on a day -for -day basis for a period equal to the length a
party's obligations hereunder are suspended due to such event of force majeure.
ARTICLE XVIII
In executing this Agreement, the Recipient whose signature appears below affirms its intent and
commitment to comply in full with Section 2264.052 of the Government Code and certifies that it does
not and will not knowingly employ an undocumented worker during the term of this Agreement. The
Recipient further certifies its understanding and agreement that if it is convicted of a violation of 8 U.S.C.
Section 1324a(f), providing for civil and/or criminal penalties for engaging in a pattern or practice of
knowingly hiring or continuing to employ unauthorized aliens, it shall repay the amount of the funds
received hereunder with interest, at the rate and according to the terms of the agreement signed under
Section 2264.053 of the Government Code, not later than the 120th day after the date the LPDC notifies
the business of the violation.
ARTICLE XIX
In no event will either party be liable to the other party for any indirect, special, punitive,
exemplary, incidental or consequential damages and this limitation will apply regardless of whether or
not the other party has been advised of the possibility of such damages. Recipient's total liability under
this Agreement, including for its indemnification, defense, and hold harmless obligations, shall not
exceed the amount of funds actually received by Recipient from the LPDC under the Agreement.
ARTICLE XX
The Agreement embodies the complete agreement of the parties hereto, superseding all oral or
written pervious and contemporary agreements between the parties, which relate to matters in this
Agreement.
SIGNED AND AGREED to by LPDC and Recipient on the dates indicated below.
LA PORTE DEVELOPMENT CORPORTION
Richard Warren, President
Date
ATTEST
Secretary of the Corporation
INEOS STYROLUTION AMERICA LLC, a Delaware limited liability company
is
Date
In
Date
Project G Payback Period
Projected PILOT found by adding applicant provided cost of building/structures and machinery/equipment, dividing by
100, multiplying by .71 to get the ad valorum tax rate, then multiplying by .20 to represent the significant improvement
discount built into our IDA's. Note, we are currently negotiating a new IDA that will likely see this number increase, but
staff thought it was vital to give the most conservative estimations possible.
(331,000,000/100*.71)*.20= 470,020
Projected Payback Period Based on Provided Construction Timeline*
Year
Amount Paid by
City
Projected PILOT
Total Projected
PILOT
2020
$250,000
$0
$0
2021
$0
$0
$0
2022
$0
$0
$0
2023
$250,000
$0
$0
2024
$200,000
$470,020
$470,020
2025
$0
$470,020
$940,040
2026
$0
$470,020
$1,410,060
2027
$0
$470,020
$1,880,080
2028
$0
$470,020
$2,350,100
2029
$0
$470,020
$2,820,120
2030
$0
$1,480,563
$4,300,683
*Timeline assumes zero growth in valuation and no change in City tax rate.
/ -4
m City of La Porte
TEXAB ECONOMIC DEVELOPMENT INCENTIVES
APPLICATION
This application must be filed at least 60 days prior to the date the City Council
considers the request. Requests for incentives must be approved by the City Council
prior to the beginning of construction or installation of equipment. This application will
become part of the agreement between the applicant and the City of La Porte. Any
knowingly false representations will be grounds for voiding the agreement. This original
application must be submitted to the Economic Development Coordinator, City of La
Porte 604 W. Fairmont Parkway, La Porte, Texas 77571.
I. APPLICANT INFORMATION
1. Date of Application: 1/22/19
2. Company Name: "il".11...:....G
3. Current Number of Employees:
4. Address: Nol avaHab[ Hhls 1lrn
5. Annual Sales: 5 3o Il: fl'os
6. Type of Ownership: Corporation Partnership
X Proprietorship
1
10. Other locations and/or places of business owned and operated by the
applicant. For each location, please provide the city, state, street address
and name(s) under which business is
I I.........................................................I ......u..................3. ..II..c......o.......n.......d......I.Iu:.......c.......t.u..e.......d.i.....:
IIs II ...11oiis
...........u....u..
11. Date Organization Formed:
12. Please attach most recent annual report or financial statement.
PROJECT INFORMATION
1. Type of Facility: Manufacturing
Distribution Center
Corporate Office or Service Center
Research and Development Facility
Regional Entertainment Facility
Other (please specify)
2. Project Description: New Construction Expansion
Modernization
3. Location address of proposed project: �.II ..ILn..... Im...:[�.IL...!I,Ou..n......!Ln...u..:t.liJ4L
....................................
4. County ...II"II".!L...........
5. School District r II Iark II II:::
6. Product(s) or Service:,,"t.,.U.".III..........II"IL..�.IL.
7. Attach map and legal description of project location showing proposed
improvements.
W
9. Please list all improvements and equipment for the project:
Improvement Items Cost
See allacIhed
10. Please state all sources for financing the improvements-
::lnan6na from lint rn II and cr nl cormDanv revenue
11. Please state the time frame or projected date of start and completion:
See allacIhed
......................................................................................................................................................
12. Improvements will be completed by January 1, 2024 (specify year).
13. Please state the productive life of the proposed improvements:
u
14. Please give a general description of business personal property (property
other than buildings, fixed machinery, inventory and supplies) that will be
purchased as a result of the project:
See allacIhed
3
III. ECONOMIC INFORMATION
1. Number of persons currently employed by applicant:
Full Time Part Time
Total Annual Payroll: $
2. Number of new jobs (full time equivalent) to be created/retained by the
proposed improvements: See allacIhed
Number Estimate Annual Payroll Year
At Opening $
At 3 years $
At 5 years $
3. Number of new jobs to be filled by persons residing in the City of La Porte
or Harris County:
4. Number of Peak Construction Jobs: see allacIhed
5. In the case of modernization, please estimate the economic life of the
existing facility: years. Added economic life after modernization:
years.
6. In the case of modernization, please state the assessed value of the
facility for the tax year immediately preceding this application:
Real Property $ Business Personal Property $
7. Amount of taxable sales currently being generated annually in the City of
La Porte (if applicable): $
8. Amount of projected taxable sales that the proposed improvements will
generate: $
9. In the case of application based on job retention, please describe potential
job loss that would occur without economic development incentives:
In
Company Representative to be contacted:
Eric Geisler
Name
President, Economic Incentive Services, LLC
Title
P.O. Box 272525. Houston. Texas 77277
Address
713-665-7200
Telephone
Authorized Company Official:
Authorized Signature
Date
Printed Name
Title
Telephone
Information Request for: Project G
f,"am,cl,N011auM INCIENTMESSIERVtOES. V,_V,_C
1 Please confirm the NAICS/ SIC code for the company and/or this specifc projectloperation 325110
4
'lease provitle a general description of the oroiect (i.e. what Nce of pas ion will this bewhat orotluctlsl will be consumedtorodu dlstoredtsold. marketslcustomers served. etc.l
hhe new petrocY en cal plan ill bock -in-clac .Y iology and berefrt it,,, a ... c, to I- t feed,tock arder erpy iron=Yale pa, a, well as ar excellen t ;tn ctr re. Ryrerenoroner, the precrr=or to a aarietyf Glsticsal other pr,rh,tc I, then i prodtctto be sold. the
naln feedstocks for the new plant are primarily oil and natural gas -based benzene and ethNene.
Estimatetl
Construction Construction Begin Operations
b Please provitle project timeline: Start MMIYY Com eta MMIYY MMIYY
113 2020 01 2023 113 2023
7 Please ii the construction lb.doetrelated tothe r ect if lease lease note in include annual lease
CATEGORY
TOTAL NEW
INVESTMENT
PORTIONOF
INVESTMENT
SUBJECT TO VU TAX
DESCRIPTION OF PROPERTY
Cost of Lan
Cost of Bel l ding/Structures (Raal Property):
Cost of Machinery B Equipment (please describe):
Cost of Engineering:
Cost of Construction:
Other (catalyst, misc. chemicals, start-up costs):
TOTAL
the reu red land for the r osed locations are oNmedb IN EOScoma s. the Intention I,to lease the land for use
$ 5000.000
326000000
Includes r lent r feedstock Intemiedmte tin )shed roduct storaceand otrier loristics lnlrastrucW re
$ 83000.000
3,117000000
1, des cost to construct and Install all or lent and structures.
$ 211000.000
040 000 000
8 Utility Needs: Please provitle the estimatetl annual utility usage requirements and estimatetl capital cost to installlpa-ide service tothe site (company portion only).
CO
Water:
ST TOINSTALL
$ 200000
ANWALUSAGE
12001NIN rals/r (gallons) MM=mil-
Sewer:
.' 100000
(vdume)
Electric:
$ 300000
t41NIN kw-hr/r (kwh/kw)
Natural Gas:
100000
1281NINSCf/ r
nn
Telecommunications:
T5D
T5D
9 Please provitle estimated annual spending on the following utilities (i.e. nnanil bill)
Water El ectricit Telecom
Natural Gas
2023 $ 410 t39 $ 12828t5
HU
1 8214tt
.' 3,965 t51
28126951
2021,
$ 821477
$ J,965 t51
$ 28126951
2026
$ 821477
$ 3,g65 t51
28126951
2020
2021 2022
10 Esti rated number of construct' on workers per year 410
li3 1518
11 Average wages of construct' on workers $110000/ It
$110050/ r $110000/ r -) $55/hr
12 Total anticipated full-time employees at the proposed site before and after project completion:
Direct Em eas GIVL1'
Contract Em loyees. Ie. g. full-time ban
an
an
ut not direct employees)
2021 0
cur ent/existing headcount
0 , ent/existing headcount
2022
21
net new jobs to be added in this year
0 net new contract jobs to be added in this year
2020
53
net new jobs to be added in this year
0 net new cont,actjobs b be added in this year
2024
0
net new jobs to be added in this year
0 net new cont,ect jobs to be added in this yes,
2025
0
net new jobs to be added in this yea,
0 net new conhect jobs to be added in this yea,
13 What is the average annual salary of the new tlirect employees (without benefits)? Provide a breakdown by job category.
EMPLOYEES
PER AVGANNUAL
TOTALANNUAL
Msnagement/Supervisory:
Engineer/Operations
Operatorii istics
Maintenance
Safety/EnA ronmentallOC
IT/Security
Acctg/Admin/Purchasing
Totals for plant: 1 741 $ 111,550.0
14 Please checkwhich benefits will be offeredtoen loyees
%paid by %paid by
YES NO EMPLOYER EMPLOYEE
Medical:
Den aI:
Vision:
401(k):
401(k) Match:
Life insurance:
Flexible spending:
Short-term I Long-term disability:
10 Please provitle a brief description of the technical training requirements, if any, for new direct employees at the site
EmployeelPosition I11: 0 erators. to
ntics. Iaintenance and 11G
Description of Training: T .Y cal train lrr for eacY ob role botY cla,=roon ar dt eld Lora to'
natal 6-12 montr' nd start-u .Total co=t of trar r. b mid s ,'4800000.
Cost per Employee: post neulvalenta rox. to$100.000 e mlo'e- based on estimated duration of env foment durinq prr andstal-t
EmployeelPosition121:
Description of Training:
Cost per Employee:
16 What is the eat matetl annual end n d ract employee training, if any
2022 ....
2020 $ 250 000.00 ,
2024 500 000.00
2025 $ 500 000.00
Amount Descri ion of Material
19 Amount(number,weigh, or dollar) ofrawmaterial imported arnnillyfor production 8,95050 metric tons of Fi7111, e and Ethylene raw material to be sourced domestically andlrom overseas
oesari tion of myento
18 Estimatetl average value ofinyentory-hand tat full operations): $ 35.000. 000.00 mate vat ue of inventor onhandreu irement, for tin )shed prolkIlt SINintermediate prolkIlt and raw material benzene
19 What percentage of your inventory will leave the state within 175 days? $ 33,950,000 00 1117ok - _ - -
In -state Out-of-state Descri ionlT of Sales
20 Estimatetl annual sales: 1031.00 hellion US dollars In revenu e. Al roduct n taneted to be sold on an ex -work basis to our customers eae e and commerical transfer of sale will take lace at the dant
REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: June 24, 2019
Requested By: Corby Alexander, City Manager
Department: CMO
Report ir Resolution 1�'°' Ordinance
Exhibits: Proposed Ordinance 2019-3746
Appropriation
Source of Funds:
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: ir Yes i; No
SUMMARY & RECOMMENDATION
CenterPoint Energy is coming forward to renew their gas franchise ordinance. This will be the first
reading, and the second reading and final approval expected for the August 12 meeting (30 days
minimum between readings, per the City Charter, Sec. 7.01).
This franchise ordinance allows CenterPoint Energy to use City right-of-way to deliver natural gas to its
customers. In exchange for having this right granted, CenterPoint Energy pays the City 4.5% of its gross
receipts for gas sold in La Porte and 7¢ per Mcf for natural gas transported by CenterPoint for its
Transport Customers quarterly.
City Charter 7.01. - Enfranchisement.
a. Power of council. City council shall have power by ordinance to grant, amend, renew and extend
all franchises of all public utilities of every character operating within the city. All ordinances granting,
amending, renewing or extending franchises for public utilities shall not be finally passed until thirty (30)
days after the first reading; and no such ordinance shall take effect until sixty (60) days after its final
passage; and pending such time, the notice and caption of such ordinance, noting the place where the
full text may be examined by the public, shall be published once each week for four (4) consecutive
weeks in the official newspaper of the city, and the expense of such publication [is] to be borne by the
proponent of the franchise. No public utility franchise shall be transferable except with the approval of
council expressed by ordinance.
ACTION REQUIRED BY COUNCIL
No motion needed unless the intent is to direct staff or for some other reason. Second reading is
anticipated for the August 12 meeting.
Approved for the City Council meeting agenda
Corby D. Alexander, City Manager Date
ORDINANCE 2019-3746
AN ORDINANCE GRANTING TO CENTERPOINT ENERGY RESOURCES CORP., D/B/A
CENTERPOINT ENERGY TEXAS GAS OPERATIONS, THE RIGHT, PRIVILEGE AND FRANCHISE
TO CONSTRUCT, INSTALL, EXTEND, REMOVE, REPLACE, ABANDON, OPERATE AND
MAINTAIN ITS FACILITIES WITHIN THE PUBLIC RIGHTS -OF -WAY OF THE CITY OF LA
PORTE, TEXAS FOR THE TRANSPORTATION, DELIVERY, SALE AND DISTRIBUTION OF
NATURAL GAS; CONTAINING OTHER PROVISIONS RELATING TO THE FOREGOING
SUBJECT; PROVIDING FOR SEVERABILITY; FINDING COMPLIANCE WITH THE OPEN
MEETINGS LAW; CONTAINING A REPEALING CLAUSE; AND PROVIDING AN EFFECTIVE
DATE.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS:
Section 1. GRANT OF AUTHORITY. Subject to the terms, conditions and provisions of this ordinance,
the right, privilege and franchise is hereby granted to CenterPoint Energy Resources Corp., D/B/A CenterPoint
Energy Texas Gas Operations, hereinafter called "Company", to construct, install, extend, remove, replace,
abandon, operate and maintain its facilities within the Public Rights -of -Way of the City of La Porte, Texas for
the transportation, delivery, sale and distribution of natural gas within the corporate limits of the City of La Porte,
Texas as the same are now and as the same may from time to time be extended.
Section 2. DEFINITIONS.
A. "City" shall mean the City of La Porte, Texas.
B. "City Group" shall have the meaning set forth in Section 13 of this Franchise Ordinance.
C. "Company" shall mean CenterPoint Energy Resources Corp., D/B/A CenterPoint Energy Texas Gas
Operations, a Delaware Corporation, and shall not mean any of its affiliates and subsidiaries who shall
have no right, privilege or franchise granted hereunder.
D. "Facilities" shall mean pipes, pipelines, natural gas mains, laterals, feeders, regulators, meters, fixtures,
connections and attachments and other instrumentalities and appurtenances, used in or incident to
providing transportation, distribution, supply and sales of natural gas for heating, lighting, power and any
other purposes for which natural gas may now or hereafter be used.
E. "Public Rights -of -Way" shall mean the areas in, under, upon, over, across, and along any and all of the
present and future Streets (as defined herein) or streams now or hereafter owned or controlled by City.
F. "Street" shall mean the surface and the space above and below any public street, road, highway, alley,
bridge, sidewalk, or other public place or way.
G. "Transport Customer" shall have the meaning set forth in Section 8 of this Franchise Ordinance.
Section 3. TERM OF FRANCHISE. This Franchise shall become effective on the Effective Date
described in Section 21 of this Franchise Ordinance and shall be in full force and effect for a term of ten (10)
years.
Section 4. CONSTRUCTION AND MAINTENANCE OF NATURAL GAS DISTRIBUTION
SYSTEM. All Facilities installed by Company shall be of sound material and good quality, and shall be laid so
that they will not interfere with the artificial drainage of the City or its underground fixtures, or with navigation
in or the natural drainage of any stream. All Facilities shall be installed in accordance with applicable Federal and
State regulations and in the absence of such regulations in accordance with accepted industry practice. Within the
Public Rights -of -Way, the location and route of the Facilities by the Company shall be subject to the reasonable
and proper regulation, direction and control of the City or the City official to whom such duties have been
delegated. Such regulation shall include, but not be limited to, the right to require in writing to the extent provided
in Section 14 of this Franchise Ordinance, the relocation of Company's Facilities at Company's cost within the
Public Rights -of -Way of the City whenever such relocation shall be reasonably necessary to accommodate the
widening, change of grade, or relocation by City of Streets or Public Rights -of -Way, or construction or relocation
by City of City utility lines or drainage facilities. Company shall keep current and up-to-date maps showing the
physical location of Company's facilities and make such maps available for inspection by the City at no cost
during normal working hours.
Section 5. STREETS TO BE RESTORED TO GOOD CONDITION. Company and its contractors
shall give City reasonable notice, via electronic mail, of the dates, location, and nature of all work to be performed
on its Facilities within the Public Rights -of -Way. Following completion of work in the Public Rights -of -Way,
Company shall repair the affected Public Rights -of -Way as soon as possible, but in all cases Company shall
comply with all City ordinances (including but not limited to Chapter 62, Article IV "Management of Public
Rights -of -Way of the City of La Porte Code of Ordinances) governing time periods and standards relating to
excavating in the Public Rights -of -Way. No street, alley, highway or public place shall be encumbered for a
longer period than shall be necessary to execute the work.
Section 6. PERMITS. Company and its contractors shall obtain a permit prior to its commencement of
any planned engineering work, including replacements, extensions and public relocations, within the Public
Rights -of -Way, except as otherwise provided below. No permit shall be required for Routine Maintenance in the
Public Rights -of -Way, but the Company must provide email notification to the City at least one day prior to the
Company's commencement of such work. Company shall be exempt from any existing or future professional
engineering stamp or certification requirement of the City. No permit shall be required to promptly initiate
emergency repairs and repairs pursuant to the rules and regulations of the Railroad Commission of Texas. All
work shall be preceded by an 811 call and be subject to the Texas One -Call Statute (Texas Utilities Code, Chapter
251, and any successor statutes). Company shall give the City telephone notice of the initiation of emergency
repairs involving breaks in the paved surface of the Public Rights -of -Way, including sidewalks and curbs, as soon
as practicable under the circumstances and shall submit a permit promptly following completion of the work.
Company and contractors performing work for the Company shall not be required to obtain any permits for
relocations of Facilities requested by the City, provided that the relocated facilities are placed in the location
designated by the City and relocation is otherwise in accordance with the City's request to relocate. This Franchise
shall constitute a permit to park vehicles in the Streets and other Public Rights -of -Way when necessary for the
installation, replacement, abandonment, operation or maintenance of Company's Facilities. Company and
contractors performing work for Company shall not be required to pay any fee in addition to the franchise fee in
order to obtain a permit to perform work on Company's Facilities, or park within the Streets and other Public
Rights -of -Way. City shall not be required to pay any fee in order to obtain a letter of consent from the Company
regarding the City's abandonment of Public Rights -of -Way. However, any third party associated with the City's
abandonment shall pay all costs related to the abandonment process.
Section 7. QUALITY OF SERVICE. The service furnished hereunder to the City and its inhabitants
shall be in accordance with the quality of service rules of the Railroad Commission of Texas (Texas
Administrative Code, Title 16, Part 1, Chapter 7), state and federal regulations. Company shall furnish the grade
of service to its customers as provided by its rate schedules and shall maintain its system in reasonable operating
condition during the continuance of this Franchise. An exception to this requirement is automatically in effect,
but only for so long as is necessary, when caused by a shortage in materials, supplies and equipment beyond the
control of the Company as a result of fires, strikes, riots, storms, floods and other casualties, governmental
regulations, limitations and restrictions as to the use and availability of materials, supplies and equipment and as
to the use of the services, and unforeseeable and unusual demands for service. In any of such events the Company
shall do all things reasonably within its power to restore normal service as quickly as practicable.
Section 8. PAYMENT TO THE CITY. In consideration of the rights and privileges herein granted, the
administration of the Franchise by the City, the temporary interference with the use of Public Rights -of -Way and
cost and obligations undertaken by the City in relation thereto and in lieu of any license, charge, fee, street or
alley rental or other character of charge for use and occupancy of the Streets, alleys, and public places of the City,
and in lieu of any inspection fee, the Company agrees to pay to the City franchise fees in the amount and manner
described herein as follows:
Company agrees to pay to the City quarterly during the continuance of this Franchise a sum of money
equal to four and one-half percent (4.50%) of the Company's gross receipts for the preceding calendar quarter
received by the Company from the sale of gas within the corporate limits of the City plus seven cents (70) per
Mcf for natural gas transported by Company for its Transport Customers during such quarter, without offset or
exclusion of any amounts received by Company for receipts associated with Miscellaneous Service Charges, as
defined and set forth in the Company's tariff. "Transport Customer" means any person or entity for whom
Company transports gas through the distribution system of Company within the corporate limits of City for
consumption within the corporate limits of City. The franchise fees hereunder shall be calculated for the calendar
quarters ending March 31, June 30, September 30, and December 31 and shall be payable on or before the fifteenth
day of May, August, November, and February following the quarter for which payment is made, beginning with
the first such date following the Effective Date of this Franchise and each August 15th, November 15th, February
15th, and May 15th thereafter; provided, however, the first such payment shall be prorated as necessary to reflect
only those gross receipts received and transportation volumes delivered by Company after the Effective Date of
this Franchise. If the ten (10) year term of this Franchise provided for in Section 3 above ends on any day other
than the last day of a calendar quarter, then the last payment shall be prorated as necessary. In no event shall the
Company be required to remit to the City franchise fee amounts that for any reason whatsoever are not fully
recoverable from its customers. Upon receipt of the above amount of money, the City Secretary shall deliver to
the Company a receipt for such amount. If any payment due date required herein falls on a weekend or bank
holiday, payment shall be made on or before the close of business of the first working day after the payment due
date.
Section 9. ANNEXATIONS BY CITY. This Franchise shall extend to and include any and all territory
that is annexed by the City during the term of this Franchise. Within sixty (60) days from the receipt of notice
from the City of any such annexation, the Company shall assure that any and all customers within such annexed
territory are included and shown on its accounting system as being within the corporate limits of the City of La
Porte, Texas. After such sixty (60) day period the payment provisions specified in Section 7 of this Franchise
Ordinance shall apply to gross receipts and transport fees received by the Company from customers located within
such annexed territory. Company shall true -up its map of City boundaries to the City's map on an annual basis.
Section 10. NON-EXCLUSIVE FRANCHISE. Nothing contained in this Franchise shall ever be
construed as conferring upon the Company any exclusive rights or privileges of any nature whatsoever.
Section 11. COMPLIANCE AND REMEDIES.
(a) In the event the Company by act or omission violates any material term, condition or provision of this
Franchise, the City shall notify the Company in writing of such violation. Should the Company fail or refuse to
correct any such violation within thirty (30) days from the date of City's notice, the City shall, upon written
notification to the Company, have the right to terminate this agreement. Any such termination and cancellation
shall be by ordinance adopted by City Council; provided, however, before any such ordinance is adopted, the
Company must be given at least sixty (60) days' advance written notice. Such notice shall set forth the causes and
reasons for the proposed termination and cancellation, shall advise the Company that it will be provided an
opportunity to be heard by City Council regarding such proposed action before any such action is taken and shall
set forth the time, date and place of the hearing.
(b) Other than its failure, refusal or inability to pay its debts and obligations, including, specifically, the
payments to the City required by this Franchise, the Company shall not be declared in default or be subject to any
sanction under any provision of this Franchise in those cases in which performance of such provision is prevented
by reasons beyond its control.
(c) The rights and remedies of City and Company set forth herein shall be in addition to, and not in
limitation of, any other rights and remedies provided at law or in equity and City's exercise of any particular
remedy shall not constitute a waiver of its rights to exercise any other remedy.
Section 12. RESERVE OF POWERS. Except as otherwise provided in this Franchise, the City by the
granting of this Franchise does not surrender or to any extent lose, waive, impair or lessen the lawful powers,
claims and rights, now or hereafter vested in the City under the Constitution and statutes of the State of Texas and
under the Charter and Ordinances of the City of La Porte or other applicable law, to regulate public utilities within
the City and to regulate the use of the Streets by the Company; and the Company by its acceptance of this
Franchise agrees that, except as otherwise provided in this Franchise, all lawful powers and rights, whether
regulatory or otherwise, as are or as may be from time to time vested in or reserved to the City, shall be in full
force and effect and subject to the exercise thereof by the City at any time and from time to time.
Section 13. INDEMNITY. THE COMPANY, ITS SUCCESSORS AND ASSIGNS, SHALL
PROTECT AND HOLD THE CITY AND ITS OFFICERS, AGENTS, AND EMPLOYEES
(COLLECTIVELY REFERRED TO IN THIS SECTION AS "CITY GROUP") HARMLESS AGAINST
ANY AND ALL CLAIMS OR DEMANDS FOR DAMAGES TO ANY PERSON OR PROPERTY BY
REASON OF THE CONSTRUCTION AND MAINTENANCE OF THE COMPANY'S NATURAL GAS
DISTRIBUTION SYSTEM, OR IN ANY WAY GROWING OUT OF THE RIGHTS GRANTED BY THIS
FRANCHISE, EITHER DIRECTLY OR INDIRECTLY, OR BY REASON OF ANY ACT, NEGLIGENCE
OR NONFEASANCE OF THE COMPANY OR THE CONTRACTORS, AGENTS OR EMPLOYEES OF
THE COMPANY OR ITS SUCCESSORS AND ASSIGNS, AND SHALL REFUND TO CITY GROUP ALL
SUMS WHICH CITY GROUP MAY BE ADJUDGED TO PAY ON ANY SUCH CLAIM, OR WHICH
MAY ARISE OR GROW OUT OF THE EXERCISE OF THE RIGHTS AND PRIVILEGES HEREBY
GRANTED OR BY THE ABUSE THEREOF, AND THE COMPANY OR ITS SUCCESSORS AND
ASSIGNS SHALL INDEMNIFY AND HOLD CITY GROUP HARMLESS FROM AND ON ACCOUNT
OF ALL DAMAGES, COSTS, EXPENSES, ACTIONS, AND CAUSES OF ACTION THAT MAY
ACCRUE TO OR BE BROUGHT BY, A PERSON, PERSONS, COMPANY OR COMPANIES AT ANY
TIME HEREAFTER BY REASON OF THE EXERCISE OF THE RIGHTS AND PRIVILEGES HEREBY
GRANTED, OR OF THE ABUSE THEREOF.
Section 14. RELOCATION OF FACILITIES. The Company shall, upon written request of the City,
relocate its Facilities within Public Rights -of -Way at Company's own expense, exclusive of Facilities installed
for service directly to City, whenever such shall be reasonably necessary on account of the widening, change of
grade, or relocation by City of Public Rights -of -Way, or construction or relocation by City of City utility lines or
drainage facilities. City shall bear the costs of all relocations of Facilities installed for service directly to City and
of any relocation of other Facilities requested by City for reasons other than the widening, change of grade, or
relocation by City of Public Rights -of -Way, or construction or relocation by the City of City utility lines or
drainage facilities.
Section 15. GOVERNMENTAL FUNCTION. All of the regulations and activities required by this
Franchise are hereby declared to be governmental functions and for the health, safety and welfare of the general
public.
Section 16. RECORDS AND REPORTS.
(a) Books of Account. The Company shall keep complete and accurate books of accounts and records of
its business and operations under and in connection with this Franchise. All such books of accounts and records
shall be kept at the company's principal office in Houston, Texas.
(b) Access by City. The City may conduct an audit or other inquiry or may pursue a cause of action in
relation to the payment of the franchise fee only if such audit, inquiry, or pursuit of a cause of action concerns a
payment made less than three (3) years before the commencement of such audit, inquiry, or pursuit of a cause of
action. Each party shall bear its own costs of any such audit or inquiry. Upon receipt of a written request from the
City, all books and records related to Company's operations under this Franchise shall be made available for
inspection and copying no later than thirty (30) days from receipt of such request.
(c) Interest on Underpayments and Overpayments. (1) Amounts due to City for late payments shall include
interest, compounded daily equal to the return on equity plus three percent (3%) granted to the Company in its
most recent proceeding fixing rates applicable to customers within the corporate limits of the City. (2) If the City
identifies, as a result of a franchise fee compliance review, amounts owed by the Company from prior periods or
prior underpayments, then the Company shall pay simple interest on such amounts equal to the return on equity
granted to the Company in its most recent proceeding fixing rates applicable to customers within the corporate
limits of the City. Said interest shall be payable on such sums from the date the initial payment was due until it
is paid and shall not be billed to customers. (3) Amounts due Company for past overpayments shall include simple
interest equal to the return on equity granted to the Company in its most recent proceeding fixing rates applicable
to customers within the corporate limits of the City; provided, however, if there is a change in the approved return
on equity during the time period subject to the City's audit or inquiry, then for each time period during which
there was an overpayment, the approved return on equity in effect during such time period shall be used in
calculating interest under this subparagraph (c). Interest payable on such sums shall be credited to customers.
Section 17. EASEMENT. In consideration for the compensation set forth in Section 8 of this Franchise
Ordinance, City agrees that if City sells, conveys, or surrenders possession of any portion of the Public Right -of -
Way that is being used by Company pursuant to this Franchise, City, to the maximum extent of its right to do so,
shall first grant Company an easement for such use and the sale, conveyance, or surrender of possession of the
Public Right -of -Way shall be subject to the right and continued use of Company.
Section 18. ACCEPTANCE. The Company shall, within thirty (30) days following the final passage and
approval of this Franchise, file with the City Secretary of the City of La Porte either 1) a written statement signed
in its name and behalf in the following form or 2) this document duly executed below by the Vice President of
Regional Operations:
"To the Honorable Mayor: and City Council of the City of LaPorte, Texas:
CenterPoint Energy Resources Corp., D/B/A CenterPoint Energy Texas Gas Operations, its successors
and assigns, hereby accepts the attached Franchise Ordinance and agrees to be bound by all of its terms
and provisions."
Dated this day of
CENTERPOINT ENERGY RESOURCES CORP
DBA CENTERPOINT ENERGY TEXAS GAS
OPERATIONS
Un
Talmadge R. Centers Jr., Division Vice President,
Regional Operations
2019.
Section 19. SEVERABILITY. If any provision, section, subsection, sentence, clause or phrase of this
Franchise is for any reason held to be unconstitutional, void, or invalid or for any reason unenforceable, the
validity of the remaining portions of this Franchise shall not be affected thereby, it being the intent the City of La
Porte, Texas in adopting this Franchise that no portion hereof or provision hereof shall become inoperative or fail
by reason of any unconstitutionality or invalidity of any other portion, provision or regulation and, to this end, all
provisions of this ordinance are declared to be severable.
Section 20. NOTICES. Every notice, order, petition, documents or other direction or communication to
be served upon the City or the Company shall be deemed sufficiently given if sent by registered or certified mail,
return receipt requested. Every such communication to the Company shall be sent to:
CenterPoint Energy Resources Corp.
Vice President Regulatory Relations
Post Office Box 4567
Houston, TX 77210-4567
With a copy to:
General Counsel, Gas Division
Post Office Box 2628
Houston, TX 77252-2628
Every such communication to the City or the City Council shall be sent to the:
Mayor, City of LaPorte, Texas
604 West Fairmont Parkway
LaPorte, Texas 77571
With a copy to:
City Secretary's Office
604 West Fairmont Parkway
LaPorte, Texas 77571
Section 21. PUBLICATION, PASSAGE AND EFFECTIVE DATE. This Franchise, having been
published in the official newspaper of the City of La Porte, Texas once each week for four consecutive weeks
after its final passage, shall take effect sixty days after final passage ("Effective Date"). The Company shall pay
the cost of those publications.
Section 22 COMPLIANCE WITH TEXAS OPEN MEETINGS LAW. The City Council officially
finds, determines, recites, and declares that a sufficient written notice of the date, hour, place, and subject of this
meeting of the City Council was posted at a place convenient to the public at the City Hall of the City for the time
required by law preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government
Code; and that this meeting has been open to the public as required by law at all times during which this ordinance
and the subject matter thereof has been discussed, considered, and formally acted upon. The City Council further
ratifies, approves, and confirms such written notice and the contents and posting thereof.
Section 23. REPEAL. All ordinances or parts of ordinances in conflict herewith are hereby repealed to
the extent of the conflict only.
Section 24. COMPLIANCE WITH CHARTER AND ORDINANCES. This Franchise, the rights
granted hereby and the operations and activities performed by Company pursuant hereto shall be subject to
applicable provisions of the Charter of the City of La Porte, Texas. Except to the extent otherwise expressly
provided herein, the Franchise and rights granted hereby and the operations and activities performed by Company
pursuant hereto, shall be subject to all valid ordinances and regulations of the City insofar as such ordinances and
regulations (a) do not shorten the term hereof or terminate, abrogate, or materially and adversely affect the
Franchise and right granted to Company hereby, (b) do not conflict with or are not inconsistent with the terms
and provisions contained in this ordinance, (c) do not modify, preempt, or cause Company to violate the terms of
a tariff approved by the Railroad Commission of Texas, Railroad Commission Rules, or the Gas Utility
Regulatory Act, or (d) do not unreasonably regulate the Company's operations and activities in the City Right of
Way.
Section 25. APPROVAL. Read in full on its first reading at a regular meeting of the City Council of La
Porte, Texas, on the day of 2019, and read in full and passed and adopted on its
second reading at a regular meeting of the City Council of La Porte, Texas, on the day of
, 2019, and approved by the Mayor.
CITY OF LA PORTE
Louis R. Rigby, Mayor
ATTEST: APPROVED AS TO FORM:
Lee Woodward, City Secretary Clark Askins, Assistant City Attorney
THE STATE OF TEXAS §
COUNTY OF HARRIS §
I, the duly appointed, qualified and acting City Secretary of City of La Porte, Texas, do hereby certify that
the above and foregoing ordinance was read on first and second readings at regular meetings of the City Council
of said City of La Porte, Texas, held on the day of , 2019 and on the day of
, 2019; that written notice of the date, place and subject of said meetings were posted on a
bulletin board located at a place convenient to the public in the City Hall, as well as on the City of La Porte,
Texas' website, for at least 72 hours preceding the day of said meetings; that the Mayor
and Council members:
1. 5.
2. 6.
3. 7.
4. 8.
were present at the meeting for the first reading of the above and foregoing ordinance and acted as the Council
throughout; that the Mayor and Council members:
1. 5.
2. 6.
3. 7.
4. 8.
were present at the meeting for the second reading of the above and foregoing ordinance and acted as the Council
throughout; that the same has been signed and approved by the Mayor and is duly attested by the City Secretary;
and that the same has been duly filed with the City Secretary and recorded by the City Secretary in full in the
books for the purpose of recording the ordinances of the City of La Porte, Texas.
EXECUTED under my hand and the official seal of the City of La Porte, Texas at said City, this
day of , 2019.
[SEAL]
Lee Woodward, City Secretary
City of LaPorte, Texas
REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested: June 24, 2019
Requested By: Corby Alexander, City Manager
Department: CMO
Report �r Resolution 4' Ordinance
Exhibits: Proposed Ordinance 2019-3747,
Exhibit A — Proposed Fee Schedule, Clean Version,
Exhibit A — Proposed Fee Schedule, Marked Version
Appropriation
Source of Funds:
Account Number:
Amount Budgeted:
Amount Requested:
Budgeted Item: r Yes i; No
SUMMARY & RECOMMENDATION
The Governor of Texas recently signed a bill into law banning the use of valuation in calculating
residential building permit fees. La Porte, like many Texas cities, had a fee structure in place that based
the cost of residential building permits on the value of the proposed improvement. Since this system is
no longer lawful, the City needs to consider an alternate method to calculate the cost of residential
building permits.
City staff is proposing that a move to a system that would calculate permit costs on the total square
footage of the permitted improvement. It is believed that the proposed rates would generate the
approximately the same amount of revenue from residential building permits as in previous years.
Building permit fees would be $87.50 flat fee for improvements 250 square feet and smaller.
Improvements greater than 250 square feet would be $87.50 plus $0.36 per additional square foot.
Additionally, the re -inspection fee would be a flat $35. The plan review fee would be 50% of the permit
fee for projects over 650 square feet.
ACTION REQUIRED BY COUNCIL
Move to adopt Ordinance 2019-3747 revising the fee structure for residential building permits.
Approved for the City Council meeting agenda
Corby D. Alexander, City Manager
Date
ORDINANCE 2019-3747
AN ORDINANCE AMENDING CHAPTER 82 `BUILDINGS AND BUILDING REGULATIONS" -
APPENDIX A "FEES" OF THE CODE OF ORDINANCES OF THE CITY OF LA PORTE, BY
CHANGING FEES FOR RESIDENTIAL BUILDING PERMITS AND RESIDENTIAL MECHANICAL
PERMITS; CONTAINING AREPEALING CLAUSE; CONTAINING A SEVERABILITY CLAUSE;
FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW; PROVIDING AN EFFECTIVE DATE
HEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE:
Section 1. Chapter 82 "Buildings and Building Regulations"- Appendix A "Fees", Article II
"Building Code", of the City of LaPorte Code of Ordinances of the Code of Ordinances of the City of LaPorte,
providing fees for building permits, is hereby amended in its entirety, and shall hereinafter read as shown on
Exhibit "A", inclusive, attached hereto and incorporated by reference herein and made a part hereof for all
purposes.
Section 2. The City Council officially finds, determines, recites, and declares that a sufficient written
notice of the date, hour, place and subject of this meeting of the City Council was posted at a place convenient
to the public at the City Hall of the City for the time required by law preceding this meeting, as required by the
Open Meetings Law, Chapter 551, Texas Government Code; and that this meeting has been open to the public as
required by law at all times during which this ordinance and the subject matter thereof has been discussed,
considered and formally acted upon. The City Council further ratifies, approves and confirms such written notice
and the contents posting thereof.
Section 3. Each and every provision, paragraph, sentence and clause of this Ordinance has been
separately considered and passed by the City Council of the City of LaPorte, Texas, and each said provision would
have been separately passed without any other provision, and if any provision hereof shall be ineffective, invalid or
unconstitutional, for any cause, it shall not impair or affect the remaining portion, or any part thereof, but the valid
portion shall be in force just as if it had been passed alone.
Section 4. All other ordinances or parts of ordinances in conflict herewith are hereby repealed, but to the
extent of such conflict only.
Section 5. This Ordinance shall be effective from and after its passage and approval, and it is so
ordered. The amended fees provided for in this ordinance shall be effective June 25, 2019.
PASSED AND APPROVED, this 24th day of JUNE, 2019.
ATTEST:
Lee Woodward, City Secretary
CITY OF LA PORTE, TEXAS
Louis R. Rigby, Mayor
APPROVED AS TO FORM:
Clark T. Askins, Assistant City Attorney
�JhAjpteir 82. Buildings and Building Regulations
Penalties. Where work is started without the required permit, the fee herein specified shall be doubled. The payment
of such double fee shall not relieve any persons from fully complying with the requirements in the execution of the
work nor from any other applicable penalties.
4rticle /L Building Code
(a)
Residential Building and Mechanical Permit Fee Schedule
Plan Review Fee
Building projects over 650 sq. ft.- 50% of Permit Fee
Building projects 250 square feet or less - $87.50
Building Permit Fee
Building projects greater than 250 square feet - $87.50 plus $0.36 per
square foot or fraction thereof in excess of 250 square feet
Mechanical Permit Fee (Heating,
ventilating, ductwork, air
$0.36 per square foot or fraction thereof
conditioning and refrigeration
systems.)
Reinspection fee
$35.00
(b)
Commercial (Non -Residential) Building Permit Fee Schedule
Total Valuation of
Fee
Project
$1,000.00 and less
$20.00
$1,001.00 to
$20.00 for the first $1,000.00 plus $7.50 for each additional thousand or fraction thereof, to
$50,000.00
and including $50,000.00
$50,001.00 to
$387.50 for the first $50,000.00 plus $6.00 for each additional thousand or fraction thereof,
$100,000.00
to and including $100,000.00
$100,001.00 to
$687.50 for the first $100,000.00 plus $4.50 for each additional thousand or fraction thereof,
$500,000.00
to and including $500,000.00
$500,001.00 and up
$2,487.50 for the first $500,000.00 plus $3.50 for each additional thousand or fraction
thereof
Reinspection fee
$35.00
MOVING FEE
For the moving of any building or structure
$150.00
House/building pre -relocation inspection fee
100.00
Plan review fee: Commercial (non-residential) projects-50% of permit fee
8� , 2--_
Article ///. Plumbing Code
(a)
Fixtures/drains/traps, each .....
3.75
(b)
Sewer (New, repair or replacement), each .....
7.50
(c)
Septic tank/seepage pit or drain field, each .....
15.00
(d)
Water heater, each .....
3.75
(e)
Gap piping system (One to four outlets, flat fee) .....
7.50
(f)
Gap piping system (Over four outlets, per outlet basis) .....
1.50
(g)
Water piping and/or water treating equipment (Installation, alteration or repair), each .....
7.50
(h)
Drain or vent (Repair or alteration), each .....
7.50
(i)
Backflow protection device/vacuum breaker
(One to five, each one) .....
3.75
(Over five, each one) .....
2.25
Reinspection fees .....
35.00
(k)
Permit issue fee .....
15.00
(1)
Minimum permit fee .....
20.00
Article IV. Electrical Code
Division 4. Inspections
7(a)
Inspection fees:
(1)
Outlets (first five) .....
3.00
(including fixtures, lights and switches)
(2)
Outlets (all other), each .....
0.60
(3)
Clothes washer/dryer .....
2.00
(4)
Range receptacle .....
3.00
(5)
Cook top or oven .....
1.50
(6)
Garbage disposal .....
1.50
(7)
Dishwasher .....
1.50
(8)
Water heater .....
3.75
(9)
A/C, window unit receptacle .....
3.00
(14)
Temporary saw pole (T-pole) .....
15.00
(15)
Meter loop and service (includes temporary cut -in) .....
15.00
(16)
Issue fee (permit) .....
7.50
(17)
Reinspection fee .....
35.00
(18)
Minimum charge on permits .....
20.00
(19)
Reconnection fee .....
15.00
(24)
Motors:
a.
Up to one-half hp .....
1.50
b.
One-half hp and up
to ten hp.....
2.50
C.
Ten hp and up to 50
hp.....
3.50
d.
50 hp and over, per
hp.....
4.50
Division 5. Standards
7(a)
Fine for violation of this article:.....
2000.00
8.2.-.
336
Article V. Fuel Gas Code Permits
(Gas permits shall be applied for and issued under the plumbing permit.)
(a)
Gap piping system (One to four outlets, flat fee) .....
7.50
(b)
Gap piping system (Over four outlets, per outlet basis) .....
1.50
(c)
Reinspection fees .....
35.00
(d)
Permit issue fee .....
15.00
(e)
Minimum permit fee .....
20.00
Article V11. Mechanical Permits for Commercial (Non -Residential) projects
(Heating, ventilating, ductwork, air conditioning and refrigeration systems.)
(a)
First $1,000.00 valuation, or fraction thereof .....
15.00
Each additional $1,000.00 valuation or fraction thereof .....
3.00
(b)
Reinspection fees .....
35.00
(c)
Permit issue fee .....
15.00
(d)
Minimum permit fee .....
30.00
Article IX. Demolition of Buildings and Other Structures
Division 2. Permit
(a)
Fee for permit, nonrefundable .....
75.00
82-537
Plus: Property owner, refundable cash bond .....
250.00
Contractor, refundable cash bond .....
500.00
Article X. Earth Removal
Division 2. Permit
(a)
I Fee for permit .....
2,500.00
82-595
Article X1. Swimming Pools
a
Fee for public pools' operating license (annual and renewal) .....
25.00
1
82_f, (d)
,(b)
Fee for proration of fees (after May 1), per elapsed month .....
1.00
1
�JhAjpteir 82. Buildings and Building Regulations
Penalties. Where work is started without the required permit, the fee herein specified shall be doubled. The payment
of such double fee shall not relieve any persons from fully complying with the requirements in the execution of the
work nor from any other applicable penalties.
4rticle /L Building Code
(a)
Residential Building and Mechanical Permit Fee Schedule
Plan Review Fee
Building projects over 650 sq. ft.- 50% of Permit Fee
Building projects 250 square feet or less - $87.50
Building Permit Fee
Building projects greater than 250 square feet - $87.50 plus $0.36 per
square foot or fraction thereof in excess of 250 square feet
Mechanical Permit Fee (Heating,
ventilating, ductwork, air
$0.36 per square foot or fraction thereof
conditioning and refrigeration
systems.)
Reinspection fee
$35.00
(b)
Commercial (Non -Residential) Building Permit Fee Schedule
Total Valuation of
Fee
Project
$1,000.00 and less
$20.00
$1,001.00 to
$20.00 for the first $1,000.00 plus $7.50 for each additional thousand or fraction thereof, to
$50,000.00
and including $50,000.00
$50,001.00 to
$387.50 for the first $50,000.00 plus $6.00 for each additional thousand or fraction thereof,
$100,000.00
to and including $100,000.00
$100,001.00 to
$687.50 for the first $100,000.00 plus $4.50 for each additional thousand or fraction thereof,
$500,000.00
to and including $500,000.00
$500,001.00 and up
$2,487.50 for the first $500,000.00 plus $3.50 for each additional thousand or fraction
thereof
Reinspection fee
$35.00
MOVING FEE I
For the moving of any building or structure $150.00
House/building pre -relocation inspection fee 100.00
8
Plan review fee: Commercial (non-residential) projects-50% of permit fee 21
Article 111. Plumbing Code
(a)
Fixtures/drains/traps, each .....
3.75
(b)
Sewer (New, repair or replacement), each .....
7.50
(c)
Septic tank/seepage pit or drain field, each .....
15.00
(d)
Water heater, each .....
3.75
(e)
Gap piping system (One to four outlets, flat fee) .....
7.50
(f)
Gap piping system (Over four outlets, per outlet basis) .....
1.50
(g)
Water piping and/or water treating equipment (Installation, alteration or repair), each .....
7.50
(h)
Drain or vent (Repair or alteration), each .....
7.50
(i)
Backflow protection device/vacuum breaker
(One to five, each one) .....
3.75
(Over five, each one) .....
2.25
Reinspection fees .....
35.00
(k)
Permit issue fee .....
15.00
(1)
Minimum permit fee .....
20.00
�rticle IV. Electrical Code
IDivision 4. Inspections
(a)
Inspection fees:
821
311
(1)
Outlets (first five) .....
3.00
(including fixtures, lights and switches)
(2)
Outlets (all other), each .....
0.60
(3)
Clothes washer/dryer .....
2.00
(4)
Range receptacle .....
3.00
(5)
Cook top or oven .....
1.50
(6)
Garbage disposal .....
1.50
(7)
Dishwasher .....
1.50
(8)
Water heater .....
3.75
(9)
A/C, window unit receptacle .....
3.00
(14)
Temporary saw pole (T-pole) .....
15.00
(15)
Meter loop and service (includes temporary cut -in) .....
15.00
(16)
Issue fee (permit) .....
7.50
(17)
Reinspection fee .....
35.00
(18)
Minimum charge on permits .....
20.00
(19)
Reconnection fee .....
15.00
(24)
Motors:
a.
Up to one-half hp .....
1.50
b.
One-half hp and up
to ten hp .....
2.50
C.
Ten hp and up to 50
hp.....
3.50
d.
50 hp and over, per
hp.....
4.50
Division 5. Standards
7(a)
Fine for violation of this article:.....
2000.00
336
Article V. Fuel Gas Code Permits
(Gas permits shall be applied for and issued under the plumbing permit.)
(a)
Gap piping system (One to four outlets, flat fee) .....
7.50
(b)
Gap piping system (Over four outlets, per outlet basis) .....
1.50
(c)
Reinspection fees .....
35.00
(d)
Permit issue fee .....
15.00
(e)
Minimum permit fee .....
20.00
Article V11. Mechanical Permits for Commercial (Non -Residential) projects
(Heating, ventilating, ductwork, air conditioning and refrigeration systems.)
(a)
First $1,000.00 valuation, or fraction thereof .....
15.00
Each additional $1,000.00 valuation or fraction thereof .....
3.00
(b)
Reinspection fees .....
35.00
(c)
Permit issue fee .....
15.00
j(d)
I Minimum permit fee .....
30.00
�rticle IX. Demolition of Buildings and Other Structures
Division 2. Permit
(a)
Fee for permit, nonrefundable .....
75.00
82-537
Plus: Property owner, refundable cash bond .....
250.00
Contractor, refundable cash bond .....
500.00
Article X. Earth Removal
Division 2. Permit
(a)
Fee for permit .....
2,500.00
82L595
Article X1. Swimming Pools
a)
Fee for public pools' operating license (annual and renewal) .....
25.00
82634
1-(d)
(b)
E Fee for proration of fees (after May 1), per elapsed month .....
1.00
1
Council Agenda Item
June 24, 2019
8 (a) Receive report of the La Porte Development Corporation Board Meeting — Councilmember Nancy
Ojeda
***********************************************************************************
Council Agenda Item
June 24, 2019
9. ADMINISTRATIVE REPORTS
• Zoning Board of Adjustment Meeting, Thursday, June 27,2019
• City Council Meeting, Monday, July 8, 2019
• Planning and Zoning Commission Meeting, Thursday, July 18, 2019
• City Council Meeting, Monday, July 22, 2019
• Zoning Board of Adjustment Meeting, Thursday, July 25, 2019
10. COUNCIL COMMENTS Hear announcements concerning matters appearing on the agenda; items
of community interest; and/or inquiries of staff regarding specific factual information or existing policy
from the Mayor, Councilmembers, and City staff, for which no formal action will be discussed or
taken.
11. ADJOURNMENT
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