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Home My WebLink About2010-11-8 MINUTES OF REGULAR MEETING AND WORKSHOP MEETING OF THE LA PORTE CITY COUNCIL November 8, 2010 1. Call to order The meeting was called to order by Mayor Rigby at 6:00 p.m. Members of City Council Present: Council members Tommy Moser, John Zemanek, Mike Clausen, Chuck Engelken, Daryl Leonard, Jay Martin, Mike Mosteit and Mayor Rigby Members of Council Absent: John Black Members of City Executive Staff and City Employees Present: City Manager's Office: Ron Bottoms, Stacey Osborne and Melisa Boaze Legal: Clark Askins City Secretary's Office: Martha Gillett Finance: Michael Dolby and Paula Bradstreet Planning: Tim Tietjens, Brian Sterling and Debbie Wilmore Police Department: Chief Ken Adcox, Yvonne Stanley, Jerome McKown, David Huckabee and Chris Paige Public Works: Steve Gillett Fire: Mike Boaze and Donald Ladd Purchasing: Jeana Masterson Parks and Recreation: Stephen Barr EMS: Ray Nolen Golf: Dennis Hlavaty Others Present: Lou Ann Martin, Dottie Kaminski, Richard Warren, Phillip Hoot, John Blakemore, Nancy Blakemore, Phillip Ferguson, Shawn Bradstreet, Karen Rigby, Mr. and Mrs. Rosa, Ted Powell, Mr. and Mrs. Nolley, Michael Thannisch, Deb Gallington, Bryan Turnquist, John Littman, Kelly Parker and David Janda. 2. The Invocation was given by Rev. Michael Thannisch - Congregation Benim Avraham 3. Councilman Leonard led the Pledge of Allegiance. 4. Presentations/Proclamations There were no presentations or proclamations to be presented. 5. Petitions, Remonstrances, Communications, Citizens and Tax Payers wishing to address Council on any item posted on the agenda (Limited to five minutes) Chuck Rosa - 812 South Virginia - informed Council he is opposed to the Sex Offender Ordinance. Minutes of Regular Meeting and Workshop Meeting of La Porte City Council on November 8, 2010 2 Phillip Hoot - 927 Seabreeze - suggested Council have more agenda review time prior to Council Meetings. In addition, he opposed to citizens being involved in the Sex Offender Ordinance enforcement. Mary Lee Nolley - 2819 E. - informed Council she is opposed to the Sex Offender Ordinance. In addition, she informed Council the K2 Marijuana should be enforced by State and Federal Government rather than Local Government. Mr. Nolley - 2819 E. - informed Council he is opposed to the Sex Offender Ordinance and the City enforcing K2 Marijuana. Ted Powell - 1700 Roscoe - informed Council he is opposed to the Sex Offender Ordinance. 6. Consent agenda - Any item may be removed by a Councilperson for discussion. A. Consider approval or other action of minutes of Regular Meeting and Workshop Meeting of the of La Porte City Council held on October 25, 2010 - M. Gillett B. Consider approval or other action awarding bid #11002 for chemical and fertilizer - J. Masterson C. Consider approval or other action authorizing the purchase of a Type I Frazer Ambulance Module with a Ford-450 diesel-powered chassis through H-GAC (Houston - Galveston Area Council) cooperative purchasing program - S. Gillett D. Consider approval or other action awarding bid #11003 for plastic garbage bags - J. Masterson E. Consider approval or other action regarding an ordinance amending Chapter 42, Article V, "Regulation of Sex Offender Residency" of the Cod of Ordinances of the City of La Porte, by prohibiting the lease of property to sex offenders, and by adding definitions and affirmative defenses (Ord. 3296) - K. Adcox F. Consider approval or other action regarding an ordinance amending Chapter 70, "Traffic and Vehicles", of the Code of Ordinances of the City of La Porte by authorizing the towing of motor vehicles from streets, including for the offense of driving without vehicle insurance (Ord. 3297) - K. Adcox G. Consider approval or other action regarding a resolution adopting a Section Three (3) Local Opportunity Plan for projects funded by the Texas Community Development Block Grant Program - (Res. 2010-26) - T. Tietjens Minutes of Regular Meeting and Workshop Meeting of La Porte City Council on November 8, 2010 3 H. Consider approval or other action regarding an ordinance authorizing the Mayor to approve an amended Interlocal Agreement between the City of La Porte and Harris County to provide bicycle-pedestrian easements at various sites on Harris County Flood Control District property (Ord. 3298) - S. Barr I. Consider approval or other action regarding and ordinance authorizing the City Manager to execute a contract with Dr. Oscar Boultinghouse, M.D., to serve as Medical Director for the City of La Porte Emergency Medical Service (Ord. 3299) - R. Nolen J. Consider approval or other action approving the appointment of Trina Glick and John Blakemore to the La Porte Police Reserve Force - K. Adcox K. Consider approval or other action regarding an ordinance authorizing an agreement with Patillo, Brown and Hill, LLP for auditing services for a one (1) year period (Ord. 3300) - M. Dolby Council wanted to pull item 6E and vote on separately. In addition, they had questions on items H, K and F. Assistant City Attorney Clark Askins read the following Ordinance captions: Ordinance 3296 - AN ORDINANCE AMENDING CHAPTER 42 "MISCELLANEOUS OFFENSES" OF THE CODE OF ORDINANCES OF THE CITY OF LA PORTE BY AMENDING ARTICLE V "REGULATION OF SEX OFFENDER RESIDENCY", BY ADDING CERTAIN DEFINITIONS; MAKING IT UNLAWFUL FOR CERTAIN SEX OFFENDERS TO RESIDE WITHIN 1000 FEET OF PREMISES WHERE CHILDREN GATHER; PROVIDE FINDINGS OF FACT AND OTHER MATTERS RELATED THERETO; PROVIDING AFFIRMATIVE DEFENSES; PROVINDING FOR A PENALTY; PROVIDING FOR A SEVERABILITY CLAUSE; CONTAINING AN OPEN MEETINGS CLAUSE; PROVIDING FOR THE PUBLICATION OF THE CAPTION HEREOF; AND PROVIDING AN EFFECTIVE DATE HEREOF. Ordinance 3297 - AN ORDINANCE AMENDING CHAPTER 70 "TRAFFIC AND VEHICLES" OF THE CODE OF ORDINANCES OF THE CITY OF LA PORTE BY AMENDING ARTICLE V, "STOPPING, STANDING, AND PARKING" TO ADD NEW SECTION 70-183 "REMOVAL OF VEHICLES OR OTHER PROPERTY FROM A STREET WHEN MEETING CRITERIA ESTABLISHED THEREIN; CONTAINING A SEVERABILITY CLAUSE; FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW; PROVIDING THAT ANY PERSON VIOLATING THE TERMS OF THIS ORDINANCE SHALL BE DEEMED GUILTY OF A MISDEMEANOR AND UPON CONVICTION SHALL BE FINED IN A SUM NOT TO EXCEED TWO HUNDRED DOLLARS ($200.00); PROVIDING FOR THE PUBLICATION OF THE CAPTION HEREOF; AND PROVIDING AN EFFECTIVE DATE HEREOF. Minutes of Regular Meeting and Workshop Meeting of La Porte City Council on November 8, 2010 4 Resolution 2010- 26 - A RESOLUTION ADOPTING SECTION 3 LOCAL OPPORTUNITY PLAN FOR THE TEXAS COMMUNITY DEVELOPMENT BLOCK GRANT (TXCDBG) PROGRAM. Ordinance 3298 - AN ORDINANCE APPROVING AND AUTHORIZING AN AMENDED INTERLOCAL AGREEMENT BETWEEN THE CITY OF LA PORTE AND HARRIS COUNTY FOR VARIOUS BICYCLE-PEDESTRIAN PATHWAY EASEMENTS ON HARRIS COUNTY FLOOD CONTROL PROPERTY, ACCORDING TO THE TERMS OF THE AGREEMENT; MAKING VARIOUS FINDINGS AND PROVISIONS RELATING TO THE SUBJECT; FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW; PROVIDING AN EFFECTIVE DATE HEREOF. Ordinance 3299 - AN ORDINANCE APPROVING AND AUTHORIZING A CONTRACT BETWEEN THE CITY OF LA PORTE AND DR. OSCAR BOULTINGHOUSE, M. D., TO SERVE AS MEDICAL DIRECTOR OF THE DEPARTMENT OF EMERGENCY SERVICE OF THE CITY OF LA PORTE, MAKING VARIOUS FINDINGS AND PROVISIONS RELATING TO THE SUBJECT, FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW; AND PROVIDING AN EFFECTIVE DATE HEREOF. Ordinance 3300 - AN ORDINANCE APPROVING AND AUTHORIZING AN AGREEMENT BETWEEN THE CITY OF LA PORTE AND PATTILLO, BROWN AND HILL, L.L.P., CERTIFIED PUBLIC ACCOUNTANTS, TO AUDIT THE CITY'S GENERAL-PURPOSE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2010, MAKING VARIOUS FINDINGS AND PROVISIONS RELATING TO THE SUBJECT; FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW; AND PROVIDING AN EFFECTIVE DATE HEREOF. Motion was made by Councilmember Clausen to approve items A.B,C,D and F,G,H,I,J,K on the consent aqenda as presented. Second by Councilmember Leonard. Motion carried. Ayes: Engelken, Martin, Clausen, Mosteit, Moser, Leonard, Zemanek and Mayor Rigby Nays: None Abstain: "None Absent: Black Motion was made by Councilmember Clausen to table item 6E until the next meeting. Second by Chuck Engelken. Councilmember Zemanek requested additional discussion. Councilmember Clausen and Councilmember Engelken withdrew motions so the item could be further discussed. Council discussed this item. Motion was made by Councilmember Clausen to table item 6E until the next meeting. Second by Councilmember Engelken. Motion carried. Ayes: Engelken, Martin, Clausen, Mosteit, Moser, Leonard, Zemanek and Mayor Rigby. Minutes of Regular Meeting and Workshop Meeting of La Porte City Council on November 8, 2010 5 Nays: None Abstain: None Absent: Black 7. Consider approval or other action authorizing the appropriation of additional funds to replace heavy duty rescue vehicle for the La Porte Fire Department - D. Ladd Motion was made by Councilmember Enqelken to approve the additions appropriation of funds as presented by Mr. Ladd. Second by Councilmember Moser. Motion carried. Ayes: Mosteit, Clausen, Moser, Martin, Engelken, Leonard, Zemanek and Mayor Leonard Nays: None Abstain: None Absent: Black 8. Consider approval or other action regarding awarding bid #S10006 for Sale of 81 Acre tract on Bay Area Blvd. - S. Cream/R. Bottoms City Manager Ron Bottoms presented summary and recommendation and answered Councils' questions. In addition, representatives John Littman and Kelly Parker from Cushman/Wakefield provided Council with information. Motion was made by Councilmember Enqelken to approve acceptance of hiqh bid to Kuraray America. Inc. as presented by Ms. Cream. Second by Councilmember Leonard. Motion carried. Ayes: Engelken, Martin, Leonard, Mosteit, Moser, Zemanek, Clausen and Mayor Rigby Nays: None Abstain: None Absent: Black 9. The Regular Meeting was closed and the Workshop Meeting was opened at 6:53 p.m. A. Discuss implementation of Fire Control Emergency Services District under Chapter 344 of the Texas Local Government Code and provide staff with direction - D. Ladd Assistant Fire Chief Donald Ladd discussed the Fire Control Emergency Services Districts. Council directed staff to move forward with the establishment of the district. B. Discuss blue roofs and permit fee waivers and provide staff with direction - D. Wilmore Chief Building Official Debbie Wilmore provided an update on travel trailers, permit fees and blue roofs related to Hurricane "Ike". Council directed staff as follows: Minutes of Regular Meeting and Workshop Meeting of La Porte City Council on November 8, 2010 6 Contact property owner at 207 Bay Colony Dr. and determine status. Grant 90 day extension to property located at 208 Bay Colony Dr. and 619 Shady Lane. Extend blue roofs for an additional six months but ensure they are properly maintained and not deteriorating. Staff was also directed to determine a current count of blue roofs and a count again in six months when brought back to City Council for update. Continue fee waiver on all "Ike" related permits until the City Council meeting in six months. C. Discuss K2 Synthetic Marijuana prohibition ordinance and provide staff with direction - K. Adcox Chief Adcox discussed the kinds of synthetic marijuana and an ordinance prohibiting the use, sale and manufacturing of certain smoking substances. Council directed staff to move forward with the ordinance. D. Discuss City of La Porte Beer and Wine Ordinance and provide staff with direction - C. Askins/M. Gillett Assistant City Attorney Clark Askins discussed the Beer and Wine Ordinance. Deb Gallington, 811 Oak Leaf, requested City Council to change the alcohol ordinance. Council directed staff to move forward with amending the ordinance. E. Discuss request of Ceres Container for deannexation of container yard and provide staff with direction. T. Tietjens Council was not in favor of this item and directed staff not to move forward. 10. Close Workshop Meeting and Open Regular Meeting at p.m. Mayor Rigby closed Workshop Meeting and reconvened Regular Meeting at 7:53 p.m. 11. Receive Monthly Drainage and Flooding Report from Staff - Chairman M. Mosteit Chairman Mike Mosteit provided the Drainage and Flooding Report. 12. Receive Monthly Inspection Report from Staff - D. Wilmore Ms. Wilmore provided Council with the monthly Inspection Report Minutes of Regular Meeting and Workshop Meeting of La Porte City Council on November 8, 2010 7 13. Administrative Reports - R. Bottoms November 11, 2010 - Veterans' Day Ceremony - La Porte High School Bulldog Stadium/Main Gym (inclement weather) - 9:30 a.m. November 11, 2010 - Plaza by the Bay Fall Series - Salute to Veterans - 7:00 p.m. - 9:00 p.m. November 13, 2010 - 29th Annual Harvest Banquet - Jennie Riley Center - 7:00 p.m. November 15, 2010 - La Porte Development Corporation Board Meeting - 5:00 p.m. November 18, 2010 - City Hall Thanksgiving Luncheon - Council Chambers 11 :00 a.m. - 1 :00 p.m. November 18, 2010 - Economic Alliance Annual Membership & Awards Banquet - Pasadena Convention Center - 6:00 p.m. Thursday, November 25 and Friday, November 26,2010 Thanksgiving Holidays December 2, 2010 - Christmas on Main Street - 5:00 p.m. - 8:00 p.m. December 10, 2010 - City of La Porte Employee Christmas & Service Awards Banquet- Magical Creations Ballroom - 7:00 p.m. December 13, 2010 - City Council Meeting - 6:00 p.m. 14. Council Comments: Zemanek, Engelken, Mosteit, Clausen, Martin, Moser, and Mayor Rigby A. Matters appearing on agenda B. Recognition of community members, city employees, and upcoming events C. Inquiry of staff regarding specific factual information or existing policy 15. Executive Session - pursuant to provision of the Open Meeting Law, Chapter 551, Texas Government Code, Sections 551.071 through 551.076, 551.087 (consultation with attorney, deliberation regarding real property, deliberation regarding prospective gift or donation personnel matters, deliberation regarding security devices, or excluding a witness during examination of another witness in an investigation , deliberation regarding economic development negotiations) 551.074 (Personnel Matter) Meet to discuss City Manager Goals and Objectives Council retired into Executive Session at 8:10 p.m. Minutes of Regular Meeting and Workshop Meeting of La Porte City Council on November 8, 2010 8 Council reconvened to Regular Meeting and Workshop Meeting at 9:31 p.m. 16. Considerations and possible action on items considered in executive session. There was no action taken. 17. Adjournment Being no further business, the meeting was duly adjourned at 9:32 p.m. Respectfully submitted, .1n aMkdivI/JJ Martha Gillett, TRMC City Secretary .... roved on this 13th day of December 2010. E 'A1em -riJf)~q REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: 11-8-10 Bude:et Requested By: Kl'nith Arlroy Source of Funds: Department: PQli~e Account Number: Report: Resolution: Ordinance: x Amount Budgeted: Amount Requested: Exhibits: Ordinance Amendine: Ord. No. 2006-2901-B Draft Ordinance showinf! Chanf!es Budgeted Item: YES NO SUMMARY & RECOMMENDATION Staff is recommending changes to Chapter 42, "Miscellaneous Offenses", of the Code of Ordinances of the City of La Porte, Article V "Regulation of Sex Offender Residency"; Ordinance Number 2006-2901-B. The changes include: 1. adding three definitions, specifically "minor", "person", and "child safety zone", to Section 42-103; 2. revising Section 42-1 04(b), in order to simplify the way distance is measured when determining prohibited residency areas; 3. adding section 42-105, "Property Owners Prohibited from Renting Real Property to Sex Offenders", making it unlawful for property owners to let or rent to a person who is required to register as a sex offender 4. including two additional Affirmative Defense(s) provision under Section 42-106; 5. revising Section 42-107; allowing for penalties, related to the violations of sex offender residency prohibitions, to be assessed daily. 6. adding Section 42-108 "No Duties Assumed". Action Required bv Council: Approve recommended changes to existing Ordinance No. 2006-2901-B; Chapter 42, Article V, "Regulation of Sex Offender Residency" of the Code of Ordinances of the City of La Porte. II ( ~ /to Date -:[#11' ?f/J/~1 ORDINANCE NO. 3 2 q IJ? AN ORDINANCE AMENDING CHAPTER 42 "MISCELLANEOUS OFFENSES" OF THE CODE OF ORDINANCES OF THE CITY OF LA PORTE BY AMENDING ARTICLE V "REGULATION OF SEX OFFENDER RESIDENCY" , BY ADDING CERTAIN DEFINITIONS; MAKING IT UNLAWFUL FOR CERTAIN SEX OFFENDERS TO RESIDE WITHIN 1000 FEET OF PREMISES WHERE CHILDREN GATHER; PROVIDING FINDINGS OF FACT AND OTHER MATTERS RELATED THERETO; PROVIDING AFFIRMATIVE DEFENSES; PROVIDING FOR A PENALTY; PROVIDING A SEVERABILITY CLAUSE; CONTAINING AN OPEN MEETINGS CLAUSE; PROVIDING FOR THE PUBLICATION OF THE CAPTION HEREOF; AND PROVIDING AN EFFECTIVE DATE HEREOF; WHEREAS, the City of La Porte, Texas (herein, the "City"), being a home-rule city having authority to utilize police power regulation for the health, safety and general welfare of the citizens of the City; and, WHEREAS, the City Council is deeply concerned about the numerous and recent occurrences in our state and elsewhere, whereby sex offenders convicted of sexual offenses involving children, who have been released from custody and repeat the unlawful acts for which they had been originally convicted; and, WHEREAS, the City Council finds from the evidence the recidivism rate for released sex offenders alarmingly high, especially for those who commit their crimes against children; and, WHEREAS, the City is becoming an increasingly attractive place for families with young children; and, WHEREAS, the restrict the will provide City; and City Council finds property available better protection that establishing a policy to for residence of sex offenders for children gathering in the WHEREAS, Article 42.l2(13B) of the Texas Procedure, provides a 1,000 foot safety zone condition of probation for those convicted offenses; and Code of Criminal for children, as a of certain sexual WHEREAS, the laws of the State of Texas, including those found in Chapter 51 of the Texas Local Government Code, and the City Charter provide the City authority to adopt ordinances for the good government, peace, order, and welfare of the municipality; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS: Section 1. The foregoing recitals are hereby found to be true and correct and are hereby adopted by the City Council and made a part hereof for all purposes as findings of fact. Section 2. That the Code of Ordinances, City of La Porte, Texas, Chapter 42 "Miscellaneous Offenses", Article V. "Regulation of Sex Offender Residency" is hereby amended and shall read as follows: "Article V, REGULATION OF SEX OFFENDER RESIDENCY Sec. 42-102. Finding and Intent. The City Council finds that repeat sex offenders, sex offenders that use physical violence and who are convicted of preying on children are sexual predators who present an extreme threat to the health, safety, and welfare of children. Sex offenders are likely to use physical violence, to repeat an offense, have many more victims than are ever reported, are prosecuted for only a fraction of their actual sexual offenses, and children not only lack the ability to protect themselves but additional measures should be taken to keep known sex offenders from having access to children in areas where children generally feel safe. It is the intent of this ordinance to serve the city's compelling interest to promote, protect and improve the health, safety and welfare of the citizens of the City by creating areas around locations where children regularly congregate in concentrated numbers wherein certain registered sex offenders and sexual predators are prohibited from establishing temporary or permanent residency. Section 42-103. Definitions. The following section, shall section, except meaning; words, have where terms, and phrases; when used the meanings ascribed to them the context clearly indicates a in this in this different Chi~d Safety Zone is a premise where children commonly gather, including a school, day-care facility, playground, public or private youth center, public swimming pool, or video arcade facility. A "playground", "premises", "school", "video arcade facility", and "youth center" have the meanings assigned by Section 481.134 of the Texas Health and Safety Code and as defined by Article 42.12 Section 13D (a) (2) (d) of the Texas Code of Criminal Procedure. Minor is an individual younger than 17 years of age as defined by Section 15.031 of the Texas Penal Code. Permanent residence is a place where a person abides, lodges, or resides for fourteen (14) or more consecutive days. Person is an individual, firm, corporation, or other business entity as defined by Chapter 1.07(a) (38) of the Texas Penal Code. T~orary Residence is: a) a place where a person abides, lodges, or resides for fourteen (14) or more days in the aggregate during any calendar year and which is not the person's permanent address; or b) a place where a person routinely abides, resides, or lodges for a period of 4 or more consecutive days in any month and which is not the person's permanent residence. Sec. 42-104. Sex Offender Residency Prohibition. (a) If a person is required to register on the Department of Public Safety's Sex Offender Database because of a violation involving a victim who was less than seventeen (17) years of age, it is unlawful for that person to establish a permanent residence or temporary residence within 1000 feet of any premise where children commonly gather, including a playground, school, video arcade facility, public or private youth center, or public swimming pool, as those terms are defined in Section 481.134 of the Texas Health and Safety Code, or a child care facility, as that term is defined in Section 42.002 of the Texas Human Resources Code. It shall be prima facie evidence that this article applies to such a person if the person's record appears on the Database and the Database indicates that the victim was less than seventeen (17) years of age. (b) For the purpose of determining the minimum distance of separation, the requirement shall be measured by following a straight line from the outer property line of the permanent or temporary residence to the nearest property line of the premises where children commonly gather, as described herein, or in the case of multiple residences on one property, measuring from the outer property line of the multi-residence premises following a straight line to the nearest property line of the premises where children commonly gather, as described herein. A map generally depicting the prohibited areas is attached to this ordinance for representation purposes. The City shall review the map at least annually for changes, and it will be available at the La Porte Police Department. (c) Nothing in this ordinance shall be interpreted to modify or reduce the State's child safety zone ban. (d) Neither allegation nor evidence of a culpable mental state is required for the proof of an offense defined in this Article. Sec. 42-105. Property Owners Prohibited from Renting Real Property to Sex Offenders It is unlawful to let or rent any place, structure or part thereof, with the knowledge that it will be used as a permanent residence by any person prohibited from establishing such permanent residence pursuant to the terms of this article, if such place, structure or part thereof, is located wi thin one thousand (1,000) feet as defined in section 42-104, of any premises where children commonly gather, including a playground, school, day care facility, video arcade facility, public or private youth center, neighborhood, or public swimming pool, as those terms are defined in Section 481.134 of the Health and Safety Code of the State of Texas. Prior to renting any premises, all persons renting property in the City of La Porte for permanent residence are required to first check the resident through the Texas Department of Public Safety Registered Sex Offender website at https://records.txdps.state.tx.us/DPS WEB/Sor/index.aspx?PageInd ex=Caveats&SubmitType=Name) or contact the La Porte Police Department to obtain necessary information to assure compliance with this article. Sec. 42-106. Affirmative Defenses. It is an affirmative defense to prosecution under this article that any of the following conditions apply: 1) The person established the permanent or temporary residence has complied with all the sex offender registration laws of the State of Texas, prior to the date of the adoption of this ordinance. The person established the permanent residence prior to conviction of an offense requiring sex offender registration as defined in Chapter 62 of the Texas Code of Criminal Procedure. The person was a minor when he/she committed the offense and was not convicted as an adult. The person is a minor. The premises where children commonly gather, as specified herein, within 1000 feet of the person's permanent or temporary residence was 2 ) 3) 4 ) 5) opened after the person established the permanent or temporary residence was opened after the person established the permanent or temporary residence and complied with all sex offender registration laws of the State of Texas. 6) The person proves that the information on the Database is incorrect and that, if corrected, this chapter would not apply to the person. 7) The person is under an order of a court of competent jurisdiction in the State of Texas or of the Texas Department of Criminal Justice Parole Board instructing the person to reside at a location within 1000 feet of any premises where children commonly gather. 8) In the case of persons renting property, the property owner conducted a criminal history check wi th the Texas Department of Public Safety and reviewed the Department of Public Safety's sexual predator registration database and that at the time the property owner conducted the criminal history check and reviewed the sexual predator database, the sexual offender's criminal history did not include a record of a sexual offense and the offender's name did not appear in the database. Sec. 42-107. Penalty for violation of this Article. Any person who violates any provision or requirement hereof and is convicted in the municipal court of this city of violating any provision, restriction, requirement, or prohibition of this chapter shall be guilty of a misdemeanor and subject to a fine, in a sum of not more than five hundred dollars ($500.00) for each violation, as listed in Appendix B of this Code. A separate offense shall be deemed committed on each day on which a violation occurs. Sec. 42-108. No Duty Assumed. In undertaking the enforcement of this Ordinance, the City of La Porte is assuming an undertaking only to promote the general health, safety and welfare of its citizens. The City of La Porte is not assuming any duty or obligation, nor is it imposing any duty and/or obligation on its officers and/or employees, nor is it liable in money damages or otherwise to any person who claims that the City of La Porte and/or one of its officers and/or employees breached any such obligation and the breach proximately caused injury." Section 3. The City of La Porte hereby encourages each individual, company, real estate agent, broker, vendor or dealer selling a home or other dwelling, or individual or entity renting or leasing an apartment, home, or other dwelling, when the property that is the subject of the sale or lease is located within the corporate limits of the City of La Porte, to notify a perspective purchaser or renter of this ordinance by providing a written copy of this ordinance or Information Sheet available from the La Porte Police Department to the purchaser or renter. Section 4. The City of La Porte hereby encourages each operator of each child care facility, as that term is defined in Texas Human Resources Code, Section 42.002, to immediately notify the City of La Porte at such time as the child care facility should lose, surrender, or otherwise no longer retain a license from the Texas Department of Family and Protective Services to operate wi thin the City of La Porte. Notice shall be provided to the Office of the City Secretary of the city of La Porte at 604 West Fairmont Parkway, La Porte, Texas 77571, by written letter transmitted through regular mail. Section 5. Open Meetings. The City Council officially finds, determines, recites, and declares that 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 Ci ty 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 6. Severability. Should any section or part of this ordinance be held unconstitutional, illegal, or invalid, or the application to any person or circumstance for any reasons thereof ineffective or inapplicable, such unconstitutionality, illegali ty, invalidity, or ineffectiveness of such section or part shall in no way affect, impair or invalidate the remaining portions thereof; but as to such remaining portion or portions, the same shall be and remain in full force and effect and to this end the provisions of this ordinance are declared to be severable. Section 7. Effective Date. fourteen (14) days after This Ordinance its passage and shall be approval. effective The City Secretary shall give notice of the passage of this ordinance by causing the caption hereof to be published in the official newspaper of the City of La Porte at least once within ten (10) days after the passage of this ordinance, in accordance with the provisions of Chapter 52, Texas Local Government Code, and the City of La Porte Charter. PASSED AND APPROVED on the first reading on the 2010. day of By: Louis R. Rigby Mayor ATTEST: l' ftm -J-If/J)./tf Martha A. Gillett City Secretary APPROVED: tlA '0 ~ Clark T. Askins Assistant City Attorney ORDINANCE NO. p~Yh ~b)~ AN ORDINANCE AMENDING CHAPTER 42 "MISCELLANEOUS OFFENSES" OF THE CODE OF ORDINANCES OF THE CITY OF LA PORTE BY AMENDING ARTICLE V "REGULATION OF SEX OFFENDER RESIDENCY", BY ADDING CERTAIN DEFINITIONS; MAKING IT UNLAWFUL FOR CERTAIN SEX OFFENDERS TO RESIDE WITHIN 1000 FEET OF PREMISES WHERE CHILDREN GATHER; PROVIDING FINDINGS OF FACT AND OTHER MATTERS RELATED THERETO; PROVIDING AFFIRMATIVE DEFENSES; PROVIDING FOR A PENALTY; PROVIDING A SEVERABILITY CLAUSE; CONTAINING AN OPEN MEETINGS CLAUSE; PROVIDING FOR THE PUBLICATION OF THE CAPTION HEREOF; AND PROVIDING AN EFFECTIVE DATE HEREOF; WHEREAS, the City of La Porte, Texas (herein, the "City"), being a horne-rule city having authority to utilize police power regulation for the health, safety and general welfare of the citizens of the City; and, WHEREAS, the City Council is deeply concerned about the numerous and recent occurrences in our state and elsewhere, whereby sex offenders convicted of sexual offenses involving children, who have been released from custody and repeat the unlawful acts for which they had been originally convicted; and, WHEREAS, the City Council finds from the evidence the recidivism rate for released sex offenders alarmingly high, especially for those who commit their crimes against children; and, WHEREAS, the City is becoming an increasingly attractive place for families with young children; and, WHEREAS, the restrict the will provide City; and Ci ty Council finds property available better protection that establishing a policy to for residence of sex offenders for children gathering in the WHEREAS, Article 42.12(13B) Procedure, provides a 1,000 condi tion of probation for offenses; and of the Texas Code of Criminal foot safety zone for children, as a those convicted of certain sexual WHEREAS, the laws of the State of Texas, including those found in Chapter 51 of the Texas Local Government Code, and the City Charter provide the City authority to adopt ordinances for the good government, peace, order, and welfare of the municipality; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS: Section 1. The foregoing recitals are hereby found to be true and correct and are hereby adopted by the City Council and made a part hereof for all purposes as findings of fact. Section 2. That the Code of Ordinances, City of La Porte, Texas, Chapter 42 "Miscellaneous Offenses", Article V. "Regulation of Sex Offender Residency" is hereby amended and shall read as follows: "Article V, REGULATION OF SEX OFFENDER RESIDENCY Sec. 42-102. Finding and Intent. The City Council finds that repeat sex offenders, sex offenders that use physical violence and who are convicted of preying on children are sexual predators who present an extreme threat to the health, safety, and welfare of children. Sex offenders are likely to use physical violence, to repeat an offense, have many more victims than are ever reported, are prosecuted for only a fraction of their actual sexual offenses, and children not only lack the ability to protect themselves but additional measures should be taken to keep known sex offenders from having access to children in areas where children generally feel safe. It lS the intent of this ordinance to serve the city's compelling interest to promote, protect and improve the health, safety and welfare of the citizens of the City by creating areas around locations where children regularly congregate in concentrated numbers wherein certain registered sex offenders and sexual predators are prohibited from establishing temporary or permanent residency. Section 42-103. Definitions. The following section, shall section, except meaning; words, terms, and phrases; when used have the meanings ascribed to them where the context clearly indicates a in this in this different Chi~d Safety Zone is a premise where children commonly gather, including a school, day-care facility, playground, public or private youth center, public swimming pool, or video arcade facility. A "playground", "premises" I "school" I "video arcade facility", and "youth center" have the meanings assigned by Section 481.134 of the Texas Health and Safety Code and as defined by Article 42.12 Section 13D (a) (2) (d) of the Texas Code of Criminal Procedure. ~nor is an individual younger than 17 years of age as defined by Section 15.031 of the Texas Penal Code. Permanent residence is a place where a person abides, lodges, or resides for fourteen (14) or more consecutive days. Person entity Code. is as an individual, firm, defined by Chapter corporation, or other business 1.07(a) (38) of the Texas Penal Temporary Residence is: a) a place where a person abides, lodges, or resides for fourteen (14) or more days in the aggregate during any calendar year and which is not the person's permanent address; or b) a place where a person routinely abides, resides, or lodges for a period of 4 or more consecutive days in any month and which is not the person's permanent residence. Sec. 42-104. Exception:] . Sex Offender Residency Prohibition. ; Penalty; and (a) If a person is required to register on the Department of Public Safety's Sex Offender Database because of a violation involving a victim who was less than seventeen (17) years of age, it is unlawful for that person to establish a permanent residence or temporary residence within 1000 feet of any premise where children commonly gather, including a playground, school, video arcade facility, public or private youth center, or public swimming pool, as those terms are defined in Section 481.134 of the Texas Health and Safety Code, or a child care facility, as that term is defined in Section 42.002 of the Texas Human Resources Code. It shall be prima facie evidence that this article applies to such a person if the person's record appears on the Database and the Database indicates that the victim was less than seventeen (17) years of age. (b) For the purpose of determining the minimum distance of separation, the requirement shall be measured by following a straight line from the outer property line of the permanent or temporary residence to the nearest property line of the premises where children commonly gather, as described herein, or in the case of multiple residences on one property, measuring from the ne~rect ~J~ll of the building or Gtructure occupied or the p~rking/drivew~y, ~hichever is cloGer outer property line of the multi-residence premises following a straight line to the nearest property line of the premises where children commonly gather, as described herein. A map generally depicting the prohibited areas is attached to this ordinance for representation purposes. The City shall review the map at least annually for changes, and it will be available at the La Porte Police Department. (c) Nothing in this ordinance shall be interpreted to modify or reduce the State's child safety zone ban. (d) Neither allegation nor evidence of a culpable mental state is required for the proof of an offense defined in this Article. Sec. 42-105. Property Owners Prohibited from Renting Real Property to Sex Offenders. It is unlawful to let or rent any place, structure or part thereof, with the knowledge that it will be used as a permanent residence by any person prohibited from establishing such permanent residence pursuant to the terms of this article, if such place, structure or part thereof, is located within one thousand (1,000) feet as defined in section 42-104, of any premises where children commonly gather, including a playground, school, day care facility, video arcade facility, public or private youth center, neighborhood, or public swimming pool, as those terms are defined in Section 481.134 of the Health and Safety Code of the State of Texas. Prior to renting any premises, all persons renting property in the City of La Porte for permanent residence are required to first check the resident through the Texas Department of Public Safety Registered Sex Offender website at https://records.txdps.state.tx.us/DPS WEB/Sor/index.aspx?PageInd ex=Caveats&SubmitType=Name) or contact the La Porte Police Department to obtain necessary information to assure compliance with this article. Sec. 42-1056. Affirmative Defenses. It is an affirmative defense to prosecution under this article that any of the following conditions apply: 1) The person established the permanent or temporary residence has complied with all the sex offender registration laws of the State of Texas, prior to the date of the adoption of this ordinance. 2) The person established the permanent residence prior to conviction of an offense requiring sex offender registration as defined in Chapter 62 of the Texas Code of Criminal Procedure. 3) The person was a minor when he/she committed the offense and was not convicted as an adult. 4) The person is a minor. 5) The premises where children commonly gather, as specified herein, within 1000 feet of the person's permanent or temporary residence was opened after the person established the permanent or temporary residence was opened after the person established the permanent or temporary residence and complied with all sex offender registration laws of the State of Texas. 6) The person proves that the information on the Database is incorrect and that, if corrected, this chapter would not apply to the person. 7) The person is under an order of a court of competent jurisdiction in the State of Texas or of the Texas Department of Criminal Justice Parole Board instructing the person to reside at a location within 1000 feet of any premises where children commonly gather. 8) In the case of persons renting property, the property owner conducted a criminal history check with the Texas Department of Public Safety and reviewed the Department of Public Safety's sexual predator registration database and that at the time the property owner conducted the criminal history check and reviewed the sexual predator database, the sexual offender's criminal history did not include a record of a sexual offense and the offender's name did not appear in the database. Sec. 42-10~7. Penalty for violation of this Article. ^ny Person, ~~ the term ~Per~on" i~ defined in the Tex~s Pen~l Code, '..ho TvTiol~te~ thi~ 7\rticle ~nd upon cowvTiction in the munieip~l court of this city, sh~ll be guilty of ~ mi~deme~nor ~nd ~ubject to ~ fine for e~ch offen~e in ~n ~mount e~t~bli~hed by the City ~nd listed in l\.ppendix B of thic Code, but in no event ~hall ~ueh fine exceed $500." Any person who violates any provision or requirement hereof and is convicted in the municipal court of this city of violating any provision, restriction, requirement, or prohibition of this chapter shall be guilty of a misdemeanor and subject to a fine, in a sum of not more than five hundred dollars ($500.00) for each violation, as listed in Appendix B of this Code. A separate offense shall be deemed committed on each day on which a violation occurs. Sec. 42.108. No Duty Assumed In undertaking the enforcement of this Ordinance, the City of La Porte is assuming an undertaking only to promote the general health, safety and welfare of its citizens. The City of La Porte is not assuming any duty or obligation, nor is it imposing any duty and/or obligation on its officers and/or employees, nor is it liable in money damages or otherwise to any person who claims that the City of La Porte and/or one of its officers and/or employees breached any such obligation and the breach proximately caused injury." Section 3. The City of La Porte hereby encourages each individual, company, real estate agent, broker, vendor or dealer selling a home or other dwelling, or individual or entity renting or leasing an apartment, home, or other dwelling, when the property that is the subject of the sale or lease is located within the corporate limits of the City of La Porte, to notify a perspective purchaser or renter of this ordinance by providing a written copy of this ordinance or Information Sheet available from the La Porte Police Department to the purchaser or renter. Section 4. The City of La Porte hereby encourages each operator of each child care facility, as that term is defined in Texas Human Resources Code, Section 42.002, to immediately notify the City of La Porte at such time as the child care facility should lose, surrender, or otherwise no longer retain a license from the Texas Department of Family and Protective Services to operate wi thin the City of La Porte. Notice shall be provided to the Office of the City Secretary of the city of La Porte at 604 West Fairmont Parkway, La Porte, Texas 77571, by written letter transmitted through regular mail. Section 5. Open Meetings. The City Council officially finds, determines, recites, and declares that 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 6. Severability. Should any section or part ordinance be held unconstitutional, illegal, or invalid, application to any person or circumstance for any of this or the reasons thereof ineffective or inapplicable, such unconsti tutionali ty, illegality, invalidity, or ineffectiveness of such section or part shall in no way affect, impair or invalidate the remaining portions thereof; but as to such remaining portion or portions, the same shall be and remain in full force and effect and to this end the provisions of this ordinance are declared to be severable. Section 7. Effective Date. This Ordinance shall be effective fourteen (14) days after its passage and approval. The City Secretary shall give notice of the passage of this ordinance by causing the caption hereof to be published in the official newspaper of the City of La Porte at least t.:icc once within ten (10) days after the passage of this ordinance, in accordance with the provisions of Chapter 52, Texas Local Government Code, and the City of La Porte Charter. PASSED AND APPROVED on the first reading on the 2010. day of By: Louis R. Rigby Mayor ATTEST: Martha A. Gillett City Secretary APPROVED: Clark T. Askins Assistant City Attorney F REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: 11-8-10 Budl!et Requested By: Kenith Adcox Source of Funds: Department: Police Account Number: Report: Resolution: Ordinance: x Amount Budgeted: Amount Requested: Exhibits: Ordinance - Amendinl! Chapter 70 "Traffic & Vehicles" of the Code of Ordinances. Addinl! New Section 70-183 "Removal of Vehicles or Other Property from Streets" Draft Ordinance showinl! revision made after item was presented in Workshop 10-25-10 Budgeted Item: YES NO SUMMARY & RECOMMENDATION Staff is recommending an amendment to Chapter 70, "Traffic and Vehicles", of the Code of Ordinances of the City of La Porte, by adding a new Section 70-183 "Removal of Vehicles and Other Property from Streets," which will authorize the La Porte Police Department to tow private vehicles under certain conditions, including, but not limited to, when a vehicle is stopped for a traffic violation and the driver is unable to provide proof of financial responsibility. Action Required bv Council: Approve Ordinance adding Section 70-183 to Chapter 70, Traffic and Vehicles, of the Code of Ordinances of the City of La Porte. Ron Bottoms, City Manager II ( ) /to Date ORDINANCE NO. 3:2Q, AN ORDINANCE AMENDING CHAPTER 70 "TRAFFIC AND VEHICLES" OF THE CODE OF ORDINANCES OF THE CITY OF LA PORTE BY AMENDING ARTICLE V. "STOPPING, STANDING, AND PARKING" TO ADD NEW SECTION 70-183 "REMOVAL OF VEHICLES OR OTHER PROPERTY FROM STREETS", TO AUTHORIZE THE REMOVAL OF MOTOR VEHICLES OR OTHER PROPERTY FROM A STREET WHEN MEETING CRITERIA ESTABLISHED THEREIN; CONTAINING A SEVERABILITY CLAUSE; FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW; PROVIDING THAT ANY PERSON VIOLATING THE TERMS OF THIS ORDINANCE SHALL BE DEEMED GUILTY OF A MISDEMEANOR AND UPON CONVICTION SHALL BE FINED IN A SUM NOT TO EXCEED TWO HUNDRED DOLLARS ($200.00); PROVIDING FOR THE PUBLICATION OF THE CAPTION HEREOF; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of La Porte, Texas (herein, the "City"), being a home-rule city having authority to utilize police power regulation for the health, safety and general welfare of the citizens of the City; and, WHEREAS, the laws of the State of Texas, including those found in Chapter 51 of the Texas Local Government Code, and the La Porte City Charter provide the City authority to adopt ordinances for the good government, peace, order, and welfare of the municipality; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS: Section 1. The foregoing recitals are hereby found to be true and correct and are hereby adopted by the City Council and made a part hereof for all purposes as findings of fact. Section 2. Chapter 70 "Traffic and Vehicles", Article V. "Stopping, Standing, and Parking" of the Code of Ordinances of the City of La Porte, Texas, is hereby amended by adding new Section 70-183 "Removal of vehicles or other property from streets", which shall read as follows: "(a) A police officer is authorized to remove or cause the removal of a vehicle or other property of any description from a street, pursuant to guidelines established under Chapter 78, Article III, Division 4 of this Code for towing of motor vehicles, when: (1) the vehicle or property is left unattended upon a bridge or viaduct or in a tunnel or underpass; (2) the vehicle is illegally parked so as to block the entrance to any private driveway; (3) the vehicle is found upon a street and a report has previously been made that the vehicle has been stolen or a complaint has been filed and a warrant issued charging that the vehicle has been unlawfully taken from the owner; (4) the officer has reasonable grounds to believe that the vehicle has been abandoned; (5) a vehicle upon a street is so disabled that its normal operation is impossible, impractical, or unsafe and/or the person or persons in charge of the vehicle are incapacitated by reason of physical injury or other reason to such an extent as to be unable to provide for its removal or custody, or are not in the immediate vicinity of the disabled vehicle. (6) An officer arrests any person driving or in control of a vehicle for an alleged offense and the officer is by law required to take that person arrested immediately before a magistrate. (7) The vehicle is standing, parked, or stopped in any portion of a street, and the officer has reason to believe that the vehicle constitutes a hazard or interferes with the normal function of a governmental agency or that the safety of the vehicles is imperiled; (8) The vehicle is standing, parked, or stopped in violation of regulations established under this Code or state law; (9) The vehicle is in an accident and the vehicle's owner or operator fails to show evidence of financial responsibility as required under Chapter 601 of the Texas Transportation Code, as amended; or (10) The vehicle is stopped by a police officer for an alleged violation of a city or state traffic law or other law applicable to the operation of a vehicle on the roadway and the vehicle's owner or operator fails to show evidence of financial responsibility as required under Chapter 601 of the Texas Transportation Code, as amended. (11) The vehicle is authorized or required to be towed by other applicable city ordinance, code, state or federal law. (b) A police officer may, at his or her discretion, with the permission of an arrested person, leave an arrested person's vehicle at the scene of the arrest or other location. In these instances, the arresting officer shall ensure that the vehicle is legally parked and secured and not otherwise in violation of any applicable city ordinance, code, state or federal law. (c) No vehicle that has been towed under items 9 or 10 of this Section may be released to an owner or other responsible party until proof of financial responsibility satisfying the requirements of Chapter 601 of the Texas Transportation has been provided to the La Porte Police Department. Once verified, the Department will issue a release form, authorizing the towing service to release the vehicle." Section 3. Chapter 70 "Traffic and Vehicles" of the Code of Ordinances of the City of La Porte, Sees. 70-183-70-210. - "Reserved." is hereby amended to read as follows: "Sees. 70-184-70-210 - Reserved." Section 4. Penalty. Any person who violates any provision or requirement of this ordinance shall be guilty of a misdemeanor and subject to a fine in a sum of not more than two hundred dollars ($200.00) for eaeh violation. Section 5. Open Meetings. The City Council officially finds, determines, recites, and declares that 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 6. Severability. Should any section or part of this ordinance be held unconstitutional, illegal, or invalid, or the application to any person or circumstance for any reasons thereof ineffective or inapplicable, such unconstitutionality, illegality, invalidity, or ineffectiveness of such section or part shall in no way affect, impair or invalidate the remaining portions thereof; but as to such remaining portion or portions, the same shall be and remain in full force and effect and to this end the provisions of this ordinance are declared to be severable. Section 7. Effective Date. This Ordinance shall be effective fourteen (14) days after its passage and approval. The City Secretary shall give notice of the passage of this ordinance by causing the caption hereof to be published in the official newspaper of the City of La Porte at least once within ten (10) days after the passage of this ordinance, in accordance with the provisions of Chapter 52, Texas Local Government Code, and the City of La Porte Charter. By: 2010. PASSED AND APPROVED on the first reading on the Mayor ATTEST: ~ 114,;1411 Martha A. Gillett City Secretary AP~ 7~ Clark T. Askins Assistant City Attorney G REQUEST FOR CITY COUNCIL AGENDA ITEM Appropriation Agenda Date Requested: November 8. 2010 Source of Funds: N/A Requested By: Tim Tietiens Account Number: N/A Department: Planninl! Amount Budgeted: N/A Report: _Resolution: ,lOrdinance:_ Amount Requested: N/A Exhibits: Resolution with Section 3 Local Opportunity Plan Budgeted Item: _YES _NO SUMMARY A Resolution adopting a Section 3 Local Opportunity Plan for the Hurricane Ike Texas Community Development Block Grant (COB G) Program. Section 3 is a COSG regulation designed to provide work opportunities for low-moderate income residents and businesses when possible. Grant recipients using Texas CDSG funding for housing or other public construction are required, to the greatest extent feasible, to provide employment opportunities to lower income residents and contract opportunities to businesses in the project area. Program funding is contingent upon approval of this Resolution. Action Required bv Council: approval of a Resolution adopting a Section 3 Local Opportunity Plan for the projects funded by Community Development Block Grant Program. II L~/ID Date RESOLUTION NO. 2010- 2&; A RESOLUTION ADOPTING A SECTION 3 LOCAL OPPORTUNITY PLAN FOR THE TEXAS COMMUNITY DEVELOPMENT BLOCK GRANT (TXCDBG) PROGRAM. WHEREAS, participation in the TXCDBG Program requires the City to strive to attain goals for compliance with Section 3 regulations by increasing opportunities for employment and by contracting with Section 3 residents and businesses within its jurisdictional boundaries in accordance with an adopted Section 3 Local Opportunity Plan. THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS THAT: SECTION 1. The City Council hereby resolves to adopt a Section 3 Local Opportunity Plan, attached hereto and incorporated herein. PASSED AND APPROVED this the 8th day of November, 2010. ATTEST: '-IJ144A'~ City Secretary t1~r~ Assistant City Attorney SECTION 3 LOCAL OPPORTUNITY PLAN In accordance with 12 U.S.C. 1701 u, (Section 3), the City of La Porte agrees to implement the following steps, which, to the greatest extent feasible, will provide job training, employment and contracting opportunities for Section 3 residents and Section 3 businesses of the areas in which the program/project is being carried out. A. Introduce and pass a resolution adopting this plan as a policy to strive to attain goals for compliance to Section 3 regulations by increasing opportunities for employment and contracting for Section 3 residents and businesses. 8. Assign duties related to implementation of this plan to the designated Equal Rights Officer. C. Notify Section 3 residents and business concerns of potential new employment and contracting opportunities as they are triggered by TxCD8G grant awards through the use of: Public Hearings and related advertisements; public notices; bidding advertisements and bid documents; notification to local business organizations such as the Chamber(s) of Commerce or the Urban League; local advertising media including public signage; project area committees and citizen advisory boards; local HUD offices; regional planning agencies; and all other appropriate referral sources. Include Section 3 clauses in all covered solicitations and contracts. D. Maintain a list of those businesses that have identified themselves as Section 3 businesses for utilization in TxCD8G funded procurements, notify those businesses of pending contractual opportunities, and make this list available for general Grant Recipient procurement needs. E. Maintain a list of those persons who have identified themselves as Section 3 residents and contact those persons when hiring/training opportunities are available through either the Grant Recipient or contractors. F. Require that all Prime contractors and subcontractors with contracts over $100,000 commit to this plan as part of their contract work. Monitor the contractors' performance with respect to meeting Section 3 requirements and require that they submit reports as may be required by HUD or TDRA to the Grant Recipient. G. Submit reports as required by HUD or TDRA regarding contracting with Section 3 businesses and/or employment as they occur; and submit reports within 20 days of calendar year end which identify and quantify Section 3 businesses and employees. M intain records, including copies of correspondence, memoranda, etc., which do u ent all actions aken to comply with Section 3 regulations. es of the City of La Porte, we the undersigned have read , and become a party to the full implementation of this (( /J ;;.. Date H REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: November 8, 2010 Appropriation Requested By: Stephen L. Barr Source of Funds: Department: Parks & Recreation Acc't Number: Report: _Resolution: _Ordinance: ~ Amount Budgeted: N/A Exhibits: Ordinance Amount Requested: N/A Exhibits: Interlocal Agreement - HC - CoLP Bud!!eted Item: YES X NO Exhibits: SUMMARY & RECOMMENDATION At the January 14, 2008 City Council meeting, the Council approved an Interlocal Agreement with Harris County Flood Control District to provide a bicycle-pedestrian easement on flood control property at the Little Cedar Bayou, Big Island Slough, Spring Gulley, and Willow Spring Gulley crossings. The bicycle- pedestrian trail Master Plan calls for additional easements on HCFCD property at various places throughout the City of La Porte. Staff has worked with Harris County Flood Control to identify all of the proposed future sites where easements will be required, and bundled them into a single Amendment to the existing Interlocal Agreement rather than having to amend the agreement for each future trail addition. Staff is recommending that the ordinance authorizing the inclusion of these additional easements to allow for their future use by the City of La Porte be approved, as a continuation of the City's Bicycle-Pedestrian Trail Plan. Action Required bv Council: Consider approval of an ordinance authorizing the Mayor to approve an Amended Interlocal Agre ent etween the City of La Porte and Harris County to provide bicycle- pedestrian easements at va 'ous sit on HCFCD property as provided in the Agreement. I/hh Date Ron Bottoms, City Manager ORDINANCE NO. 2010- 32 q 3 AN ORDINANCE APPROVING AND AUTHORIZING AN AMENDED INTERLOCAL AGREEMENT BETWEEN THE CITY OF LA PORTE AND HARRIS COUNTY FOR VARIOUS BICYCLE-PEDESTRIAN PATHWAY EASEMENTS ON HARRS COUNTY FLOOD CONTROL PROPERTY, ACCORDING TO THE TERMS OF THE AGREEMENT; MAKING VARIOUS FINDINGS AND PROVISIONS RELATING TO THE SUBJECT; 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. The City Council hereby approves and authorizes the contract, agreement, or other undertaking described in the title of this ordinance, a copy of which is on file in the office of the City Secretary. The Mayor is hereby authorized to execute such document and all related documents on behalf of the City of La Porte. The City Secretary is hereby authorized to attest to all such signatures and to affix the seal of the City to all such documents. 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 and posting thereof. Page 1 of2 Section 3. This Ordinance shall be effective from and after its passage and approval, and it is so ordered. PASSED AND APPROVED, this 8TH day of November, 2010. CITY OF LA PORTE By: ATTEST: fYl~Au/I Martha Gillett, City Secretary APPROVED AS TO FORM: /~ I. ~ Clark T. Askins, Assistant City Attorney Page 2 of2 AMENDMENTTOINTERLOCALAGREEMENT THE STATE OF TEXAS ~ ~ COUNTY OF HARRIS ~ THIS AMENDMENT TO AN INTERLOCAL AGREEMENT is made, entered into, and executed by and between the Harris County Flood Control District, a body corporate and politic under the laws of the State of Texas, hereinafter referred to as the "District" or "HCFCD," and the City of La Porte, a municipal corporation, hereinafter referred to as the "City." WITNESSETH, that WHEREAS, the District and the City previously entered into an Interlocal Agreement executed on September 15, 2009, hereinafter referred to as the "Original Agreement," to construct and maintain, or cause to be constructed and maintained, a 10-foot wide public hike and bike trail with related appurtenances across HCFCD Units B106-00-00, B109-00-00, B509-03-00, and F216-00-00 to extend from the Pasadena Convention Center, on the South side of Fairmont Parkway to Little Cedar Bayou Park on the East side of Highway 146 approximately 5.2 miles in length and 10 feet wide, hereinafter referred to as the "Trail"; and WHEREAS, the City and the District desire to amend the Original Agreement to allow the City to add additional lands to be covered by the 1 O-foot wide hike and bike trail, to wit, additional locations at or near the same HCFCD Units listed in the Original Agreement, and certain other lands at or near HCFCD Units A104-00-00, B106-02-00, B109-03-00, F101-00-00, F101-06-00, and F212-00-00, and Lots 66, 67, and 68, Block 1, Brookglen Section Two Replat, a subdivision in Harris County, Texas being out of HCFCD Unit B100-00-00, Tract Nos. 07-811.00, 07-812.0 and 07-824; and WHEREAS, the District owns or has easement rights in real property in Harris County, Texas, designated by the HCFCD Unit Nos. included in the Trail and shown in Exhibit "A" (hereinafter the "Property"), and is willing to allow the City to use the portion of the Property owned in fee by the District and the District has no objection to the City using the portion of the Property in which the District owns an easement for such purpose, with the understanding that the City will acquire the additional right, title, or interest as needed for the construction and maintenance of the Trail at no cost to the District; and WHEREAS, The City has prepared a new map or layout of the proposed alignment of the 10-foot wide, public hike and bike trail with related appurtenances reflecting the entire proposed alignment of the trail including the additional locations, which has been reviewed and approved by the District personnel and is shown in an amended Exhibit "A," which is attached hereto for descriptive purposes only and will replace Exhibit "A" of the Original Agreement; said alignment hereinafter referred to as the "Trail;" and NOW, THEREFORE, in consideration of the mutual covenants, agreements and benefits to both parties, it is agreed as follows: EXHIBIT "A" in the Original Agreement has been amended to include the collective proposed alignment of the Trails. Article I. of the Original Agreement, entitled, "Plans and Specifications," reading: After the approval of this Agreement by the Commissioners Court of Harris County, the City will furnish the District, for the District's written approval, detailed construction plans and specifications (hereinafter the "Plans and Specifications") for the Project. After the approval of the Plans and Specifications by an authorized representative of the District, the District representative will so notify the City that the District allows the City's use of the following described Property situated in the County of Harris, State of Texas, for the purpose of constructing and maintaining the Trail: a 10-foot wide public hike and bike trail with related appurtenances across HCFCD Units 8106-00-00, 8109-00-00, 8509-03-00, and F216-00-00 to extend from the Pasadena Convention Center, on the south side of Fairmont Parkway to Little Cedar 8ayou Park on the east side of Highway 146 approximately 5.2 miles in length. Is hereby amended to read: After the approval of this Amendment to the Interlocal Agreement by the Commissioners Court of Harris County, the City will furnish the District, for the District's written approval, detailed construction plans and specifications (hereinafter the "Plans and Specifications") for the Trail. After the approval of the Plans and Specifications by an authorized representative of the District, the District representative will so notify the City that the District allows the City's use of the following described Property situated in the County of Harris, State of Texas, for the purpose of constructing and maintaining the Trail: 10-foot wide public hike and bike trails with related appurtenances on, over, across and through certain lands along various HCFCD Units within Harris County, Texas, including but not limited to, HCFCD Units A104-00-00, 8106-00-00, 8106-02-00, 8109-00-00, 8109-03-00, 8509-03-00, F101-00-00, F101-06-00, F212-00-00, and F216-00-00 and Lots 66, 67, and 68, 810ck 1, 8rookglen Section Two Replat, a subdivision in Harris County, Texas being out of HCFCD Unit 8100-00-00, Tract Nos. 07-811.00, 07-812.0 and 07-824.0. Article IX. of the Original Agreement, entitled, "Notices," reading: All notices shall be given to the District by registered or certified mail, postage prepaid, return receipt requested, addressed to Harris County Flood Control District, Attention: Director, 9900 Northwest Freeway, Houston, Texas 77092, or to such other address as the District may designate in writing from time to time. All notices shall be given to The City, by registered or certified mail, postage prepaid, return receipt requested, addressed to The City of La Porte, Attention: Director of Parks and Recreation, 1322 South Broadway Street, Houston, Texas 77571. Each notice shall be considered exercised and completed upon deposit of the notice in the United States mail as aforesaid. Is hereby amended to read: All notices shall be given to the District by registered or certified mail, postage prepaid, return receipt requested, addressed to the Harris County Flood Control District, Attention: Director, 9900 Northwest Freeway, Houston, Texas 77092, or to such other address as the District may designate in writing from time to time. All notices shall be given to the City, by registered or certified mail, postage prepaid, return receipt requested, addressed to The City of La Porte, Attention: Director of Parks and Recreation, 1322 South Broadway Street, La Porte, Texas 77571. Each notice shall be considered exercised and completed upon deposit of the notice in the United States mail as aforesaid. Article X. of the Original Agreement, entitled, "The District's Rights Paramount," reading: 2 The District has advised the City and the City is aware that portions of the Property located along HCFCD Units B 106-00-00, B 109-00-00, B509-03-00, and F216-00-00 were acquired for flood control and drainage purposes. The District presently uses said portions of the Property upon which the Trail is to be constructed for maintenance of HCFCD Units B 106-00-00, B 109-00-00, B509-03-00, and F216-00-00, and the District contemplates future use of the Property for widening of the drainage facility and for other flood control and drainage improvements as the need for the same may arise and funds may be available. The District hereby expressly reserves to itself, its officers, employees, agents and contractors, the right to enter upon said Property and Trail at any time for any purpose necessary or convenient in connection with drainage and flood control work, to flood said Property and Trail, and to make such other use of said Property and Trail as may be necessary or desirable in connection with drainage and flood control, and the City shall have no claim for damages of any character on account thereof against the District , or any officer, employee, agent, or contractor thereof. The District shall have no responsibility to replace or repair any portion of the Trail that is damaged in the course of such flood control activities. If the Trail or other structures appurtenant thereto constructed by the City, including but not limited to, railings or low water crossings, are damaged by the District during drainage or flood control activities or by the flow of water in the channel, the District reserves the right not to allow the City to rebuild the Trail or replace the structures appurtenant thereto if to do so would in the Director's opinion impede the flow of water of water in the channel. The District further reserves the right to remove portions of the Trail from time to time as the Director determines necessary or convenient to accommodate channel improvements, and further, to not permit the City to rebuild same. The District makes no representation as to the suitability of the soils or the stability of the channel bank for the City's intended purposes. The City understands that in the event of a failure involving distinct elements of the Trail's construction, the District may not permit the City to replace those elements. Is hereby amended to read: The District has advised the City and the City is aware that portions of the Property were acquired for flood control and drainage purposes. The District presently uses said portions of the Property upon which the Trail is to be constructed for maintenance of the Property and the District contemplates future use of the Property for widening of the drainage facility and for other flood control and drainage improvements as the need for the same may arise and funds may be available. The District hereby expressly reserves to itself, its officers, employees, agents and contractors, the right to enter upon said Property and Trail at any time for any purpose necessary or convenient in connection with drainage and flood control work, to flood said Property and Trail, and to make such other use of said Property and Trail as may be necessary or desirable in connection with drainage and flood control, and the City shall have no claim for damages of any character on account thereof against the District , or any officer, employee, agent, or contractor thereof. The District shall have no responsibility to replace or repair any portion of the Trail that is damaged in the course of such flood control activities. If the Trail or other structures appurtenant thereto constructed by the City, including but not limited to, railings or low water crossings, are damaged by the District during drainage or flood control activities or by the flow of water in the channel, the District reserves the right not to allow the City to rebuild the Trail or replace the structures appurtenant thereto if to do so would in the Director's opinion impede the flow of water of water in the channel. The District further reserves the right to remove portions of the Trail from time to time as the Director determines necessary or convenient to accommodate channel improvements, and further, to not permit the City to rebuild same. The District makes no representation as to the suitability of the soils or the stability of the channel bank for the City's intended purposes. The City understands that in the event of a failure involving distinct elements of the Trail's construction, the District may not permit the City to replace those elements. All other terms and provisions of the Original Agreement shall remain in full force and effect as originally written. 3 EXECUTED in triplicate originals APPROVED AS TO FORM: VINCE RYAN Harris County Attorney ATTEST: l:1fZJdLu d.d/ Martha Gillett City Secretary City of La Porte, Texas APPROVED AS TO FORM: By: t1~ T_~ CLARK T. ASKINS Assistant City Attorney DEe (J 7 20111 HARRIS COUNTY FLOOD CONTROL DISTRICT By: ~~Hc-~~ ED EMMETT County Judge RON BOTTOMS City Manager City of La Porte, Texas 4 Un EXHIBIT A Amendment to Interlocal Agreement City of La Porte Red Lines Indicate Proposed Trails , ;~ ~~ ~-- ~ ~ o 2:! "T1 ~ o o o o ;0 FAIRMONT PKWY ~~===.=.=.=.=. .&......, ;!J..... &....~ ~....y ~~.... ,~~ ...~~~ .,&.....,,- .:t1'''''~ P STREE . F101-06-00 r~;:;~-~~~7, ex 6;1 J .'....1 {~~"~..,..-.c..~ ~__~"...-.,,'_.'~J I ! I I I - { / I / II II B109-03-00 II (") :J> Z :J> Hl09-00-00 B509-03-00 :J: o r- ;0 o r Fl01-00-00 (J) m z (J) ;0 o MAIN ST F212-00-00,- B SHORE DR IIF216-00-00 II <nIl ~\~ A104-00-00 Presented to Commissioner's Court COUNTY OF HARRIS ~ ~ ~ DEe 0 7 2010 APPROVE Recorded Vol Page THE STATE OF TEXAS The Commissioners Court of Harris County, Texas, convened at a meeting of said Court at the Harris County Administration Building in the City of Houston, Texas, on 9EC g 7 29t8--' with the following members present, to-wit: Ed Emmett County Judge EI F"r3l1ee Lee Commissignl3r, PrsGinct No 1 Sylvia R. Garcia Commissioner, Precinct NO.2 Steve Radack Commissioner, Precinct NO.3 Jerry Eversole Commissioner, Precinct NO.4 and the following members absent, to-wit: le '€... quorum, when among other business, the following was transacted: , constituting a ORDER AUTHORIZING EXECUTION OF AN AMENDMENT TO ANINTERLOCALAGREEMENT BETWEEN THE HARRIS COUNTY FLOOD CONTROL DISTRICT AND THE CITY OF LA PORTE HCFCD UNITS A104-00-00, B106-00-00, B106-02-00, B109-00-00, B109-03-00, B509-03-00, F1 01-00-00, F101-06-00, F212-00-00, F216-00-00 & LOTS 66, 67, & 68, BLOCK 1, BROOKGLEN SECTION TWO REPLAT, A SUBDIVISION IN HARRIS COUNTY, TEXAS BEING OUT OF HCFCD UNIT B100-00-00 TRACT NOS. B1 00-00-00-07 -811.0, B1 00-00-00-07 -812.0 & B1 00-00-00-07 -824.0 KEY MAP PAGES 539-T, U, V, X, 540-5, X, Y, Z, 578-0, H, 579-A, B, C, E, F & 580-B, C, 0, F PRECINCT 2 Commissioner Q n!LC \ A-- introduced an order and made a motion that the same be adopted. Commissioner ~Qck seconded the motion for adoption of the order. The motion, carrying with it the adoption of the order, prevailed by the following vote: AYES: NAYS: ABSTENTIONS: Judge Emmett COIIIII.. Lee ~ o ~ ~ No o o o o o Abstain o o D o o Comm. Garcia Comm. Radack Comm. Eversole The County Judge thereupon announced that the motion had duly and lawfully carried and that the order had been duly and lawfully adopted. The order thus adopted follows: WHEREAS, the District and the City previously entered into an Interlocal Agreement executed on September 15, 2009, hereinafter referred to as the "Original Agreement," to construct and maintain, or cause to be constructed and maintained, a 1 O-foot wide public hike and bike trail with related appurtenances across HCFCD Units B106-00-00, B109-00-00, B509-03-00, and F216-00-00 to extend from the Pasadena Convention Center, on the South side of Fairmont Parkway to Little Cedar Bayou Park on the East side of Highway 146 approximately 5.2 miles in length and 10 feet wide, hereinafter referred to as the "Trail"; and. WHEREAS, the City and the District desire to amend the Original Agreement to allow the City to add additional lands to be covered by the 10-foot wide hike and bike trail, to wit, additional locations at or near the same HCFCD Units listed in the Original Agreement, and certain other lands at or near HCFCD Units A 104-00-00, B 106-02-00, B 109-03-00, F101-00-00, F101-06-00, and F212-00-00, and Lots 66,67, and 68, Block 1, Brookglen Section Two Replat, a subdivision in Harris County, Texas being out of HCFCD Unit B100-00-00, Tract Nos. 07-811.00, 07-812.0 and 07-824; and WHEREAS, the District owns or has easement rights in real property in Harris County, Texas, designated by the HCFCD Unit Nos. included in the Trail and shown in Exhibit "A" (hereinafter the "Property"), and is willing to allow the City to use the portion of the Property owned in fee by the District and the District has no objection to the City using the portion of the Property in which the District owns an easement for such purpose, with the understanding that the City will acquire the additional right, title, or interest as needed for the construction and maintenance of the Trail at no cost to the District; and WHEREAS, The City has prepared a new map or layout of the proposed alignment of the 10- foot wide, public hike and bike trail with related appurtenances reflecting the entire proposed alignment of the trail including the additional locations, which has been reviewed and approved by the District personnel and is shown in an amended Exhibit "A," which is attached hereto for descriptive purposes only and will replace Exhibit "A" of the Original Agreement; said alignment hereinafter referred to as the "Trail;" and NOW, THEREFORE, BE IT ORDERED BY THE COMMISSIONERS COURT OF HARRIS COUNTY, TEXAS THAT: Section 1: The recitals set forth in this order are true and correct. Section 2: County Judge Ed Emmett is hereby authorized to execute for and on behalf of the Harris County Flood Control District, an Amendment to an Interlocal Agreement by and between the Harris County Flood Control District and the City of La Porte, said amendment being incorporated herein by reference for all purposes as though fully set forth verbatim herein. I REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: 11/8/2010 Appropriation Requested By: Ray Nolen Source of Funds: General Fund Department: EMS Account Number: 00150595225005 Report: Resolution: Ordinance: xxx Amount Budgeted: $9,000.00 Contract with Medical Director Amount Requested: $9,00000 Exhibits: Exhibits: Copy of Ordinance Budgeted Item: YES NO Exhibits SUMMARY & RECOMMENDATION Annual contract renewal between Dr. Oscar Boultinghouse and the City of La Porte to serve as medical director for EMS. Contract renewal period is October 1, 2010 through September 30, 2011. Contract renewal fee is same as last year with no increase. EMS medical directors are a covered party under the TML Incidental Medical Malpractice Liability Coverage plan. Dr. Boultinghouse has been the EMS medical director for the City of La Porte for the last I3 years and has done an outstanding job in that capacity. His response to EMS needs are timely and of high quality. Recommend that council approve contract. Action Required by Council: Consider approving an ordinance authorizing the City Manager to execute a contract with Dr. Os Boultinghouse, M.D., Medical Director for the City of La Porte EMS. e / I '5/';) Date ORDINANCE NO. 2010- 3 2 q q AN ORDINANCE APPROVING AND AUTHORIZING A CONTRACT BETWEEN THE CITY OF lA PORTE AND DR. OSCAR BOULTINGHOUSE, M.D., TO SERVE AS MEDICAL DIRECTOR OF THE DEPARTMENT OF EMERGENCY MEDICAL SERVICES OF THE CITY OF lA PORTE, MAKING VARIOUS FINDINGS AND PROVISIONS RElATING TO THE SUBJECT, FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW, AND PROVIDING AN EFFECTIVE DATE HEREOF. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE: Section 1. The City Council of the City of La Porte hereby approves and authorizes the contract, agreement, or other undertaking described in the title of this ordinance, a copy of which is on file in the office of the City Secretary. The City Manager is hereby authorized to execute such document and all related documents on behalf of the City of La Porte. The City Secretary is hereby authorized to attest to all such signatures and to affix the seal of the City to all such documents. Section 2. The City Council of the City of La Porte 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. ORDINANCE NO. 2010- ~d--qq PAGE 2 Section 3. This Ordinance shall be effective from and after its passage and approval, and it is so ordered. PASSED AND APPROVED, this 8th day of November, 2010 By: ATTEST: ~~4t~ Secretary AP~r~ Clark T. Askins, City Attorney K REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: November 8.2010 Amount Budl!eted Requested By: Michael Dolby, Director of Finance Source of Funds: 001 &016 Department: FINANCE Account Number: 500t-Audit Report: Resolution: Ordinance: x Amount Budgeted: $65,500 Exhibits: Engagement letter Amount Requested: $65,500 Exhibits: Ordinance Budgeted Item: (YES) NO The finance office is requesting to continue the current contract with Pattillo, Brown and Hill to perform the September 30, 2010 year end audit. Pattillo, Brown and Hill has performed the city's year end for the past three years and offer stability and continuity to the City of La Porte. Based on performance and experience, we believe they will do an excellent job. The City appreciates the size of the firm along with the qualifications and availability of professional personnel assigned to our audit. They have assisted staff in preparing an award winning CAFR as well as assisted in preparing the required reports for the receipt of FEMA funds for Hurricane lKE expenses. Staff believes the firm is well qualified to perform the financial audit of the City. The audit fee proposed by Pattillo, Brown and Hill is $65,500. There are sufficient funds budgeted for the audit fees. At this time, staff recommends we proceed with a one year engagement with Pattillo, Brown and Hill for financial auditing services for the City of La Porte. ~/?:. /'" Date PH~ PAT T ILL 0, B ROW N & HI L L, L.L.P. CERTIFIED PUBLIC ACCOUNTANTS. BUSINESS CONSULTANTS August 26 20 1 0 City of LaPorte Attention: Phyllis Rinehmt, Controller 604 West Fahmont Parkway LaPorte, Texas 77571 Ladies and Gentlemen: We are pleased to confirm our understanding of the services we are to provide the City of La Porte for the year ended September 30, 2010. We will audit the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information, which collectively comprise the basic financial statements, of the City of La Porte as of and for the year ended September 30, 2010. Accounting standards generally accepted in the United States provide for celtain required supplementary infOlmation (RSI), such as management's discussion and analysis (MD&A), to supplement the City of La POlte's basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial rep0l1ing for placing the basic financial statements in an appropliate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to the City of La Porte's RSI ill accordance with auditing standards generally accepted in the United States of America. These limited procedures will consist of inquiries of management regarding the methods of preparing the infOlmation and comparing the information for consistency with management's responses to our inquiries, the basic financial statements) and other knowledge we obtained during our audit of the basic financial statements. We will not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. TIle following RSI is required by generally accepted accounting principles and will be subjected to celtaiu limited procedures, but will not be audited: 1) Management's Discussion and Analysis. 2) TMRS Schedule of Funding Progress. 3) Budgetmy Comparison Schedules. 401 WEST HIGHWAY 6. P. O. BOX 20725. WACO, TX 76702-0725. (254) 712-4901. FAX: (254) 772-4920. www.pbhcpa.com AFFILIATE OFFICES: BROWNSVrLlE, TX (956) 544-7778. HILLSBORO, TX (254) 582-2583 TEMPLE, TX (254) 791-3460. WHITNEY. TX (254) 694.4600. ALBUQUERQUE, NM (505) 266-5904 City of La Porte, Texas August 26,2010 Page 2 Supplementary infonnation other than RSI also accompanies the City of La Porte's financial statements. We will subject the following supplementmy information to the auditing procedures applied in our audit of the financial statements and ce11ain additional procedures, including comparing and reconciling such infol1nation directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America and will provide an opinion on it in relation to the financial statements as a whole: 1) Combining and individual non major fund financial statements. 2) Schedule of expenditures of federal awards. The following other information accompanying the financial statements will not be subjected to the auditing procedures applied in our audit of the financial statements, and for which our auditor's repOli will not provide an opinion or any assurance. 1) IntroductOlY section. 2) Statistical section. Audit Objectives The objective of our audit is the expression of opinions as to whether your basic financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting plinciples and to report on the faimess of the supplementary infOlmation refened to in the second paragraph when considered in relation to the financial statements as a whole. The objective also includes rep0l1ing on- · Intemal control related to the financial statements and compliance with laws, regulations, and the provisions of contracts or grant agreements, noncompliance with which could have a material effect on the financial statements in accordance with Government Auditing Stane/ards. · Internal control related to major programs and 8n opinion (or disclaimer of opinion) on compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a direct and material effect on each major program in accordance with the Single Audit Act Amendments of 1996 and OMB Circular A-B3, Audits o(States, Local Governments, and Non-Profit Organizations. The rep0l1s on intemal control and compliance will each include a statement that the rep0l1 is intended solely for the information and use of management, the body or individuals charged with governance, others within the entity specific legislative or regulatory bodies, federal awarding agencies, and if applicable, pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. City of La Porte, Texas August 26,2010 Page 3 Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America; the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the Single Audit Act Amendments of 1996; and the provisions of OMB Circular A-l33, and will include tests of accounting records, a detelmination of major program(s) in accordance with OMB Circular A-I33, and other procedures we consider necessmy to enable us to express such opinions and to render the required reports. If our opinions on the financial statements or the Single Audit compliance opinions are other than unqualified, we will fully discuss the reasons with you in advance. If circumstances occur related to the condition of your records, the availability of sufficient, appropriate audit evidence, or the existence of a significant risk of material misstatement of the financial statements caused by enol', fraudulent financial reporting, or misappropriation of assets, which in our professional judgment prevent us from completing the audit or forming an opinion on the financial statements, we retain the right to take any course of action pelmitted by professional standards, including declining to express an opinion or issue a report, or withdrawing from the engagement. Management Responsibilities Management is responsible for the basic financial statements and all accompanying infonnation as well as all representations contained therein. Management is also responsible for identifying govemment award programs and understanding and complying with the compliance requirements, and for preparation of the schedule of expenditures of federal awards in accordance with the requirements of OMB Circular A-l33. As pmi ofthe audit, we will assist with preparation of your financial statements, schedule of expenditures of federal awards, and related notes. You are responsible for making all management decisions and perfOlming all management functions relating to the financial statements, schedule of expenditures of federal awards, and related notes and for accepting full responsibility for such decisions. You will be required to acknowledge in the management representation letter our assistance with preparation of the financial statements and the schedule of expenditures of federal awards and that you have reviewed and approved the financial statements, schedule of expenditures of federal awards, and related notes prior to their issuance and have accepted responsibility for them. Further, you are required to designate an individual with suitable skill, knowledge, or experience to oversee any nonaudit services we provide and for evaluating the adequacy and results of those services and accepting responsibility for them. Management is responsible for establishing and maintaining effective internal controls, including internal controls over compliance, and for evaluating and monitoring ongoing activities, to help ensure that appropriate goals and objectives are met and that there is reasonable assurance that government programs are administered in compliance with compliance requirements. You are also responsible for the selection and application of accounting principles; for the fair presentation in the financial statements of the respective financial position of the governmental activities, the business- type activities, each major fund, and the aggregate remaining fund infol1nation of the City of La Porte and the respective changes in financial position and, where applicable, cash flows in confonnity with U.S. generally accepted accounting principles; and for compliance with applicable laws and regulations and the provisions of contracts and grant agreements. Management is also responsible for making all financial records and related information available to us and for cnsm1ng that management and financial illfomlation is reliable and properly recorded. Your responsibilities also include identifying significant vendor relationships in which the vendor has responsibility for program compliance and for the accuracy and completeness of that infornlation. Your responsibilities include adjusting the financial statements to conect material City of La Porte) Texas August 26) 2010 Page 4 misstatements and confitming to us in the representation letter that the effects of any uncorrected misstatements aggregated by us during the cun'ent engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud or illegal acts affecting the government involving (l) management, (2) employees who have significant roles in intemal control, and (3) others where the fraud or illegal acts could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees) former employees, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the entity complies with applicable laws, regulations, contracts, agreements, and grants. Additionally, as required by OMB Circular A-l33, it is management's responsibility to follow up and take corrective action on reported audit findings and to prepare a summary schedule of prior audit findings and a c011'ective action plan. The summary schedule of prior audit findings should be available for our review during March 2011. You are responsible for the preparation of the supplementary information in confonnity with U.S. generally accepted accounting principles. You agree to include our report on the supplementmy infonuation in any document that contains and indicates that we have reported on the supplementary infonnation. You also agree to present the supplementmy infOlmation with the audited financial statements. Management is responsible for establishing and maintaining a process for tracking the status of audit findings and recommendations. Management is also responsible for identifying for us previous financial audits, attestation engagements, performance audits, or other studies related to the objectives discussed in the Audit Objectives section of this letter. TI1is responsibility includes relaying to us corrective actions taken to address significant findings and recommendations resulting fi'om those audits, attestation engagements, performance audits, or studies. You are also responsible for providing management's views on our current findings, conclusions, and recommendations, as well as your planned cOll'ective actions, for the repmi, and for the timing and format for providing that infonnation. With regard to using the auditor's report, you understand that you must obtain our prior written consent to reproduce or use our repmi in bond offering official statements or other documents. With regard to the electronic dissemination of audited financial statements, including financial statements published electronically on your website, you understand that electronic sites are a means to dishibute information and, therefore, we are 110t required to read the information contained in these sites or to consider the consistency of other information in the electronic site with the original document. Audit Procedures-General An audit includes examining, on a test basis, evidence suppoi1ing the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. We will plan and perfonu the audit to obtain reasonable rather than absolute assurance about whether the financial statements are fi'ee of material misstatement, whether from (1) eiTors, (2) fraudulent financial rep0l1ing, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity. Because the detennination of abuse is subjective, Government Auditing Standards do not expect auditors to provide reasonable assurance of detecting abuse. City of La Porte, Texas August 26, 2010 Page 5 Because an audit is designed to provide reasonable, but not absolute assurance and because we will not petfonn a detailed examination of all transactions, there is a risk that material misstatements or noncompliance may exist and not be detected by us. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or govemmental regulations that do not have a direct and material effect on the financial statements or major programs. However, we will infonn you of any material elTors and any fraudulent financial reporting or misappropriation of assets that come to our attention. We will also infOlm you of any violations of laws or govemmental regulations that come to our attention, unless clearly inconsequential, and of any material abuse that comes to our attention. We will include such matters in the repOlis required for a Single Audit. Our responsibility as auditors is limited to the period covered by our audit and does not extend to any later periods for which we are not engaged as auditors. Our procedures will include tests of documentmy evidence sUPPOliing the transactions recorded in the accounts, and direct confirmation of receivables and certain other assets and liabilities by con'espondence with selected individuals, funding sources, creditors, and financial institutions. We will request written representations from your attomeys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will require celiain written representations from you about the financial statements and related matters. Audit Procedures-Internal Controls Our audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of ftn1her audit procedures. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting enol'S and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on intemal control issued pursuant to Government Auditing Standards. As required by OMB Circular A-133, we will perform tests of controls over compliance to evaluate the effectiveness of the design and operation of controls that we consider relevant to preventing or detecting material noncompliance with compliance requirements applicable to each major federal award program. However, our tests will be less in scope than would be necessary to render an opinion on those controls and, accordingly, no opinion will be expressed in our repOli on intemal control issued pursuant to OMB Circular A-I33. An audit is not designed to provide assurance on internal control or to identify significant deficiencies. However, during the audit, we will communicate to management and those charged with govemance internal control related matters that are required to be communicated under AICP A professional standards, Government Auditing Standards, and OMB Circular A~133. City of La Porte, Texas August 26,2010 Page 6 Audit Procedures-Compliance As pmt of obtaining reasonable assurance about whether the financial statements are free of matelial misstatement, we will perform tests of the City of La Porte's compliance with applicable laws and regulations and the provisions of contracts and agreements, including grant agreements. However, the objective of those procedures will not be to provide an opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards. OMB Circular A-l33 requires that we also plan and pelfonn the audit to obtain reasonable assurance about whether the auditee has complied with applicable laws and regulations and the provisions of contracts and grant agreements applicable to major programs. Our procedures will consist of tests of transactions and other applicable procedures described in the OMB Circular A-i33 Compliance Supplement and related addenda for the types of compliance requirements that could have a direct and material effect on each of the City of La POlte's major programs. The purpose of these procedures wiII be to express an opinion on the City of La Porte's compliance with requirements applicable to each of its major programs in our report on compliance issued pursuant to OMB Circular A-133. Engagement Administration, Fees, and Other We understand that your employees will prepare all cash, accounts receivable, or other confirmations we request and will locate any documents selected by us for testing. At the conclusion of the engagement, we will complete the appropriate sections of the Data Collection Form that summarizes our audit findings. It is management's responsibility to submit the repOlting package (including financial statements, schedule of expenditures of federal awards, smnmm)' schedule ofptior audit findings, auditors' reports, and cOll'ective action plan) along with the Data Collection Fonn to the federal audit clearinghouse. We will coordinate with you the electronic submission and celtification. If applicable, we will provide copies of our repOlt for you to include with the reporting package you will submit to pass-through entities. The Data Collection FOlID and the reporting package must be submitted within the earlier of 30 days after receipt of the auditors' reports or nine months after the end of the audit peliod, unless a longer period is agreed to in advance by the cognizant or oversight agency for audits. The audit documentation for this engagement is the propelty o[Pattillo, Brown & Hill, L.L.P. and constitutes confidential infonnation. However, pursuant to authority given by law or regulation, we may be requested to make certain audit documentation available to a federal agency providing direct or indirect funding, or the U.S. Govemment Accountability Office for purposes of a quality review of the audit, to resolve audit findings, or to can)' out oversight responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be provided under the supervision of Pattillo, Brown & Hill, L.L.P. personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned parties. These parties may intend, or decide, to distribute the copies or infol1l1ation contained therein to others, including other govenunental agencies. City of La Porte, Texas August 26, 2010 Page 7 We expect to begin our audit on approximately November 29, 2010 and to issue our reports no later than March 15, 2011. Paula Lowe is the engagement partner and is responsible for supervising the engagement and signing the reports or authorizing another individual to sign them. Our fee for these services will be at our standard hourly rates plus out-of-pocket costs (such as report reproduction, word processing, postage, travel, copies, telephone, etc.) except that we agree that our gross fee, including expenses, will not exceed $65,500. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to YOllr audit. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. In accordance with our firm policies, work may be suspended if your account becomes 60 days or more overdue and may not be resumed until your account is paid in full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed upon written notification of termination, even if we have not completed our report(s). You will be obligated to compensate us for all time expended and to reimburse us for all out-of-pocket costs through the date of tennination. The above fee is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs. Government Auditing Standards require that we provide you with a copy of our most recent external peer review report and any letter of comment, and any subsequent peer review rep0l1s and letters of comment received during the period of the contract. Our 2007 peer review letter of comment accompanies this letter. We appreciate the opportunity to be of service to the City of La Porte and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. Very truly yours, Pattillo, Brown & Hill, L.L.P. V~~ Paula Lowe, CPA PUar City of La Porte, Texas August 26, 2010 Page 8 By: Title: Date: ORDINANCE NO. 33DO AN ORDINANCE APPROVING AND AUTHORIZING AN AGREEMENT BETWEEN THE CITY OF LA PORTE AND PATTILLO, BROWN AND HILL, L. L. P., CERTIFIED PUBLIC ACCOUNTANTS, TO AUDIT THE CITY'S GENERAL-PURPOSE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDING SEPTEMBER 30,2010; MAKING VARIOUS FINDINGS AND PROVISIONS RELATING TO THE SUBJECT; FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW; AND PROVIDING AN EFFECTIVE DATE HEREOF. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE: Section 1. The City Council hereby approves and authorizes the contract, agreement, or other undertaking described in the title of this ordinance, in substantially the form as shown In th e document which is attached hereto and incorporated herein by this reference. The City Manager is hereby authorized to execute such document and all related documents on behalf of the City of La Porte. The City Secretary is hereby authorized to attest to all such signatures and to affix the seal of the City to all such documents. Sec tion 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 ci ty for the time required by law preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government Codej 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 content and posting thereof. Section 3. This Ordinance shall be effective from and after its passage and approval, and it is so ordered. PASSED AND APPROVED, this tf1- day of IJ () [) , 2010. CITY OF LA PORTE L Mayor ATTEST: ~Ald,., ~ t4.d11 Martha A. Gillett, City Secretary APPROVED: tL6f~-t r ~ Clark T. Askins, Assistant City Attorney 8 REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: November 8. 2010 Appropriation Requested By: Susan CreamlRon Bottoms Source of Funds: N/ A Department: Finance/Purchasin2 Account Number: N/A Report: Resolution: Ordinance: Amount Budgeted: N/A Exhibits: Bid Tabulation Amount Requested: Exhibits: Budgeted Item: YES NO SUMMARY & RECOMMENDATION Advertised, Sealed Bid #S 1 0006 - Sale of81 Acres on Bay Area Boulevard will be opened and read on Monday, November 8,2010 at 5:00 p.m. at the offices of the City's broker, John Littman of Cushman Wakefield, in Houston. Marketing information was sent to numerous industrial companies in the Bayport area in addition to industrial brokers and developers. A series of ads were also run in the Houston Chronicle in the business section. Property availability information is also placed on various commercial property databases (Websites) including Commercial Gateway, LoopNet, CoStar and the Cushman & Wakefield Website. Direct solicitation follow-up marketing to prospects was also conducted. "For Sale" signage was also placed on the property. Bid tabulation will be placed at the Council desks prior to the November 8, 2010 Council meeting. John Littman will be present at this meeting to answer any questions which Council may have on the bids received. The 81 acre property was appraised for the City of La Porte, on November 2,2007, by Fox & Bubela, Inc., MIA Appraisers. The property was appraised in two (2) tracts. The western tract of36.05 acres was appraised at $2.00 per square foot, and the eastern tract of 44.92 acres was appraised at $1.50 per square foot. Rounded, this appraisal of the western tract was $3,140,000.00 and the eastern tract of $2,935.000.00. ~ The bid package consisted of a proposed Earnest Money Contract, with attached form of Special Warranty Deed; and an attached City of La Porte Industrial District Agreement, for execution by the bidder. The names of the firms which registered to bid, as of November 1,2010, are as follows: 1) Transwestern 2) Kuraray America, Inc. 3) Davis Commercial Development, Inc. 4) Phoenix International Terminal, LLC (Bret Braden) 5) Brennan Investment Group, LLC 6) Nelson Duffie Interests, Inc. 7) Vantex CPG, LLC Staff will recommend award of Sealed Bid #10006 -, to the highest bidder, or, if a satisfactory high bid is not received, staff will recommend that the bids be rejected. Council: Bid #S 1 0006 - Sale of 81 Acres on Bay Area Boulevard to the highest bidder, or, if a satisfactory high bid ider . cti all bids. 1/ ;f ~ Date z o - 'd. ..J ::> ~ \- o - CO ~ 4- Gi ..J ::> o en c( '& 4- ~ CO Z o f/) '& <:a ~ f:IJ u- o ~ 4- f/) cD <:> <:> <:> ~ ~ o - CO c,) c ......- (G ~ ~ ~ ... .- '=' ... ~Q) ~ tJl tJl ~ o .... 0- C- O ~ ~ ~ ~ Q) :S Ol C- .c ~ '0 '0 Q) .... Q) -0 .1ji C- g Q) .0 fu' E tJl .... B ~ -- Q) :S o -0 ~ ~ o Ol C- .0 .c 0- !!3 I,) Q) ~ .... a skins & askins p.c. ATTORNEYS and COUNSELORS Knox W. Askins Clark T. Askins November 9, 2010 via messenaer Ms. Staci Gay American Title Company 5003 College Park Deer Park, TX 77536 Re: GF# 1229-09-1148 / 81 Acres on Bay Area Boulevard Sale from City of La Porte, Texas, to Kuraray America, Inc. Dear Staci: I am delivering to you the original Earnest Money Contract between the City of La Porte and Kuraray America, Inc., on this transaction. I am also delivering to you Kuraray America, Inc., earnest money check in the amount of $25,000.00, payable to American Title Company. The Contract was awarded to Kuraray America, Inc., by the City Council of the City of La Porte, on November 8, 2010. It has been signed by Mr. Ron Bottoms, City Manager of the City of La Porte, on page 12, and Mr. Bottoms has also initialed the bottom of each page. The effective date of the Contract is the date on which the title company executes the escrow receipt. Please email a copy of the fully executed Contract, and the title company escrow receipt, to the parties and their attorneys, as shown below. Thank you for your cooperation in this matter. Yours very truly, ~ Knox W. Askins City Attorney City of La Porte KWA: sw Enclosures 702 W. Fairmont Parkway, P.O. Box 1218, La Porte, TX 77572-1218 281.471.1887 phone . 281.471.2047 fax . knoxaskins@comcast.net . ctaskins@swbell.net American Title Company November 9, 2010 page 2 cc: Mr. Kenichi Abe, President Kuraray America, Inc. kenichi.abe8kuraravamerica.com Mr. William B. Sing, Attorney Fulbright Jaworski, LLP wsina8fulbriaht.com Mr. John Littman Cushman Wakefield iohn.littman8cushwake.com Mr. Ron Bottoms City Manager City of La Porte bottomsr81aDortetx.aov Ms. Martha A. Gillett City Secretary City of La Porte qillettm81aDortetx.aov Mr. Knox W. Askins City Attorney City of La Porte knoxaskins8comcast.net KURARAY AMERICA INC 4165 . REFERENCE NO. DESCRIPTION INVOICE DATE INVOICE AMOUNT DISCOUNT TAKEN AMOUNT PAlO 102910ERNESTB D ERNEST BID DEPOSIT 10/29/10 25,000.00 25,000.00 . ... ..t. .' ". j CHECK OATE I CHECK NO. I PAYEE DISCOUNTS TAKEN CHECK AMOUNT 10/29/10 , 41654 I American Title Company $25,000.00 - ~~~_.- . ........v.._. _.. .... ...___.',' __...u.~...'_'_;_~'_'~ _'~','_'_r_ ~"'_'_"_'__' _" __ _"'_" ...._ ___..__......~.__." 0....-.. ,... 4165. .....KURJ\RAYAMERICA,-INC. . '. .' .2625 BAY AREA BLVD.; STE.550 :..- . HOUS::rON, 'n< 770SS- (!) Bank of TokyO:Mitsubishl UFJTrust Com,..;;.y -- .1211........~__~~..,..,,1tf 'Ioo:zo.1104- .. :. . J:968.260 CHECK NO. . DATE AMOUNT .41654 10/29/10 $25.000.00 .' - .... ", ..uTWENTY-FlVE TH.OUS~ND Dollars' . American Title Company . . 5003 College Park OeerPark TX77536' USA' c:#f~ -&t~ . . .' . .' I . ..... . .. j/>.~jJ7/v0 . . . SlGNAlURE ~ . ..- ....-. .,.__...-..-....,. 1110 L. . (; 5 "'111 .:0 2 bOO 9 (;871: III :i .005 L. 70 2111 r'-~:'~, ~.~~..., ;;?~, :~~::: t ~\ ~~ ~~~ ~:"~ '~.i i'...... t ,.-" l; ':~ f. ..~ t.... ~ ,,~ .;"rt~ ..~ ..-" ~... n : II ) . , , r t I; r"~: "M" 'e:: ~. 'T'\( ~ IU, ',I ,. , ;....1.: ....' \....../t I \Ji'_~I'':-'_ Of'" t'" \ \..J \::'. SEALED BID IS10oo6 ~~ TEXAS ASSOCIATION OF REAL TORS@ COMMERCIAL CONTRACT - UNIMPROVED PROPERTY USE OF THIS FORM BY PERSONS WHO ARE NOT MEMBERS OF THE TEXAS ASSOCIATION OF REAL TORS4ll IS NOT AUTHORIZED. €lT.""" Aaaoclatlon 01 REAL TORS4ll, IlIc. 2005 1. PARTIES: Seller agrees to sell and convey to Buyer the Property described in Paragraph 2. Buyer agrees to buy the Property from Seller for the sales price stated in Paragraph 3. The parties to this contract are: Seller: Ci ty of La Porte. Texas Address: 604 W. Fairmont Parkway. La Porta TX' 77571 Phone: (281) 471-5020 Fax: (281) 471-2047 E-mail: bottomsr@laportetx. qOV Buyer: ~ru~ Ame.r-k4., "IMc.. Address: ~ ~ ~BlvJ.~ l-lCUB"tHI. IX '1'10~ Phone: ( 4 4 Fax: ('}13) .4115"'- '13t>~ E-mail: Aceft~chi. &k~ ~4..e-ic.a.. c.O<'W\ 2. PROPERTY: A. "Property" means that real property situated in Harris Bav Area Boulevard (address) and that is legally described on the attached Exhibit A +/-81 acres on Bay Area Blvd., Tract 10B-1, Bayport U/R, Section 1A-47, La Porte, Harris County, Texas County, Texas at ef as follows: B. Seller will sell and convey the Property together with: (1) all rights, privileges, and appurtenances pertaining to the Property, including Seller's right, title, and interest in any minerals, utilities, adjacent streets, alleys, strips, gores, and rights-of-way; (2) Seller's interest in all leases, rents, and security deposits for all or part of the Property; and (3) Seller's interest in all licenses and permits related to the Property. (Describe any exceptions, reservations, or restrictions in Paragraph 12 or an addendum.) 3. SALES PRICE: A. At or before closing, Buyer will pay the following sales price for the Property: (1) Cash portion payable by Buyer at closing .........................$ (2) Sum of all financing described in Paragraph 4 . . . . . . . . . . . . . . . . . . . . . .$ (3) Sales price (sum of 3A(1) and 3A(2)) " . . . . , . . . . . . . . . . . . . . . . . . . . . .$ (T AR-1002) 10-18-05 Initialed for Identification by Buyer /CA ,_ and Seller ~ Cushman & Waketield ofTexas. Inc. 1330 Post Oak Blvd Ste. 2700 Houston. TX 77056 Phone: 713.877.1 700 Fa.x: 713.877.1965 Cushman & Wakefield of Texas. Produced with ZipFo~ by zipLogix 18070 Fifteen Mile Road. Fraser, Michigan 48026 www.zioLoalx.com (.'c 7. po" . O~{? . c~ /:1, Pi> ~ ~"t'. pot> . . 'f' \,1,\ Page 1 of 12 \' City of La Porte- Commercial Contract - Unimproved Property Concerning Bay Area Boulevard B. Adjustment to Sales Price: (Check (1) or (2) only.) lit (1) The sales price will not be adjusted based on a survey. Q (2) The sales price will be adjusted based on the latest survey obtained under Paragraph 6B. (a) The sales price is calculated on the basis of $ per: o (i) square foot of 0 total area 0 net area. o (ii) acre of 0 total area 0 net area. (b) "Total area" means all land area within the perimeter boundaries of the Property. "Net area" means total area less any area of the Property within: o (i) public roadways; o (ii) rights-of-way and easements other than those that directly provide utility services to the Property; and o (Hi) (c) If the sales price is adjusted by more than % of the stated sales price, either party may terminate this contract by providing written notice to the other party within days atter the terminating party receives the survey. If neither party terminates this contract or if the variance is less than the stated percentage, the adjustment to the sales price will be made to the cash portion of the sales price payable by Buyer. 4. FINANCING: Buyer will finance the portion of the sales price under Paragraph 3A(2) as follows: o A. Third Party Financing: One or more third party loans in the total amount of $ This contract: o (1) is nQt contingent upon Buyer obtaining third party financing. o (2) is contingent upon Buyer obtaining third party financing in accordance with the attached Commercial Contract Financing Addendum. o B:- Assumption: In accordance 'ovith the ::lUached Commerci::ll Contract Financing /\ddendum, Buyer will ::lssume the existing promissory note seoured by the Property, whioh balanoe ::It olocing \o:ill be $ o G-: Seller Finanoina: The delivery of ::l promissory note and deed of trust from Buyer to Seller under the terms of the ::lUaohed Commeroial Contract Finanoing .^.ddendum in the amount of $ 5. EARNEST MONEY: On A. Not later than a days after the effective date, Buyer must deposit $ 25.000.00 as earnest money with Ms. Staci Gav American Title C01l\Parur (escrow agent) at 5003 College Park. Deer Park. TX 77536 (address). If Buyer fails to timely deposit the earnest money, Seller may terminate this contract by providing written notice to Buyer before Buyer deposits the earnest money and may exercise Seller's remedies under Paragraph 15. B. Buyer will deposit an additional amount of $ 75.000.00 with the escrow agent to be made part of the earnest money on or before: aD (i) 1 days after Buyer's right to terminate under Paragraph 78 expires; or o (ii) . Buyer will be in default if Buyer fails to deposit the additional amount required by this Paragraph 5B within 3 days after Seller notifies Buyer that Buyer has not timely deposited the additional amount. C. Buyer may instruct the escrow agent to deposit the earnest money in an interest-bearing account at a federally insured financial institution and to credit any interest to BUYf}, (TAR-1802) 10-18-05 Initialed for Identification by Buyer~,_and Seller -.w_ Page 2 of 12 Commercial Contract - Unimproved Property Concerning Bay Area Boulevard 6. TITLE POLICY AND SURVEY: A. Title Policy: (1) Seller, at Seller's expense, will furnish Buyer an Owner's Policy of Title Insurance (the title policy) issued by American Title Company (title company) in the amount of the sales price, dated at or after closing, insuring Buyer against loss under the title policy, subject only to: (a) those title exceptions permitted by this contract or as may be approved by Buyer in writing; and (b) the standard printed exceptions contained in the promulgated form of title policy unless this contract provides otherwise. (2) The standard printed exception as to discrepancies, conflicts, or shortages in area and boundary lines, or any encroachments or protrusions, or any overlapping improvements: o (a) will not be amended or deleted from the title policy. iii (b) will be amended to read "shortages in areas" at the expense of lit Buyer 0 Seller. may (3) Buyer may object to any restrictive covenants on the Property within the time required under Paragraph ac. (4) Within 10 days after the effective date, Seller will furnish Buyer a commitment for title insurance (the commitment) including legible copies of recorded documents evidencing title exceptions. Seller authorizes the title company to deliver the commitment and related documents to Buyer at Buyer's address. B. Survey: Within 5 days after the effective date: o (1) Buyer will obtain a survey of the Property at Buyer's expense and deliver a copy of the survey to Seller. The survey must be made in accordance with the Texas Society of Professional Surveyors' standards for a Category 1A survey under the appropriate condition. D (2) Seller, at Seller's expense, will furnish Buyer a survey of the Property dated after the effective date. The survey must be made in accordance with the Texas Society of Professional Surveyors' standards for a Category 1A survey under the appropriate condition. iii (3) Seller will deliver to Buyer and the title company a true and correct copy of Seller's existing survey of the Property dated April 20. 2010 along with an affidavit required by the title company for approval of the survey. If the survey is not acceptable to the title company, Seller, at Seller's expense, will obtain a survey acceptable to the title company and deliver the acceptable survey to the Buyer and the title company within 15 days after Seller receives notice that the existing survey is not acceptable to the title company. The closing date will be extended daily up to 15 days if necessary for Seller to deliver an acceptable survey within the time required. C. Buver's Obiections to the Commitment and Survey: (1) Within 7 days after Buyer receives the commitment, copies of the documents evidencing the title exceptions, and any required survey, Buyer may object in writing to matters disolooed in the item6 if: (a) the matters disclosed constitute a defect or encumbrance to title other than those permitted by this contract or liens that Seller will satisfy at closing or Buyer will assume at closing; or (b) the items show that any part of the Property lies in a Gpoeial flood hazard meo (on "^" or "\I" zone as defined by FEMJ\). If P:Jragraph 68(1) applies, Buyer is deemed to receilfe the Qurvey on the earlier of: (i) the date of Buyer's actual moeipt of the survey; or (ii) of the deadline opecified in Paragraph 68. (TAR-1802) 10-18-05 Inmaled foe identification by Buy", K:A . _ and selle'~_ Page 3 of 12 Commercial Contract - Unimproved Property Concerning B"'Y Area Boulevard 10 (2) Seller may, but is not obligated to, cure Buyer's timely objections within 4e days after Seller receives the objections. The closing date will be extended as necessary to provide such time to cure the objections. If Seller fails to cure the objections by the time required, Buyer may terminate this contract by providing written notice to Seller within 5 days after the time by which Seller must cure the objections. If Buyer terminates, the earnest money, less any independent consideration under Paragraph 7B(1), will be refunded to Buyer. (3) Buyer's failure to timely object or terminate under this Paragraph 6C is a waiver of Buyer's right to object except that Buyer will not waive the requirements in Schedule C of the commitment. 7. PROPERTY CONDITION: A. Present Condition: Buyer accepts the Property in its present condition exoept that Soller, at Seller's expense, 'Nill oomplete the following before olosing: See Exhibit B. Paae 2 B. Feasibilitv Period: Buyer may terminate this contract for any reason within 45 days after the effective date (feasibility period) by providing Seller written notice of termination. (Check only one box.) lit (1) If Buyer terminates under this Paragraph 7B, the earnest money will be refunded to Buyer less $ 10.000.00 that Seller will retain as independent consideration for Buyer's unrestricted right to terminate. Buyer has tendered the independent consideration to Seller upon payment of the amount specified in Paragraph 5A to the escrow agent. The independent consideration is to be credited to the sales price only upon closing of the sale. .If no dollar amount is stated.in ~ Para9raph 7B(1) or if Buyer fails to timely deposit the earnest money. Buver will not have the right to terminate under this Para<;.1raph 7B. q (2) Not later than 3 days after the effective date, Buyer must pay Seller $ as independent consideration for Buyer's right to terminate by tendering such amount to Seller or Seller's agent. If Buyer terminates under this Paragraph 7B, the earnest money will be refunded to Buyer and Seller will retain the independent consideration. The independent consideration will be credited to the sales price only upon closing of the sale. if...llQ dollar amount is stated in this Paragraph 7B(2)...Q[ if Buyer failsj,Q timely ~ the independent consideration. Buyer will not have the right to terminate under this Paragraoh 7B. C. Inspections. Studies. or Assessments: (1) During the feasibility period, Buyer, at Buyer's expense, may complete or cause to be completed any and all inspections, studies, or assessments of the Property (including all improvements and fixtures) desired by Buyer. (2) Buyer must: (a) employ only trained and qualified inspectors and assessors; (b) notify Seller, in advance, of when the inspectors or assessors will be on the Property; (c) abide by any reasonable entry rules or requirements of Seller; (d) not interfere with existing operations or occupants of the Property; and (e) restore the Property to its original condition if altered due to inspections, studies, or assessments that Buyer completes or causes to be completed. (3) Except for those matters that arise from the negligence of Seller or Seller's agents, Buyer is responsible for any claim, liability, encumbrance, cause of action, and expense resulting from (T AR-1802) 1 0-18-05 Initialed fo, Identification by Buye,K4 ._and selle,!lsiz Page 4 of 12 Produced with ZlpFormoll) by zipLogix 18070 Fifteen Mile Road. Fraser. Michigan 48026 www.zioLoaix.com City of La Porte - Commercial Contract - Unimproved Property Concerning Bav Area Boulevard Buyer's inspections, studies, or assessments, including any property damage or personal injury. Buyer will indemnify, hold harmless, and defend Seller and Seller's agents against any claim involving a matter for which Buyer is responsible under this paragraph. This paragraph survives termination of this contract. to the extent in D. Prooerty Information: Seller' s ~ession. if availal (1) Delivery of Property Information: Within 7 . days after the effective date, Selle~will deliver to Buyer: o (a) copies of all current leases pertaining to the Property, including any modifications, supplements, or amendments to the leases; o (b) copies of all notes and deeds of trust against the Property that Buyer will assume or that Seller will not pay in full on or before closing; o (c) copies of all previous environmental assessments, geotechnical reports, studies, or analyses made on or relating to the Property; o (d) copies property tax statements for the Property for the previous 2 calendar years; o (e) plats of the Property; li IXI (f) copies of current utility ~p~ty letters from the Property's water and sewer service provider; and Da (g) Survey dated A~ril 20. 2010. as revised July 19. 2010. adding flood plain note (2) Return of Prooerty Information: If this contract terminates for any reason, Buyer will, not later than 10 days after the termination date: (a) return to Seller all those items described in Paragraph 70(1) that Seller delivered to Buyer and all copies that Buyer made of those items; and (b) deliver copies of all inspection and assessment reports related to the Property that Buyer completed or caused to be compJeted. This Paragraph 7D(2) survives termination of this contract. E. Contracts Affecting Operations: Until closing, Seller: (1) will operate the Property in the same manner as on the effective date under reasonably prudent business standards; and (2) will not transfer or dispose of any part of the Property, any interest or right in the Property, or any of the personal property or other items described in Paragraph 2B or sold under this contract. After the feasibility period ends, Seller may not enter into, amend, or terminate any other contract that affects the operations of the Property without Buyer's written approval. 8. LEASES: A. Each written lease Seller is to assign to Buyer under this contract must be in full force and effect according to its terms. Seller may not enter into any new lease, fail to comply with any existing lease, or make any amendment or modification to any existing lease without Buyer's written consent. Seller must disclose, in writing, if any of the following exist at the time Seller provides the leases to the Buyer or subsequently occur before closing: (1) any failure by Seller to comply with Seller's obligations under the leases; (2) any circumstances under any lease that entitle the tenant to terminate the lease or seek any offsets or damages; (3) any advance sums paid by a tenant under any lease; (4) any concessions, bonuses, free rents, rebates, brokerage commissions, or other matters that affect any lease; and (5) any amounts payable under the leases that have been assigned or encumbered, except as security for loan(s) assumed or taken subject to under this contract. B. Estop Dol CortifiGateG: Within days after the effeotive date, Seller will doli'o'er to Buyer octoppol certificates signed not earlier than by each tenant that loao05 space in the Property. The estoppel certificates mUGt state: ~ (TAR-1802) 10-18-05 Initialed for Identification by Buyer 1<4 ,_and Seller ~_ Page 5 of 12 Commercial Contract - Unimproved Property Concerning Bav Area Boulevard fB that no debult exists under the leace by the landlord or tenant as of the date the estoppel certifioate is signed; ~ the amount of the soheduled r€nts to be paid through the end of the lease and any rental payments that ha'le been paid in advanoe; t3) the amount of any seourity deposit; (41 the amount of any offsets tenant io entitled against rent; t&) the expiration date of the leaoe; (61 a description of any renewal optiono; and ff) 9. BROKERS: A. The brokers to this sale are: _NfA Cooperating Broker Cushman & Wakefield of Texas. Inc. License No. Principal Broker 0234174 License No. 1330 Post Oak Blvd.. ste. 2700 Address Houston. TX. 77056 Address Phone (713) 963-2862 Fax Phone (713) 877-1965 Fax E-mail: E-mail: john.littman@cushwake.com Cooperating Broker represents buyer. Principal Broker: (Check only one box.) lllJ represents Seller only. o represents Buyer only. o is an intermediary between Seller and Buyer. o B. Fees. (Check only one box.) IlD (1) Seller will pay Principal Broker the fee specified by separate written commISSIon agreement between Principal Broker and Seller. Principal Broker will pay Cooperating Broker the foe cpecified in the /\grocment BowJccn Brokers found below the parties' signatures to this oontraot. (2) At the Closing of this sale, Seller will pay: Cooperating Broker a total cash fee of: Q % of the sales price. Q Principal Broker a total cash fee of: o % of the sales price. C1 The cash fees will be paid in Harris County, Texas. Seller authorizes escrow agent to pay the brokers from the Seller's proceeds at closing. NOTICE: Chapter 62, Texas Properly Code, authorizes a broker to secure an earned commission with a lien against the Properly. C. The parties may not amend this Paragraph 9 without the written consent of the brokers affected by the amendment. 10. CLOSING: A. The closing of the sale will be on or before thirty (30) days after the expiration of the FeasibiJ.i tv Period stated in Paraara'Dh 7B or within 7 days after objections made under Paragraph 6C have been cured or waived, whichever date is later (the closing date). B. If either party fails to close by the closing date, the non-detaulting@iay exercise the remedies in Paragraph 15. (TAR-1802) 10-18-05 Initialed for Identification by Buyer KA ,~nd Seller' . ,_ Page 6 of 12 Commercial Contract - Unimproved Property Concerning Bay Area Boulevard C. At closing, Seller will execute and deliver, at Seller's expense, a 0 general an special warranty deed. The deed must include a vendor's lien if any part of the sales price is financed. The deed must convey good and indefeasible title to the Property and show no exceptions other than those permitted under Paragraph 6 or other provisions of this contract. Seller must convey the Property: (1) with no liens, assessments, or other security interests against the Property which will not be satisfied out of the sales price, unless securing loans Buyer assumes; (2) without any assumed loans in default; and (3) with no persons in possession of any part of the Property as lessees, tenants at sufferance, or trespassers except tenants wider the written leases assigned to Buyer under this contract. D. At closing, Seller, at Seller's expense, will also deliver to Buyer: (1) tax statements showing no delinquent taxes on the Property; (2) an assignment of all leases to or on the Property; (3) to the extent assignable, an assignment to Buyer of any licenses and permits related to the Property; (4) evidence that the person executing this contract is legally capable and authorized to bind Seller; (5) an affidavit acceptable to the escrow agent stating that Seller is not a foreign person or, if Seller is a foreign person, a written authorization for the escrow agent to: (i) withhold from Seller's proceeds an amount sufficient to comply applicable tax law; and (ii) deliver the amount to the Internal Revenue Service (IRS) together with appropriate tax forms; and (6) any notices, statements, certificates, affidavits, releases, and other documents required by this contract, the commitment, or law necessary for the closing of the sale and issuance of the title policy, all of which must be completed by Seller as necessary. E. At closing, Buyer will: (1) pay the sales price in good funds acceptable to the escrow agent; (2) deliver evidence that the person executing this contract is legally capable and authorized to bind Buyer; (3) sign and send to each tenant in a lease for any part of the Property a written statement that: (a) acknowledges Buyer has received and is responsible for the tenant's security deposit; and (b) specifies the exact dollar amount of the security deposit; (4) sign an assumption of all leases then in effect; and (5) execute and deliver any notices, statements, certificates, or other documents required by this contract or law necessary to close the sale. F. Unless the parties agree otherwise, the closing documents will be as found in the basic forms in the current edition of the State Bar of Texas Real Estate Forms Manual without any additional clauses. 11. POSSESSION: Seller will deliver possession of the Property to Buyer upon cfosing and funding of this sale in its present condition with any repairs Seller is obligated to complete, ordinary wear and tear excepted. Any possession by Buyer before closing or by Seller after closing that is not authorized by a separate written lease agreement is a landlord-tenant at sufferance relationship between the parties. 12. SPECIAL PROVISIONS: (Identify exhibit if special provisions are contained in an attachment.) A. Seller will cooperate with Buyer for a 1031 Exchange so long as no additional expense is incurred by the Seller. B. A copy of the proposed Special Warranty Deed, to be delivered at closing, is attached hereto as Exhibit "B", incorporated by reference herein and made a part hereof for all purposes. C. A copy of the City of La Porte's standard form of industrial district agreement, to be executed by Buyer at closing, is attached hereto as Exhibit "C", incorporated by reference herein and made a part hereof for all purposes. (TAR-1802) '0-18-05 Initialed to< Idenlfficatio" bV .",er /<A ._and Se"e, ~_ Produced with ZipForm@by zipLoglx 18070 Fifteen Mile Road, Fraser. Michigan 48026 wwwzioLoaix com Page 7 of 12 City of La Porte. Commercial Contract - Unimproved Property Concerning Bav Area Boulevard 13. SALES EXPENSES: A. Seller's Expenses: Seller will pay for the following at or before closing: (1) releases of existing liens, other than those liens assumed by Buyer, including prepayment penalties and recording fees; (2) release of Seller's loan liability, if applicable; (3) tax statements or certificates; (4) preparation of the deed; (5) one-half of any escrow fee; (6) costs to record any documents to cure title objections that Seller must cure; and (7) other expenses that Seller will pay under other provisions of this contract. B. ~r'$ E~penses: Buyer will pay for the following at or before closing: (1) all loan expenses and fees; (2) preparation of any deed of trust; (3) recording fees for the deed and any deed of trust; (4) premiums for flood insurance as may be required by Buyer's lender; (5) one-half of any escrow fee; (6) other expenses that Buyer will pay under other provisions of this contract. 14. PRORATIONS: A. Prorations: (1) Interest on any ossumed loon, taxes, rents, and any expense reimbursements from tenants will be prorated through the closing date. (2) If the amount of ad valorem taxes for the year in which the sale closes is not available on the closing date, taxes will be prorated on the basis of taxes assessed in the previous year. If the taxes for the year in which the sale closes vary from the amount prorated at closing, the parties will adjust the prorations when the tax statements for the year in which the sale closes become available. This Paragraph 14A(2) survives closing. (3) If Buyer assumes a loan or is t::lking the Property cubject to ::In exiGting lion, Seller will transfer all reGcrve deposits. held by the lender for the payment of taxes, insuranoe premiums, and other oharges to Buyer at olosing and Buyer \\'i11 reimburse ouoh amounts to Seller by on oppropriate adjustment at clooing. B. Rollback Taxes: If Seller changes the use of the Property before closing or if a denial of a special valuation on the Property claimed by Seller results in the assessment of additional taxes, penalties, or interest (assessments) for periods before closing, the assessments will be the obligation of the Seller. If this sale or Buyer's use of the Property after closing results in additional assessments for periods before closing, the assessments will be the obligation of Buyer. This Paragraph 14B survives closing. C. Rent and Security Deposits: At closing, Seller will tender to Buyer all security deposits and the following advance payments received by Seller for periods after closing: prepaid expenses, advance rental payments, and other advance payments paid by tenants. Rents prorated to one party but received by the other party will be remitted by the recipient to the party to whom it was prorated within 5 days after the rent is received. This Paragraph 14C survives closing. 15. DEFAULT: A. If Buyer fails to comply with this contract, Buyer is in default and Seller may: (1) terminate this contract and receive the earnest money as liquidated damages, thereby releasing the parties from this contract; or ~ enforce specific performance, or seck other relicf an may be pro'.'idcd by law, or both. IT AR.1802) 'lJ.'8-05 lo,..red to< Ideoli"",lioo by .,ye, kA ,_ aod Selle, ~_ Page 8 of 12 Produced with ZipForm<<l by ziplogix 18070 Fifteen Mile Road, Fraser, Michigan 46026 www zipLoaix com City of La Por Commercial Contract - Unimproved Property Concerning Bay Area Boulevard B:- If, 'I:ithout fault, Seller is unable within the time allowed to deliver the estoppel oertifioates, survey, or commitment, Buyer may: (41 terminate this oontract and receive the eomest money, less ~:my independent consideration under P-ar;Jgroph 78(1), as the cole remedy; or t21 extend the time for performanoe up to 15 dnys and the c10cing will be extended as neoessary. C. Exeept as provided in Paragraph 15B, if Seller fails to comply with this contract, Seller is in default and Buyer may: (1) terminate this contract and receive the earnest money, less any independent consideration under Paragraph 7B(1), as liquidated damages, thereby releasing the parties from this contract; or (2) enforce specific performance, or seck such other relief as may be provided by law, or both. 16. CONDEMNATION: If before closing, condemnation proceedings are commenced against any part of the Property, Buyer may: A. terminate this contract by providing written notice to Seller within 15 days after Buyer is advised of the condemnation proceedings and the earnest money, less any independent consideration paid under Paragraph 7B(1), will be refunded to Buyer; or B. appear and defend in the condemnation proceedings and any award will, at Buyer's election, belong to: (1) Seller and the sales price will be reduced by the same amount; or (2) Buyer and the sales price will not be reduced. 17. ATTORNEY'S FEES: If Buyer, Seller, any broker, or any escrow agent is a prevailing party in any legal proceeding brought under or with relation to this contract or this transaction, such party is entitled to recover from the non-prevailing parties all costs of such proceeding and reasonable attorney's fees. This Paragraph 17 survives termination of this contract. 18. ESCROW: A. At closing, the earnest money will be applied first to any cash down payment, then to Buyer's closing costs, and any excess will be refunded to Buyer. B. If both parties make written demand for the earnest money. escrow agent may require payment of unpaid expenses incurred on behalf of the parties and a written release of liability of escrow agent from all parties. C. If one party makes written demand for the earnest money, escrow agent will give notice of the demand by providing to the other party a copy of the demand. If escrow agent does not receive written objection to the demand from the other party within 15 days after the date escrow agent sent the demand to the other party, escrow agent may disburse the earnest money to the party making demand, reduced by the amount of unpaid expenses incurred on behalf of the party receiving the earnest money and escrow agent may pay the same to the creditors. D. Escrow agent will deduct any independent consideration under Paragraph 78(1) before disbursing any earnest money to Buyer and will pay the independent consideration to Seller. E. If escrow agent complies with this Paragraph 18, each party hereby releases escrow agent from all claims related to the disbursal of the earnest money. F. Notices under this Paragraph 18 must be sent by certified mail. return receipt requested. Notices to escrow agent are effective upon receipt by escrow agent. 19. MATERIAL FACTS: To the best of Seller's knowledge and belief: (Check only one box.) CD A. Seller is not aware of any material defects to the Property except as stated in the attached Property Condition Statement. ~ (TAR-1802) 10-18-05 Initialed for Identification by Buyer.fA._and Seller _~__'L Page 9 of 12 Produced with ZipFol1T'O!l by zipLogix 18070 Fifteen Mile Road. Fraser, Michigan 48026 www.zioLooix.com City of La Por Commercial Contract - Unimproved Property Concerning Bav Area Boulevard [J 8:- Except as otherwise provided in this controct. Seller is not av,'om of: t41 :my subsurface: structures. pits, '/.'oste, springs, or improvemento; ~ ::my pending or threatened litigation. condemnation, or assessment affecting the Property; t31 any environmertal hazards or oonditions that moterially offect the Property; t4) whether the Property ic or hos been used for the storage or disposal of haz3rdouG materialo or toxic '....oote. a dump Gite or landfill. or any underground t::mks or containers; fa) whether radon, asbestos containing materials. urea formaldehyde f{lam insulation. lead based paint, toxic mold (to the extent that it advcrGely affectc the health of ordinary occupants), or other pollutant!:> or oontaminants of ony nature now exist or over existed on the Property; tat 3ny v.'etlands, as defined by federal or state law or regulation. on the Property; f71 any threatened or endangered species or their habitat on the Property; f81 any present or pact infestation of wood deotroying inGccts in the Property's improvements; ~ any contemplated material ohangeG to the Property or surrounding orca that would materially and detrimentally ::1ffoct the ordinary ucc of the Property; (4Q1 any condition on the Property that violates any Iav.' or ordin::1nce. (Describe any exoept:ons to (1) (10) in Parograph 12 or an addendum.) 20. NOTICES: All notices between the parties under this contract must be in writing and are effective when hand-delivered, mailed by certified mail return receipt requested, or sent by facsimile transmission to the parties addresses or facsimile numbers stated in Paragraph 1. The parties will send copies of any notices to the broker representing the party to whom the notices are sent. [J A. Seller also consents to receive any notices bye-mail at Seller's e-mail address stated in Paragraph 1. [J B. Buyer also consents to receive any notices bye-mail at Buyer's e-mail address stated in Paragraph 1. 21. DISPUTE RESOLUTION: The parties agree to negotiate in good faith in an effort to resolve any dispute related to this contract that may arise. If the dispute cannot be resolved by negotiation, the parties will submit the dispute to mediation before resorting to arbitration or litigation and will equally share the costs of a mutually acceptable mediator. This paragraph survives termination of this contract. This paragraph does not preclude a party from seeking equitable relief from a court of competent jurisdiction. 22. AGREEMENT OF THE PARTIES: A. This contract is binding on the parties. their heirs. executors, representatives, successors, and permitted assigns. B. This contract is to be construed in accordance with the laws of the State of Texas. C. This contract contains the entire agreement of the parties and may not be changed except in writing. D. If this contract is executed in a number of identical counterparts. each counterpart is an original and all counterparts. collectively, constitute one agreement. E. Addenda which are part of this contract are: (Check all that apply.) fi) (1) Property Description Exhibit identified in Paragraph 2; o (2) Commercial Contract Financing Addendum; [J (3) Commercial Property Condition Statement; [J (4) Notice to Purchaser of Real Property in a Water District (MUD); [J (5) Addendum for Coastal Area Property; [J (6) Addendum for Property Located Seaward of the Gulf Intracoastal Waterway; and fi) (7) Exhibi ts A, B, and C (Note: Counsel for the Texas Association of REAL TORS@(TAR) has determined that any of the foregoing addenda which are promulgated by the Texas Real Estate Commission (TREe) or published by TAR are appropriafe for use with th~ (TAR-1802) 10-18-05 Initialed for Identification by Buyer ('Y\ ,_and Seller ~_ Page 10 of 12 Produced with lipFormQll by zlplogix 18070 Fifteen Mile Road, "'raser, Michigan 48026 www zioloalx com City of La Porte - Commercial Contract - Unimproved Property Concerning Bav Area Boulevard to an entity controlled by the Buyer F. Buyer iii may" a may not assign this contract. If Buyer oscigno this oontr:Jot, Buyer will be rolieved of any future liability under this contract only if the :lssignee :lssumes, in 'Nriting, :311 obligations ond liability of Buyer under this contract. 23. TIME: Time is of the essence in this contract. The parties require strict compliance with the times for performance. If the last day to perform under a provision of this contract falls on a Saturday, Sunday, or legal holiday, the time for performance is extended until the end of the next day which is not a Saturday, Sunday, or legal holiday. 24. EFFECTIVE DATE: The effective date of this contract for the purpose of performance of all obligations is the date the escrow agent receipts this contract after all parties execute this contract. 25. ADDITIONAL NOTICES: A. Buyer should have an abstract covering the Property examined by an attorney of Buyer's selection, or Buyer should be furnished with or obtain a title policy. B. If the Property is situated in a utility or other statutorily created district providing water, sewer, drainage, or flood control facilities and services, Chapter 49, Texas Water Code, requires Seller to deliver and Buyer to sign the statutory notice relating to the tax rate, bonded indebtedness, or standby fees of the district before final execution of this contract. C. Notice Required by 913.257, Water Code: "The real property. described below, that you are about to purchase may be located in a certificated water or sewer service area, which is authorized by law to provide water or sewer service to the properties in the certificated area. If your property is located in a certificated area there may be special costs or charges that you will be required to pay before you can receive water or sewer service. There may be a period required to construct lines or other facilities necessary to provide water or sewer service to your property. You are advised to determine if the property is in a certificated area and contact the utility service provider to determine the cost that you will be required to pay and the period, if any, that is required to provide water or sewer service to your property. The undersigned purchaser hereby acknowledges receipt of the foregoing notice at or before the execution of a binding contract for the purchase of the real property described in the notice or at closing of purchase of the real property." The real property is described in Paragraph 2 of this contract. D, If the Property adjoins or shares a common boundary with the tidally influenced submerged lands of the state, ~33.135 of the Texas Natural Resources Code requires a notice regarding coastal area property to be included as part of this contract. E. If the Property is located seaward of the Gulf Intracoastal Waterway, ~61.025, Texas Natural Resources Code, requires a notice regarding the seaward location of the Property to be included as part of this contract. F. If the Property is located outside the limits of a municipality, the Property may now or later be included in the extra-territorial jurisdiction (ET J) of a municipality and may now or later be subject to annexation by the municipality. Each municipality maintains a map that depicts its boundaries and ET J. To determine if the Property is located within a municipality's ET J, Buyer should contact all municipalities located in the general proximity of the Property for further information. G. Brokers are not qualified to perform property inspections, surveys, engineering studies, environmental assessments, or inspections to determine compliance with zoning, governmental regulations, or laws. Buyer should seek experts to perform such services. Selection of inspectors and repairmen is the responsibility of Buyer and not the brokers. 26. CONTRACT AS OFFER: The execution of this contract by the first party constitutes an offer to buy or sell the Property. Unless the other party accepts the offer by 5:00 p.m., in the time zone in which the Property is located, on November 19. 2010 , the offer will lapse and beco~1 and void. (TAR-1802) 10-18-05 Initialed for Identification by Buyer&,_and seller.1\..!-2-. Page 11 of 12 Produced with ZipForm@ by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www ziclooix com City of La Porte - Commercial Contract" Unimproved Property Concerning Bay Area Boulevard make no representation or sequences of this document or READ THIS CONTRACT CAREFULLY. The brokers and recommendation as to the legal sufficiency, legal effect, tax c transaction. CONSULT your attorney BEFORE signing. :~yer: ry~~~1 Tn!:. Seller: By: Printed Name: Printed Name:Mr. Ron Bottoms Title: -President Title: Ci ty Manaaer Buyer: By: Seller: By: Printed Name: Printed Name: Title: Title: AGREEMENT BETWEEN BROKERS Principal Broker agrees to pay (Cooperating Broker) a fee of $ or % of the sales price when the Principal Broker's fee is received. Escrow agent is authorized and directed to pay Cooperating Broker from Principal Broker's fee at closing. This Agreement Between Brokers supersedes any prior offers and agreements for compensation between brokers. Cooperating Broker By: Principal Broker By: ATTORNEYS Buyer's altorne~ Seller's altorney is: Name:J:ji.J~' ';l~Name:Mr. Knox W. Askins. City AttY. Address: . ~ ~ Address: 702 W. Fairmont Parkway flhu~I!J'" -rP~M:' 'J?o/()- ~"iJ La Porte TX 77572 Phone & Fax: (7/3) 6.r 1- 3'109 (?/3)6S"1-,f2.ie6 Phone & Fax: (281) 471-1887 (281) 471-2047 E-mail: \Alsi1f/ ~ tu./ ~y,t. CO'h"l E-mail: knoxaskins@comcast.net Buyer's attorney requests copies of documents, Seller's attorney requests copies of documents, I.Sltices. and other information: notices, and other information: the title company sends to Buyer. !Xl the title company sends to Seller. ~ Seller sends to Buyer. IXJ Buyer sends to Seller. ESCROW RECEIPT Escrow agent acknowledges receipt of: DA. the contract on this day (effective date); DB. earnest money in the amount of $ in the form of on Escrow Agent: Ms. Staci Gav Address: 5003 Colleae Park Deer Park. TX 77536 Phone & Fax: (281) 479-1913 (281) 479-8609 By: American Title Company E-mail: staciiaatcdn. com (T AR-1802) 10-18-05 Produced with zipForm@bv zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 WNW zioLoaix com Page 12 of 12 City of La Por 81.00 ACRES (3,528,480 sa. FT.) GEORGE B. McKINSTRY LEAGUE ABSTRACT NUMBER 47 PAGE 1 OF2 Being a tract or parcel of land containing 81.00 acres (3,528,480 square feet) located in the George B. McKinstry League, Abstract Number 47, Harris County, Texas, and being all of a called 80.972 acre tract of land described in deed executed July 24, 1989 from FMC Corporation to the City of La Porte, Texas as recorded under Harris County Clerks File (HCCF) No. M253982 of the Official Public Records of Real Property, Harris County, Texas (OPRRPHCT), said 81.00 acre tract being more particularly described as follows (all bearings are based upon the Texas State Plane Coordinate System, South Central Zone; all coordinates and distances are surface and may be converted to grid by multiplying by the combined scale factor of 0.99988150: coordinates are based upon the North American Datum of 1983 (NAD 83)): BEGINNING at a five-eighths inch iron rod found for the southwest comer of said 80.972 acre tract and the northwest comer of a called 21.28 acre tract described in deed executed September 11, 2000 from FMC Foundation to Superior Carriers, Inc. as recorded under HCCF No. U628453 of said OPRRPHCT, and also being on the east right-of-way line of Bay Area Boulevard (150 feet wide) as dedicated by instrument recorded in Volume 7235, Page 135 of the Deed Records of said Harris County, Texas (HCDR) said comer having surface coordinates of X=3,224,420.70, Y=13,803,220.51; THENCE, North 01000' 03" West (called North 01000'45" West), with the west line of said called 80.972 acre tract and with the east right-of-way line of Bay Area Boulevard, a distance of 1,689.99 feet (called 1,689.46 feet) to a five-eights inch iron rod found for the northwest comer of said called 80.972 acre tract in the south line of a called 21.274 acre tract (50 foot wide) described as Tract 2 in deed executed April 12, 1973 from Friendswood Development Company to Southern Pacific Transportation Company as recorded under HCCF No. D867930 of the OPRRPHCT; THENCE, North 87024'54" East (called North 8r25'50" East), with the north line of said called 80.972 acre tract and the south line of said called 21.274 acre tract, at a distance of 464.41 feet (called 464.89 feet) pass a five-eighths inch iron rod with brass cap found 0.10 feet right of line, marking the east right-of-way line of a 40 foot wide pipeline easement described in easement deed from Humble Oil & Refining Company to Channel Industries, et al executed July 10, 1967 and recorded under Volume 6835, Page 616 of the HCDR, at a distance of 906.61 feet (called 906.83 feet) pass a five- eighths inch iron rod with brass cap stamped 2393 found, in all a total distance of 2,058.34 feet (called 2,058.62 feet) to a five-eighths inch iron rod with brass cap stamped 2382 found for the northeast comer of said called 80.972 acre tract and being the northwest comer of a called 38.096 acre tract described as Ditch "C", Tract 2 in deed executed September 29, 1970 from Friendswood Development Company to Harris County Flood Control District as recorded in Volume 8260, Page 124 of the HCDR; !'XHIBTT A.. 1< Ii 81.00 ACRES (3,528,480 SQ. FT.) GEORGE B. McKINSTRY LEAGUE ABSTRACT NUMBER 47 PAGE 2 OF 2 THENCE, South 03001'53" East (called South 03002'25" East), with the east line of said called 80.972 acre tract and with the west line of said called 38.096 acre tract, a distance of 1,690.01 feet (called 1,688.89 feet) to a five-eighths inch iron rod and "Baseline Corp." cap, set for the southeast comer of said 80.972 acre tract and the northeast comer of a called 20.0000 acre tract described in deed executed August 26, 1991 from FMC Foundation to Chusei (U.S.A.) Inc. as recorded under HCCF No. N291863 of said OPRRPHCT, and from which a found five-eighths inch iron rod bears North 01009' West, a distance of 20.88 feet; THENCE, South 87025'54" West (called South 8r25'50" West), with the south line of said 80.972 acre tract and the north line of said called 20.0000 acre tract and the north line of a called 22.72 acre tract described in deed executed December 2, 1999 from FMC Foundation to Chusei (U.S.A.) Inc. as recorded under HCCF No. U115813 of the OPRRPHCT, at a distance of 0.42 feet pass a five-eighths inch iron rod found, at a distance of 1,341.44 feet pass the northwest comer of said ca lied 22.72 acre tract and the northeast comer of the aforesaid called 21.28 acre tract from which a found five- eighths inch iron rod and "Texas Land Surveying" cap found bears South 71059' West. a distance of 0.36 feet, continuing with the north line of said called 21.28 acre tract, for a total distance of 2,118.23 feet (called 2.118.40 feet) to the POINT OF BEGINNING and containing 81.00 acres (3,528480 square feet) of land. A survey map of even date was prepared in conjunction with this property description. This description is based upon a land title survey perfonned by Michael F. Carrington, Registered Professional Land Surveyor, Texas Registration Number 5366, completed April 20, 2010, and is on file in the office of Baseline Corporation, Houston, Texas, Job No. 03.003.11. ~/ ~~\~ KA _.-4..'",;,'/11.,- SPECIAL W ABRANTY DEED IIO'rXCll OJ' COUlJ)JDrrDLXTY UGIl'rS. U TOll AUl ~ JD.'rUIl.I.L l'BaSOlf, YOl1 aT Jl.I:IIOft 01. SDDJI .IJf!' 01' '1'D J'OLLOlfDlQ J:D"OJtXJ.TI:OH "I.OK TKI:S nrlnUJlD"l' BDOD :IT :IS J':u.JIJ) 1'01. UCOD Dr 'l'D P'DBI.:IC UC01lJ)S I YOft SOCDL SBCl1J.rrY KOIIBD OR YOft Da:rvD I S L:ICDS. IlUJDD. Date: , 2010 Grantor: CITY OF LA PORTE, a 1In1Dicipal corporation Mailing Address: 604 West :raircnont Parkway La Porte, TX 77571 Grantee: Mailing Address: consideration: Ten and No/10Q Dollars ($10.00) cash and other good and valuable considerations Property (including any improvements) : Being a tract or parcel of land containing 81.00 acres (3,528,480 square feet) located in the George B. McKinstry League, Abstract Humber 47, Barris county, Texas, and being all of a called 80.972 acre tract of land, described in deed executed July 24, 1989, from PMC Corporation to the City of La Porte, Texas, as recorded under Barris county Clerk's File (BCep) No. M253982 of the Official Public Records of Real Property, Harris County, Texas (OPRRPHCTI, said 81.00 acre tract being more particularly described by metes and bounds on Exlrlbit "A" attached hereto, incorporated by reference herein and made a part hereof for all purposes (hereinafter referred to as the .Property"). Rese."..!... Ii... r-il Jill...,...... lie QeRv.yaa.. ..4 WlWilr_'"l'l ftis esJll\."ey....l!. ill ..ll. lillMlj.e" ~8 all aall ...~le... 'ae Jres"'!e!!!.!!., e~aIUt1oI!8, oil, saa, a....J. ..kalr m~llla..l ..aSBlF\"a"i."II, aall_aRt_, aM ge".RJ.atll, if aay, ..,1i.ele 158 _, aafQ~8.~1. a~aia.~ ~~. ~r~ .a.8lriaa. p.&p..~Y as Ifeile._e. ~ .he ..eee~.. e. 15a. 8B~Y 81.~ ei ~ae aie~e.aia SBUB_Y. Jlxhiblt: -D" THIS PROPERTY IS HEREBY CONVEYED "AS IS", "WHERE IS" AND WITH ALL FAULTS AND GRANTOR MAKES NO REPRESENTATION OR WARRANTY WHATSOEVER WHETHER EXPRESSED, IMPLIED OR STATUTORY WITH RESPECT TO THE PROPERTY, THE AVAILABILITY OF UTILITIES, ACCESS OF THE PROPERTY TO PUBLIC ROADS, APPLIANCES OR THE CONDITION, ADEQUACY OR SUITABILITY OF THE PROPERTY FOR PURPOSES. GRANTEE AGREES THAT GRANTEE IS NOT RELYING ON ANY WARRANTY OR REPRESENTATIONS OF GRANTOR OR ANY AGENT, EMPLOYEE, REPRESENTATIVE, DIRECTOR OR OFFICER OF GRANTOR, AND THAT GRANTEE IS BUYING THE PROPERTY "AS IS", "WHERE IS" I SUBJECT TO ALL FAULTS AND WITHOUT ANY EXPRESSED OR IMPLIED WARRANTIES OF ANY KIND, INCLUDING BUT NOT LIMITED TO, MATERIALS, WORKMANSHIP, GOOD AND WORKMANLIKE CONSTRUCTION, DESIGN, CONDITION, HABITABILITY, TENANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY OR THE ENVIRONMENTAL CONDITION OF THE PROPERTY AND THE PRESENCE OF OR CONTAMINATION BY HAZARDOUS MATERIALS AND GRANTOR HEREBY DISCLAIMS ANY SUCH WARRANTY. GRANTEE HAS DETERMINED ON GRANTEE'S BEHALF (I) THE PHYSICAL CONDITION OF THE PROPERTY AND THAT THERE IS NO DEFECT OR CONDITION WHICH IS UNACCEPTABLE TO GRANTEE, (II) WHETHER ANY PORTION OF THE PROPERTY LIES IN ANY FLOOD PLAIN, FLOOD WAY OR SPECIAL FLOOD HAZARD AREA, (III) WHETHER ANY GEOLOGICAL FAULT OR UNSATISFACTORY SOIL CONDITION I INCLUDING WETLANDS, EXISTS ON ANY PORTION OF THE PROPERTY, AND (IV) THAT ALL ENVIRONMENTAL CONDITIONS RELATING TO THE PROPERTY ARE ACCEPTABLE TO GRANTEE. GRANTEE FURTHER ACKNOWLEDGES THAT GRANTOR HAS NOT OCCUPIED THE PROPERTY AND THEREFORE, THE PROPERTY MAY CONTAIN DEFECTS OR MAY BE IN NEED OF REPAIR. without limiting the generality of the foregoing paragraph, this Special warranty Deed is executed and delivered, and the conveyance hereinabove set forth is made by Grantor and accepted by Grantee, subject to each and all of those certain exceptions to and conditione and encumbrances on title to the property which are set forth in Exhibit "B" attached hereto, incorporated by reference herein and made a part hereof for all purposes (such exceptions, conditions and encumbrances being herein collectively referred to as the "Permitted Exceptions"), to the extent the Permitted Exceptions are validly existing and are applicable to the Property. OOVERANTS: Grantee joins in the execution of this Special Warranty Deed, to evidence its agreement to the following covenants, which shall be considered covenants running with the land: 1. No portion of the property shall be used for the incineration or disposal of hazardous waste, or for storage, processing, incineration or disposal of radioactive waste, or medical waste. 2. In the event that any portion of the Property is used for open storage of shipping containere, the shipping containers shall be stacked not to exceed four (4) containers in height. Minimum setback for open storage of Shipping containers, shall be fifty feet (50') on Bay Area Boulevard~ twenty five feet (25') from the rear property line; and twenty-five feet (25') from each side property line. tTntil development of fixed and permanent structure (e) existing vegetation in the setback areae shall remain in place. ~A 3. There shall be a permanent fifteen foot (IS') landscape setback contiguous to Bay Area Boulevard which, upon development of fixed and permanent structure(s) shall be landscaped by one of the following techniques; a) Leave in place existing trees and vegetation to provide a thorough and effective landscape. b) Develop and install a landscaping plan that includes a combination of trees, shrubs, grass and ground cover. por items a and b above, the actual length of required landscaping along the right-of-way of Bay Area Boulevard will be equal to the length of the new development that is parallel to the roadway. In all cases the 15' strip along the entire right~of~way of Bay Area Boulevard, shall be dedicated as a landscape easement and shall be kept free from any improvements except for approved driveway access and identification signs. Grantor for the consideration and subject to the Permitted Exceptions, reservations from and exceptions to conveyance and warranty, and the Restrictions and Covenants herein provided, grants, sells, and conveys to Grantee the property, together with all and singular the rights and appurtenances thereto in any wise belonging. to have and hold to Grantee, Grantee's successors or assigns, forever. Grantor binds Grantor and Grantor's successors and aSSigns to warrant and forever defend all and singular the Property to Grantee and Grantee's successors and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof, by, through, or under Grantor but not otherwise, except as to the Permitted Bxceptions, reservations from and exceptions to conveyance and warranty, and the Restrictions and Covenants herein provided. CITY OF LA POR'I'B By: Ron Bottoms, City Manager A'l"l'EST: City Secretary APPROVED AS TO FORM: Knox W. Askins, City Attorney A.CCKP!'BD .urD A.QUa> I , Grantee By: Authorized Officer STATE 011' TEXAS " " COUNTY 011' HARRIS & This instrument was acknowledged before me on the ____ day of 2010, by Ron Bottoms, City Manager of the City of La Porte, a municipal corporation. Notary Public, State of Texas STATE 011' TEXAS & " COtmTY OF HARRrS " This instrument was acknowledged before me on the ____ day of 201.0, by , Authorized Officer of Notary Public, State of Texas ~ .-coJlJ)DTG ~ 'to. PUP.IJlZD Dr TO LAW 0.1'%0 01'. ASIalfS " ASIaNS l P. C. P.O. Box 1.218 La Porte, TX 77572-1218 I<A DJlnrf -B- .permitted Bxceptions. 1. The fOllowing restrictive covenants of record itemized below: None of record except the following: As set forth in lnetrument(.) recorded in volume 5550, Page ~1S , of the Deed Records of sarrie County, Texas. Recorded in volume 5920, Page 165, of the Deed Records of Sarris county, Texas. Recorded in Volume 8470, Page ~38, of the Deed Records of Barris County, Texa.. Recorded in Volume 8035, Page 51, of the Deed Records of Barri. county, Texa8. 2. An unlocated right-of-way and ea.ement for pipeline purpose., a. granted to H\UlIble pipe Line Company by instrument recorded in Volume 102, Page 346, of the Deed Record8 of Harris County, Texas. 3. A right -of -way and easement for pipeline purposes, as granted to Tennessee Gas Transmission Company by instruments recorded in Volume 3007, Page 706, Volume 3135, Page 261, Volume 3340, page 188, and in Volume 6835, Page 616. all of the Deed Records of Harris County, Texas. .. A right-of-way and easement for pipeline purpose., .s granted to Channel Industries Ga. Company, Houston Pipe Line Company and Tenneco oil Company by instrument recorded in Volume 8017, Page 190, of the Deed Record. of Harri. county, Texas. 5. A dght -of -WilY and easement for electric distribution and communication syste.s ten (10) feet in width along the most we8terly property line, lying east of and adjacent to Bay Area Boulevard, a. granted to Bouston Lighting ~ Power Company by instrument recorded in Volume 69.S, Page .37, of the Deed Record. of Harris County, Texas. 6. A l/Stla Don-participating royalty intereat in a.ll oil, gas and other minerals on, in, under or that may be produced from the subject property i. excepted herefrom, a. Bame i. Bet forth in instrument recorded in Volume 6890, Page 115, of the Deed Recorda of HarriBCounty, Texas. '7. All oil, gas and other mineral., royalties, bonuses, rental. and other rights in connection with .ame, all of which are expres.ly excepted herefrom, as set forth in instruments filed under Volume 6926, Page 352, and under Volume 6973, Page 503, both of the Deed Records of Harris COUDty, Texas. KAt NO. 200?-IDA-___ STATE OF TEXAS COUNTY OF HARRIS nmUSTRIAL DISTR:ICT AGRBlDIBNT This AGREEMENT made and entered into by and between the CITY OF LA PORTE, TEXAS, a municipal corporation of Harris County, Texas, hereinafter called .CITY", and , a corporation, hereinafter called .COMPANY", WIT N E SSE T H: WHEREAS, it is the established policy of the city Council of the City of La Porte, Texas, to adopt such reasonable measures from time to time as are permitted by law and which will tend to enhance the economic stability and growth of the City and its environs by attracting the location of new and the expansion of existing industries therein, and such policy is hereby reaffirmed and adopted by this City Council as being in the best interest of the city and its citizens; and WHEREAS, pursuant to its policy, City has enacted Ordinance No. 729, designating portions of the area located in its extraterritorial jurisdiction as the "Battleground Industrial District of La Porte, Texas., and Ordinance No. 842A, designating portions of the area located in its extraterritorial jurisdiction as the "Bayport Industrial District of La Porte, Texas", hereinafter collectively called "District", such Ordinances being in compliance with the Municipal Annexation Act of Texas, codified as Section 42.044, Texas Local Government Code; and WHEREAS, Company is the owner of land within a designated Industrial District of the City of La Porte, said land being legally described on the attached Exhibit "A" (hereinafter "Land"); and said Land being more particularly shown on a plat attached as Exhibit "B", which plat describes the ownership boundary lines; a site layout, showing all improvements, including pipelines and railroads, and also showing areas of the Land previously annexed by the City of La Porte; and WHEREAS, City desires to encourage the expansion and growth of industrial plants within said Districts and for such purpose desires to enter into this Agreement with Company pursuant to Ordinance adopted by the City Council of said City and recorded in the official minutes of said City: Bxhibit: .C" 1 KA NOW, THEREFORE, in consideration of the premises and the mutual agreements of the parties contained herein and pursuant to the authority granted under the Municipal Annexation Act and the Ordinances of City referred to above, City and Company hereby agree with each other as follows: 1. city covenants, agrees and guarantees that during the term of this Agreement, provided below, and subject to the terms and provisions of this Agreement, said District shall continue to retain its extraterritorial status as an industrial district, at least to the extent that the same covers the Land belonging to Company and its assigns, unless and until the status of said Land, or a portion or portions thereof, as an industrial district may be changed pursuant to the terms Qf this Agreement. Subject to the foregoing and to the later provisions of this Agreement, City does further covenant, agree and guarantee that such industrial district, to the extent that it covers said Land lying within said District and not now within the corporate limits of City, shall be immune from annexation by City during the term hereof (except as hereinafter provided) and shall have no right to have extended to it any services by City, and that all Land, including that which has been heretofore annexed, shall not have extended to it by ordinance any rules and regulations (a) governing plats and subdivisions of land, (b) prescribing any building, electrical, plumbing or inspection code or codes, or (c) attempting to exercise in any manner whatever control over the conduct of business thereon; provided, however, any portion of Land constituting a strip of land 100' wide and contiguous to either Fairmont Parkway, state Highway 225, or State Highway 146, shall be subject to the rules and regulations attached hereto as Exhibit "C" and made a' part hereof; and provided, however, it is agreed that City shall have the right to institute or intervene in any administrative andlor judicial proceeding authorized by the Texas Water Code, the Texas Clean Air Act, the Texas Health & Safety Code, or other federal or state environmental laws, rules.or regulations, to the same extent and to the same intent and effect as if all Land covered by this Agreement were not subject to the Agreement. II. In the event that any portion of the Land has heretofore been annexed by City, Company agrees to render and pay full City ad valorem taxes on such annexed Land and improvements, and tangible personal property. Under the terms of ~he Texas Property Tax Code (S.B. 621, Acts of the 65th Texas Leg~slature, Regular Session, 1979, as amended), the appraised value for tax purposes of the annexed portion of Land, improvements, and tangible personal property shall be determined by the Harris County Appraisal District. The parties hereto recognize that said Appraisal District has no authority to appraise the Land, improvements, and tangible personal property in the unannexed area for the purpose of computing the II in lieu" 2 KA payments hereunder. Therefore, the parties agree that the appraisal of the Land, improvements, and tangible personal property in the unannexed area shall be conducted by City I at City's expense, by an independent appraiser of City'S selection. The parties recognize that in making such appraisal for .in lieu. payment purposes, such appraiser must of necessity appraise the entire (annexed and unannexed) Land, improvements, and tangible personal property. Nothing herein contained shall ever be interpreted as lessening the authority of the Harris County Appraisal District to establish the appraised value of Land, improvements, and tangible personal property in the annexed portion, for ad valorem tax purposes. III. A. The properties upon which the "in lieu of" taxes are assessed are more fully described in subsections 1, 2, and 3 of subsection C, of this Paragraph III (sometimes collectively called the "Property"); provided, however, pollution control equipment installed on the Land which is exempt from ad valorem taxation pursuant to the provisions of Sec. 11.31 of the Texas Property Tax Code is exempt from ad valorem taxation and "in lieu of taxes. hereunder. Property included in this Agreement shall not be entitled to an agricultural use exemption for purposes of computing "in lieu of taxes# hereunder. B. On or before the later of December 31, 2008, or 30 days from mailing of tax bill and in like manner on or before each December 31st thereafter, through and including December 31, 2019, Company shall pay to City an amount of "in lieu of taxes" on Company's Property as of January 1st of the current calendar year ("Value Year") . C. Company and City agree that the fOllowing percentages ("Percentage Amount") shall apply during each of the Value Years: Value Year 2008: 62% Value Year 2009: 62% Value Year 2010: 62% Value Year 2011: 62% Value Year 2012 : 62% Value Year 2013: 62% Value Year 2014: 63% Value Year 2015: 63% Value Year 2016: 63% Value Year 2017: 63% Value Year 2018: 63% Value Year 2019: 63% Company agrees to pay to City an amount of "in lieu of taxes" on Company's land, improvements and tangible personal property in the unannexed area equal to the sum of: - 1. percentage Amount of the amount of ad valorem taxes which would be payable to city if all of the companyfs Land and improvements which existed on January 1, 2006, and each January 1 thereafter of the applicable Value Year during the term of this Agreement, (excluding amounts which would be so payable with respect to any Substantial Increase in value of such Land and improvements to which subparagraph 2, below applies), had been within the corporate limits of City and appraised each year by city's independent appraiser, in accordance with the applicable provisions of the Texas property Tax Code; and 2. (a) On any substantial Increase in value of the Land, improvements, and tangible personal property (excluding inventory) dedicated to new construction, in excess of the appraised value of same on January 1, 2007, resulting from new construction (exclusive of construction in progress, which shall be exempt from taxation), for each Value Years following completion of construction in progress, an amount equal to Twenty-five percent (25%), if construction is completed in Value years 2008 through 2013; and Twenty percent (20%), if construction is completed in Value years 2014 through 2019, of the amount of ad valorem taxes which would be payable to City if all of said new construction had been within the corporate limits of City and appraised by City's independent appraiser, in accordance with the applicable provisions of the Texas Property Tax Code. In the case of new construction which is completed in Value Year 2016 or later, and provided, further, that City and Company enter into an Industrial District Agreement after the expiration of this Industrial District Agreement, then, and in such events, such new construction shall be entitled to additional Value Years under the new Agreement at a Twenty percent (20\) valuation under this subparagraph (a), for a total of six (6) Value Years, but not extending beyond Value Year 2022. (b) A Substantial Increase in value of the Land, improvements, and tangible personal property (excluding inventory) as used in subparagraph 2(a) above, is defined as an increase in value that is the lesser of either: 1. at least Five percent appraised value of Land January 1, 2007; or a cumulative value of at (5%) of the total and improvements, on i1. least $3,500,000.00. For the purposes of this Agreement, multiple projects that are completed in a value Year can be cumulated to arrive at the amount for the increase in value. If existing property values have depreciated below the Property value established on January 1, 2007, an amount equal to the amount of the depreciation will be removed from the calculation under this subparagraph 2 to restore the value to the January 1, 2007, value; and 3 . Percentage Amount of the amount of ad valorem taxes which would be payable to City on all of the Company's tangible personal property of every description, located in an industrial district of City, including, without limitation, inventory, (including inventory in a federal Foreign Trade Zone and including Freeport exempted inventory), oil, gas, and mineral interests, items of leased equipment, railroads, pipelines, and products in storage located on the Land, if all of said tangible personal property which existed on January I, 2008, and each January 1 thereafter of the applicable Value Year during the term of this Agreement, (excluding amounts which would be so payable with respect to any Substantial Increase in value of such tangible personal property to which subparagraph 2, above applies), had been within the corporate limits of City and appraised each year by the City'S independent appraiser, in accordance with the applicable provisions of the Texas property Tax Code. (c) with the sum of 1, 2 and 3 reduced by the amount of City's ad valorem taxes on the annexed portion thereof as determined by appraisal by the Harris County Appraisal District. 4. Notwithstanding the above, should City elect to grant the freeport inventory exemption authorized by Article VIII, Section l-j of the Texas Constitution and Section 11. 251 of the Texas Property Tax Code to taxpayers within the city limits, then the freeport inventory exemption shall apply to parties to this Agreement. Further, should inventory or any other class or type of property become exempt from taxation by constitutional amendment or act of the Texas Legislature (including, but not limited to, Article VIII, Section 1-n, of the Texas Constitution and Section 11.253 of the Texas Property Tax Code), such class or type of property shall be exempt for purposes of this Agreement, unless the City Council of the City of La Porte shall by Ordinance provide for the cont inued taxation of such property under the authority of any applicable provisions of the Texas Constitution and Texas Statutes. 5. city and Company acknowledge circumstances might require the city to provide emergency services to company's property described on Exhibit "Aft attached hereto. Emergency services are limited to fire, police, and public works emergency services. If Company is not a member of Channel Industries Mutual Aid Association (CIMA), Company agrees to reimburse City for its costs arising out of any emergency response requested by Company to Company I s property, and to which city agrees to respond. If Company is a member of CIMA, the obligations of Company and City shall be governed by the CIMA agreement, to which agreement City is a party. IV. This Agreement shall extend for a period beginning on the 1st day of January, 2008, and continuing thereafter until December 31, 2019, unless extended for an additional period or periods of time upon mutual consent of Company and City as provided by the Municipal Annexation Act; provided, however, that in the event this Agreement is not so extended for an additional period or periOdS of time on or before August 31, 2019, the agreement of City not to annex property of Company within the District shall terminate. In that event, City shall have the right to commence immediate annexation proceedings as to all of Company's property covered by this Agreement. notwithstanding any of the terms and provisions of this Agreement. Company agrees that if the Texas Municipal Act, Section 42.044, Texas Local Government Code, is amended after January 1, 1994, or any new legislation is thereafter enacted by the Legislature of the State of Texas which imposes greater restrictions on the right of City to annex land belonging to Company or imposes further obligations on city in connection therewith after the annexation of such land, Company will waive the right to require City to comply with any such additional restrictions or obligations and the rights of the parties shall be then determined in accordance with the provisions of said Texas Municipal Annexation Act as the same existed January 1, 1994. v. This Agreement may be extended for an additional period or periods by agreement between City and Company and/ or its assigns even though it is not extended by agreement between City and all of the owners of all land within the District of which it is a part. VI. A. In the event Company elects to protest the valuation for tax purposes set on its said properties by City or by the Harris County Appraisal District for any year or years during the terms hereof. nothing in this Agreement shall preclude such protest and Company shall have the right to take all legal steps desired by it to reduce the same. Notwithstanding such protest by Company, and except as otherwise provided in Article VI (B), Company agrees to pay to City on or before the date therefor hereinabove provided, at least the total of (a) the total amount of ad valorem taxes on the annexed portions, plus (b) the total amount of the "in lieu of taxes. on the unannexed portions of Company's hereinabove described property which would be due to City in accordance with the foregoing provisions of this Agreement on the basis of renditions which shall be filed by Company. When the City or Harris County Appraisal District (as the case may be) valuation on said property of Company has been so finally determined, either as the result of final judgment of a court of competent jurisdiction or as the result of other final conclusion of the controversy, then within thirty (30) days thereafter Company shall make payment to City of any additional payment due hereunder, or City shall make payment to Company of any refund due, as the case may be, based on such final valuation, together with applicable penalties, interests, and costs. B. Should Company disagree with any appraisal made by the independent appraiser selected by City pursuant to Article II above (which shall be given in writing to Company), Company shall, within twenty (20) calendar days of receiving City's invoice, give written notice to the City of such disagreement. In the event Company does not give such written notice of disagreement within such time period, the appraisal made by said independent appraiser shall be final and controlling for purposes of the determination of lIin lieu of taxesl1 payments to be made under this Agreement. Should Company give such notice of disagreement, Company shall also submit to the City with such notice a written statement setting forth what Company believes to be the market value of Company's hereinabove described property. Both parties agree to thereupon enter into good faith negotiations in an attempt to reach an agreement as to the market value of Company's property for II in lieu 11 purposes hereunder. If, after the expiration of thirty (30) days from the date the notice of disagreement was received by City, the parties have not reached agreement as to such market value, the parties agree to submit the dispute to final arbitration as provided in subparagraph 1 of this ArtiCle VI(B). Notwithstanding any such disagreement by Company, Company agrees to pay to City on or before December 31 of each year during the term hereof, at least the total of (a) the ad valorem taxes on the annexed portions, plus (b) the total amount of the "in lieu. payments which would be due hereunder on the basis of Company's written valuationa statement submitted to City by Company hereunder, or the total assessment and "in lieu of taxes. thereon for the last preceding year, whichever is higher. 1. A Board of Arbitrators shall be created composed of one person named by Company, one by City, and a third to be named by those two. In case of no agreement on this arbitrator in 10 days, the parties will join in a written request that the Chief Judge of the U.S. District Court for the southern District of Texas appoint the third arbitrator who, (as the "Impartial Arbitrator" ) shall preside over the arbitration proceeding. The sole issue to be determined in the arbitration shall be resolution of the difference between the parties as to the fair market value of company's property for calculation of the "in lieu" payment and total payment hereunder for the year in question. The Board shall hear and consider all relevant and material evidence on that issue including expert opinion, and shall render its written decision as promptly as practicable. That decision shall then be final and binding upon the parties, subject only to judicial review as may be available under the Texas General Arbitration Act (Chapter 171, "General Arbitration", Texas civil Practice and Remedies Code). Costs of the arbitration shall be shared equally by the Company and the city, provided that each party shall bear its own attorneys fees. VII. City shall be entitled to a tax lien on Company's above described property, all improvements thereon, and all tangible personal property thereon, in the event of default in payment of "in lieu of taxes" payments hereunder, which shall accrue penalty and interest in like manner as delinquent taxes, and which shall be collectible by city in the same manner as provided by law for delinquent taxes. VIII. This Agreement shall inure to the benefit of and be binding upon city and company, and upon Company's successors and assigns, affiliates and subsidiaries t and shall remain in force whether Company sells, assigns, or in any other manner disposes of, either voluntarily or by operation of law, all or any part of the property belonging to it within the territory hereinabove described, and the agreements herein contained shall be held to be covenants running with the land owned by Company situated within said territory, for so long as this Agreement or any extension thereof remains in force. Company shall give City written notice within ninety (90) days, with full particulars as to property assigned and identity of assignee, of any disposition of the ~and, and assignment of this Agreement. IX. If city enters into an Agreement with any other landowner with respect to an industrial district or enters into a renewal of any 8 KA existing industrial district agreements after the effective date hereof and while this Agreement is in effect, which contains terms and provisions more favorable to the landowner than those in this Agreement, Company and its assigns shall have the right to amend this Agreement and City agrees to amend same to embrace the more favorable terms of such agreement or renewal agreement. x. The parties agree that this Agreement complies with existing laws pertaining to the subject and that all terms, considerations and conditions set forth herein are lawful, reasonable, appropriate, and not unduly restrictive of Company's business activities. Without such agreement neither party hereto would enter into this Agreement. In the event anyone or more words, phrases, clauses, sentences, paragraphs, sections, articles or other parts of this Agreement or the application thereof to any person, firm, corporation or circumstances shall be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, then the application, invalidity or unconstitutionality of such words, phrase, clause, sentence, paragraph, section, article or other part of the Agreement shall be deemed to be independent of and separable from the remainder of this Agreement and the validity of the remaining parts of this Agreement shall not be affected thereby. XI. Upon the cotmnencement of the term of this Agreement I all other previously existing industrial district agreements with respect to said Land shall terminate. XII. Notices by a party to the other party hereto, shall be mailed or delivered as follows: To the City of La Porte: City Manager City of La Porte 604 West Fairmont Parkway La Porte, TX 77571 To Company: Attention: (COMPANY) Department Company shall promptly notify city of any change of ownerShip of property, any assignment of this Agreement, and of any change of billing address. Company shall notify city annually, on or before June 1, of any changes to the following information: Plant Manager Name: Address: Phone: Fax: Email: Tax Agent/Billing Contact Name: Address: Phone: Fax: Email: ENTERED INTO effective the 1st day of January, 2008. (COMPANY) By: Name: Title: Address: ATTEST: CITY OF LA PORTE By: Barry Beasley Mayor city secretary APPROVED: Knox W. Askins City Attorney City of La Porte P.O. Box J.218 La Porte, TX 77572-J.218 281.471.1886 281.471.2047 fax knoxaskins@comcast.net By: John Joerns Assistant City Manager CITY OF LA PORTE 604 West Fairmont Parkway La Porte, TX 77571 ,;' ,1";;;l'1J'11'fj:i' ..>>'.:,'l.-j(<c""~ .BD:IBIT AW (Metes and Bounds Description of Land) ~ -.- ~--,-,> WBDrB:I:T B- Attach Plat reflecting the ownership boundary lines; a site layout, showing all improvements, including pipelines and railroads, and also showing areas of the Land previously annexed by the City of La Porte.) ...- Page 1 of 3 RULBS AND UGtJLATXORS Any portion of Land constituting a strip of land 100' wide and contiguous to either Fairmont Parkway, state Highway 225, or State Highway 146 shall be subject to the following rules and regulations pertaining to new signage, screening, driveways and median crossovers. These rules and regulations shall apply after the effective date of this Agreement when Company develops or constructs improvements on vacant Land described in Exhibit -Aft which is adjacent to Fairmont Parkway, state Highway 225, or State Highway 146. 1. Any sign erected in said 100' strip of land shall be subject to the following provisions: ~ One freestanding identification sign shall be permitted for each side of an industrial establishment that fronts on an improved public right-of-way. ~ Freestanding identification signs for single tenant buildings shall not exceed 150 square feet in area. ~ One freestanding identification sign for identifying multiple businesses is allowable at the intersection of improved public rights-of-way. ~ Freestanding identification signs for businesses shall not exceed 350 square feet. multiple 0:. Freestanding identification signs shall not exceed 45 feet in height. ~ Minimum setback for sign construction shall be ten (10) feet from property lines. 2. When Land adjacent to said 100 I strip is developed, the initial SO' of said strip beyond any existing pipeline easement contiguous to either Fairmont Parkway, state Highway 225 I or State Highway 146 shall be screened by one of the following techniques: a) Leaving in place existing trees, vegetation, underbrush, etc. to provide a thorough and effective visual screening of the development. Existing trees shall, together with other vegetation and underbrush, create a continuous visual screen. 14 J<A -laHIBrI' C. Page 2 of 3 b) The use of earthen berms with approximately 3: 1 side slopes, 50' wide at the base and 8' high. The berms may be landscaped with a combination of trees, shrubs, and ground cover. All berms and landscaping will be maintained by the property owners. c) A screening plan, to be approved by the City, that includes a combination of trees, shrubs, and ground cover that after 5 years growth will be at least 20 feet in height and shall, together with shrubs and ground cover, create a continuous visual screen. Provided, however, in public utility easements or rights-of-way, the vegetation shall be installed and maintained in a manner which is acceptable to the public utility company, and does not interfere with the operation and maintenance of the public utility facilities. For items band c above, the actual length of required screening along the roadway will be equal to the length of the new development that is parallel to the roadway. Screening shall not be required for new development that is to the rear of or behind existing facilities. In all cases the 50' strip, along the entire roadway frontage, shall be dedicated as a landscape easement and shall be kept free from any improvements except for approved driveway access and identification signs. For cases of new development or improvements where a 50 ' landscape easement is not available or practical, Company shall. meet with city to determine a suitable landscaping alternative. d) In the case of land contiguous to Fairmont Parkway, in addition to the other requirements of these Rules and Regulations, Company shall dedicate to City by Plat a ten foot (10') wide pedestrian and bicycle easement, extending along Company's Fairmont Parkway boundary , within the fifty foot (50') landscape easement. The pedestrian easement shall not be within any pipeline facility, except for necessary crossings. 3. Driveways opening from said strip of land onto State Highway 225 or State Highway 146 shall be subject to the rules and regulations of the Texas Department of Transportation and provisions of the City's Code of Ordinances, whichever is more restrictive. Driveways opening from said strip of land onto Fairmont Parkway shall be subject to the rules and regulations of Harris County and provisions of the City's Code of Ordinances, whichever is more restrictive. 15 vA SEALED BID 1310006 4t\.. ~ TEXAS ASSOCL~ nON OF REAL TORS@ COMMERCIAL CONTRACT - UNIMPROVED PROPERTY USE OF THIS FORM BY PERSONS "YHO ARE NOT MEMBERS OF THE TEXAS ASSOCIATiON OF REAL TORS@iS NOT AUTHORIZED. @Te.as Association of REAL TORS@.lnc. 2005 1. PARTIES: Seller agrees to sell and convey to Buyer the Property described in Paragraph 2. Buyer agrees to buy the Property from Seller for the sales price stated in Paragraph 3. The parties to this contract are: Seller: City of La Porte. Texas Address: 604 W. Fairmont Parkway. La Porte TX 77571 Phone: (281) 471-5020 Fax: (281) 471-2047 E-mail: bottomsr@laportetx. qov Buyer: Jeu.tn.ruy Ame.rka., ~c. Address: 2b2; Bay An!tl. BlvA., HCJ.LS"t:I". IX '770/i11 Phone: (1'1/3) 4QS" ~ 1304- Fax: (rJI3) -+q5""- '730" E-mail: ~en:chi.a.kla>~Y4.".e...ic.Cl. <'O'W\ 2. PROPERTY: A. "Property" means that real property situated in Harris Bay Area Boulevard (address) and that is legally described on the attached Exhibit A +/-Bl acres on Bay Area Blvd., Tract lOB-I, Bayport U/R, Section lA-47, La Porte, Harris County, Texas County, Texas at ef as follows: 3. B. Seller will self and convey the Property together with: (1) all rights, privileges, and appurtenances pertaining to the Property, including Seifer's right, title, and interest in any minerals, utilities, adjacent streets, alleys, strips, gores, and rights-of-way; (2) Seifer's interest in all leases, rents, and security deposits for all or part of the Property; and (3) Seller's interest in all licenses and permits related to the Property. (Describe any exceptions, reservations, or restrictions in Paragraph 12 or an addendum.) SALES PRICE: A. At or before closing, Buyer will pay the fol/owing sales price for the Property: ;,:., c.~~ (1) Cash portion payable by Buyer at closing .........................$ (2) Sum of all financing described in Paragraph 4 . . . . . . . . . . . . . . . . . . . . . .$ (3) Sales price (sum of 3A(1) and 3A(2)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 1 ,.,/'/..7 ('Joe) i' ~...... ....... ;. . ..-~.. r.' CJ fJ )() /}, ocl) . !.JJ(){). ' (T AR-1802) 10-18-05 Initialed for Identification by Buyert:::t-\- ._and Seller _,_ Page 1 of 12 Cushman & Wakctidd of Texas. Inc. LBO Post Oak Blvd Stc. 2700 Houston, TX 77056 I'l1one:7\3.817.1700 Fax: 713.877.1965 Cushman & Wakefidd of Texas. Produced wit~ lipForm@by zipL09'X 18070 Fifteen Mile Road. Fraser, Michigan 48026 www.zipLoaix.com City of La Porte - Commercial Contract - Unimproved Property Concerning Bay Area Boulevard o B. Adiustment to Sales Price: (Check (1) or (2) only.) !Xl (1) The safes price will not be adjusted based on a survey. o (2) The sales price will be adjusted based on the latest survey obtained under Paragraph 6B. (a) The sales price is calculated on the basis of $ per: o (i) square foot of 0 total area 0 net area. o (ii) acre of 0 total area 0 net area. (b) "Total area" means all land area within the perimeter boundaries of the Property. "Net area" means total area less any area of the Property within: o (i) public roadways; o (ii) rights-of-way and easements other than those that directly provide utility services to the Property; and o Oii) (c) If the sales price is adjusted by more than % of the stated sales price, either party may terminate this contract by providing written notice to the other party within days after the terminating party receives the survey. If neither party terminates this contract or if the variance is less than the stated percentage, the adjustment to the sales price will be made to the cash portion of the sales price payable by Buyer. 4. FINANCING: Buyer will finance the portion of the sales price under Paragraph 3A(2) as follows: o A. Third Party Financing: One or more third party loans in the total amount of $ This contract: o (1) is not contingent upon Buyer obtaining third party financing. o (2) is contingent upon Buyer obtaining third party financing in accordance with the attached Commercial Contract Financing Addendum. B-:- Assumption: In 8ccord;:mce with the ;Jtt.::lched Commerci;J/ Contr<:lct FinaA6ing Addendum, Buyer will <:lSGume the existing promissory note secured by the Property, '",hich b;Jl;Jnce at closing will bo $ o 5. C, SeU€r Fin;Jncing: The delivery of ;J promissory note .::lnd deed oHmst from Buyer to Seller under the terms of the ;Jttoched Commerci;]1 Contr8ct Financing Addendum in the <:lmount of $ EARNEST MONEY: On A. Not /;Jtcr than 3 days ;Jftcr the effective date, Buyer must deposit $ 25,000.00 as earnest money with Ms. Staci Gay American Title Company (escrow agent) at 5003 College Park, Deer Park. TX 77536 (address). If Buyer fails to timely deposit the earnest money, Seller may terminate this contract by providing written notice to Buyer before Buyer deposits the earnest money and may exercise Seller's remedies under Paragraph 15. B. Buyer will deposit an additional amount of $ 75,000.00 with the escrow agent to be made part of the earnest money on or before: !XI (i) 1 days after Buyer's right to terminate under Paragraph 78 expires; or o (ii) Buyer will be in default if Buyer fails to deposit the additional amount required by this Paragraph 58 within 3 days after Seller notifies Buyer that Buyer has not timely deposited the additional amount. C. Buyer may instruct the escrow agent to deposit the earnest money in an interest-bearing account at a federally insured financial institution and to credit any interest to Buyer. (TAR-1802) 10-18-05 Initialed for Identification by Buyer.fA.., _and Seller _ ,_ Page 2 of 12 Produced with ZipForm@by zipLogix 18070 Fifteen Mile Road, Fraser. Michigan 48026 w'MV.ziolOQixcom CilY of La Porte- Commercial Contract - Unimproved Property Concerning Bay Area Boulevard 6. TITLE POLICY AND SURVEY: A Title Policy: (1) Seller, at Seller's expense, will furnish Buyer an Owner's Policy of Title Insurance (the title policy) issued by American Title Company (title company) in the amount of the sales price, dated at or after closing, insuring Buyer against loss under the title policy, subject only to: (a) those title exceptions permitted by this contract or as may be approved by Buyer in writing; and (b) the standard printed exceptions contained in the promulgated form of title policy unless this contract provides otherwise. (2) The standard printed exception as to discrepancies, conflicts, or shortages in area and boundary lines, or any encroachments or protrusions, or any overlapping improvements: o (a) will not be amended or deleted from the title policy. lXl (b) wit! be amended to read "shortages in areas" at the expense of 00 Buyer 0 Seller. may (3) Buyer may object to any restrictive covenants on the Property within the time required under Paragraph 6C. (4) Within 10 days after the effective date, Seller will furnish Buyer a commitment for title insurance (the commitment) including legible copies of recorded documents evidencing title exceptions. Seller authorizes the title company to deliver the commitment and related documents to Buyer at Buyer's address. B. Survey: Within 5 days after the effective date: o (1) Buyer will obtain a survey of the Property at Buyer's expense and deliver a copy of the survey to Seller. The survey must be made in accordance with the Texas Society of Professional Surveyors' standards for a Category 1 A survey under the appropriate condition. o (2) Seller, at Seller's expense, will furnish Buyer a survey of the Property dated after the effective date. The survey must be made in accordance with the Texas Society of Professional Surveyors' standards for a Category 1 A survey under the appropriate condition. IX) (3) Seller will deliver to Buyer and the title company a true and correct copy of Seller's existing survey of the Property dated April 20, 2010 along with an affidavit required by the title company for approval of the survey. If the survey is not acceptable to the title company, Seller. at Seller's expense, will obtain a survey acceptable to the title company and deliver the acceptable survey to the Buyer and the title company within 15 days after Seller receives notice that the existing survey is not acceptable to the title company. The closing date will be extended daily up to 15 days if necessary for Seller to deliver an acceptable survey within the time required. C. Buver's Obiections to the Commitment and Survey (1) Within 7 days after Buyer receives the commitment, copies of the documents evidencing the title exceptions, and any required survey, Buyer may object in writing to matters disclaoed in the ttems if: (a) the matters disclosed constitute a defect or encumbrance to title other than those permitted by this contract or liens that Seller will satisfy at closing or Buyer will assume at closing; or (b) the items show that any part of tho Property lice in a epecial flood h:1z::lrd :1roa (an "/\" or "V" zonc as defined by FEMA). If P::lragr::lph 6B(1) applies, Buyer is deemed to receive the survey on the c::lrlior of: (i) the d::lte of Buyer's actual receipt of the survey; or (ii) of the doodline specified in Paragraph 68-. (T AR-1 802) 10-18-05 Initialed for Identification by Buyer kA ,_ and Seller _ '_ Page 3 of 12 Produced with ZlpForm@by zipLogix 18070 Fifteen Mile Road, Fraser. Michigan 48026 wWN.zioLoaixcom City of La Porte Commercial Contract - Unimproved Property Concerning Bay Area Boulevard 10 (2) Seller may, but is not obligated to, cure Buyer's timely objections within +B days after Seller receives the objections. The closing date will be extended as necessary to provide such time to cure the objections. If Seller fails to cure the objections by the time required, Buyer may terminate this contract by providing written notice to Seller within 5 days after the time by which Seller must cure the objections. If Buyer terminates, the earnest money, less any independent consideration under Paragraph 7B(1), will be refunded to Buyer. (3) Buyer's failure to timely object or terminate under this Paragraph 6C is a waiver of Buyer's right to object except that Buyer will not waive the requirements in Schedule C of the commitment. 7. PROPERTY CONDITION: A. Present Condition: Buyer accepts the Property in its present condition except that Seller, at Seller's cxpenGc, will complete the following before cloGing: See Exhibit B. Page 2 B. Feasibility Period: Buyer may terminate this contract for any reason within 45 days after the effective date (feasibility period) by providing Seller written notice of termination. (Check only one box.) !XI (1) If Buyer terminates under this Paragraph 7B, the earnest money will be refunded to Buyer less $ 10.000.00 that Seller will retain as independent consideration for Buyer's unrestricted right to terminate. Buyer has tendered the independent consideration to Seller upon payment of the amount specified in Paragraph 5A to the escrow agent. The independent consideration is to be credited to the sales price only upon closing of the sale. If no dollar amount is stated JD. this Paraqraph 7B(1) or if Buyer fails to timely deposit the earnest money. Buver will not have the right to terminate under this Paragraph 7B. o (2) Not later than 3 days after the effective date, Buyer must pay Seller $ as independent consideration for Buyer's right to terminate by tendering such amount to Seller or Seller's agent. If Buyer terminates under this Paragraph 7B, the earnest money will be refunded to Buyer and Seller will retain the independent consideration. The independent consideration will be credited to the sales price only upon closing of the sale. If JJQ dollar amount..lli stated in this Paragraph 7B(2Lm:jf Buyer fails JQ timely..m!Y the independent consideration. Buyer will not have the right to terminate under this Paragraph 7B. C. Inspections. Studies. or Assessments: (1) During the feasibility period, Buyer, at Buyer's expense, may complete or cause to be completed any and all inspections, studies, or assessments of the Property (including all improvements and fixtures) desired by Buyer. (2) Buyer must: (a) employ only trained and qualified inspectors and assessors; (b) notify Seller, in advance, of when the inspectors or assessors will be on the Property; (c) abide by any reasonable entry rules or requirements of Seller; (d) not interfere with existing operations or occupants of the Property; and (e) restore the Property to its original condition if altered due to inspections, studies, or assessments that Buyer completes or causes to be completed. (3) Except for those matters that arise from the negligence of Seller or Seller's agents, Buyer is responsible for any claim, liability, encumbrance, cause of action, and expense resulting from (T AR-1802) 10-18-05 Initialed for Identification by Buyer tit ._and Seller _,_ Page 4 of 12 Produoed with ZipForm@by zipLogix 18070 Fifteen Mile Road. Fraser. Michigan 48026 www.zIOLOQlx.com City of La Porte- Commercial Contract - Unimproved Property Concerning Bay Area Boulevard Buyer's inspections, studies, or assessments, including any property damage or personal injury. Buyer will indemnify, hold harmless, and defend Seller and Seller's agents against any claim involving a matter for which Buyer is responsible under this paragraph. This paragraph survives termination of this contract. D. Property Information: to the extent in Seller's [Xlssession. if o.vailal days after the effective date, Selle~\Will deliver to (1) Delivery of Property I nformation: Within Buyer: o (a) copies of all current leases pertaining to the Property, including any modifications, supplements, or amendments to the leases; o (b) copies of all notes and deeds of trust against the Property that Buyer will assume or that Seller will not pay in full on or before closing; o (c) copies of all previous environmental assessments, geotechnical reports, studies, or analyses made on or relating to the Property; o (d) copies property tax statements for the Property for the previous 2 calendar years; o (e) plats of the Property; 1i fXI (f) copies of current utility g:p~~ity letters from the Property's water and sewer service provider; and fXI (g) Survey dated A~ril 20. 2010. as revised July 19. 2010. adding flood plain note 7 (2) Return of Property Information: If this contract terminates for any reason, Buyer will, not later than 10 days after the termination date: (a) return to Seller all those items described in Paragraph 70(1) that Seller delivered to Buyer and all copies that Buyer made of those items; and (b) deliver copies of all inspection and assessment reports related to the Property that Buyer completed or caused to be completed. This Paragraph 70(2) survives termination of this contract. E. Contracts Affecting Operations: Until closing, Seller: (1) will operate the Property in the same manner as on the effective date under reasonably prudent business standards; and (2) will not transfer or dispose of any part of the Property, any interest or right in the Property, or any of the personal property or other items described in Paragraph 28 or sold under this contract After the feasibility period ends, Seller may not enter into, amend, or terminate any other contract that affects the operations of the Property without Buyer's written approval. 8. LEASES: A. Each written lease Seller is to assign to Buyer under this contract must be in full force and effect according to its terms. Seller may not enter into any new lease, fail to comply with any existing lease, or make any amendment or modification to any existing lease without Buyer's written consent. Seller must disclose, in writing, if any of the following exist at the time Seller provides the leases to the Buyer or subsequently occur before closing: (1) any failure by Seller to comply with Seller's obligations under the leases; (2) any circumstances under any lease that entitle the tenant to terminate the lease or seek any offsets or damages; (3) any advance sums paid by a tenant under any lease; (4) any concessions, bonuses, free rents, rebates, brokerage commissions, or other matters that affect any lease; and (5) any amounts payable under the leases that have been assigned or encumbered, except as security for loan(s) assumed or taken subject to under this contract. B. E~toppcl Certificates: Within ccrtific<:ltcs signed not earlier than in the Property. The estoppel certificates must state: days after the effective d;Jte, Seller '....;11 deliver to Buyer cctoppel by each ten;Jnt that leases cpace (TAR-1802) 10-18-05 Initialed for Identification by Buyer Kfi- ,_and Seller _,_ Page 5 of 12 Produced with ZlpForm@by zipLogix 18070 Fifteen Mile Road. Fraser, Michigan 48026 www.zioLoglx.com City of La Por Commercial Contract - Unimproved Property Concerning Bay Area Boulevard fB th::1t no default exists under the lease by the l::1ndlord or ten~mt as of the date the estoppel certificate ~e4; {-2:-) the amount of the scheffiHed rents to be paid through tRe--end of the lease and ;:my rent;)1 paymeffis that have been paid in advance; f3-j tRe-amount of ;)ny security deposit; t41 the :Jmount of :JA)'-0#sets-tef1;mt b cnt~nst rent; ~ the expiration date of-tl:tc lC:Jse; f&) a-desGfifHion of m'tY-FeAcv.'al options; and t+1 9. BROKERS: A The brokers to this sale are: ----N/A Cooperating Broker Cushman & Wakefield of Texas. Inc. License No. Principal Broker 0234174 License No. 1330 Post Oak Blvd., Ste. 2700 Address Houston. TX. 77056 Address Phone (713)963-2862 Fax Phone (713) 877-1965 Fax E-mail: E-mail: iohn.littman@cushwake.com Cooperating Broker represents buyer. Principal Broker: (Check only one box.) lZ) represents Seller only. o represents Buyer only. o is an intermediary between Seller and Buyer. B. Fees. (Check only one box.) IX) (1) Seifer will pay Principal Broker the fee specified by separate written commiSSion agreement between Principal Broker and Seller. Principal Broker will P:JY Cooper:Jting Broker the fee cpecified in the I\greement Between Brol<:crs found bclO\u the p:Jrties' signatures to this contract. o (2) At the closing of this sale, Seller will pay: Cooperating Broker a total cash fee of: Principal Broker a total cash fee of: Q % of the sales price. 0 % of the sales price. Q 0 The cash fees will be paid in Harris County, Texas. Seller authorizes escrow agent to pay the brokers from the Seller's proceeds at closing. NOTICE: Chapter 62, Texas Property Code, authorizes a broker to secure an earned commission with a lien against the Property. C. The parties may not amend this Paragraph 9 without the written consent of the brokers affected by the amendment. 10. CLOSING: A. The closing of the sale will be on or before thirty (30) days after the expiration of the Feasibilitv Period stated in Paraqraph 7B or within 7 days after objections made under Paragraph 6C have been cured or waived, whichever date is later (the closing date ). B. If either party fails to close by the closing date, the non-defaulting party may exercise the remedies in Paragraph 15. (T AR-1802) 10-18-05 'f., Initialed for Identification by Buyer K/"i. ._and Seller _'_ Page 6 of 12 Produced with ZipForm@by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 "^NWzioLoaixcom City of La Por Commercial Contract - Unimproved Property Concerning Bay Area Boulevard C. At closing, Seller will execute and deliver, at Seller's expense, a 0 general IX) special warranty deed. The deed must include a vendor's lien if any part of the sales price is financed. The deed must convey good and indefeasible title to the Property and show no exceptions other than those permitted under Paragraph 6 or other provisions of this contract. Seller must convey the Property: (1) with no liens, assessments, or other security interests against the Property which will not be satisfied out of the sales price, unless securing loans Buyer assumes; (2) without any assumed loans in default; and (3) with no persons in possession of any part of the Property as lessees, tenants at sufferance, or trespassers except tenants under the written leases assigned to Buyer under this contract. D. At closing, Seller, at Seller's expense, will also deliver to Buyer: (1) tax statements showing no delinquent taxes on the Property; (2) an assignment of all leases to or on the Property; (3) to the extent assignable, an assignment to Buyer of any licenses and permits related to the Property: (4) evidence that the person executing this contract is legally capable and authorized to bind Seller; (5) an affidavit acceptable to the escrow agent stating that Seller is not a foreign person or, if Seller is a foreign person, a written authorization for the escrow agent to: (i) withhold from Seller's proceeds an amount sufficient to comply applicable tax law; and (ii) deliver the amount to the Internal Revenue Service (IRS) together with appropriate tax forms; and (6) any notices, statements, certificates, affidavits, releases, and other documents required by this contract, the commitment, or law necessary for the closing of the sale and issuance of the title policy, all of which must be completed by Seller as necessary. E. At closing, Buyer will: (1) pay the sales price in good funds acceptable to the escrow agent; (2) deliver evidence that the person executing this contract is legally capable and authorized to bind Buyer; (3) sign and send to each tenant in a lease for any part of the Property a written statement that: (a) acknowledges Buyer has received and is responsible for the tenant's security deposit; and (b) specifies the exact dollar amount of the security deposit; (4) sign an assumption of all leases then in effect; and (5) execute and deliver any notices, statements, certificates, or other documents required by this contract or law necessary to close the sale F. Unless the parties agree otherwise, the closing documents will be as found in the basic forms in the current edition of the State Bar of Texas Real Estate Forms Manual without any additional clauses. 11. POSSESSION: Seller will deliver possession of the Property to Buyer upon closing and funding of this sale in its present condition with any repairs Seller is obligated to complete, ordinary wear and tear excepted. Any possession by Buyer before closing or by Seller after closing that is not authorized by a separate written lease agreement is a landlord-tenant at sufferance relationship between the parties. 12. SPECIAL PROVISIONS: (Identify exhibit if special provisions are contained in an attachment.) A. Seller will cooperate with Buyer for a 1031 Exchange so long as no additional expense is incurred by the Seller. B. A copy of the proposed Special Warranty Deed, to be delivered at closing, is attached hereto as Exhibit "B", incorporated by reference herein and made a part hereof for all purposes_ C. A copy of the City of La Porte's standard form of industrial district agreement, to be executed by Buyer at closing, is attached hereto as Exhibit "C", incorporated by reference herein and made a part hereof for all purposes. (TAR-1802) 10-18-05 Initialed for Identification by Buyer fA ._and Seller _,_ Page 7 of 12 Produced With ZipForm@by zipLogix 18070 Fifteen Mile Road. Fraser. Michigan 48026 W'NW.zloLoaix.com City of La Porte - Commercial Contract - Unimproved Property Concerning Bay Area Boulevard 13. SALES EXPENSES: A Seller's Expenses: Seller will pay for the following at or before closing: (1) releases of existing liens, other than those liens assumed by Buyer, including prepayment penalties and recording fees; (2) release of Seller's loan liability, if applicable; (3) tax statements or certificates; (4) preparation of the deed; (5) one-half of any escrow fee; (6) costs to record any documents to cure title objections that Seller must cure; and (7) other expenses that Seller will pay under other provisions of this contract. B. Bu~r's Expenses: Buyer will pay for the following at or before closing: (1) all loan expenses and fees; (2) preparation of any deed of trust; (3) recording fees for the deed and any deed of trust; (4) premiums for flood insurance as may be required by Buyer's lender; (5) one-half of any escrow fee; (6) other expenses that Buyer will pay under other provisions of this contract. 14. PRORATIONS: A Prorations: (1) Interest on any ;)ssumed lo~:m, taxes, rents, and any expense reimbursements from tenants will be prorated through the closing date. (2) If the amount of ad valorem taxes for the year in which the sale closes is not available on the closing date, taxes will be prorated on the basis of taxes assessed in the previous year. If the taxes for the year in which the sale closes vary from the amount prorated at closing, the parties will adjust the prorations when the tax statements for the year in which the sale closes become available. This Paragraph 14A(2) survIves closing. ~ l-f.-Bttyer ;)ssumes ;) lo;)n or is t;)king-#1e Property subject to ;)n existing lien, Seller will tr;)nsfcr-all- reserve deposits held by the lender for the payment of t;)xes, insurance premiums, and other ch;)rgcs to Buyer at closing and Buyer '.viII reimburse Guch amounts to Seller by an ;)pprOprklte adjustment 8t cloGing. B. Rollback Taxes: If Seller changes the use of the Property before closing or if a denial of a special valuation on the Property claimed by Seller results in the assessment of additional taxes, penalties, or interest (assessments) for periods before closing, the assessments will be the obligation of the Seller. If this sale or Buyer's use of the Property after closing results in additional assessments for periods before closing, the assessments will be the obligation of Buyer. This Paragraph 14B survives closing. C. Rent and Security Deposits: At closing, Seller will tender to Buyer all security deposits and the following advance payments received by Seller for periods after closing: prepaid expenses, advance rental payments, and other advance payments paid by tenants. Rents prorated to one party but received by the other party will be remitted by the recipient to the party to whom it was prorated within 5 days after the rent is received. This Paragraph 14C survives closing. 15. DEFAULT: A. If Buyer fails to comply with this contract, Buyer is in default and Seller may: (1) terminate this contract and receive the earnest money as liquidated damages, thereby releasing the parties from this contract; or t21 enforce Gpecific pcrform;)ncc, or seck other relief as m~y be provided by 1;)'1{, or both. (TAR-1802) 10-18-05 Initialed for Identification by Buyer leA ._and Seller_._ Page 8 of 12 Produced With lipForm@ by ziplogix 18070 FiNeen Mile Road, Fraser, Michigan 48026 www zioLoGix com City of La Por Commercial Contract - Unimproved Property Concerning Bay Area Boulevard B-c ~llit;-Seltef--is unable withiR---#le-hme allmved to deliver the estoppel certificates,.-&UfVey;-eF-- commitment, Buyer moy: f+1 termin;Jtc this contract and receive the eomest money, less ony indepeAdcnt considcrotion under P-afa~h-+B(l}, 8S the sole remedy; or f-21 extend the time for perform;Jnce up to 15 days and the closing will be extended os necessary. C. Except as provided in Paragraph 15B, if Seller fails to comply with this contract, Seller is in default and Buyer may: (1) terminate this contract and receive the earnest money, less any independent consideration under Paragraph 7B( 1), as liquidated damages, thereby releasing the parties from this contract; or (2) enforce specific performance,or seek such other relief ::1S may be provided by 1::1...." or both. 16. CONDEMNATION: If before closing, condemnation proceedings are commenced against any part of the Property, Buyer may: A. terminate this contract by providing written notice to Seller within 15 days after Buyer is advised of the condemnation proceedings and the earnest money, less any independent consideration paid under Paragraph 7B( 1), will be refunded to Buyer; or B. appear and defend in the condemnation proceedings and any award will, at Buyer's election, belong to: (1) Seller and the sales price will be reduced by the same amount; or (2) Buyer and the sales price will not be reduced. 17. ATTORNEY'S FEES: If Buyer, Seller, any broker, or any escrow agent is a prevailing party in any legal proceeding brought under or with relation to this contract or this transaction, such party is entitled to recover from the non-prevailing parties all costs of such proceeding and reasonable attorney's fees. This Paragraph 17 survives termination of this contract. 18. ESCROW: A. At closing, the earnest money will be applied first to any cash down payment, then to Buyer's closing costs, and any excess will be refunded to Buyer. B. If both parties make written demand for the earnest money, escrow agent may require payment of unpaid expenses incurred on behalf of the parties and a written rerease of liability of escrow agent from all parties. C. If one party makes written demand for the earnest money, escrow agent will give notice of the demand by providing to the other party a copy of the demand. If escrow agent does not receive written objection to the demand from the other party within 15 days after the date escrow agent sent the demand to the other party, escrow agent may disburse the earnest money to the party making demand, reduced by the amount of unpaid expenses incurred on behalf of the party receiving the earnest money and escrow agent may pay the same to the creditors. D. Escrow agent will deduct any independent consideration under Paragraph 7B(1) before disbursing any earnest money to Buyer and will pay the independent consideration to Seller. E. If escrow agent complies with this Paragraph 18, each party hereby releases escrow agent from all claims related to the disbursal of the earnest money. F. Notices under this Paragraph 18 must be sent by certified mail, return receipt requested. Notices to escrow agent are effective upon receipt by escrow agent. 19. MATERIAL FACTS: To the best of Seller's knowledge and belief: (Check only one box.) \XI A. Seller is not aware of any material defects to the Property except as stated in the attached Property Condition Statement. (T AR-1802) 10-18-05 Initialed for Identification by Buyer KA ._and Seller _,_ Page 9 of 12 Produced With ZipFol11'1@ by zipLogix 18070 Fifteen Mile Road. Fraser. Michigan 48026 www.zipLooix.com City of La Por Commercial Contract - Unimproved Property Concerning Bav Area Boulevard o g,. Except D~ otherwi~e provided in thi~ contract, Seller is not oware-ef:. f+1 ;:my subsurfoce: structures, pits, .....;]ste, springs, or improvements; Ri ~~f-~hre3tencd l~atjon, condemn;)tion, or ;)~sessment ;]ffccting tho Pro~ fd1 any environmept;]1 h;]zards or conditions th;)t m;)terblly ;)ffect the Property; f41 wfletl1er-the--f!ffij9€rty i~ or h;)s been used for the stor;)90 or di~posol of h;]zardous--marerials. or toxic waste, ;] dump site or landfill, or any underground tmks or containeFS~ fe1 whether radon, ;]sbestos containing m;)teri;)'~, urea formaldehyde foam insulation, Icad b;]~cd point. toxic mold (to the extent th3t it adversely affects the he31th of ordin3ry occup;]nts), or other pollutonts or conbmin;:mts. of any n;)ture now exist or ever existed on the Property; fB1 any wetlands, as defined by federol or ~tote 10'.'1 or regulation, on the Property; (71 aAy-#lfeatef1ed or endongered species or their h3bit;]t on the Property; (&) any pre~ent or p3St infc~totion of wood destroying-fRSects-jn the Property'~ improvemeA-ts-; f91 any contcmploted materbl change~ to the Property or surrounding mea thot would m3teri;:.llly ond detriment311y affect the ordinory use of the Property; (-1-Gt any condittefHlA-tI1e-Property that viol3tes. ;:my 1;)'.-: or ordin;)nce. (Describe any exceptions to (1) (10) in P{]rogroph 12 or on {]ddondum.) 20. NOTICES: All notices between the parties under this contract must be in writing and are effective when hand-delivered, mailed by certified mail return receipt requested, or sent by facsimile transmission to the parties addresses or facsimile numbers stated in Paragraph 1. The parties will send copies of any notices to the broker representing the party to whom the notices are sent. o A. Seller also consents to receive any notices bye-mail at Seller's e-mail address stated in Paragraph 1. o B. Buyer also consents to receive any notices bye-mail at Buyer's e-mail address stated in Paragraph 1. 21. DISPUTE RESOLUTION: The parties agree to negotiate in good faith in an effort to resolve any dispute related to this contract that may arise. If the dispute cannot be resolved by negotiation, the parties will submit the dispute to mediation before resorting to arbitration or litigation and will equally share the costs of a mutually acceptable mediator. This paragraph survives termination of this contract. This paragraph does not preclude a party from seeking equitable relief from a court of competent jurisdiction. 22. AGREEMENT OF THE PARTIES: A. This contract is binding on the parties, their heirs, executors, representatives, successors, and permitted assigns. B. This contract is to be construed in accordance with the laws of the State of Texas. C This contract contains the entire agreement of the parties and may not be changed except in writing. D. If this contract is executed in a number of identical counterparts, each counterpart is an original and all counterparts, collectively, constitute one agreement. E. Addenda which are part of this contract are: (Check all that apply.) fXI (1) Property Description Exhibit identified in Paragraph 2; o (2) Commercial Contract Financing Addendum; o (3) Commercial Property Condition Statement; o (4) Notice to Purchaser of Real Property in a Water District (MUD); o (5) Addendum for Coastal Area Property; o (6) Addendum for Property Located Seaward of the Gulf Intracoastal Waterway; and ~ (7) Exhibits A, B, and C (Note: Counsel for the Texas Association of REAL TORS@ (TAR) has determmed that any of the foregoing addenda which are promulgated by the Texas Real Estate CommIssion (TREe) or published by TAR are appropriate for use with this form.) (TAR-1802) 10-18-05 Initialed for Identification by Buyer (.;4 ,_ and Seller _ '_ Page 10 of 12 Produced with ZipForm@by zipLogix 18070 Fifteen Mile Road, Fraser, Michigan 48026 www.zloLoqixcom City of La Porte - Commercial Contract - Unimproved Property Concerning Bay Area Boulevard to an entity controlled by the Buyer F Buyer lID may to may not assign this contract. If Buyer Clssigns this contract, Buyer '.vill be relieved of ony future 1i3bility under this contract only if the assignee assumes, in 'Nriting, 011 obligations ond- li-ability of Buyer under this controct. 23. TIME: Time is of the essence in this contract. The parties require strict compliance with the times for performance. If the last day to perform under a provision of this contract falls on a Saturday, Sunday, or legal holiday, the time for performance is extended until the end of the next day which is not a Saturday, Sunday, or legal holiday. 24. EFFECTIVE DATE: The effective date of this contract for the purpose of performance of all obligations is the date the escrow agent receipts this contract after all parties execute this contract. 25. ADDITIONAL NOTICES: A. Buyer should have an abstract covering the Property examined by an attorney of Buyer's selection, or Buyer should be furnished with or obtain a title policy. B. If the Property is situated in a utility or other statutorily created district providing water, sewer, drainage, or flood control facilities and services, Chapter 49, Texas Water Code, requires Seller to deliver and Buyer to sign the statutory notice relating to the tax rate, bonded indebtedness, or standby fees of the district before final execution of this contract. C. Notice Required by S13.257, Water Code: "The real property, described below, that you are about to purchase may be located in a certificated water or sewer service area, which is authorized by law to provide water or sewer service to the properties in the certificated area. If your property is located in a certificated area there may be special costs or charges that you will be required to pay before you can receive water or sewer service. There may be a period required to construct lines or other facilities necessary to provide water or sewer service to your property. You are advised to determine if the property is in a certificated area and contact the utility service provider to determine the cost that you will be required to pay and the period, if any, that is required to provide water or sewer service to your property. The undersigned purchaser hereby acknowledges receipt of the foregoing notice at or before the execution of a binding contract for the purchase of the real property described in the notice or at closing of purChase of the real property." The real property is described in Paragraph 2 of this contract. D. If the Property adjoins or shares a common boundary with the tidally influenced submerged lands of the state, ~33.135 of the Texas Natural Resources Code requires a notice regarding coastal area property to be included as part of this contract. E. If the Property is located seaward of the Gulf Intracoastal Waterway, S61.025, Texas Natural Resources Code, requires a notice regarding the seaward location of the Property to be included as part of this contract. F. If the Property is located outside the limits of a municipality, the Property may now or later be included in the extra-territorial jurisdiction (ET J) of a municipality and may now or later be subject to annexation by the municipality. Each municipality maintains a map that depicts its boundaries and ET J. To determine if the Property is located within a municipality's ET J, Buyer should contact all municipalities located in the general proximity of the Property for further information. G. Brokers are not qualified to perform property inspections, surveys, engineering studies, environmental assessments, or inspections to determine compliance with zoning, governmental regulations, or laws. Buyer should seek experts to perform such services. Selection of inspectors and repairmen is the responsibility of Buyer and not the brokers. 26. CONTRACT AS OFFER: The execution of this contract by the first party constitutes an offer to buy or sell the Property. Unless the other party accepts the offer by 5:00 p.m., in the time zone in which the Property is located, on November 19, 2010 , the offer will lapse and become null and void. (TAR-1802) 10-18-05 Initialed for Identification by Buyer KL\ ._and Seller _._ Page 11 of 12 Produced with lipForm@ by zipLogix 18070 Fifteen Mile Road, Fraser. Michigan 48026 wwwzioLooix.com City of La Porte - Commercial Contract - Unimproved Property Concerning Bay Area Boulevard READ THIS CONTRACT CAREFULLY. The brokers and agents make no representation or recommendation as to the legal sufficiency, legal effect, or tax consequences of this document or transaction. CONSULT your attorney BEFORE signing. Buyer ~~1:C4, r.,~. By: _~Iti_~~ - Printed Name: n" Seller: The Ci tv of La Porte, Texas By: Printed Name: Mr. Ron Bot toms Title: _PresIdent Title: Ci ty ManaQ"er Buyer: By: Seller: By: Printed Name: Printed Name: Title: Title: AGREEMENT BETWEEN BROKERS Principal Broker agrees to pay (Cooperating Broker) a fee of $ or % of the sales price when the Principal Broker's fee is received. Escrow agent is authorized and directed to pay Cooperating Broker from Principal Broker's fee at closing. This Agreement Between Brokers supersedes any prior offers and agreements for compensation between brokers. Cooperating Broker By: Principal Broker By: ATTORNEYS Buyer's altOrn~is: Seller's attorney is: Name1::f~~'I:'t ~. S;~~'~:~ Name:Mr. Knox w'. Askins. City Atty Address: J 0 er . 0 .. . Address: 702 W. Fa~rmont Parkwav J-/hU~"ttY17 /exa..) '770/0- .~O?J La Porte TX 77572 Phone & Fax: ('1/3) 6s/- 3709 ('/l3)6$"1 -J296 Phone & Fax: (281) 471-1887 (281) 471-2047 E-mail: WSJn,j@ fal hr'lJht. co'l1'l E-mail: knoxaskins@comcast.net Buyer's attorney requests copies of documents, Seller's attorney requests copies of documents, notices, and other information: notices, and other information: ~ the title company sends to Buyer. I&J the title company sends to Seller. "'t Seller sends to Buyer. lXl Buyer sends to Seller. ESCROW RECEIPT Escrow agent acknowledges receipt of: OA. the contract on this day (effective date); DB. earnest money in the amount of $ in the form of on Escrow Agent: Ms, staci Gay Address: 5003 College Park Deer Park, TX 77536 Phone & Fax: (281) 479-1913 (281)479-8609 By: American Title Company E-mail: stacitaatcd,p. com (T AR-1802) 10-18-05 Produced with ZipForm@by zipLog!x 18070 Fifteen Mile Road, Fraser, Michigan 48026 WNW zioloQix com Page 12 of 12 City of La Por 81.00 ACRES (3,528,480 sa. FT.) GEORGE B. McKINSTRY LEAGUE ABSTRACT NUMBER 47 PAGE 1 OF 2 Being a tract or parcel of land containing 81.00 acres (3,528,480 square feet) located in the George B. McKinstry League, Abstract Number 47, Harris County, Texas, and being all of a called 80.972 acre tract of land described in deed executed July 24, 1989 from FMC Corporation to the City of La Porte, Texas as recorded under Harris County Clerks File (HCCF) No. M253982 of the Official Public Records of Real Property, Harris County, Texas (OPRRPHCT), said 81.00 acre tract being more particularly described as follows (all bearings are based upon the Texas State Plane Coordinate System, South Central Zone; all coordinates and distances are surface and may be converted to grid by multiplying by the combined scale factor of 0.99988150; coordinates are based upon the North American Datum of 1983 (NAD 83)): BEGINNING at a five-eighths inch iron rod found for the southwest comer of said 80.972 acre tract and the northwest corner of a called 21.28 acre tract described in deed executed September 11, 2000 from FMC Foundation to Superior Carriers, Inc. as recorded under HCCF No. U628453 of said OPRRPHCT, and also being on the east right-of-way line of Bay Area Boulevard (150 feet wide) as dedicated by instrument recorded in Volume 7235, Page 135 of the Deed Records of said Harris County, Texas (HCDR) said corner having surface coordinates of X=3,224,420.70, Y=13,803,220.51; THENCE, North 01 "00' 03" West (called North 01 "00'45" West), with the west line of said called 80.972 acre tract and with the east right-of-way line of Bay Area Boulevard, a distance of 1,689.99 feet (called 1,689.46 feet) to a five-eights inch iron rod found for the northwest comer of said called 80.972 acre tract in the south line of a called 21.274 acre tract (50 foot wide) described as Tract 2 in deed executed April 12, 1973 from Friendswood Development Company to Southern Pacific Transportation Company as recorded under HCCF No. 0867930 of the OPRRPHCT; THENCE, North 87"24'54" East (called North 87"25'50" East), with the north line of said called 80.972 acre tract and the south line of said called 21.274 acre tract, at a distance of 464.41 feet (called 464.89 feet) pass a five-eighths inch iron rod with brass cap found 0.10 feet right of line, marking the east right-of-way line of a 40 foot wide pipeline easement described in easement deed from Humble Oil & Refining Company to Channel Industries, et al executed July 10, 1967 and recorded under Volume 6835, Page 616 of the HCDR, at a distance of 906.61 feet (called 906.83 feet) pass a five- eighths inch iron rod with brass cap stamped 2393 found, in all a total distance of 2,058.34 feet (called 2,058.62 feet) to a five-eighths inch iron rod with brass cap stamped 2382 found for the northeast comer of said called 80.972 acre tract and being the northwest comer of a called 38.096 acre tract described as Ditch "C", Tract 2 in deed executed September 29, 1970 from Friendswood Development Company to Harris County Flood Control District as recorded in Volume 8260, Page 124 of the HCDR; ~XHIBIT A l( Ii 81.00 ACRES (3,528.480 SQ. FT.) GEORGE B. McKINSTRY LEAGUE ABSTRACT NUMBER 47 PAGE 2 OF 2 THENCE, South 03001'53" East (called South 03002'25" East), with the east line of said called 80.972 acre tract and with the west line of said called 38.096 acre tract, a distance of 1,690.01 feet (called 1,688.89 feet) to a five-eighths inch iron rod and "Baseline Corp." cap, set for the southeast comer of said 80.972 acre tract and the northeast comer of a called 20.0000 acre tract described in deed executed August 26, 1991 from FMC Foundation to Chusei (U.S.A.) Inc. as recorded under HCCF No. N291863 of said OPRRPHCT, and from which a found five-eighths inch iron rod bears North 01009' West, a distance of 20.88 feet; THENCE, South 8]025'54" West (called South 8r25'50" West), with the south line of said 80.972 acre tract and the north line of said called 20.0000 acre tract and the north line of a called 22.72 acre tract described in deed executed December 2, 1999 from FMC Foundation to Chusei (U.S.A.) Inc. as recorded under HCCF No. U115813 of the OPRRPHCT, at a distance of 0.42 feet pass a five-eighths inch iron rod found, at a distance of 1,341.44 feet pass the northwest corner of said called 22.72 acre tract and the northeast corner of the aforesaid called 21.28 acre tract from which a found five- eighths inch iron rod and "Texas Land Surveying" cap found bears South 71059' West, a distance of 0.36 feet, continuing with the north line of said called 21.28 acre tract, for a total distance of 2,118.23 feet (called 2,118.40 feet) to the POINT OF BEGINNING and containing 81.00 acres (3,528480 square feet) of land. A survey map of even date was prepared in conjunction with this property description. This description is based upon a land title survey performed by Michael F. Carrington, Registered Professional Land Surveyor, Texas Registration Number 5366, completed April 20,2010, and is on file in the office of Baseline Corporation, Houston, Texas, Job No. 03.003.11. ~/ "\::\ 'V~ k/\ SPECIAL WARRANTY DEED NO'r:ICS or COlf!'J:DBN'rUL:ITY ll1:G1l'rS I 1:!' YOU us A NA'.r'JllAL PERSON I yOU KAY llDon all snu!: ANY 01' 'rRJ: J'OLLOWDl'G J:H!'OlUO.TION 1"llO1l( TRIS INSTll'(Jl(.DT BlCFOd :IT IS r:I:Llm lOR UCORD IN 'I'la PlmL:IC UCORDS I YOUR SOCIAL SBC'JRITY mnmzR. OR yom DRIV&R'S LICBNSlC NUMBZR. Date: , 2010 Grantor: CITY OF LA PORTE. a municipal corporation Mailing Address: 604 West Fairmont Parkway La Porte, TX 77571 Grantee: Mailing Address: Consideration: Ten and No/100 Dollars ($10.00) cash and other good and valuable considerations Property (including any improvements) : Being a tract or parcel of land containing B1.00 acres (3,52B,480 square feet) located in the George B. McKinstry League, Abstract Number 47, Harris County, Texas, and being all of a called 80.972 acre tract of land, described in deed executed July 24, 1989, from FMC Corporation to the City of La Porte, Texas, as recorded under Harris County Clerk's File (HeeF) No. M2539B2 of the Official Public Records of Real Property, Harris County, Texas (OPRRPHCTI, said 81.00 acre tract being more particularly described by metes and bounds on Exhibit "A" attached hereto, incorporated by reference herein and made a part hereof for all purposes (hereinafter referred to as the "property"). Rese.rvatieRe frel'll aRE! EnseI?tlaa t:.e Cew'BYaR1;1i aal1 W;;u:raat.Yi TlaiB eeaye.yaae~ ill _ae suQj Iillilt 1;:9 all aaa BiR!!J1ilar t::he reetrieeieft8, e!oaditioll.s, oil, ga.b, Il.u.l ether l'IIiaeral reeervatioRB, eas.lll.at;, ill,"- cQ"liI:QaJ;ltil, if ;a,ay, applieliBle sa lH!.1! liRfQ:rg.~le against. tAli a,l)rre Q81lsriaea pr9~erty as refleeEcd a'}' tac rcearas ef tae soanty clerk of the aforesaid oounty. Exhibit "B" kA THIS PROPERTY IS HEREBY CONVEYED "AS IS", llWHERE IS" AND WITH ALL FAULTS AND GRANTOR MAKES NO REPRESENTATION OR WARRANTY WHATSOEVER WHETHER EXPRESSED, IMPLIED OR STATUTORY WITH RESPECT TO THE PROPERTY, THE AVAILABILITY OF UTILITIES, ACCESS OF THE PROPERTY TO PUBLIC ROADS, APPLIANCES OR THE CONDITION, ADEQUACY OR SUITABILITY OF THE PROPERTY FOR PURPOSES. GRANTEE AGREES THAT GRANTEE IS NOT RELYING ON ANY WARRANTY OR REPRESENTATIONS OF GRANTOR OR ANY AGENT, EMPLOYEE, REPRESENTATIVE, DIRECTOR OR OFFICER OF GRANTOR, AND THAT GRANTEE IS BUYING THE PROPERTY "AS IS", "WHERE IS", SUBJECT TO ALL FAULTS AND WITHOUT ANY EXPRESSED OR IMPLIED WARRANTIES OF ANY KIND, INCLUDING BUT NOT LIMITED TO, MATERIALS, WORKMANSHIP, GOOD AND WORKMANLIKE CONSTRUCTION, DESIGN, CONDITION, HABITABILITY, TENANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY OR THE ENVIRONMENTAL CONDITION OF THE PROPERTY AND THE PRESENCE OF OR CONTAMINATION BY HAZARDOUS MATERIALS AND GRANTOR HEREBY DISCLAIMS ANY SUCH WARRANTY. GRANTEE HAS DETERMINED ON GRANTEE'S BEHALF (I) THE PHYSICAL CONDITION OF THE PROPERTY AND THAT THERE IS NO DEFECT OR CONDITION WHICH IS UNACCEPTABLE TO GRANTEE, (II) WHETHER ANY PORTION OF THE PROPERTY LIES IN ANY FLOOD PLAIN, FLOOD WAY OR SPECIAL FLOOD HAZARD AREA, (III) WHETHER ANY GEOLOGICAL FAULT OR UNSATISFACTORY SOIL CONDITION, INCLUDING WETLANDS, EXISTS ON ANY PORTION OF THE PROPERTY, AND (IV) THAT ALL ENVIRONMENTAL CONDITIONS RELATING TO THE PROPERTY ARE ACCEPTABLE TO GRANTEE. GRANTEE FURTHER ACKNOWLEDGES THAT GRANTOR HAS NOT OCCUPIED THE PROPERTY AND THEREFORE, THE PROPERTY MAY CONTAIN DEFECTS OR MAY BE IN NEED OF REPAIR. without limiting the generality of the foregoing paragraph, this Special Warranty Deed is executed and delivered, and the conveyance hereinabove set forth is made by Grantor and accepted by Grantee, subject to each and all of those certain exceptions to and conditions and encumbrances on title to the Property which are set forth in Exhibit WB" attached hereto, incorporated by reference herein and made a part hereof for all purposes (such exceptions, conditions and encumbrances being herein collectively referred to as the ftpermitted Exceptions"), to the extent the Permitted Exceptions are validly existing and are applicable to the property. COVENANTS: Grantee joins in the execution of this Special Warranty Deed, to evidence its agreement to the following covenants, which shall be considered covenants running with the land: 1. No portion of the property shall be used for the incineration or disposal of hazardous waste, or for storage, processing, incineration or disposal of radioactive waste, or medical waste. 2. In the event that any portion of the Property is used for open storage of shipping containers, the shipping containers shall be stacked not to exceed four (4) containers in height. Minimum setback for open storage of shipping containers, shall be fifty feet (SO') on Bay Area Boulevard; twenty five feet (25') from the rear property line; and twenty-five feet (25' ) from each side property line. Until development of fixed and permanent structure (s) existing vegetation in the setback areas shall remain in place. KA 3. There shall be a permanent fifteen foot (15') landscape setback contiguous to Bay Area Boulevard which, upon development of fixed and permanent structure(s} shall be landscaped by one of the following techniques; a) Leave in place existing trees and vegetation to provide a thorough and effective landscape. b) Develop and install a landscaping plan that includes a combination of trees, shrubs, grass and ground cover. For items a and b above, the actual length of required landscaping along the right-of-way of Bay Area Boulevard will be equal to the length of the new development that is parallel to the roadway. In all cases the 15' strip along the entire right-of-way of Bay Boulevard, shall be dedicated as a landscape easement and shall be free from any improvements except for approved driveway access identification signs. Area kept and Grantor for the consideration and subject to the Permitted Exceptions, reservations from and exceptions to conveyance and warranty, and the Restrictions and Covenants herein provided, grants, sells, and conveys to Grantee the property, together with all and singular the rights and appurtenances thereto in any wise belonging, to have and hold to Grantee, Grantee's successors or assigns, forever. Grantor binds Grantor and Grantor's successors and assigns to warrant and forever defend all and singular the Property to Grantee and Grantee's successors and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof, by, through, or under Grantor but not otherwise, except as to the Permitted Exceptions, reservations from and exceptions to conveyance and warranty, and the Restrictions and Covenants herein provided. CITY OF LA PORTE By: Ron Bottoms, City Manager ATTEST: City Secretary APPROVED AS TO FORM: Knox W. Askins, City Attorney ACCZPTlm .urn AGRJ:BD, , Grantee By: Authorized Officer KA STATE OF TEXAS & & COUNTY OF HARRIS & This instrument was acknowledged before me on the ____ day of 2010, by Ron Bottoms, city Manager of the City of La Porte, a municipal corporation. Notary Public, State of Texas STATE OF TEXAS & & COUNTY OF HARRIS & This instrument was acknowledged before me on the ____ day of 2010, by , Authorized Officer of Notary Public, State of Texas Anll:Il UCORDING UTURN' TO t PUPARlCD IN TlIl!: LAW OJ'J':rCB OJ'I ASKINS & ASKINS, P. C. P.O. Box 1218 La Porte, TX 77572-1218 '(/~ ZDJ:BIT -B- 'permitted Exceptions. 1. The following restrictive covenants of record itemized below: None of record except the following: As set forth in instrument(s} recorded in Volume 5550, Page 215, of the Deed Records of Harris County, Texas. Recorded in volume 5920, Page 165, of the Deed Records of Harris County, Texas. Recorded in Volume 8470, page 238, of the Deed Records of Harris County, Texas. Recorded in Volume 8035, page 51, of the Deed Records of Harris County, Texas. 2. An unlocated right-of-way and easement for pipeline purposes, as granted to Humble Pipe Line Company by instrument recorded in Volume 702, Page 346, of the Deed Records of Harris County, Texas. 3. A right-of-way and easement for pipeline purposes, as granted to Tennessee Gas Transmission Company by instruments recorded in volume 3007, Page 706, Volume 3135, page 261, Volume 3340, page 188, and in Volume 6835, Page 616, all of the Deed Records of Harris county, Texas. 4. A right-of-way and easement for pipeline purposes, as granted to Channel Industries Gas company, Houston Pipe Line Company and Tenneco oil Company by instrument recorded in Volume 8017, Page 190, of the Deed Records of Harris County, Texas. 5. A right - of -way and easement for electric distribution and communication systems ten (10) feet in width along the most wellterly property line, lying east of and adjacent to Bay Area Boulevard, as granted to HOUston Lighting & Power Company by iostrument recorded in Volume 6948, Page 437, of the Deed Records of Harris County, Texas. 6. A l/atl> non-participating royalty interest in all oil, gas and other minerals 00, in, under or that may be produced from the subject property is excepted herefrom, as same is set forth in instrument recorded in Volume 6890, page 115, of the Deed Records of Harris County, Texas. 7. All oil, gas and other minerals, royalties, bonuses, rentals and other rights in connection with same, all of which are expressly excepted herefrom, as set forth in instruments filed under Volume 6926, page 352, and under Volume 6973, page 503, both of the Deed Records of Harrill County, Texas. K~ A NO. 2007-IDA- STATE OF TEXAS COUNTY OF EUL~IS INDUSTRIAL DISTRICT AGREEMENT This AGREEMENT made and entered into by and between the CITY OF LA PORTE, TEXAS, a municipal corporation of Harris County, Texas, hereinafter called "CITY", and corporation, hereinafter , a called "COMPANY", WIT N E SSE T H: WHEREAS, it is the established policy of the city Council of the City of La Porte, Texas / to adopt such reasonable measures from time to time as are permitted by law and which will tend to enhance the economic stability and growth of the City and its environs by attracting the location of new and the expansion of existing industries therein, and such policy is hereby reaffirmed and adopted by this City Council as being in the best interest of the City and its citizens; and WHEREAS, pursuant to its policy, City has enacted Ordinance No. 729, designating portions of the area located in its extraterritorial jurisdiction as the "Battleground Industrial District of La Porte, Texas", and Ordinance No. 842A, designating portions of the area located in its extraterritorial jurisdiction as the "Bayport Industrial District of La Porte, Texas", hereinafter collectively called "District", such Ordinances being in compliance with the Municipal Annexation Act of Texas, codified as Section 42.044, Texas Local Government Code; and WHEREAS, Company is the owner of land within a designated Industrial District of the City of La Porte, said land being legally described on the attached Exhibit "A" (hereinafter "Land"); and said Land being more particularly shown on a plat attached as Exhibit "B", which plat describes the ownership boundary lines; a site layout, showing all improvements, including pipelines and railroads, and also showing areas of the Land previously annexed by the City of La Porte; and WHEREAS, City desires to encourage the expansion and growth of industrial plants within said Districts and for such purpose desires to enter into this Agreement with Company pursuant to Ordinance adopted by the City Council of said city and recorded in the official minutes of said city: Exhibit "e" 1 /(A NOW, THEREFORE, in consideration of the premises and the mutual agreements of the parties contained herein and pursuant to the authority granted under the Municipal Annexation Act and the Ordinances of city referred to above, city and Company hereby agree with each other as follows: 1. City covenants, agrees and guarantees that during the term of this Agreement, provided below, and subject to the terms and provisions of this Agreement, said District shall continue to retain its extraterritorial status as an industrial district, at least to the extent that the same covers the Land belonging to Company and its assigns, unless and until the status of said Land, or a portion or portions thereof, as an industrial district may be changed pursuant to the terms of this Agreement. subject to the foregoing and to the later provisions of this Agreement, City does further covenant, agree and guarantee that such industrial district, to the extent that it covers said Land lying within said District and not now within the corporate limits of city, shall be immune from annexation by City during the term hereof (except as hereinafter provided) and shall have no right to have extended to it any services by city, and that all Land, including that which has been heretofore annexed, shall not have extended to it by ordinance any rules and regulations (a) governing plats and subdivisions of land, (b) prescribing any building, electrical, plumbing or inspection code or codes, or (c) attempting to exercise in any manner whatever control over the conduct of business thereon; provided, however, any portion of Land constituting a strip of land 100' wide and contiguous to either Fairmont Parkway, State Highway 225, or State Highway 146, shall be subject to the rules and regulations attached hereto as Exhibit "C" and made a. part hereof; and provided, however, it is agreed that city shall have the right to institute or intervene in any administrative and/or judicial proceeding authorized by the Texas Water Code, the Texas Clean Air Act, the Texas Health & Safety Code, or other federal or state environmental laws, rules or regulations, to the same extent and to the same intent and effect as if all Land covered by this Agreement were not subject to the Agreement. II. In the event that any portion of the Land has heretofore been annexed by City, Company agrees to render and pay full City ad valorem taxes on such annexed Land and improvements, and tangible personal property. Under the terms of the Texas Property Tax Code (S.B. 621, Acts of the 65th Texas Legislature, Regular Session, 1979, as amended) the appraised value for tax purposes of the annexed portion of Land, improvements, and tangible personal property shall be determined by the Harris County Appraisal District. The parties hereto recognize that said Appraisal District has no authority to appraise the Land, improvements, and tangible personal property in the unannexed area for the purpose of computing the "in lieu" 2 l<'A payments hereunder. Therefore, the parties agree that the appraisal of the Land, improvements, and tangible personal property in the unannexed area shall be conducted by City, at City's expense, by an independent appraiser of City's selection. The parties recognize that in making such appraisal for "in lieu" payment purposes, such appraiser must of necessity appraise the entire (annexed and unannexed) Land, improvements, and tangible personal property. Nothing herein contained shall ever be interpreted as lessening the authority of the Harris County Appraisal District to establish the appraised value of Land, improvements, and tangible personal property in the annexed portion, for ad valorem tax purposes. III. A. The properties upon which the "in lieu of" taxes are assessed are more fully described in subsections ~, 2, and 3 of subsection C, of this Paragraph III (sometimes collectively called the "Property"); provided, however, pollution control equipment installed on the Land which is exempt from ad valorem taxation pursuant to the provisions of Sec. ~1.31 of the Texas Property Tax Code is exempt from ad valorem taxation and "in lieu of taxes" hereunder. Property included in this Agreement shall not be entitled to an agricultural use exemption for purposes of computing "in lieu of taxes" hereunder. B. On or before the later of December 31, 2008, or 30 days from mailing of tax bill and in like manner on or before each December 31st thereafter, through and including December 31, 2019, Company shall pay to City an amount of "in lieu of taxes" on Company's Property as of January 1st of the current calendar year (lfValue Year") . C. Company and City agree that the following percentages ("Percentage Amount") shall apply during each of the Value Years: Value Year 2008: 62% Value Year 2009: 62% Value Year 2010: 62% Value Year 2011: 62% Value Year 2012: 62%- Value Year 2013 : 62% Value Year 2014: 63% Value Year 2015: 63% Value Year 2016: 63% Value Year 2017 : 63% Value Year 2018: 63% Value Year 2019: 63% Company agrees to pay to City an amount of "in lieu of taxes" on Company's land, improvements and tangible personal property in the unannexed area equal to the sum of: 3 )( Ii 1. Percentage Amount of the amount of ad valorem taxes which would be payable to city if all of the Company's Land and improvements which existed on January 1, 2008/ and each January 1 thereafter of the applicable Value Year during the term of this Agreement, (excluding amounts which would be so payable with respect to any Substantial Increase in value of such Land and improvements to which subparagraph 2, below applies), had been within the corporate limits of City and appraised each year by City'S independent appraiser, in accordance with the applicable provisions of the Texas Property Tax Code; and 2. (a) On any Substantial Increase in value of the Land, improvements, and tangible personal property (excluding inventory) dedicated to new construction, in excess of the appraised value of same on January 1, 2007, resulting from new construction (exclusive of construction in progress, which shall be exempt from taxation), for each Value Years following completion of construction in progress, an amount equal to Twenty-five percent (25%), if construction is completed in Value years 2008 through 2013; and Twenty percent (20%), if construction is completed in Value years 2014 through 2019, of the amount of ad valorem taxes which would be payable to City if all of said new construction had been within the corporate limits of City and appraised by City's independent appraiser, in accordance with the applicable provisions of the Texas Property Tax Code. In the case of new construction which is completed in Value Year 2016 or later, and provided, further, that City and Company enter into an Industrial District Agreement after the expiration of this Industrial District Agreement, then, and in such events, such new construction shall be entitled to additional Value Years under the new Agreement at a Twenty percent (20%) valuation under this subparagraph (a), for a total of six (6) Value Years, but not extending beyond Value Year 2022. (b) A Substantial Increase in value of the Land, improvements, and tangible personal property (excluding inventory) as used in subparagraph 2(a) above, is defined as an increase in value that is the lesser of either: i. at least Five percent (5%) of the total appraised value of Land and improvements, on January 1, 2007; or ii. a cumulative value of at least $3,500,000.00. 4 l<A For the purposes of this Agreement, multiple projects that are completed in a Value Year can be cumulated to arrive at the amount for the increase in value. (c) If existing Property values have depreciated below the Property value established on January 1, 2007, an amount equal to the amount of the depreciation will be removed from the calculation under this subparagraph 2 to restore the value to the January 1, 2007, value; and 3. Percentage Amount of the amount of ad valorem taxes which would be payable to City on all of the company's tangible personal property of every description, located in an industrial district of City, including, without limitation, inventory, (including inventory in a federal Foreign Trade Zone and including Freeport exempted inventory), oil, gas, and mineral interests, items of leased equipment, railroads, pipelines, and products in storage located on the Land, if all of said tangible personal property which existed on January 1, 2008, and each January 1 thereafter of the applicable Value Year during the term of this Agreement, (excluding amounts which would be so payable with respect to any Substantial Increase in value of such tangible personal property to which subparagraph 2, above applies), had been within the corporate limits of City and appraised each year by the city's independent appraiser, in accordance with the applicable provisions of the Texas Property Tax Code. with the sum of 1, 2 and 3 reduced by the amount of city's ad valorem taxes on the annexed portion thereof as determined by appraisal by the Harris County Appraisal District. 4. Notwithstanding the above, should City elect to grant the freeport inventory exemption autborized by Article VIII, Section I-j of the Texas Constitution and section 11.251 of the Texas Property Tax Code to taxpayers within the City limits, then the freeport inventory exemption shall apply to parties to this Agreement. Further, should inventory or any other class or type of property become exempt from taxation by constitutional amendment or act of the Texas Legislature (including, but not limited to, Article VIII, Section I-n, of the Texas Constitution and section ~~.253 of the Texas Property Tax Code), such class or type of property shall be exempt for purposes of this Agreement, unless the City Council of the City of La Porte shall by Ordinance provide for the continued taxation of such property under the authority of any applicable provisions of the Texas Constitution and Texas statutes. 5 , -' t\ K ~ 5. City and Company acknowledge circumstances might require the City to provide emergency services to Company's property described on Exhibit "An attached hereto. Emergency services are limited to fire, police, and public works emergency services. If Company is not a member of Channel Industries Mutual Aid Association (ClMA) , Company agrees to reimburse City for its costs arising out of any emergency response requested by Company to Company's property, and to which City agrees to respond. If Company is a member of CIMA, the obligations of Company and City shall be governed by the ClMA agreement, to which agreement city is a party. IV. This Agreement shall extend for a period beginning on the 1st day of January, 2008, and continuing thereafter until December 31, 2019, unless extended for an additional period or periods of time upon mutual consent of Company and City as provided by the Municipal Annexation Act; provided, however, that in the event this Agreement is not so extended for an additional period or periods of time on or before August 31., 2019, the agreement of city not to annex property of Company within the District shall terminate. In that event, City shall have the right to commence immediate annexation proceedings as to all of Company's property covered by this Agreement, notwithstanding any of the terms and provisions of this Agreement. Company agrees that if the Texas Municipal Act, Section 42.044, Texas Local Government Code, is amended after January I, 1994, or any new legislation is thereafter enacted by the Legislature of the State of Texas which imposes greater restrictions on the right of City to annex land belonging to Company or imposes further obligations on City in connection therewith after the annexation of such land, Company will waive the right to require City to comply with any such additional restrictions or obligations and the rights of the parties shall be then determined in accordance with the provisions of said Texas Municipal Annexation Act as the same existed January I, 1994. V. This Agreement may be extended for an additional period or periods by agreement between City and Company and/or its assigns even though it is not extended by agreement between City and all of the owners of all land within the District of which it is a part. VI. A. In the event Company elects to protest the valuation for tax purposes set on its said properties by City or by the Harris County Appraisal District for any year or years during the terms hereof, nothing in this Agreement shall preclude such protest and 6 k~ /~ Company shall have the right to take all legal steps desired by it to reduce the same. Notwithstanding such protest by Company, and except as otherwise provided in Article VI (B), Company agrees to pay to City on or before the date therefor hereinabove provided, at least the total of (a) the total amount of ad valorem taxes on the annexed portions, plus (b) the total amount of the "in lieu of taxes" on the unannexed portions of Company's hereinabove described property which would be due to City in accordance with the foregoing provisions of this Agreement on the basis of renditions which shall be filed by Company. When the City or Harris County Appraisal District (as the case may be) valuation on said property of Company has been so finally determined, either as the result of final judgment of a court of competent jurisdiction or as the result of other final conclusion of the controversy, then within thirty (30) days thereafter Company shall make payment to city of any additional payment due hereunder, or City shall make payment to Company of any refund due, as the case may be, based on such final valuation, together with applicable penalties, interests, and costs. B. Should Company disagree with any appraisal made by the independent appraiser selected by City pursuant to Article II above (Which shall be given in writing to Company), company shall, within twenty (20) calendar days of receiving City'S invoice, give written notice to the City of such disagreement. In the event Company does not give such written notice of disagreement within such time period, the appraisal made by said independent appraiser shall be final and controlling for purposes of the determination of "in lieu of taxes" payments to be made under this Agreement. Should Company give such notice of disagreement, Company shall also submit to the City with such notice a written statement setting forth what Company believes to be the market value of Company's hereinabove described property. Both parties agree to thereupon enter into good faith negotiations in an attempt to reach an agreement as to the market value of Company's property for "in lieu" purposes hereunder. If, after the expiration of thirty (30) days from the date the notice of disagreement was received by City, the parties have not reached agreement as to such market value, the parties agree to submit the dispute to final arbitration as provided in subparagraph 1 of this Article VI (B) . Notwithstanding any such disagreement by Company, Company agrees to pay to City on or before December 31 of each year during the term hereof, at least the total of (a) the ad valorem taxes on the annexed portions, plus (b) the total amount of the "in lieu" payments which would be due hereunder on the basis of Company's written valuations statement submitted to City by Company hereunder, or the total assessment and "in lieu of taxes" thereon for the last preceding year, whichever is higher. 7 Ki\ 1. A Board of Arbitrators shall be created composed of one person named by Company, one by City, and a third to be named by those two. In case of no agreement on this arbitrator in 10 days, the parties will join in a written request that the Chief Judge of the U.S. District Court for the southern District of Texas appoint the third arbitrator who, (as the "Impartial Arbitrator") shall preside over the arbitration proceeding. The sole issue to be determined in the arbitration shall be resolution of the difference between the parties as to the fair market value of Company's property for calculation of the "in lieu" payment and total payment hereunder for the year in question. The Board shall hear and consider all relevant and material evidence on that issue including expert opinion, and shall render its written decision as promptly as practicable. That decision shall then be final and binding upon the parties, subject only to judicial review as may be available under the Texas General Arbitration Act (Chanter 171, "General Arbitration", Texas civil Practice and Remedies Code). Costs of the arbitration shall be shared equally by the Company and the city, provided that each party shall bear its own attorneys fees. VII. City shall be entitled to a tax lien on Company's above described property, all improvements thereon, and all tangible personal property thereon, in the event of default in payment of "in lieu of taxes" payments hereunder, which shall accrue penalty and interest in like manner as delinquent taxes, and which shall be collectible by city in the same manner as provided by law for delinquent taxes. VIII. This Agreement shall inure to the benefit of and be binding upon City and Company, and upon Company's successors and assigns, affiliates and subsidiaries, and shall remain in force whether Company sells, assigns, or in any other manner disposes of, either voluntarily or by operation of law, all or any part of the property belonging to it within the territory hereinabove described, and the agreements herein contained shall be held to be covenants running with the land owned by Company situated within said territory, for 60 long as this Agreement or any extension thereof remains in force. Company shall give City written notice within ninety (90) days, with full particulars as to property assigned and identity of assignee, of any disposition of the Land, and assignment of this Agreement. IX. If city enters into an Agreement with any other landowner with respect to an industrial district or enters into a renewal of any 8 KA existing industrial district agreements after the effective date hereof and while this Agreement is in effect, which contains terms and provisions more favorable to the landowner than those in this Agreement, Company and its assigns shall have the right to amend this Agreement and City agrees to amend same to embrace the more favorable terms of such agreement or renewal agreement. X. The parties agree that this Agreement complies with existing laws pertaining to the subject and that all terms, considerations and conditions set forth herein are lawful, reasonable, appropriate, and not unduly restrictive of Company's business activities. Without such agreement neither party hereto would enter into this Agreement. In the event anyone or more words, phrases, clauses, sentences, paragraphs, sections, articles or other parts of this Agreement or the application thereof to any person, firm, corporation or circumstances shall be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, then the application, invalidity or unconstitutionality of such words, phrase, clause, sentence, paragraph, section, article or other part of the Agreement shall be deemed to be independent of and separable from the remainder of this Agreement and the validity of the remaining parts of this Agreement shall not be affected thereby. XI. Upon the commencement of the term of this Agreement, all other previously existing industrial district agreements with respect to said Land shall terminate. XII. Notices by a party to the other party hereto, shall be mailed or delivered as follows: To the City of La Porte: City Manager City of La Porte 604 West Fairmont Parkway La Porte, TX 77571 To Company: (COMPANY) Department Attention: Company shall promptly notify City of any change of ownership of Property, any assignment of this Agreement, and of any change of billing address. Company shall notify City annually, on or before June 1, of any changes to the following information: 9 K/\ Plant Manager Name: Address: Phone: Fax: Email: Tax Agent/Billing Contact Name: Address: Phone: Fax: Email: ENTEP~D I~nro effective the 1st day of January, 2008. (COMPANY) By: Name: Title: Address: ATTEST: CITY OF LA PORTE By: Barry Beasley Mayor City Secretary APPROVED: By: John Joerns Assistant City Manager Knox W. Askins City Attorney City of La Porte P.O. Box 1218 La Porte, TX 77572-1218 281.471.1886 281.471.2047 fax knoxaskins@comcast.net CITY OF LA PORTE 604 West Fairmont Parkway La Porte, TX 77571 10 V} 1'\ 14, -EXHIBIT A" (Metes and Bounds Description of Land) 12 l<!-\ "";~,",~~'h "EXHIBIT BW Attach Plat reflecting the ownership boundary lines; a site layout, showing all improvements, including pipelines and railroads, and also showing areas of the Land previously annexed by the City of La Porte.) 13 1</\ .. "EXHIBIT C. Page 1 of 3 RULES AND REGULATIONS Any portion of Land constituting a strip of land 100 I wide and contiguous to either Fairmont Parkway, state Highway 225, or state Highway 146 shall be subject to the following rules and regulations pertaining to new signage, screening , driveways and median crossovers. These rules and regulations shall apply after the effective date of this Agreement when Company develops or constructs improvements on vacant Land described in Exhibit itA" which is adjacent to Fairmont Parkway, State Highway 225, or State Highway 146. 1. Any sign erected in said 100' strip of land shall be subject to the following provisions: a One freestanding identification sign shall be permitted for each side of an industrial establishment that fronts on an improved public right-of-way. a Freestanding identification signs for single tenant buildings shall not exceed 150 square feet in area. a One freestanding identification sign for identifying multiple businesses is allowable at the intersection of improved public rights-of-way. a Freestanding identification signs for businesses shall not exceed 350 square feet. multiple a Freestanding identification signs shall not exceed 45 feet in height. a Minimum setback for sign construction shall be ten (10) feet from property lines. 2. When Land adjacent to said 100 I strip is developed, the initial 50' of said strip beyond any existing pipeline easement contiguous to either Fairmont Parkway, State Highway 225, or State Highway 146 shall be screened by one of the following techniques: a) Leaving in place existing trees, vegetation, underbrush, etc. to provide a thorough and effective visual screening of the development. Existing trees shall, together with other vegetation and underbrush, create a continuous visual screen. 14 l<A "EXHIBIT C" Page 2 of 3 b) The use of earthen berms with approximately 3: ~ side slopes, 50 I wide at the base and 8 I high. The berms may be landscaped with a combination of trees, shrubs, and ground cover. All berms and landscaping will be maintained by the property owners. c) A screening plan, to be approved by the City, that includes a combination of trees, shrubs, and ground cover that after 5 years growth will be at least 20 feet in height and shall, together with shrubs and ground cover, create a continuous visual screen. Provided, however, in public utility easements or rights-of-way, the vegetation shall be installed and maintained in a manner which is acceptable to the public utility company, and does not interfere with the operation and maintenance of the public utility facilities. For items band c above, the actual length of required screening along the roadway will be equal to the length of the new development that is parallel to the roadway. Screening shall not be required for new development that is to the rear of or behind existing facilities. In all cases the SO' strip, along the entire roadway frontage, shall be dedicated as a landscape easement and shall be kept free from any improvements except for approved driveway access and identification signs. For cases of new development or improvements where a 50' landscape easement is not available or practical, Company shall meet with City to determine a suitable landscaping alternative. d) In the case of land contiguous to Fairmont Parkway, in addition to the other requirements of these Rules and Regulations, Company shall dedicate to City by Plat a ten foot (10') wide pedestrian and bicycle easement, extending along Company's Fairmont Parkway boundary, within the fifty foot (50') landscape easement. The pedestrian easement shall not be within any pipeline facility, except for necessary crossings. 3. Driveways opening from said strip of land onto State Highway 225 or State Highway 146 shall be subject to the rules and regulations of the Texas Department of Transportation and provisions of the City's Code of Ordinances, whichever is more restrictive. Driveways opening from said strip of land onto Fairmont Parkway shall be subj ect to the rules and regulations of Harris County and prov~s~ons of the City's Code of Ordinances, whichever is more restrictive. 15 KA "EXHIBIT e" Page 3 of 3 4. Driveways opening from said strip of land onto Fairmont Parkway shall be approved by the city and may require the installation of separate acceleration/deceleration lanes. 5. Installation of a median crossover on Fairmont Parkway shall be subject to the approval of both Harris County and City. 16 1</\ -.;t 1.0 <<> M -.;t S; 0 8 !z 8 ~ ci ::l ~ 0 0 !z q ~ ::l It> .n 0 '" ~ N ~ U ." W :t U Z Z W W ~ ~ !z ~ ::l 8 is !/) ~ Ci Ci 8 !z ~ ::l 0 .n ~ '" w U ~ ~ 0 ~ w (j; w 0 '" ~ w 0 U ~ 0: ~ >- c: 111 Q. E 0 u .!! i= c: 111 -!:? Q; E ~ <l: if l- . U Vi ff3 ~ 0 0 w 0 Z .l 0 ~ ., iii frl It) I- is co V) "<t w Z a: w ,... III g l- V) ~ w Z 0 w a: U w 0 ;;; z 0 ~ w ~ U '" a: 0> w 0 HJ '" ;; .... () ~ < () it w ~ < ~ ~ ::) -------1 I i I I I -.;t It) <<> M -.;t -_ uo ItIVl80 "lMlR1!'" 4moes C8 o o g ~ It) N * ~ ::> o ~ !' ! 0 ... ~ - Jf en N ~ ~f c - 0 ru 0 ... 0 Ii ID N C\- oO ...r ID 0:' L11 ... 0 ..., 0 'IJ 6 ... J! z r1"l ~ G)I (.) 'It ~ W It) ::I: CD (.) ... .. 'It - C\- c:a c..D IT 0 0 c..D cj ru ~:R 0 .. ~~~ - j ~ _ 0 ...r ex: cil::: w~~ 0 L11 Z ~~z < >- c..D !/) f",,~ ... a:: 0 ::;) > <&; 0 ...r ~ >-:l ::I: 0 ili~ ~ (,)li~ ~~ LIl Ij;; ~ > i ~ ~ ::> J l llt ~ f')a;< <~C!~ . . . Wa: ?;~~.. 1< r October 29, 2010 RE: Real Estate Bid Kuraray America Inc. authorizes Bank of Tokyo-Mitsubishi UFJ to release Information on all bank accounts with balances. To: City of LaPorte,Texas Cushman & Wakefield Thank you, f~;;K. c// ' (~~~-~ ~'~~r:2~~ .. Phil Kawanishi, Treasurer Kuraray America, Inc. Headquarters: Trading Business Unit: EVAL Business Unit: SEPTON Business Unit: 2625 Bay Area Blvd., Suite 300, Houston, TX 77058 600 Lexington Avenue 26FL New York, N.Y. 10022 2625 Bay Area Blvd., Suite 300, Houston, TX 77058 11414 Choate Road Pasadena, TX 77507 Phone: 713-495-7311 Fax: 713-495-7308 Phone: 212-986-2230 Fax: 212-867-3543 Phone: 713-495-7311 Fax: 713-495-7308 Phone: 281-909-5800 Fax: 281-909-5801 '.",.. CREDIT INFORMATION CORPORATE HEADQUARTERS: KURARA Y AMERICA, INC. 2625 Bay Area Blvd. Suite 300 Houston, TX 77058-1551 (800) 423-9762 OFFICERS: Kenichi AbeIPresident Kunihiro Kawanishi/Treasurer PLANT LOCATIONS: Eval Business Unit (Sept. 14, 1983) 11500 Bay Area Blvd. Pasadena, TX 77507 (281) 474-9111, (281) 474-1555 EV AL is the exclusive manufacturer and marketer for EV AL @ Resins in the Western Hemisphere. These resins are well recognized worldwide by the packaging industry as the premier gas barrier polymer for the packaging of food, medical, chemical and other products. SEPT ON Business Unit (Oct. 2, 2000) 11414 Choate Rd. Pasadena, TX 77507 (281)909-5800,(281)909-5801 Septon is the exclusive manufacturer of SEPTON@ and HYBRAR@ (thermoplastic elastomer) in U.S.A. These elastomers are well recognized by the plastic compounders and other industry as a synthetic rubber with excellent elasticity. Its applications include car interiors, electrical appliances, housing materials, and also toys, tools and stationery. Trading Business Unit 600 Lexington Ave. 26th Floor New York, NY 10022 (212) 986-2230, (212) 867-3543-(fax) Vectran Division 460 E. Greenway Industrial Drive Fort Mill, SC 29708 (803) 396-7350, (803) 547-5888-(fax) BANK REFERENCE: Bank of Tokyo-Mitsubishi 1251 Avenue of the Americas New York, NY 10020-1104 Contact: Deposit Desk (212) 782-4400, (212) 782-4471-(fax) TRADE REFERENCES: Wholesale Electric P.O. Box 1913 Deer Park, TX 77536 (281) 479-6055, (281) 479-7466-(fax) Attn: Gina Lindsay Georgia Pacific P.O. Box 39806 West Monroe, LA 71294-5806 www.gp.comlcredit Neopal 1400 Kowis Houston, TX 77093 (281) 219-9600, (281) 219-9688-(fax) Attn: JeffKrug Accounts payable contact: Lavita Isgate (281) 474-1526, (713) 495-7366-(fax) Federal ID 13 -4119995 Duns # 94-809-5245 SIC # 2821 Kuraray America Inc. (KAI) is a wholly owned subsidiary of Kuraray Co., Ltd (Japan). Because KAI does not have third party financing, there are no restrictive covenants that require audited financial statements. Please contact us for alternate methods of assurance should your credit policy require such statements Kuraray America, Inc. website: http://www.kurarayamerica.com/ FULBRIGHT tdJaworski L.L.E Attin7leJl lit Law William B. Sing Partner Fulbright Tower. 1301 McKinney, Suite 5100 · Houston, Texas 77010-3095 wsing@fu/bright.com.Direct: 713 65/ 3709. Main: 713 651 5151. Facsimile: 7/365/5246 November 15,2010 Via email tostacig@atcdp.com Ms. Staci Gay, Escrow Officer Commercial Division American Title Company 5003 College Park Deer Park, Texas 77536 Re: Your GF No. 1229-09-1148 -- Sale by the City of La Porte, Texas ("Seller") to Kuraray America, Inc. ("Buyer") covering approximately 81 acres in Fort Bend County, Texas (the "Property") Dear Staci: On behalf of Buyer, we acknowledge receipt of a Commitment for Title Insurance with an effective date of November 8, 2010, re-issued November 12, 2010 (the "Commitment"). The purpose of this letter is to ensure timely objection to certain title matters shown in the Commitment, in accordance with the requirements of the Commercial Contract - Unimproved Property by and between Seller and Buyer (the "Purchase Agreemenf'). We have also received an electronic copy of the plat of a land title survey dated April 20, 2010 (the "Survey"). We have not received any separate certified metes and bounds description, however. A. We will discuss with our client whether it wishes to have, at its cost, the standard exception for survey matters (item 2 in Schedule B) modified by deleting such exception except for "shortages in area." We will advise you in due course on this issue. B. We object to item 1O.A (pertaining to rights of parties in possession) and item 10.N (pertaining written but unrecorded leases, with rights of tenants as tenants 90259339.11 AUSTIN. BEIJING. DALLAS. DENVER. DUBAl. HONG KONG. HOUSTON. lONDON. LOS ANGELES MINNEAPOLIS. MUNICH. NEW YORK. RIYADH. SAN ANTONIO. ST. LOUIS. WASHINGTON DC www.jidbright.r;om Letter to Staci Gay Page 2 only) in Schedule B of the Commitment, both of which must be deleted from the Owners Title Policy when issued. We understand that the Property is entirely vacant and free of any tenants. C. We request that item 10.M. in Schedule B of the Commitment be modified to add the following. "(Mineral owner(s) expressly denied surface rights)." D. All matters shown in Schedule C of the Commitment must be satisfied on or before closing, and none may be carried over to or reflected as exceptions in the Owners Title Policy. E. As to the Survey, we understand that the Seller will provide a survey affidavit to be approved by your company pursuant to paragraph 6.B.(3) of the Purchase Agreement. We request a copy of the proposed form of that affidavit, which we request be made to Kuraray America, Inc. as well as to your title company. We reserve the right to supplement this letter as we receive additional information regarding the Property. Very truly yours, ~*~7 Copies sent via email to: Mr. Kenichi Abe, President Kuraray America, Inc. kenichi.abe@kurarayamerica.com Mr. Hiroshi Fukuizumi, Legal Manager Kuraray America, Inc. hiroshi.fukuizumi@kurarayamerica.com Mr. John Littman Cuslunan Wakefield iohn.littman@cushwake.com Mr. Ron Bottoms, City Manager City of La Porte bottomsr@laoortetx.gov 90259339.1 Letter to Staci Gay Page 3 Ms. Martha A. Gillett, City Secretary City of La Porte gillettm@laoortetx.gov Mr. Knox W. Askins, City Attorney City of La Porte knoxaskins@comcast.net WBS/vam 90259339.1 THE FOllOWING COMMITMENT FOR TITLE INSURANCE IS NOT VALID UNLESS YOUR NAME AND THE POLICY AMOUNT ARE SHOWN IN SCHEDULE A, AND OUR AUTHORIZED REPRESENTATIVE HAS COUNTERSIGNED BELOW. COMMITMENT FOR TITLE INSURANCE ISSUED BY L~~~!!~! ."1.i:' ~ w . o . . ~ " ("0,..1 po" We, STEWART TITLE GUARANTY COMPANY, will issue our title insurance pOlicy or policies (the Policy) to You (the proposed insured) upon payment of the premium and other charges due, and compliance with the requirements in Schedule B and Schedule C. Our Policy will be in the form approved by the Texas Department of Insurance at the date of issuance. and will insure your interest in the land described in Schedule A. The estimated premium for our Policy and applicable endorsements is shown on Schedule 0: There may be additional charges such as recording fees, and expedited delivery expenses. Tt,is Commitment ends ninety (90) days from the effective date, unless the Poiicy is issued sooner, or failure to issue the Policy is our fault. Our liability and obligations to you are under the express terms of this Commitment and end when this Commitment expires. In witness whereof, the Company has caused this commitment to be signed and sealed as of the effective date of commitment as shown in Schedule A, the commitment to become valid and binding only when countersigned by an authorized signatory. ~~'!!!!! AUI~Orized Signatory ~ Cd..A \ili~. Company 'Vt.ar Vq))k- '-~. .. .....- ",uPJl1NJ,... l~\:}'~'~Z? it;..... ... ......,~ ~~... t,IlI\PO"A ...~, 1><:-+ ...,/\ ~~\ .....' -*- ~'~l ..-. . r ~...\ 1908 leil \ ..... ... .... ~ ~ ~"""""~. X~~,.."", ~#,h(;J..~t1~ '11 V~<.- Cily, Slale CONDITIONS AND STIPULATIONS 1. If you have actual knowledge of any matter which may affect the title or mortgage covered by this Commitment, that is not shown in Schedule B, you must notify us in writing. If you do not notify us in writing, our liability to you is ended or reduced to the extent that your failure to notify us affects our liability. If you do notify us, or we learn of such malter, we may amend Schedule B. but we will not be relieved of liability already incurred. 2. Our liability is only to you. and others who are included In the definition of Insured in the Policy to be issued. Our liability is only for actual loss incurred in your reliance on this Commitment to comply with its requirements or to acquire the interest In the land. Our lIability is limited to the amount shown in Schedule A of this commitment and will be subject to the following terms of the Policy: Insuring PrOVisions, Conditions and Stipulations. and Exclusions. All notices required to be given the Company and any statement in writing required to be furnished the Company shall be addressed to it at P.O. Box 2029. Houston, Texas 77252. I-~~~~!:! Proposed Language for a Commitment CO\ cr Leifer The artached lirle insurance commitment Conldlf1$ Infol rnatl(.\n \.\ hich has been OI)I<1lill:J or derived from records and informdtlon ovmed by Title Dala, Inc. or one of its Sub')ldlarlcs (colleCli\'dy "Tille DaI3"). Tille Data owns and maintain:. bnd rille plants for Harris, Bra/erla, Chambc:rs, Fan Bend, GalveslOn, Libcr1Y, 0.10nlg0lT1cry and \I,'aller counties, Texas Tilk I),lla crcJled irs title plants through the investment of extcnslu.: lime, labor, skill and money The infurmation contained in Ihe title plants is protected by federal copyri~hl law and Texas common law on trade secrets and conlract Tille Data has granted our comp':l/lY a license 10 use one or more of ifS 1IIIc I11anl5 Our company's right 10 access and use Tille Data's t!lle plants is governed by our conlract with Tille Data. Our contract vl"/lh Title Data restriclS who call receive and/or use a tifle insurance commItment ,vhich is based, in \\.h()le or In pari, upon Title Data's records and tnformallon Under the terms of our contract with Title 03t3, we are permincd to provide you \\ ith the Jttached IIIIe insurance commitment for limited use and distribution only. Speclllcally, yOU arC sublIcensed to dell\er, exhibit, or furnish Ihe anachcd title insurance commitmenl (or allY copics thereof) ONLY 10 your bona fide emplo:,ecs dnd a Ihird parly who is playing a bona fide role in this proposed real estate transacrion, Including a lawyer, a lender, a surveyor, a real c~tare broker or agenl, and (he parties (0 this proposed transaction. For purposes of our agreement wilh Tille Dala, "deliver, exhibit, or furnIsh" Inc ludes, \\clthout IJmltalion, copying this litlc insurance commitment (whether such copying be by means of a photocopier, facsimile rnachl/)c, another electronic scanning device, UI JIl)' other m,:,thod of reproduction) and providing sue!: Cl'py lO any third party Your furnishing or the al1Jched title insurance commitment to anyone not speCIfically enumerated ,)bove is nol permined hy our contract With Title DatJ and conSlitutes a breach of our sublicense ro you. Your (urrllshlng of the anilched tllle insurance comlnllment to anyone nOI specifically enumeraled abclVe IS also a viol3licn of federal copyright law and TnJs common law Therefore, as an express condition of uS providing you ,^Ilhthe altachcd tille insLJI Jnce cOlromitment, you spccilically agree 10 IJn1l1 ils uses to those set fonh herein, Jnd 10 prOVide a copy of thiS lencr to any pany (0 \\hom you delivcr, cxhiblt, or furnish the i:JltJched lllle Insurance commilment (or any copies lhereot). In the event you are unable or unwilling (0 comply with these conditions. Immediately IClurn the allached title insurance commitment to our company, wlth(lUt reVieWing, COPYII1f!. or orherwlse utilizing in any way the Inlormalion conlained therein. .\ COI'\' OF THIS l FTT[R MUST ACCUMPANY TilE 1\ TT ,\('IIED T/"I I.f 1'~l'RA';CE C()\1.\11 i ',~I. "T ,\ TALl. TII\.1ES ALL Dov.N~rRFAl\l RECJPI!.r-iTS MlJST PROVIDE" COpy Of 1 HIS I r.ll II' 1<,) i\r>;y () Tilt R .\ UTI 10 RILl. () USERS OF rHE All ACHl [) r i 11.[1 :'-JS\ ,R...V;CE COt\'ll\~1 r~ \f NT !IC(.d"'fVT1(Q_ Cr dOC c.;:]tJN;(, Stewart Title Guaranty Company SCHEDULE A GF No. 1229-09-1148 Address (for reference only): Bay Area Boulevard Effective Date: November 8, 2010, 8:00 a.m. Issue Date: March 9, 2009, Reissued November 12, 2010 1. The policy or policies to be issued are: (a) OWNER POLICY OF TITLE INSURANCE (Form T-1) Policy Amount: $ 7,000,000.00 PROPOSED INSURED: Kuraray America, Inc. (b) TEXAS RESIDENTIAL OWNER POLICY OF TITLE INSURANCE - ONE-TO-FOUR FAMILY RESIDENCES (Form T-1 R) Policy Amount: $ PROPOSED INSURED: (c) MORTGAGEE POLICY OF TITLE INSURANCE (Form T.2) Policy Amount: $ PROPOSED INSURED: Proposed Borrower: Kuraray America, Inc. (d) TEXAS SHORT FORM RESIDENTIAL MORTGAGEE POLICY OF TITLE INSURANCE (Form T -2R) Policy Amount: $ PROPOSED INSURED: Proposed Borrower: (e) MORTGAGEE TITLE POLICY BINDER ON INTERIM CONSTRUCTION LOAN (Form T- 13) Binder Amount: $ PROPOSED INSURED: Proposed Borrower: (f) OTHER Policy Amount: $ PROPOSED INSURED: 2. The interest in the land covered by this Commitment is: Fee Simple 3. Record title to the land on the Effective Date appears to be vested in: City of La Porte, Texas, a home rule city of the County of Harris and State of Texas 4. Legal description of land: Being a tract or parcel of land containing 81.00 acres (3,528,480 square feet) located in the George B. McKinstry League. Abstract Number 47. Harris County, Texas, and being all of a called 80.972 acre tract of land described in deed executed July 24, 1989 from FMC Corporation to the City of La Porte, Texas as recorded under Harris County Clerks File (HCCF) No. M253982 of the Official Public Records of Real Property, Harris County, Form T-7: Commitmentfor Title Insurance 1229-09-1148 Texas (OPRRPHCT), said 81.00 acre tract being more particularly described as follows (all bearings are based upon the Texas State Plane Coordinate System, South Central Zone; all coordinates and distances are surface and may be converted to grid by multiplying by the combined scale factor of 0.99988150; coordinates are based upon the North American Datum of 1983 (NAD 83)) BEGINNING at a five-eighths inch iron rod found for the southwest corner of said 80.972 acre tract and the northwest corner of a called 21.28 acre tract described in deed executed September 11, 2000 from FMC Foundation to Superior Carriers, Inc. as recorded under HCCF No. U628453 of said OPRRPHCT, and also being on the east right-of-way line of Bay Area Boulevard (150 feet wide) as dedicated by instrument recorded in Volume 7235, Page 135 of the Deed Records of said Harris County, Texas (HCDR) said corner having surface coordinates of X=3,224,420.70, Y=1 3,803,220.51; THENCE, North 01000' 03" West (called North 010 00'45' West), with the west line of said called 80.972 acre tract and with the east right-of-way line of Bay Area Boulevard, a distance of 1689.99 feet (called 1,689.46 feet) to a five-eights inch iron rod found for the northwest corner of said called 80.972 acre tract in the south line of a called 21.274 acre tract (50 foot wide) described as Tract 2 in deed executed April 12, 1973 from Friendswood Development Company to Southern Pacific Transportation Company as recorded under HCCF No. 0867930 of the OPRRPHCT; THENCE, North 87024'54" East (called North 8r 25'50" East), with the north line of said called 80.972 acre tract and the south line of said called 21.274 acre tract, at a distance of 464.41 feet (called 464.89 feet) pass a five-eighths inch iron rod with brass cap found 0.10 feet right of line, marking the east right-af-way line of a 40 foot wide pipeline easement described in easement deed from Humble Oil & Refining Company to Channel Industries, et al executed July 10, 1967 and recorded under Volume 6835, Page 616 of the HCDR, at a distance of 906.61 feet (called 906.83 feet) pass a five-eighths inch iron rod with brass cap stamped 2393 found, in all a total distance of 2,058.34 feet (called 2,058.62 feet) to a five-eighths inch iron rod with brass cap stamped 2382 found for the northeast corner of said called 80.972 acre tract and being the northwest corner of a called 38.096 acre tract described as Ditch "C", Tract 2 in deed executed September 29, 1970 from Friendswood Development Company to Harris Cou nty Flood Control District as recorded in Volume 8260, Page 124 of the HCDR; THENCE, South 03001 '53" East (called South 03002'25" East), with the east line of said called 80.972 acre tract and with the west line of said called 38.096 acre tract, a distance . of 1 ,690.01 feet (called 1,688.89 feet) to a five-eighths inch iron rod and "Baseline Corp." cap, set for the southeast corner of said 80.972 acre tract and the northeast corner of a called 20.0000 acre tract described in deed executed August 26, 1991 from FMC Foundation to Chusei (U.S.A.) Inc. as recorded under HCCF No. N291863 of said OPRRPHCT, and from which a found five-eighths inch iron rod bears North 01 09' West, a distance of 20.88 feet; THENCE, South 87025'54" West (called South 8r25'50" West), with the south line of said 80.972 acre tract and the north line of said called 20.0000 acre tract and the north line of a called 22.72 acre tract described in deed executed December 2, 1999 from FMC Foundation to Chusei (U.S.A.) Inc. as recorded under HCCF No. U115813 ofthe OPRRPHCT, at a distance of 0.42 feet pass a five-eighths inch iron rod found, at a distance of 1 ,341 .44 feet pass the northwest corner of said called 22.72 acre tract and the northeast corner of the aforesaid called 21.28 acre tract from which a found five- eighths inch iron rod and "Texas Land Surveying" cap found bears South 71059' West, a distance of 0.36 feet, continuing with the north line of said called 21.28 acre tract, for a total distance of 2.118.23 feet (called 2,118.40 feet) to the POINT OF BEGINNING and containing 81.00 acres (3,528480 square feet) of land. FOnTl T-7: Commitment for Title Insurance 1229-09-1148 Note: the company is prohibited from insuring the area or quantity of the Land described herein. Any statement in the above legal description of the area or quantity of Land is not a representation that such area or quantity is correct, but is made only for informational andlor identification purposes and does not override item 2 of Schedule "8" hereof. Fonn T .7: Commitment for Title Insurance 1229-09-1148 SCHEDULE B EXCEPTIONS FROM COVERAGE In addition to the Exclusions and Conditions and Stipulations, your Policy will not cover loss, costs, attorney's fees, and expenses resulting from: 1. The following restrictive covenants of record Itemized below eNe must either insert specific recording data or delete this exception): Volume 5550, Page 215, Volume 5920, Page 165, Volume 8470, Page 238 and Volume 8035, Page 51, all of the Deed Records of Harris County, Texas, But deleting any covenant, condition or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status or national origin unless and only to the extent that said covenant (a) is exempt under chapter 42, section 3607 of the United States code or (b) Relates to handicap but does not discriminate against handicapped persons. 2. Any discrepancies, conflicts, or shortages in area or boundary lines, or any encroachments or protrusions, or any overlapping of improvements. 3. Homestead or community property or survivorship rights, if any of any spouse of any insured. (Applies to the Owner Policy only.) 4. Any titles or rights asserted by anyone, including, but not limited to, persons, the public, corporations, governments or other entities, a. to tidelands, or lands comprising the shores or beds of navigable or perennial rivers and streams, lakes, bays, gulfs or oceans, or b. to lands beyond the line of the harbor or bulkhead lines as established or changed by any government, or c. to filled-in lands, or artificial islands, or d. to statutory water rights, including riparian rights, or e. to the area extending from the line of mean low tide to the line of vegetation, or the rights of access to that area or easement along and across that area. f. (Applies to the Owner Policy only.) 5. Standby fees, taxes and assessments by any taxing authority for the year 2010, and subsequent years; and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership, but not those taxes or assessments for prior years because of an exemption granted to a previous owner of the property under Section 11.13, Texas Tax Code, or because of improvements not assessed for a previOUS tax year. (If Texas Short Form Residential Mortgagee Policy of Title Insurance (T-2R) is issued, that policy will substitute "which become due and payable subsequent to Date of Policy" in lieu of "for the year 2009 and subsequent years") 6. The terms and conditions of the documents creating your interest in the land. 7. Materials furnished or labor performed in connection with planned construction before signing and delivering the lien document described in Schedule A, if the land is part of the homestead of the owner. (Applies to the Mortgagee Title POlicy Binder on Interim Construction Loan only, and may be deleted if satisfactory evidence is furnished to us before a binder is Issued.) 8. Liens and leases that affect the title to the land, but that are subordinate to the lien of the insured mortgage. (Applies to Mortgagee Policy (T-2) only.) 9. The Exceptions from Coverage and Express Insurance in Schedule B of the Texas Short Form Form T -7: Commitment for Title Insurance 1229-09-1148 Residential Mortgagee Policy of Title Insurance (T-2R). (Applies to Texas Short Form Residential Mortgagee Policy of Title Insurance (T-2R) only. Separate exceptions 1 through 8 of this Schedule B do not apply to the Texas Short Form Residential Mortgagee Policy of Title Insurance (T -2R). 10. The following matters and all terms of the documents creating or offering evidence of the matters (We must insert matters or delete this exception.): A. Rights of Parties in possession. (OWNER POLICY ONLY) B. Intentionally deleted. c. Intentionally deleted. D. Intentionally deleted. E. Intentionally deleted. F. Intentionally deleted. G. Intentionally deleted. H. A right-of-way and easement for pipeline purposes. as granted to Tennessee Gas Transmission Company by instruments recorded in Volume 3007, Page 706, Volume 3135. Page 261, Volume 3340. Page 188 and in Volume 6835, Page 616, a/l of the Deed Records of Harris County. Texas. I. A right-of-way and easement tor pipeline purposes, as granted to Channel Industries Gas Company. Houston Pipe Line Company and Tenneco Oil Company by instrument recorded in Volume 8017, Page 190 ot the Deed Records of Harris County, Texas. J. A right-ot-way and easement for electric distribution and communication systems ten (10) feet in width along the most Westerly property line, lying East of and adjacent to Bay Area Boulevard, as granted to Houston Lighting & Power Company by instrument recorded in Volume 6948, Page 437 of the Deed Records of Harris County, Texas. K. Intentionally deleted. L. A 1/8th non-participating royalty interest in a/l oil, gas and other minerals on, in, under or that may be produced from the subject property is excepted herefrom, as same is set forth in the instrument recorded in Volume 6890, Page 115 of the Deed Records of Harris County, Texas. Title to said interest has not been traced further. M. All oil, gas and other minerals, royalties, bonuses, rentals and other rights in connection with same, all of which are expressly excepted herefrom and not insured hereunder, as set forth in instruments filed under Volume 6926, Page 352 and under Volume 6973, Page 503, both of the Deed Records of Harris County, Texas. Title to said mineral interest has not been traced further. N. Any written but unrecorded leases, with rights of tenants as tenants only. Form T-7: Commitment for Title Insurance 1229-09-1148 SCHEDULE C Your Policy will not cover loss, costs, attorneys fees, and expenses resulting from the following requirements that will appear as Exceptions in Schedule B of the Policy, unless you dispose of these matters to our satisfaction, before the date the Policy is issued: 1. Documents creating your title or interest must be approved by us and must be signed, notarized and filed for record. 2. Satisfactory evidence must be provided that: no person occupying the land claims any interest in that land against the persons named in paragraph 3 of Schedule A, all standby fees, taxes, assessments and charges against the property have been paid, all improvements or repairs to the property are completed and accepted by the owner, and that all contractors, sub-contractors, laborers and suppliers have been fully paid, and that no mechanic's, laborer's or materialmen's liens have attached to the property, there is legal right of access to and from the land, (on a Mortgagee Policy only) restrictions have not been and will not be violated that affect the validity and priority of the insured mortgage. 3. You must pay the seller or borrower the agreed amount for your property or interest. 4. Any defect, lien or other matter that may affect title to the land or interest insured, that arises or is filed after the effective date of this Commitment. 5. NOTE: Procedural Rule P-27 as provided for in Article 9.39A of the Texas Insurance Code requires that "Good Funds" be received and deposited before a Title Agent may disburse from its Trust Fund Account. 6. Note: We find no outstanding mortgage liens of record affecting the subject property. An inquiry should be made concerning the existence of any unrecorded lien or other indebtedness, which could give rise to any security interest in the subject property. 7. Intentionally deleted. 8. Proposed assured will be required to execute a waiver of inspection at the time of closing. An exception to "rights of parties in possession" will be contained in the owner's policy when Issued; however, the proposed assured may request that this exception be omitted, in which case the company will require that an inspection be conducted by its agent, for which an inspection fee may be charged, and the company reserves the right to make additional exceptions in the policy to matters revealed by the inspection. NOTE TO CLOSER: Title is vested as shown above by Warranty Deed dated July 24, 1989, filed for record July 28. 1989, under Harris County Clerk's File No. M253982, from FMC Corporation to City of La Porte, Texas. Note to Closer: this examination includes the following; that the underwriter guidelines have been Form T-?: Commitment for Title Insurance 1229-09-1148 checked to allow a T-19 endorsement to be issued, subject to the payment of assessments having been paid, the release of right of first refusal, if required above. However subject to underwriter approval of encroachments or violation of restrictions if any shown on survey. In addition we found No waiver of surface rights regarding minerals shown on Schedule "B"; therefore you should delete 3(B) on the endorsement. Note to Closer: A search of the following name(s) Kuraray America, Inc., listed as Purchasers herein, reflects the following Federal Judgments, National Liens or listed on the Anti-terrorist list, which may apply: None found of record. (For Title Department Use Only: Tract 10/A, 41/3, Abstract No.4?, Harris County, Texas) American Title Company of Houston Authorized Officer or Agent This Commitment is invalid unless the insuring provisions and Schedules A, B, and Care attached. DB Form T-7: Commitment for Title Insurance 1229-09-1148 SCHEDULE D You are entitled to receive advance disclosure of settlement charges in connection with the proposed transaction to which this Commitment relates. Upon your request, such disclosure will be made to you. Additionally, the name of any person, firm, or corporation receiving a portion of the premium from the settlement of this transaction will be disclosed on the closing or settlement statement. You are further advised that the estimated title premium* is: Owners Policy $30449.00 MortQaQee Policy $0.00 Endorsement CharQes $4567.35 Other $0.00 Total $35016.35 Of this amount: $< -> (or 15%) will be paid to the policy issuing Title Insurance Company; $<-> (or 30 %) will be retained by the Title Insurance Agent; and the remainder of the estimated premium will be paid to other parties as follows: AMOUNT TO WHOM FOR SERVICES 55% Jimmy Fox. Attorney Closing Services < -Amount and Percent> < -Enter fee attv/OOC name> < -enter service> *The estimated premium is based upon information furnished us as the date of this Commitment for Title Insurance. Final determination of the amount of the premium will be made at closing in accordance with the Rules and Regulations adopted by the Commissioner of Insurance. The following disclosures are made by the Title Insurance Agent issuing this commitment. The following individuals are directors and/or officers, as indicated, of American Title Company of Houston: SHAREHOLDERS: ATCOH Holding Company DIRECTORS: Donald J Casey, Thomas N. Rispoli, Kim Sobieski, Herbert L. Williams. Robert Way, Marilyn J. Wasser, David J. Weaving; OFFICERS: Kim Sobieski, President; Herb L. Williams, Executive Vice President; Donald J. Casey, Executive Vice President and Assistant Secretary; Marilyn J. Wasser, Executive Vice President and Assistant Secretary; Robert Way, Senior Vice President and Chief Operating Officer; Dea Benson, Senior Vice President; Michael P. Gozdan, Senior Vice President, General Counsel and Secretary; Thomas N. Rispoli, Senior Vice President and Chief Financial Officer; Jonathan M. Silver, Vice President and Assistant Secretary; Brian Ahlquist, Assistant Secretary; Lynette Joy Carhart-Gladdis, Senior Vice President and Assistant Secretary; Patrick Andrew Treacy, Vice President, Tax; Seth I. Truwit, Senior Vice President and Assistant Secretary; Anthony E. Hull, Executive Vice President and Treasurer. The information contained in this Schedule (D) does not affect title to or the lien upon the land described in Schedule A hereof. to be insured in any policy(ies) of title Insurance to be issued in accordance with this Commitment. As to Stewart Title Guaranty ComDanv, the Underwriter herein, the following disclosures are made: Shareholders owning, controlling or holding, either personally or beneficially, 10% or more of the lease Shares of Stewart Title Guaranty Company as of the last day of the year preceding the date hereinabove set forth are as follows: Form T-7: Commitment for Title Insurance 1229-09-1148 Stewart Information Services Corporation - 100% The members of the Board of Directors of Stewart Title Guaranty Company as of the last day of the year preceding the date hereinabove set forth are as follows: Bruce Belin, Max Crisp, Nita Hanks. Charles F. Howard. C.M. Hudspeth. Malcolm S. Morris, Stewart Morris, Stewart Morris, Jr.. Matt Morris The four designated officers of Stewart Title Guaranty Company as of the last day of the year preceding the date hereinabove set forth are as follows: President Malcolm S. Morris. Executive Vice President Glenn H. Clements, Secretary: Sue Pizzitola, Treasurer: Ken Anderson. Jr. Form T -7: Commitment for Title Insurance 1229-09-1148 Stewart Title Guaranty Company DELETION OF ARBITRATION PROVISION (Not applicable to the Texas Residential Owner Policy) ARBITRATION is a common form of alternative dispute resolution. It can be a quicker and cheaper means to settle a dispute with your Title Insurance Company. However, if you agree to arbitrate, you give up your right to take the Title Company to court and your rights to discovery of evidence may be limited in the arbitration process. Further, an arbitrator's award is not normally appealable in court. Your policy contains an arbitration provision (shown below). It allows you or the Company to require arbitration if the amount of insurance is $1,000,000 or less. If you want to retain your right to sue the Company in case of a dispute over a claim, you must request deletion of the arbitration provision before the policy is issued. You can do this by signing this form and returning it to the Company at or before the closing of your real estate transaction or by writing to the Company. The Arbitration provision in the Policy is as follows: Unless prohibited by applicable law or unless this arbitration section is deleted by specific provision in Schedule B of this policy, either the Company or the Insured may demand arbitration pursuant to the Title Insurance Arbitration Rules of the American Arbitration Association. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the Insured arising out of or relating to this Policy, and service of the Company in connection with its issuance or the breach of a policy provision or other obligation. All arbitrable matters when the Amount of Insurance is $1,000,000 or less SHALL BE arbitrated at the request of either the Company or the Insured, unless the insured is an individual person (as distinguished from a corporation, trust, partnership, association or other legal entity). All arbitrable matters when the Amount of Insurance is in excess of $1,000,000 shall be arbitrated only when agreed to by both the Company and the Insured. Arbitration pursuant to this Policy and under the Rules in effect on the date the demand for arbitration is made or, at the option of the Insured, the rules in effect at the Date of Policy shall be binding upon the parties. The award may include attorney's fees only if the laws of the state in which the land is located permit a court to award attorneys' fees to a prevailing party. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof. I request deletion of the Arbitration provision. SIGNATURE DATE SIGNATURE DATE NAME OF TITLE AGENT GF NUMBER OR FILE NUMBER Deletion of Arbitration 1229-09-1148 Privacy Policy Notice PURPOSE OF THIS NOTICE Title V of the Gramm-Leach-Bliley Act (GLBA) generally prohibits any financial institution, directly or through its affiliates, from sharing nonpublic personal information about you with a nonaffiliated third party unless the institution provides you with a notice of its privacy policies and practices, such as the type of information that it collects about you and the categories of persons or entities to whom it may be disclosed. In compliance with the GLBA, we are providing you with this document, which notifies you of the privacy policies and practices of Stewart Title Guaranty Company and American Title Company of Houston. We may collect nonpublic personal information about you from the following sources: Information we receive from you such as on applications or other forms. · Information about your transactions we secure from our files, or from our affiliates or others. Information we receive from a consumer reporting agency. Information that we receive from others involved in your transaction, such as the real estate agent or lender. Unless it is specifically stated otherwise in an amended Privacy Policy Notice, no additional non public personal information will be collected about you. We may disclose any of the above information that we collect about our customers or former customers to our affiliates or to nonaffiliated third parties as permitted by law. We also may disclose this information about our customers or former customers to the following types of nonaffiliated companies that perform marketing services on our behalf or with whom we have joint marketing agreements: Financial service providers such as companies engaged in banking, consumer finance, securities and insurance. Non-financial companies such as envelope stuffers and other fulfillment service providers. WE DO NOT DISCLOSE ANY NONPUBLlC PERSONAL INFORMATION ABOUT YOU WITH ANYONE FOR ANY PURPOSE THAT IS NOT SPECIFICALLY PERMmED BY LAW. We restrict access to nonpublic personal information about you to those employees who need to know that information in order to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information. Privacy Notice 1229-09-1148 DISCLOSURE STATEMENT To: Consumer From: American Title Company of Houston GF Number: 1229-09-1148 Property: Bay Area Boulevard Being a tract or parcel of land containing 81.00 acres (3,528,480 square feet) located in the George B. McKinstry League, Abstract Number 47, Harris County, Texas, and being all of a called 80.972 acre tract of land described in deed executed July 24, 1989 from FMC Corporation to the City of La Porte, Texas as recorded under Harris County Clerks File (HCCF) No. M253982 of the Official Public Records of Real Property, Harris County, Texas (OPRRPHCT), said 81.00 acre tract being more particularly described as follows (all bearings are based upon the Texas State Plane Coordinate System, South Central Zone; all coordinates and distances are surface and may be converted to grid by multiplying by the combined scale factor of 0.99988150; coordinates are based upon the North American Datum of 1983 (NAD 83)) BEGINNING at a five-eighths inch iron rod found for the southwest corner of said 80.972 acre tract and the northwest corner of a called 21.28 acre tract described in deed executed September 11, 2000 from FMC Foundation to Superior Carriers, Inc. as recorded under HCCF No. U628453 of said OPRRPHCT, and also being on the east right-of-way line of Bay Area Boulevard (150 feet wide) as dedicated by instrument recorded in Volume 7235, Page 135 of the Deed Records of said Harris County, Texas (HCDR) said corner having surface coordinates' of X=3,224,420.70, Y=1 3,803,220.51; THENCE, North 010 00' 03" West (called North 010 00'45' West), with the west line of said called 80.972 acre tract and with the east right-of-way line of Bay Area Boulevard, a distance of 1689.99 feet (called 1,689.46 feet) to a five-eights inch iron rod found for the northwest corner of said called 80.972 acre tract in the south line of a called 21.274 acre tract (50 foot wide) described as Tract 2 in deed executed April 12, 1973 from Friendswood Development Company to Southern Pacific Transportation Company as recorded under HCCF No. 0867930 of the OPRRPHCT; THENCE, North 87024'54" East (called North 87" 25'50" East), with the north line of said called 80.972 acre tract and the south line of said called 21.274 acre tract, at a distance of 464.41 feet (called 464.89 feet) pass a five-eighths inch iron rod with brass cap found 0.10 feet right of line, marking the east right-of-way line of a 40 foot wide pipeline easement described in easement deed from Humble Oil & Refining Company to Channel Industries, et al executed July 10, 1967 and recorded under Volume 6835, Page 616 of the HCDR, at a distance of 906.61 feet (called 906.83 feet) pass a five-eighths inch iron rod with brass cap stamped 2393 found, in all a total distance of 2,058.34 feet (called 2,058.62 feet) to a five-eighths inch iron rod with brass cap stamped 2382 found for the northeast corner of said called 80.972 acre tract and being the northwest corner of a called 38.096 acre tract described as Ditch .C., Tract 2 in deed executed September 29. 1970 from Friendswood Development Company to Harris County Flood Control District as recorded in Volume 8260. Page 124 of the HCDR; . THENCE, South 03001'53" East (called South 03002'25" East), with the east line of said called 80.972 acre tract and with the west line of said called 38.096 acre tract, a distance of 1,690.01 feet (called 1,688.89 feet) to a five-eighths inch iron rod and "Baseline Corp." cap, set for the southeast corner of said 80.972 acre tract and the northeast corner of a called 20.0000 acre tract described in deed executed August 26, 1991 from FMC Foundation to Chusei (U.S.A.) Inc. as recorded under HCCF No. N291863 of said OPRRPHCT. and from which a found five-eighths inch iron rod bears North 01 09' West, a distance of 20.88 feet; THENCE, South 8r25'54" West (called South 8r25'50" West), with the south line of said 80.972 acre tract and the north line of said called 20.0000 acre tract and the north line of a called 22.72 acre tract described in deed executed December 2. 1999 from FMC Foundation to Chusel (U.S.A.) Inc. as recorded under HCCF No. U115813 of the OPRRPHCT, at a distance of 0.42 feet pass a five-eighths inch iron rod found. at a distance of 1,341.44 feet pass the northwest corner of said called 22.72 acre tract and the northeast corner of the aforesaid called 21.28 acre tract from which a found five- eighths inch iron rod and "Texas Land Surveying" cap found bears South 71059' West, a distance of 0.36 feet. continuing with the north line of said called 21.28 acre tract, for a total distance of 2,118.23 feet (called 2.118.40 feet) to the POINT OF BEGINNING and containing 81.00 acres (3,528480 square feet) of land. Note: the company Is prohibited from insuring the area or quantity of the Land described herein. Any statement in the above legal description of the area or quantity of Land is not a representation that such area or quantity is correct. but is made only for informational andlor identification purposes and does not override item 2 of Schedule "B" hereof. I. AFFILIATED BUSINESS ARRANGEMENT Thank you for contacting American Title Company of Houston (hereinafter "Agent"). This is to give you notice that Agent has a business relationship with Title Resources Guaranty Company. which is a title insurance underwriting company and Processing Solutions. Inc. which is a tax certificate provider. The majority owner of Agent is also the one hundred percent owner of Title Resources Guaranty Company and Processing Solutions. Inc. Because of this relationship, this referral of business to the companies below may provide Agent a financial or other benefit. Set forth below is the estimated charge or range of charges for the services listed. You are NOT required to use the companies below in connection with the provision of title services. THERE ARE FREQUENTLY OTHER COMPANIES AVAILABLE WITH SIMILAR SERVICES. YOU ARE FREE TO SHOP AROUND TO DETERMINE THAT YOU ARE RECEIVING THE BEST SERVICES AND THE BEST RATE FOR THESE SERVICES. COMPANIES DESCRIPTION OF CHARGES ESTIMATE OF RANGE OF CHARGES GENERALLY MADE BY PROVIDER Title Resources Guaranty TiDe Insurance premium between $8.43 TiDe Insurance premium and $6.11 per thousand dollars of polley Company ("TRGC") coverage* *This range of charges covers, as an example, pollcles from $100,000 to $400,000. however the cost to you will differ depending on the policy amount. Processing Solutions, Inc Provision of Tax certificate $65-$100 per certificate II. FDIC COVERAGE We deposit funds received on your behalf in state or federally-chartered banks that are insured by the Federal Deposit Insurance Corporation ("FDIC"). FDIC deposit insurance coverage applies to a maximum amount of $100,000 per depositor for deposits held in the same legal ownership category at each bank. For example, funds held on your behalf in an account maintained by us will be combined with any individual accounts held directly by you at the same bank. You are responsible for monitoring the total amount of deposits that are owned directly or indirectly by you in anyone bank. Please contact your closing agent if you wish to know the specific bank where your funds have been deposited. If you have questions about FDIC deposit insurance, contact your financial or legal advisors or go to http;/Iwww.fdic.gov/deposiVdeposits/index.html. We do not guarantee the solvency of any bank into which funds are deposited and we assume no liability for any loss you incur due to the failure, insolvency or suspension of operations of any bank or the $100,000 FDIC deposit insurance limit. While we do not guarantee the solvency of any bank, we attempt to deposit funds only in banks that appear to be safe and sound. Neither the FDIC nor other bank regulatory agencies provide ratings to the public so we obtain bank ratings from one or more commercial rating services that provide ratings for a fee. A favorable rating from any rating services does not guarantee the solvency of a bank. We use good faith efforts to monitor the banks for funds held on your behalf but we do not guarantee or insure the funds we received on your behalf and we do not assume any liability to you for any loss you incur for any reason including failure, insolvency or suspension of operations of any bank. Ill. ACKNOWLEDGEMENT OF RECEIPT OF DISCLOSURE A. I/we have read this disclosure form and understand that Agent is referring me/us to use the above-described companies and may receive a financial or other benefit as the result of this referral. B. I acknowledge the disclosure entitled FDIC Coverage and agree to your depositing funds as described above. Name Date Name Date Name Date Name Date Important Notice The attached title insurance commitment contains information which has been obtained or derived from records and information owned by Title Data, Inc. or one of its subsidiaries (collectively "Title Data"). Title Data owns and maintains land title plants for Harris, Brazoria, Chambers, Fort Bend, Galveston, Jefferson, Liberty, Montgomery and Waller counties, Texas. Title Data created its title plants through the investment of extensive time, labor, skill and money. The Information contained in the title plants is protected by Federal copyright law and Texas common law on trade secrets and contract. Title Data has granted our company a license to use one or more of its title plants. Our company's right to access and use Title Data's title plants is governed by our contract with Title Data. Our contract with Title Data restricts who can receive and/or use a title insurance commitment which is based, in whole or in part, upon Title Data's records and information. Under the terms of our contract with Title Data, we are permitted to provide you with the attached title insurance commitment for limited use and distribution only. Specifically, you are sublicensed to deliver, exhibit, or furnish the attached title insurance commitment (or any copies thereof) ONLY to your bona fide employees and a third party who is playing a bona fide role in this proposed real estate transaction, including a lawyer, a lender, a surveyor, a real estate broker or agent, and the parties to this proposed transaction. For purposes of our agreement with Title Data, "deliver, exhibit, or furnish" includes, without limitation, copying this title insurance commitment (whether such copying be by means of a photocopier, facsimile machine, another electronic scanning device, or any other method of reproduction) and providing such copy to any third party. Your furnishing of the attached title insurance commitment to anyone not specifically enumerated above is not permitted by our contract with Title Data and constitutes a breach of our sublicense to you. Your furnishing of the attached title insurance commitment to anyone not specifically enumerated above is also a violation of federal copyright law and Texas common law. Therefore, as an express condition of us providing you with the attached title insurance commitment, you specifically agree to limit its uses to those set forth herein, and to provide a copy of this letter to any party to whom you deliver, exhibit, or furnish the attached title insurance commitment (or any copies thereof). In the event you are unable or unwilling to comply with these conditions, immediately return the attached title insurance commitment to our company, without reviewing, copying, or otherwise utilizing in any way the information contained therein. A COPY OF THIS LETTER MUST ACCOMPANY THE ATTACHED TITLE INSURANCE COMMITMENT AT ALL TIMES. ALL DOWNSTREAM RECIPIENTS MUST PROVIDE A COpy OF THIS LETTER TO ANY OTHER AUTHORIZED USERS OF THE ATTACHED TITLE INSURANCE COMMITMENT. . L~~Y'!!!~~ IMPORTANT INFORMATION AVISO IMPORTANTE FOR INFORMATION. OR TO MAKE A COMPLAINT CALL OUR TOLL-FREE TELE- PHONE NUMBER PARA INFORMACION, 0 PARA SOMETER UNA QUE.JA LLAME AL NUMERO GRATIS 1 -800- 729-1902 1-800- 729-1902 ALSO YOU MAY CONTACT THE TEXAS DEPARTMENT OF INSURANCE AT TAMBIEN PUEDE COMUNICARSE CON EL DEPARTAMENTO DE SEGUROS DE TEXAS AL 1-800-252-3439 1-800-252-3439 to obtain information on: 1. filing a comp:alnt agal'1st an Insurance company or agent. 2. whether an Hlsurance company or agent is licensed. 3. complaints received against an Insurance company or agent, 4. policyholder rights, and 5. a list of consumer publications and services available through the Department. para obtener informacion sobre: como someter una qU8Ja en contra de una cOrllparlia de sE::.luros a agente de seguros, 2. Sl una carnpania rJt! seguros 0 agente de seguros tlene IicenCIJ, 3. quejas reclhldas en contra de una companla de seguros 0 agente de seguras 4. los derechos del asegurado, y 5. una lisla de publicaclones y servicios para consumidares disponibles a traves del Departamento. YOU MAY ALSO WRITE TO THE TEXAS DEPARTMENT OF INSURANCE P.O. BOX 149104 AUSTIN, TEXAS 78714-9104 FAX NO. (512) 475.1771 TAMBIEN PUEDE ESCRIBIR AL DEPARTAMENTO DE SEGUROS DE TEXAS P.O, BOX 149104 AUSTIN. TEXAS 78714-9104 FAX NO. (512) 475-1771 FORM: Commitment far Title Insurance stewar-t ~title guaranty company TEXAS TITLE INSURANCE INFORMATION Title Insurance insures you against loss resulting from certain risks to your title. The Commitment for Title Insurance IS the Iitle insurance company's promise to issue the Iltle Insurance poliCY. The commltmenl is a legal document You should review It carefully to completely understand It before your closing date EI seguro de titulo Ie asegura en relacion a rerdidas resultantes de clertos r1esgos que pueden afectar el titulo de su propiedad. EI compromlso para Segura de Titulo es la I promesa de la compania aseguradora de l titulos de emihr la poliza de. segura de titulo. EI Compromlso es un documento legal. USled debe leerlo cUldadosamente y enlenderlo completamenle antes de la fecha para finalizar su transacclon -..- - - Your commltmenl lor Title Insurance IS a legai contract between you Jnd uS The Commltmenlls not an op!nion or report of your title. It is a conlract to Issue you a policy subjeCIIO the Commitments terms and reqUirements Before iSSUing a Commitment for Title Insurance (the Comml~men:1 or a T!tle Il1surance PoliCY (the PO!tCYi. the Title Insurance Company (the Company) determines whether the tllle IS Insurable T~ls de!err:linatlon has already been made Part of that determination Involves the Companys deCISion to InSlJre t~le title exceot 101 certain risks Il1al will not be covered by the Policy. Some of these risks are listed In Schedule B 01 the allached Commllment as Exceptions Olher r,sks are stated In the policy as ExclUSions. These nsks wtll not be covered by the PoliCY Another part ot the determination Involves whether the prcmlse to Insure 15 conditioned upon cerlaln requirements being met. Schedule C 01 the Commitment lists !hese reQwemenlS that must be sa\:sfled or !f.e Company Will refuse to cover them You may wanl to diSCUSS any matters shown In Schedules Band C of tile Comml:lT1er! Wllh an attorney These matters will affect your title and your use of the land When your Policy IS Issued. the coverage wil! be limited by the Policy's Except:ons. Exclusions and Conditions defined below _ EXCEPTIONS a'e title rtsks that a PoliCY generally covers but does not cover 10 a particular Instance Exceptions are shown on Schedule B or discussed In Schedule C of the Commitment They can also be adaed if you do not comply with the Conditions section of the CommiTment When the Policy IS Issued all Exceptions Will be on Schedule B of the Policy _ EXCLUSIONS are title risks that a PoliCY generally does not cover ExclUSions are conlamed In Ihe Policy but not shown or discussed In the CommItment _ CONDITIONS are additional prOVISions that quall'y or limit your coverage Condrlions Inciude your responsibilities and those of the Company. They are contained in the Policy but not shown or dIscussed In the Commitment. The Policy Conditions are not the same as Ihe Commitment Conditions. You can get a copy of the policy fc~m approved by the Stale Board of Insurance by calling the Title Insurance Company at 1.800- 729-1902 or by calling the lItle IOsur311ce agent that Issued the Commitment The State Board 01 Insurance may revise the policy lorm from time to time. You can also get a brochure that explains the policy from the Texas Department 01 Insurance by calling 1-800-252-3439. Before the Policy IS issued. you may request changes in the policy Some of the changes to conSider are: _ Request amendment of the "area and boundary" excepllon (Schedule 8, paragraph 2). To get this amendment, you must furnish a survey and comply with other requirements of the Company. On tile Owner Policy, you must pay an additional premium for the amendment. lithe survey is acceptable to Ihe Company and if lhe Company's other requirements are mel. your Policy will Insure you againsl loss because of discrepanCies or conflicts in boundary lines, encroachments or protrusions, or overlapping of Improvements. The Company may then decide nollo Insure against specihc boundary or survey problems by making speCial excephons in the Policy. Whether or nol you request amendment of the "area and boundary' excephon, you should determine whelher you want 10 purchase and review a survey it a survey is nol being provided to you. - Allow the Company \0 add a,1 exceptio!" to "flghlS 01 pailles In possession" If you reluse ThiS exception the Company or the Title 'nsurance agenl may inspect the property The Company may except 10 and ro\ InSlHe yeti against lhe rights 01 specil:c perscr.$ such as renters adverse O\\ll1ers or easefTlenl horders who occupy H1e lard The Company may charge you tor irt. II-:spec!lo:1 If you wanlto ::lake you' O'Nr: InSiJe;~tlon you rl'uS; slgr> a Wa;.Jcr 0: !:'s;:;ec~lor. 'orll1 and allow the Compar.y :0 aad th,s exceptIon to your PollCY The ~n::rc ;lrp:i!.u"-' b ? Pelley rnl:~~ be ;:Hd 'Nnen ;r.e Po"c/ ::; IS:;lJed 'h'J \',::' no~ owe ;:1~1 '.i:jc!i!!0r\~i ;:rer'!lJ"':3 cm;ess you Vl,'ant tc 1T~cre.J::;~~ y'CI~r ('O'...Pf8ge at a ia!er da~e ~lnd the CO~lr.:I:~'j'{ (}(~?22~ tc JGl~ ar: In,~''eas~j V d~t.Je Fr'IGcr.::er~t~:'f"\! FORM Comr~;!n1enl for T;!le jnsurarce ..---~~..~ ' . A REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: November 8. 2010 Appropriation Requested By: Donald 1,add Source of Funds: N/A Department: Fire Account Number: Amount Budgeted: Report: X Resolution: Ordinance: Amount Requested Exhibits: PowerPoint Budgeted Item: YES No Exhibits: Local Gov code Title 11 Sec 344 Exhibits: SUMMARY & RECOMMENDATION Fire Department will give an updated report on the Fire Control Emergency Services Districts Council A enda II /~ tD Date LOCAL GOVERNMENT CODE TITLE 11. PUBLIC SAFETY SUBTITLE A. MUNICIPAL PUBLIC SAFETY CHAPTER 344. FIRE CONTROL, PREVENTION, AND EMERGENCY MEDICAL SERVICES DISTRICTS SUBCHAPTER A. GENERAL PROVISIONS Sec. 344.001. SHORT TITLE. This chapter may be cited as the Fire Control, Prevention, and Emergency Medical Services District Act. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.002. DEFINITIONS. In this chapter: (1) "Board" means the board of directors of a district. (2) "Director" means a member of a board. (3) "District" means a fire control, prevention, and emergency medical services district created under this chapter. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.003. LIABILITY OF STATE. The state is not obligated for the support, maintenance, or dissolution of a district created under this chapter. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. SUBCHAPTER B. CREATION OF DISTRICT AND TEMPORARY BOARD Sec. 344.051. AUTHORITY OF MUNICIPALITY TO PROPOSE DISTRICT. (a) The governing body of a municipality with a population of not less than 25,000 nor more than 550,000, or a municipality with a population of more than 1.9 million, may propose the creation of a fire control, prevention, and emergency medical services district under this chapter. (b) The proposed district may include all or any part of the municipality. (c) Except as provided by Subsection (f), a district may be created inside the boundaries of an emergency services district operating under Chapter 775 or 776, Health and Safety Code, only if the governing body of the emergency services district gives its written consent by order or resolution not later than the 60th day after the date the governing body receives a request for its consent. (d) If the governing body of the emergency services district consents to the inclusion of territory inside its geographic boundaries, the territory may be included in the district in the same manner as other territory is included under this chapter. (e) The consent of the governing body of the emergency services district to include territory in the district and to initiate proceedings to create a district as prescribed by this chapter expires six months after the date on which the consent is given. (f) Subsection (c) does not apply if: (1) on the effective date of this chapter, the municipality is providing fire suppression and prevention services and emergency medical services; or (2) the fire control, prevention, and emergency medical services plan of the proposed district proposes enlergency services that, on the effective date of this chapter, were not provided by any rural fire prevention district or emergency services district inside the boundaries of the municipality. (g) If the voters ln a municipality with a population of more than 1.9 million create a fire control, prevention, and emergency medical services district under this chapter, the fire department shall comply with the minimum standards established by the National Fire Protection Association or its successor in function regarding fire protection personnel operating at emergency incidents. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Amended by Acts 2003, 78th Leg., ch. 1204, Sec. 2.004, eff. Sept. 1, 2003. Sec. 344.052. TEMPORARY BOARD. (a) Not later than the 60th day after the date the governing body proposes to create a district under this chapter, the governing body shall appoint seven persons to serve as temporary directors of the district. The temporary directors must reside in the proposed district. (b) Not later than the 75th day after the date the governing body proposes to create the district, the temporary board shall conduct a meeting to organize the board. The temporary directors shall elect one of its members as presiding officer of the board at that meeting. (c) designate (d) A temporary director other than the presiding officer may another person to serve in the director's place. The governing body shall fill a vacancy in the office of a director in the same manner that it originally filled the vacant temporary position. (e) The term "governing body" in this section means the mayor if the municipality creating the district has a population of 1.9 million or more. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.053. ELECTION REQUIRED. A proposed district may be created and a district tax may be authorized only if the creation and the tax are approved by a majority of the qualified voters of the proposed district voting at an election called and held for that purpose. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.054. CONFIRMATION ELECTION ORDER. (a) The temporary board may call and hold a confirmation election only after the board adopts plans under Section 344.061. (b) An order calling an election under Subsection (a) must state: (1) the nature of the election, including the proposition that is to appear on the ballot; (2) the date of the election; (3) the hours during which the polls will be open; (4) the location of the polling places; (5) a summary of the proposed district's budget plan and fire control, prevention, and emergency medical services plan; and (6) the proposed rate of the sales and use tax for the district. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.055. SALES AND USE TAX. (a) A municipality that creates a district shall adopt a sales and use tax under Section 321.106, Tax Code, for financing the operation of the district. The proposed rate for the district sales and use tax imposed under Subchapter B, Chapter 321, Tax Code, may be only: (1) one-eighth of one percent; (2) one-fourth of one percent; (3) three-eighths of one percent; or (4) one-half of one percent. (b) A sales and use tax adopted under this chapter may be charged in addition to any other sales and use tax authorized by law, and is included in computing a combined sales and use tax rate for purposes of any limitation provided by law on the maximum combined sales and use tax rate of political subdivisions. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.056. NOTICE OF ELECTION. In addition to the notice required by Section 4.003(c), Election Code, the temporary directors of a proposed district shall give notice of an election to create a district by publishing a substantial copy of the election order in a newspaper with general circulation in the proposed district once a week for two consecutive weeks. The first publication must appear before the 35th day before the date set for the election. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.057. ELECTION DATE. The election shall be held on the next uniform election date authorized by Section 41.001(a), Election Code, after the date on which the election is ordered that affords sufficient time for election procedures to be carried out. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.058. BALLOT PROPOSITION. The ballot for an election to create a district shall be printed to permit voting for or against the proposition: "The creation of the (name of the municipality proposing to create the district) Fire Control, Prevention, and Emergency Medical Services District dedicated to fire safety and emergency medical services programs and the adoption of a proposed local sales and use tax at a rate of (rate specified in the election order)." Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.059. CANVASSING RETURNS. (a) Not earlier than the second day and not later than the 13th day after the date of the election, the temporary board shall meet and canvass the returns of the election. (b) If a majority of the votes cast in the election favor the creation of the district, the temporary board shall issue an order declaring the district created. (c) If less than a majority of the votes cast in the election favor the creation of the district, the temporary board may order another election on the matter not earlier than the first anniversary of the date of the preceding election. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.060. DISSOLUTION OF TEMPORARY BOARD. If a district has not been created under this chapter before the fifth anniversary of the date a district is first proposed by the governing body or mayor, as appropriate, under Section 344.051: (1) the temporary board is dissolved on that date; and (2) the proposed district may not be created under this chapter. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.061. FIRE CONTROL, PREVENTION, AND EMERGENCY MEDICAL SERVICES PLAN AND BUDGET PLAN. (a) The temporary board shall develop and adopt a two-year fire control, prevention, and emergency medical services plan and a two-year budget plan. The fire control, prevention, and emergency medical services plan must include: (1) a detailed list of the fire control, prevention, and emergency medical services strategies to be supported by the district; and (2) the method of evaluating each year the effectiveness and efficiency of individual fire control, prevention, and emergency medical services strategies. (b) The budget plan must include: (1) the amount of money budgeted by the district for each fire control, prevention, and emergency medical services strategy; (2) the amount of money budgeted by the district and the percentage of the total budget of the district for administration, with individual amounts showing the cost of the administration that would be conducted by the district and the cost of administration that would be conducted by private or public entities; (3) the estimated amount of money available to the district from all sources during the subsequent year; (4) the account balances expected at the end of the years for which the budget is prepared; and (5) the estimated tax rate that will be required to support the budget. (c) Plans under this section must be adopted in the same manner as provided for adoption of a proposed annual budget under Section 344.204. (d) The temporary board shall coordinate its efforts in developing its plans under this section with appropriate local officials and entities. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.062. FINANCING CREATION OF DISTRICT. (a) A municipality creating a district shall pay the entire cost of creating the district. (b) If a district is created, the district shall reimburse the municipality for the actual expenses the municipality incurred in the creation of the district. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. SUBCHAPTER C. ADMINISTRATION Sec. 344.101. BOARD OF DIRECTORS. (a) Except as provided by Subsections (e) and (f), a district is governed by a board of seven directors appointed in the same manner as provided by Section 344.052(a) for the appointment of temporary directors. (b) Initial appointees under this section shall draw lots to determine their terms so that: (1) three directors serve terms that expire on September 1 of the first year following creation of the district; and (2) four directors serve terms that expire on September 1 of the second year following creation of the district. (c) Directors serve staggered two-year terms. (d) A vacancy in the office of director shall be filled for the unexpired term in the same manner that the vacant position was originally filled. (e) The governing body of a municipality by resolution may appoint the governing body's membership as the board of directors of the district, if the appointment is approved by the voters in a creation election or continuation referendum under this chapter. A member of a governing body appointed under this section as an ex officio director serves a term concurrent with the member's term as a member of the governing body. (f) In a district for which the governing body of the municipality does not serve as the district's board of directors, the governing body may create a board of directors for which one director is appointed by each member of the governing body to serve at the pleasure of that member for a term not to exceed two years and that expires when the member of the governing body that appointed the director leaves office. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.102. PERFORMANCE BOND. (a) Before assuming the duties of the office, each director or officer must execute a bond for $5,000 payable to the district, conditioned on the faithful performance of the person's duties as director or officer. (b) The bond shall be kept in the permanent records of the district. (c) The board may pay for the bonds of directors or officers with district funds. (d) The board and the district may issue and sell bonds conditioned on the faithful performance of a person's duties as a director as provided by this section. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.103. OFFICERS. (a) The board shall elect from among its members a president and vice president. (b) The board shall appoint a secretary. The secretary may be a director. (c) The person who performs the duties of auditor for the municipality shall serve as treasurer of the district. (d) Each officer of the board serves for a term of one year. (e) A vacancy ln a board office shall be filled by the board for the unexpired term. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.104. COMPENSATION. A director or officer serves without compensation, but a director or officer may be reimbursed for actual expenses incurred in the performance of official duties. Those expenses must be reported in the district's minute book or other district record and must be approved by the board. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.105. VOTING REQUIREMENT. A concurrence of a majority of the members of the board is necessary in matters relating to the business of a district. A two-thirds majority vote of the board is required to reject any application for funding available under this chapter. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.106. CONTRACT FOR ADMINISTRATIVE ASSISTANCE. The board may contract with a public agency or private vendor to assist the board in the administration or management of the district or to assist the board in the review of applications for funding available under this chapter. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. SUBCHAPTER D. POWERS AND DUTIES Sec. 344.151. FINANCING DISTRICT PROGRAMS. (a) The district may finance all costs of a fire control, prevention, and emergency medical services district program, including costs for personnel, administration, expansion, enhancement, and capital expenditures. (b) The program may include: (1) fire apparatus and equipment; (2) a bomb disposal unit and related equipment; (3) compensation of fire protection and prevention personnel for specialized training regarding: (A) arson; (B) bomb disposal; (C) hazardous materials; (D) technical rescue; (E) paramedic certification; and (F) any other specialized training under the program; (4) funding for turn-out gear, self-contained breathing apparatus, and protective uniforms or other firefighter safety equipment; (5) additional compensation for municipal fire-fighting personnel, including overtime compensation for unforeseen staffing needs; and (6) funding for the construction and maintenance of fire stations, training facilities, or the equipment needed for those stations or facilities. (c) The program may include an enhanced emergency communications center or other emergency communications programs and equipment, including: (1) emergency medical dispatch training; (2) additional fire and emergency medical service dispatchers; (3) uniformed fire deployment and communications officers; (4) real-time weather information; and (5) computer databases and systems maintenance personnel for hazardous materials responses. (d) The program may include a public training program, including: (1) a juvenile fire starter program; (2) an urban survival program, including school programs for fire safety, gun safety, and safety with strangers; (3) a fire prevention program; (4) a fire education program; (5) a hazardous materials education program; (6) a psychological intervention program; and (7) a citizen's ride-along program or home inspection program. (e) The program may include public preventive health programs, including: (1) juvenile inoculations; (2) weekend health days; (3) first aid and cardiopulmonary resuscitation training; (4) injury prevention; and (5) drug and alcohol awareness. (f) The program may include response training programs, equipment, facilities, and instructors, including: (1) a regional training center for fire, rescue, hazardous materials, and emergency medical services; (2) staff personnel to support the center; (3) equipment and apparatus to support the center; (4) computer-aided continuing education training conducted in- station; and (5) training regarding hazardous material storage and response. (g) The program may include computers and other systems to support information management systems to: (1) maintain occupancy information; (2) track incident analyses; (3) track incident reports; (4) track internal communications and reporting; (5) maintain inventory; and (6) serve other information management needs. (h) The program may include capital items needed to improve emergency response and increase service efficiency, including equipment, apparatus, vehicles, and training material or equipment. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.152. COORDINATION; EVALUATION; GRANTS. (a) The district shall coordinate its efforts with local agencies In developing its fire control, prevention, and emergency medical services program. (b) The district shall conduct an annual evaluation program to study the impact, efficiency, and effectiveness of new or expanded fire control, prevention, and emergency medical services programs. (c) The board may seek the assistance of the Office of State-Federal Relations in identifying and applying for federal grants for fire control, prevention, and emergency medical serVlces programs. (d) The district may apply for and receive grants for fire control, prevention, and emergency medical services programs from a state or federal agency. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.153. GENERAL BOARD POWER OVER FUNDS. The board shall manage, control, and administer the district finances except as provided by Section 344.205. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.154. USE OF REVENUE. The board may spend revenue derived from the sales and use tax distributed under Section 321.106, Tax Code, only for a purpose authorized by Section 344.151. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.155. RULES AND PROCEDURES. (a) A board may adopt rules governlng programs financed by the district and the functions of district staff. (b) The board may prescribe accounting and control procedures for the district. (c) The board is subject to Chapter 2001, Government Code. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.156. PURCHASING. (a) Except as provided by Subsection (b), the board may prescribe the method of making purchases and expenditures by and for the district. (b) To the extent competitive bidding procedures in Title 8 apply, the board may not enter into a purchasing contract for more than $15,000 unless the board complies with Chapter 252. (c) If the municipality that created the district has a purchasing agent authorized by law, that agent shall serve as purchasing agent for the district. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.157. PROPERTY TO BE USED IN ADMINISTRATION. The board may lease or acquire in another manner facilities, equipment, or other property for the sole purpose of administering the district. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.158. REIMBURSEMENT FOR SERVICES. (a) A county or municipality located outside the boundaries of a district on the district's request shall reimburse the district for the district's cost of including a resident of that county or municipality who is not a resident of that district in a district program. (b) On behalf of the district, the board may contract with a municipal or county government or with the state or federal government for the municipal, county, state, or federal government to reimburse the district for including a person in a district program. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.159. SERVICE CONTRACTS. The board may contract with the following entities to furnish the staff, facilities, equipment, programs, or services the board considers necessary for the effective operation of the district: (1) a municipality, county, special district, or other political subdivision of the state; (2) a state or federal agency; (3) an individual; or (4) a private person. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.160. DONATIONS, GIFTS, AND ENDOWMENTS. On behalf of the district, the board or the temporary board may accept a donation, gift, or endowment. The district may hold a donation, gift, or endowment in trust for any purpose and under any direction, limitation, or other provision prescribed in writing by the donor that is consistent with this chapter and the proper management of the district. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.161. AUTHORITY TO SUE AND BE SUED. The board may sue and be sued in the name of the district. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. SUBCHAPTER E. DISTRICT FINANCES Sec. 344.201. FISCAL YEAR. (a) The board shall establish the fiscal year for the district, and the district shall operate on the basis of that year. (b) The fiscal year may not be changed more than once in a 24-month period. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.202. AUDITS AND DISTRICT RECORDS. (a) The board shall have an annual audit made of the financial condition of the district by an independent auditor. (b) The annual audit and other district records shall be open to inspection during regular business hours at the principal office of the district. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.203. ANNUAL BUDGET PROPOSAL. (a) The board shall propose an annual budget. The board shall consider the applications for program funding in preparing the proposed budget. (b) The proposed budget must contain a complete financial statement, including a statement of: (1) the outstanding obligations of the district; (2) the amount of cash on hand to the credit of each fund of the district; (3) the amount of money received by the district from all sources during the previous year; (4) the estimated amount of money available to the district from all sources during the current fiscal year; (5) the amount of money needed to fund programs approved for funding by the board; (6) the amount of money requested for programs that were not approved for funding by the board; (7) the tax rate for the next fiscal year; (8) the amount of the balances expected at the end of the year in which the budget is being prepared; and (9) the estimated amount of revenues and balances available to cover the proposed budget. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.204. ADOPTION OF BUDGET. (a) Not later than the 100th day before the date each fiscal year begins, the board shall hold a public hearing to consider the proposed annual budget. (b) The board shall publish notice of the hearing in a newspaper with general circulation in the district not later than the 10th day before the date of the hearing. (c) A resident of the district is entitled to participate in the hearing. (d) Not later than the 80th day before the date each fiscal year begins, the board shall adopt a budget. The board may make any changes in the proposed budget that the interests of the taxpayers demand. (e) Not later than the 10th day after the date the budget is adopted, the board shall submit the budget to the governing body of the municipality that created the district. (f) The board by rule may adopt alternative procedures for adopting a budget that differ from the procedures outlined in this subchapter. The board must hold at least one public hearing related to the alternative procedures before their adoption. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.205. APPROVAL OF BUDGET. (a) Not later than the 45th day before the date each fiscal year begins, the governing body of the municipality that created the district shall hold a public hearing to consider the budget adopted by the board and submitted to the governing body. (b) The governing body must publish notice of the hearing in a newspaper with general circulation in the district not later than the 10th day before the date of the hearing. (c) A resident of the district is entitled to participate in the hearing. (d) Not later than the 30th day before the date the fiscal year begins, the governing body shall approve or reject the budget submitted by the board. The governing body may not amend the budget. (e) If the governing body rejects the budget submitted by the board, the governing body and the board shall meet and together amend and approve the budget before the beginning of the fiscal year. (f) The budget may be amended after the beginning of the fiscal year on approval by the board and the governing body. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.206. LIMITATIONS ON EXPENDITURES AND INVESTMENTS. (a) The district may spend money only for an expense included in the annual budget or an amendment to the budget. (b) A district may not incur a debt payable from revenues of the district other than the revenues on hand or to be on hand in the current or immediately following fiscal year of the district. (c) The board may not invest district money in funds or securities other than those specified by Chapter 2256, Government Code. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.207. ACCOUNT OF DISBURSEMENTS OF DISTRICT. Not later than the 60th day after the last day of each fiscal year, an administrator shall prepare for the board a sworn statement of the amount of money that belongs to the district and an account of the disbursements of that money. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.208. DEPOSIT OF MONEY. (a) The board shall deposit district money in a special account in the treasury of the municipality that created the district. (b) District money, other than that invested as provided by Section 344.206(c), shall be deposited as received in the treasury of the municipality and must remain on deposit. (c) The board shall reimburse the municipality for any costs, other than personnel costs, the municipality incurs for performing the duties under this section. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.209. APPLICATIONS FOR PROGRAM FUNDING. (a) An officer of the municipality that created the district or the head of a department of that municipality may, with the consent of the governing body of the municipality, apply to the board for funding of a program described by Section 344.151. (b) The officer must apply under this section not later than the 140th day before the date the fiscal year begins, unless the board by rule has adopted an exception. (c) The board by rule may adopt application procedures. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.210. BONDS PROHIBITED. The board may not issue or sell general obligation bonds, revenue bonds, or refunding bonds. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. SUBCHAPTER F. REFERENDUM ON CONTINUATION OR DISSOLUTION OF DISTRICT Sec. 344.251. REFERENDUM AUTHORIZED. (a) The board may call and hold a referendum election on the question of whether to: (1) continue the district; or (2) dissolve the district. (b) A board may order a referendum election on its own motion. (c) The board shall order a referendum election: (1) on receipt of a petition that requests continuation or dissolution of the district and complies with the requirements of Sections 344.252-344.256; or (2) if the governing body of the municipality that created the district, after notice and a public hearing on the matter, by resolution requests a referendum on continuation or dissolution. (d) The board may not hold a referendum election under this subchapter before the fourth anniversary of the date the district was created or before the third anniversary of the date of the last continuation or dissolution referendum election. (e) For a continuation referendum election, the ballot shall be printed to permit voting for or against the proposition: "Whether the (name of the municipality that created the district) Fire Control, Prevention, and Emergency Medical Services District should be continued and whether the fire control, prevention, and emergency medical services district sales and use tax should be continued." (f) For a dissolution referendum, the ballot shall be printed to permit voting for or against the proposition: "Whether the (name of the municipality that created the district) Fire Control, Prevention, and Emergency Medical Services District should be dissolved and whether the fire control, prevention, and emergency medical services district sales and use tax should be abolished." (g) The governing body of a municipality that creates a district under this chapter may specify the number of years for which the district should be continued. The board or the governing body of a municipality may continue a district for 5, 10, 15, or 20 years. For a continuation referendum election under this subsection, the ballot shall be printed to permi t voting for or against the proposition: "Whether the (name of the municipality that created the district) Fire Control, Prevention, and Emergency Medical Services District should be continued for years and whether the fire control, prevention, and emergency medical services district sales and use tax should be continued for years." Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Amended by: Acts 2009, 8Ist Leg., R.S., Ch. 662, Sec. 1, eff. June 19, 2009. Sec. 344.252. APPLICATION FOR PETITION. (a) On written application of 10 or more registered voters of the district, the clerk of the municipality that created the district shall issue to the applicants a petition to be circulated among registered voters for their signatures. (b) An application for a petition to continue the district must contain: (1) the heading: "Application for a Petition for a Local Option Referendum to Continue the Fire Control, Prevention, and Emergency Medical Services District and to Continue the Fire Control, Prevention, and Emergency Medical Services District Sales and Use Tax"; (2) the statement: "Whether the (name of the municipality that created the district) Fire Control, Prevention, and Emergency Medical Services District should be continued and whether the fire control, prevention, and emergency medical services district sales and use tax should be continued"; (3) immediately above the signatures of the applicants, the statement: "It is the purpose and intent of the applicants whose signatures appear below that the fire control, prevention, and emergency medical services district be continued and that the fire control, prevention, and emergency medical services district sales and use tax in (name of the municipality that created the district) be continued"; and (4) the printed name, signature, residence address, and voter registration certificate number of each applicant. (c) An application for a petition to dissolve the district must contain: (1) the heading: "Application for a Petition for a Local Option Referendum to Dissolve the Fire Control, Prevention, and Emergency Medical Services District and to Abolish the Fire Control, Prevention, and Emergency Medical Services District Sales and Use Tax"; (2) the statement: "Whether the (name of the municipality that created the district) Fire Control, Prevention, and Emergency Medical Services District should be dissolved and whether the fire control, prevention, and emergency medical services district sales and use tax should be abolished"; (3) immediately above the signatures of the applicants, the statement: "It is the purpose and intent of the applicants whose signatures appear below that the fire control, prevention, and emergency medical services district be dissolved and that the fire control, prevention, and emergency medical services district sales and use tax In (name of the municipality that created the district) be abolished"; and (4) the printed name, signature, residence address, and voter registration certificate number of each applicant. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.253. PETITION. (a) A petition for a referendum to continue a district must contain: (1) the heading: "Petition for a Local Option Referendum to Continue the (name of the municipality that created the district) Fire Control, Prevention, and Emergency Medical Services District and to Continue the Fire Control, Prevention, and Emergency Medical Services District Sales and Use Tax"; (2) a statement of the issue to be voted on in the same words used In the application; (3) immediately above the signatures of the petitioners, the statement: "It is the purpose and intent of the petitioners whose signatures appear below that the fire control, prevention, and emergency medical services district be continued and that the fire control, prevention, and emergency medical services district sales and use tax in (name of the municipality that created the district) be continued"; (4) lines and spaces for the names, signatures, residence addresses, and voter registration certificate numbers of the petitioners; and (5) the date of issuance, the serial number, and the seal of the clerk of the municipality on each page. (b) A petition for a referendum to dissolve a district must contain: (1) the heading: "Petition for a Local Option Referendum to Dissolve the (name of the municipality that created the district) Fire Control, Prevention, and Emergency Medical Services District and to Abolish the Fire Control, Prevention, and Emergency Medical Services District Sales and Use Tax"; (2) a statement of the issue to be voted on in the same words used in the application; (3) immediately above the signatures of the petitioners, the statement: "It is the purpose and intent of the petitioners whose signatures appear below that the fire control, prevention, and emergency medical services district be dissolved and that the fire control, prevention, and emergency medical services district sales and use tax In (name of the municipality that created the district) be abolished"; (4) lines and spaces for the names, signatures, residence addresses, and voter registration certificate numbers of the petitioners; and (5) the date of issuance, the serial number, and the seal of the clerk of the municipality on each page. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.254. COPIES OF APPLICATION AND PETITION. The clerk or secretary of the municipality shall keep an application and a copy of the petition in the files of the clerk's or secretary's office. The clerk shall lssue to the applicants as many copies as they request. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.255. FILING OF PETITION. To form the basis for the ordering of a referendum, the petition must: (1) be filed with the clerk or secretary of the municipality not later than the 60th day after the date of its issuance; and (2) contain at least a number of signatures of registered voters of the municipality equal to five percent of the number of votes cast in the municipality for all candidates for governor in the most recent gubernatorial general election. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.256. REVIEW BY CLERK OR SECRETARY. (a) The clerk or secretary of the municipality shall, on the request of any person, check each name on a petition to determine whether the signer is a registered voter of the district. A person requesting verification by the clerk or secretary of the municipality shall pay the clerk or secretary a sum equal to 20 cents for each name on the petition before the verification begins. (b) The clerk or secretary of the municipality may not count a signature if the clerk or secretary has a reason to believe that: (1) it is not the actual signature of the purported signer; (2) the voter registration certificate number is not correct; (3) it is a duplication either of a name or of handwriting used in any other signature on the petition; (4) the residence address of the signer is not correct; or (5) the name of the voter is not signed exactly as it appears on the official copy of the current list of registered voters for the voting year in which the petition is issued. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.257. CERTIFICATION. Not later than the 40th day after the date a petition is filed, excluding Saturdays, Sundays, and legal holidays, the clerk or secretary of the municipality shall certify to the board the number of registered voters signing the petition. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.258. ELECTION ORDER. (a) The board shall record on its minutes the date the petition is filed and the date it is certified by the clerk or secretary of the municipality. (b) If the petition contains the required number of signatures and lS in proper order, the board shall, at its next regular session after the certification by the clerk or secretary of the municipality, order a referendum election to be held at the regular polling place in each election precinct in the municipality on the next uniform election date authorized by Section 41.001(a), Election Code, that occurs at least 20 days after the date of the order. (c) The board shall state in the order the proposition to be voted on In the referendum election. The order is prima facie evidence of compliance with all provisions necessary to give it validity. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.259. APPLICABILITY OF ELECTION CODE. A referendum election authorized by this subchapter shall be held and the returns shall be prepared and canvassed in conformity with the Election Code. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.260. RESULTS OF REFERENDUM. (a) If less than a majority of the votes cast in a continuation referendum election are for the continuation of a district or if a majority of the votes cast In a dissolution referendum are for dissolution of the district: (1) the board shall certify that fact to the secretary of state not later than the 10th day after the date of the canvass of the returns; and (2) the district is dissolved and ceases to operate. (b) If a majority of the votes cast in a continuation referendum election are for the continuation of the district or if less than a majority of the votes cast in a dissolution referendum election are for dissolution of the district, another referendum may not be held except as authorized by Section 344.251. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.261. ELECTION CONTEST. Not later than the 30th day after the date the result of a referendum is declared, any qualified voter of the district may contest the election by filing a petition in a district court located In the district. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. SUBCHAPTER G. DISTRICT DISSOLUTION Sec. 344.301. TIME FOR DISSOLUTION OF DISTRICT. (a) A district is dissolved five years after the date the municipality began to impose taxes for district purposes if the district has not held a continuation or dissolution referendum. (b) The district is dissolved on the fifth anniversary of the date of the most recent continuation or dissolution referendum. (c) Subsection (b) does not apply to a district that is continued under Section 344.251(g), and that district is dissolved on the expiration of the period for which it was continued. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. Sec. 344.302. DISSOLUTION OF DISTRICT. (a) On the date that the district is dissolved, the district shall conveyor transfer, as provided by Subsection (h): (1) title to land, buildings, real and tangible improvements, and equipment owned by the district; (2) operating money and reserves for operating expenses and money that has been budgeted by the district for the remainder of the fiscal year in which the district is dissolved to support fire control, prevention, and emergency medical services activities and programs for residents of the municipality that created the district; (3) taxes imposed for the district during the current year for fire control, prevention, and emergency medical services purposes; (4) each fund established for payment of indebtedness assumed by the district; and (5) any money accumulated in an employee retirement fund. (b) After the date the district is dissolved, taxes may not be imposed for district purposes or for providing fire control, prevention, and emergency medical services activities and programs for the residents of the district. (c) If on the date that the district is dissolved the district has outstanding short-term or long-term liabilities, the board shall, not later than the 30th day after the date of the dissolution, adopt a resolution certifying each outstanding short-term and long-term liability. The municipality that created the district shall assume the outstanding short-term and long-term liabilities. The municipality shall collect the sales and use tax under Chapter 321, Tax Code, for the remainder of the calendar year and may by resolution of its governing body continue to collect the tax for an additional calendar year if the revenue from the tax is needed to retire liabilities of the district that were assumed by the municipality. The governing body shall notify the comptroller of this continuation not later than the 60th day before the date the tax would otherwise expire. A tax collected after the liabilities have been retired shall be transferred or conveyed as provided by Subsection (a). (d) The district and the board may continue to operate for a period not to exceed two months after carrying out the responsibilities required by Subsections (a) and (c). The board and the district are continued for the purpose of satisfying these responsibilities. (e) If the board and the district are continued under Subsection (d), the board and district are dissolved entirely on the first day of the month following the month in which the board issues an order certifying to the secretary of state that the responsibilities of Subsections (a) and (c) are satisfied. (f) A district or board that continues to operate under Subsection (d) may not incur any new liabilities without the approval of the governing body of the municipality that created the district. Not later than the 60th day after the date of the dissolution referendum, the governing body shall review the outstanding liabilities of the district and set a specific date by which the municipality must retire the district's outstanding liabilities. (g) On the date that the district lS dissolved, programs funded by the district shall immediately terminate and personnel paid from district funds, except personnel required to retire the responsibilities of the district, are terminated. (h) The board shall conveyor transfer the value of the items described by Subsection (a) to the municipality that created the district. Added by Acts 2001, 77th Leg., ch. 1295, Sec. 1, eff. June 1, 2001. B REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: November 08. 2010 Budl!et Requested By: D. Wilmore Source of Funds: Department: Plannin~ Account Number: Report: X Resolution: Ordinance: Amount Budgeted: Substantial Damage (SD) List Amount Requested: Exhibits: Exhibits: Travel Trailer/ FEMA Unit List Budgeted Item: YES NO SUMMARY & RECOMMENDATION At the past 01/25/1 0 and 07/26/1 0 workshops, City Council provided staff with direction regarding the use of FEMA temporary housing units/private travel trailers, permit fee waivers and the continued use of blue roofs. It is now just over two years since Hurricane Ike devastated our area. The purpose ofthis workshop is to provide Council with an update on the remaining "substantially damaged" homes, an updated list of the remaining FEMA temporary housing units (THUs)/private travel trailers while also seeking direction from Council on blue roofs and permit fees. · As of 10/25/1 0, only one (1) of the original fifty-seven (57) "substantially damaged homes" remains unresolved. The owner of207 Bay Colony Circle says he is still dealing with his insurance company. · Originally we issued fifty-six (56) trailer permits that included eight (8) FEMA THUs. As of 10/14/10, only one (1) FEMA THU and one (1) private trailer remain. The owners of 208 Bay Colony and 619 So. Shady Lane both requested and received a 2nd 90-day extension based on their continued progress. Each party expects to be complete by January 2011. · In September 2009 and January 2010, Council asked staff to "not address" blue roofs as long as they were installed/maintained properly and no deadline was provided. However, at the July 20 I 0 meeting, Council direction was to continue allowing blue roofs for residential properties but require commercial properties to have their roofs repaired/replaced. At this time, staff wants to corifirm with Council that this policy should continue without change. · At the January and July 2010 workshops, staff was directed to continue waiving all Ike related permit fees but return to Council in November for further direction. Requests for lke related permits are minimal. Staffis requesting Council direction on the continued waiver or re-instatement of all permitfees. ~ I '\ I~ Date SUBSTANTIAL DAMAGE (SD) LIST (As of 10/25/10 List & RSDE Reports) Address % Damaged HCAD Name 1) 207 Bay Colony Circle 52.46% Clifford H. Farley The structures shown below were elevated l' above BFE which NOW allows reDair of the structure. "SD" LIST OF ELEVATED STRUCTURES Address %Damaged HCAD Name 2) 531 S. Shady Lane 82.56% Raefael A. & Doris Rivera 3) 110 Bay Oaks Rd. 78% Sandra Sanchez 4) 130 Bay Oaks Rd 74.51% Melton Koch 5) 619 S. Shady Lane 68.29% Wesley Mc Nally ------------ ----------- The following addresses are substantially damaged homes that have been or will be demolished. Address % Damaged HCAD Name 6) 205 Bay Colony Drive 53.61% Walter Cubberly (Demo complete) 7) 208 Bay Colony Drive 103.45% Michael Manering (Demo complete) 8) 6 Bay Oaks Rd. 58.36% Hugh McCulley (Demo complete) 9) 115 Bay Oaks Rd. 53.18% Linda Hutfless (Demo complete) 10) 406 Bay Oaks Rd. 763.55% (M Home) Douglas J. Baird (Demo complete) 11) 415 Bay Oaks Rd 172.50% R D Bartley (Demo complete) 12) 3143 Carlisle St. 118.66% Laura Reeves (Demo complete) 13) 3031 Fondren St. 114.83% Farley Fontenot (Demo complete) 14) 3111 Green Leaf 64.74% Thongkam Carpenter (Demo complete) 15) 3803 Marlin Ln. 77.98% Deborah Kime (Demo complete) SD List as of 10/25/2010 Page 2 Address % Damaged HCAD Name 16) 412 N. Shady Lane(aka414) 73.53% Dorothy Everett (Demo complete) 17) 427 N. Shady Lane 72.82% Micah Richardson (Demo complete) 18) 626 N. Shady Lane 110.96% Christina Williams (Demo complete) 19) 6 Pine Bluff 105.91% Donald Remmel (Demo P Issued) 20) 138 Pine BluffSt. 816.18% (M Home) Dwayne Steele (Demo complete) 21) 3811 Sailfish Lane 68.25% Est. of J esseCharles Haver (Demo complete) 22) 406 S. Shady Lane 57.53% Aline Cook (Demo complete) 23) 407 S. Shady Lane 174.67% Jack A. Cook (Demo complete) 24) 418 S. Shady Lane 80.63% Arthur B. Kelly (Demo complete) 25) 510 S. Shady Lane 91.48% Terry Hilborn (Demo complete) 26) 523 S. Shady Lane 80.60% Lloyd Cyr (Demo complete) 27) 603 S. Shady Lane 70.06% Cecil Redd (Demo complete) Was: Henry S. Veltkamp 28) 611 S. Shady Lane 90.04% Now: CLP, Trustee (Demo complete) 29) 522 S. Shady Lane 88.70% Robert Biaza (Demo complete) 30) 3706 Sunrise 310.27% Kathy Coleman (Demo complete) 31) 3708 Sunrise 58.18% Suzann Richardson (Demo complete) 32) 3130 Weatherford 94.02% Marcia Kling (Demo complete) (1) "Substantially Damaged" (SD) Structures Remain (4) "SD" Structure Was Elevated above BFE (27) "SD" Structures are part of the Demolition Process (25) "SD" Structures that are now "Non-Substantially Damaged" (NSD 2) TOTAL (57) ----------------- ----------------- SD List as of 10/25/2010 "NSD 2" LIST Address %Damaged HCAD Name 240 Bay Colony Drive 33.79% Timothy W. Kelley 506 Bay Colony 27.13% Albert Kinnard 203 Bay Oaks 40.47% Otis Wright 3914 Bonita 41.01 % Lisa Koch 3915 Dolphin 35.53% Michael Boyaki Jr. 223 Dwire 38.60% Brian Pitcox 408 Dwire 2.97% Max Joines 3103 Green Leaf Ln. 49.82% Bettye Dejon 3203 Lazy Pine 33.92% Caroline Wilkins 3811 Marlin 42.15% Cory Briscoe 322 N. Shady Lane 46.77% Noe Juarez 420 N. Shady Lane 20.37% Curtis L. Everett 503 N Shady Lane 30.28% LuLu Lopez 526 N. Shady Lane 38.96% Denise & Lloyd Spevack 814 Oak Leaf 47.90% Frank Sawberger 3803 Sailfish 31.67% Ricky Holland 3910 Sailfish 29.28% Paul Dobos 419 S. Shady Lane 29.29% Robert Byrd 435 S. Shady Lane 42.74% Benjamin Ritchie 502 S. Shady Lane 45.28% John Walston 527 S. Shady Lane 17.81 % J.J.Meza 618 S. Shady Lane 42.59% T eri Walston Page 3 SD List as of 10/25/2010 Page 4 "NSD 2" LIST Address 3910 Tarpon 3911 Tarpon 3914 Tarpon %Damaged 49.43% 45.73% 44.96% HeAD Name George Ann Adams Julie Bowers Burtine Higgins s:\city planning share\04-inspections division\inspections\substantial damage list.doc STILL ON SITE: 2 TRAVEL TRAILER/FEMA UNITS October 14, 2010 208 BAY COLONY DR - FEMA THU 619 S SHADY LN - PRIVATE TRAILER REMOVED: 54 615 BAY COLONY DRIVE 210 BAY OAKS RD 427 BAY OAKS RD 3030 BAYOU DR 211 S BAYSHORE 716 S BLACKWELL 3802 BONITA 3122 BONNER 3143 CARLISLE 219 CRESENT VIEW 11007 DOGWOOD 3803 DOLPHIN 102 DWIRE 314 DWIRE 3031 FONDREN 3107 GREEN LEAF 3111 GREEN LEAF 906 HOLLOW TREE 930 HOLLOW TREE 934 HOLLOW TREE 10614 NORTH L 10811 NORTH L 3023 LAYNE 3007 LAZY PINE 3114 LAZY PINE 3806 MARLIN 3911 MARLIN 9212 MOHAWK 810 OAK LEAF 811 OAK LEAF 902 OAK LEAF 1011 OAK LEAF 222 OAK HURST 10303 RUSTIC ROCK 3906 SAILFISH 3907 SAILFISH 410 N SHADY LN 416 N SHADY LN 503 N SHADY LN 526 N SHADY LN 414 S SHADY LN 418 S SHADY LN 502 S SHADY LN 522 S SHADY LN 600 S SHADY LN 618 S SHADY LN 719 SHADY RIVER 3703 SOMERTON 3706 SUNRISE 3819 TARPON 3911 TARPON 3115 WEATHERFORD 2528 WESTVIEW 3110 WOODLAND CT S:\Council Agendas - Draft\CllY COUNCil DRAFT FOlDERS\11.08.2010\Planning\lke Update\03 - Trailer & FEMA Units.xlsx c REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: 11-8-10 Budl!et Requested By: Kenith Adcox Source of Funds: Department: PQlice Account Number: Report: Resolution: Ordinance: x Amount Budgeted: Amount Requested: Exhibits: Draft of Ordinance Addinl! Article VI "Prohibition of Certain "Smokinl! Substances" to Chanter 42 "Miscellaneous Budgeted Item: YES NO Offenses" of the Code of Ordinanances SUMMARY & RECOMMENDATION Staff is recommending the addition of Article VI "Prohibition of Certain Smoking Substances" to Chapter 42, "Miscellaneous Offenses", of the Code of Ordinances of the City of La Porte. When ingested, substances commonly referred to as synthetic marijuana produce powerful intoxicating effects, similar to THC or organic marijuana, but are not yet categorized as illegal controlled substances under state or federal law. With the manufacture, sale, and use of synthetic marijuana becoming more and more prevalent, it has become necessary for law enforcement to look for ways to control its availability within the community in order to ensure the safety and well-being ofthe citizens of La Porte. As such, staff recommends that City Council approve the passage of an ordinance prohibiting the possession, sale or use of the illegal synthetic smoking substances and amend Appendix B of the Code of Ordinances adding the fine amount for the offense. Action Reauired bv Council: Consider request of staff to add VI "Prohibition of Certain Smoking Substances" to Chapter 42, "Miscellaneous Offenses", of the Code of Ordinances of the City of La Porte. Provide input and guidance to staff. tl (3 (.D Date ORDINANCE NO. AN ORDINANCE AMENDING CHAPTER 42 "MISCELLANEOUS OFFENSES" OF THE CODE OF ORDINANCES OF THE CITY OF LA PORTE BY ADDING ARTICLE VI. "PROHIBITION OF CERTAIN SMOKING SUBSTANCES", TO BAN THE USE OR POSSESSION OF SYNTHETHIC NARCOTICS WHEN MEETING CRITERIA ESTABLISHED THEREIN; CONTAINING A SEVERABILITY CLAUSE; FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW; PROVIDING THAT ANY PERSON VIOLATING THE TERMS OF THIS ORDINANCE SHALL BE DEEMED GUILTY OF A MISDEMEANOR AND UPON CONVICTION SHALL BE FINED IN A SUM NOT TO EXCEED FIVE HUNDRED DOLLARS ($500.00); PROVIDING FOR THE PUBLICATION OF THE CAPTION HEREOF; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of La Porte, Texas (herein, the "City"), being a home-rule city having authority to utilize police power regulation for the health, safety and general welfare of the citizens of the City; and, WHEREAS, the laws of the State of Texas, including those found in Chapter 51 of the Texas Local Government Code, and the La Porte City Charter provide the City authority to adopt ordinances for the good government, peace, order, and welfare of the municipality; WHEREAS, the City Council of the City of La Porte, Texas has determined that certain businesses within the City may be selling certain substances that when ingested produce intoxicating effects similar to THC or marijuana; and WHEREAS, the aforementioned substances are not yet categorized as illegal controlled substances under state or federal law; and WHEREAS, these substances, which are described herein below, are often used as an alternative to marijuana and are potentially dangerous to users and further, the long term effects are not yet known; and WHEREAS, the City Council of the City of La Porte, has determined that it is in the best interest of the public health, safety and welfare to prohibit the substances; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS: Section 1. The foregoing recitals are hereby found to be true and correct and are hereby adopted by the City Council and made a part hereof for all purposes as findings of fact. Section 2. Chapter 42 "Miscellaneous Offenses", is hereby amended by adding a new Article VI. "Prohibition of Certain Smoking Substances" of the Code of Ordinances of the City of La Porte, Texas, which shall read as follows: "ARTICLE VI. PROHIBTION OF CERTAIN SMOKING SUBSTANCES. Section 42-120. Definitions The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning. Illegal smoking substance means any plant or other substance, whether described as tobacco, herbs, incense, spice of any blend thereof, regardless of how the product is marketed for intended uses, which includes anyone or more of the following chemicals: 1. Salvia divinorum or salvinorin A; all parts of the plant presently classified botanically as salvia divinorum, whether grown or not, the seeds thereof, any extract from any part of such plant, and every compound, manufacture, salts, derivative, mixture or preparation of such plants, its seeds or extracts; 2. 2-{(1R, 3S)-3 hydroxycyclohexyl}-5-(2-mehylocatan-2-yl) phenol (also known as CP47, 497) and homologues; 3. Derivative, mixture or preparation of such plant, its seeds or extracts; 4. (6aS, 1 OaS)-9-(hydromehyl)-6, 6-dimethyl-3-(2-mehyloctan-2-yl)-6a, 7, 10, 10 atetrahydrobenzo [c} chormen-l-ol) (also known as HU-21 1 or Dexanabinol); 5. I-Pnetyl-3-(1-naphythoyl) indole (also known as JWH-018); or 6. Butyl-3-(1-naphthoyl) indole (also known as JWH-073) 7. Or similarly structured chemical analogs. Products containing some or all of the above substances are currently being marketed under the following commercial names: "K-2", "K-2 SUMMIT", "K-2 SEX", "GENIE", "DASCENTS", "ZOHAI", "SAGE", "SPICE", "KO KNOCKOUT 2", "SPICE GOLD", "SPICE DIAMOND", "YUCANTAN FIRE", "SOLAR FLARE", "PEP SPICE", "FIRE N' ICE", "SERENITY", AND "SALVIA DIVINORUM". The above product names are not an all inclusive list of products which contain the substances, but are listed for reference purposes. Ingestion device means any equipment, product or material that is used or intended for use in ingesting, inhaling or otherwise introducing an illegal smoking substance into the human body including: I. a metal, wooden, acrylic, glass, stone, plastic, or ceramic pipe with or without a screen, permanent screen, hashish head, or punctured metal bowl; 2. a water pipe; 3. a carburetion tube or device; 4. a smoking or carburetion mask; 5. a chamber pipe; 6. a carburetor pipe; 7. an electric pipe; 8. an air-driven pipe; 9. a chillum; 10. a bong, or 11. an ice pipe or chiller Section 42-121. Use or Possession of Illegal Smoking Substances It shall be unlawful for any person to use, buy, possess, or purchase any illegal smoking substances. Section 42-122. Sale of Illegal Smoking Substances It shall be unlawful for any person to sell, advertise or publically display for sale any illegal smoking substances. Section 42-123. Acquisition of Illegal Smoking Substance It shall be unlawful for any person if, with the intent to acquire any illegal smoking substance, he or she requests, commands or attempts to induce another to sell, donate or otherwise transfer or deliver any illegal smoking substance. Section 42-124. Possession of ingestion device. It shall be illegal for any person to use or possess an ingestion device for the purpose of using the device to inject, ingest, inhale or otherwise introduce into the human body an illegal smoking substance. Section 42-125. No defense. It is not a defense to prosecution under this article that I) no monetary consideration was tendered to the person solicited; or 2) the person solicited was unable or unwilling to transfer or deliver an illegal smoking substance. Section 42-126. Affirmative Defenses. It is an affirmative defense for a person charged with use or possession of an illegal smoking substance that the use or possession was pursuant to the direction or prescription of a licensed physician or dentist authorized to direct or prescribe such act. It is an affirmative defense that the sale or possession on Salvinorin A was in conjunction with ornamental landscaping and used solely for that purpose. It is an affirmative defense for a person charged with use or possession of an illegal smoking substance that the illegal smoking product was in the possession of or being used by a governmental entity for a health purpose, research and education, or a similar program. It is an affirmative defense to any prosecution under section 42-123 that 1) the solicitation is made in furtherance of a transaction that would not constitute a violation of applicable law; or 2) the solicitation is made by a peace officer in the lawful discharge of his duties or by a law enforcement agent acting in the lawful discharge of an official duty. Section 42-127. Penalty A person who violates any provisions of this article shall be guilty of a Class C misdemeanor and upon conviction shall be fined an amount not to exceed five hundred dollars ($500.00). Section 4. Open Meetings. The City Council officially finds, determines, recites, and declares that 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 ruling 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 5. Severability. Should any section or part of this ordinance be held unconstitutional, illegal, or invalid, or the application to any person or circumstance for any reasons thereof ineffective or inapplicable, such unconstitutionality, illegality, invalidity, or ineffectiveness of such section or part shall in no way affect, impair or invalidate the remaining portions thereof; but as to such remaining portion or portions, the same shall be and remain in full force and effect and to this end the provisions of this ordinance are declared to be severable. Section 6. Effective Date. This Ordinance shall be effective fourteen (14) days after its passage and approval. The City Secretary shall give notice of the passage of this ordinance by causing the caption hereof to be published in the official newspaper of the City of La Porte at least once within ten (10) days after the passage of this ordinance, in accordance with the provisions of Chapter 52, Texas Local Government Code, and the City of La Porte Charter. PASSED AND APPROVED on the first reading on the _ day of 2010. By: Louis R. Rigby Mayor ATTEST: Martha A. Gillett City Secretary APPROVED: Clark T. Askins Assistant City Attorney D REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: November 8. 2010 Budl!et Requested By: C Askins/M. Gillett Source of Funds: Department: City !\ttorlley/City Se~retllrY Account Number: Report: X Resolution: Ordinance: Amount Budgeted: Exhibits: Letter from Debra Gallington Amount Requested: Exhibits: Budgeted Item: YES NO Exhibits SUMMARY & RECOMMENDATION Discuss attached letter sent to City Council October 20,2010 from Debra Gallington regarding the City of La Porte Beer and Wine Ordinance, Chapter 6, Article III. Action Required bv Council: Discuss City of La Porte Beer and Wine Ordinance, Chapter 6, Article III and provide staff with direction. tl (':> (u- Date t.\ . i\~~ ~ ~ Greetings r-. Steven and Debra Gallington 811 Oak Leaf La Porte, Texas 77571 Phone: (281) 470-7744 Fax: (281) 271-8690 E-mail: debra@gallington.com steve@gallington.com October 20,2010 Via Email and Regular 1st Class Mail Mr. Louis R. Rigby, Mayor Mr. John P. Zemanek, City Council Mr. John Black, City Council Mr. Mike Mosteit, City Council Mr. Chuck Engelken, City Council Mr. Daryl Leonard, City Council Mr. Tommy Moser, City Council Mr. Jay Martin, City Council Mr. Mike Clausen, City Council 604 West Fairmont Parkway La Porte, Texas 77571 Re: 'Mainly Drinks' 223 West Main Street This is sent to ask City Council's assistance regarding a La Porte ordinance that affects the sale of beer and wine for on-premise consumption. I have attached a copy of the ordinance to this letter. As background for this request, allow me to give you some information. I assumed ownership of 223 West Main Street on October 6, 2010. The 1st floor is currently occupied by CMR Jewelers. Ms. Redden has a lease through the end of this year and I have offered her an additional month after the holiday sales season in which to complete her move. I plan to open a coffee and wine bar at this location. The name of the business is 'Mainly Drinks'. As the name implies, the majority of the sales will be beverages. The coffee portion of the store is modeled after a Starbucks-type establishment. The sale of beer and wine is the other component of the store. My vision for the alcohol sales is to sell the bottles/cases for off-premise consumption (a mini-Spec's) and also serve beer and wine to be consumed on site. I would like to open the wine bar/wine sales portion of the business immediately in the detached building that fronts Second Street. I have started the process of T ABC licensing, but have run into problems with our La Porte Beer and Wine Ordinance (Subpart A., Chapter 6, Article IlL). The ordinance, which was drafted in 1997, states that beer and wine can only be li Printed on 100% Post-Consumer Recyded Paper Mayor and City Council La Porte, Texas October 20, 2010 Page 2 of 2 consumed on-premises in a restaurant setting. A restaurant is defined as having its primary business the sale of on-premise prepared food (65% of the gross income). A strict reading of la Porte's ordinance disallows beer and wine to be served and drunk in any non-restaurant setting (e.g., a bar, club, etc.) regardless of the license that the establishment has been granted by the T ABC. Having a mixed beverage license would still not allow beer and wine to be served. If this ordinance was strictly enforced, it would certainly impose a hardship on most bars in La Porte. The TABC license I am applying for is a Wine & Beer Retailer's Permit (BG). This would allow me to sell beer, ale, and wine to go or for on-premises consumption. I could also sell traditional port and sherry for on-premises consumption. This 'BG' license perfectly fits the concept I have for Mainly Drinks. I have met with Clark Askins and Martha Gillette regarding this La Porte ordinance. Neither of them was working for La Porte when this ordinance was drafted. Apparently it was drafted by John Armstrong, a former Assistant City Attorney. It is also my understanding that this ordinance may be in violation of our state's Alcoholic Beverage Code. The Code may disallow municipalities from further restricting the Code's regulations. I am asking City Council's assistance with this ordinance. This assistance could be one of the following, or such other solution that the Council deems appropriate: (1) a variance from this ordinance for my business; (2) a redrafting of the ordinance; and/or (3) a repeal of the ordinance. I offer my assistance with any drafting or research that might be needed to accomplish whatever action you deem advisable. If you need any further information or clarification of the issues, please don't hesitate to contact me. I can be reached at home at (281) 470-7744 or my cell phone at (281) 299-8000. Thank you for your time and consideration. Sincerely{ ~~"....../ . \, ,>I" ".. " "', Debra L. Gallington /enclosure cc: Via Email and Regular 1st Class Mail Mr. Ron Bottoms, City Manager :Mn;. Martha Gillette, City Secretary Mr. Clark Askins, City Attorney La Porte, Texas, Code of Ordinances >> Subpart A - GENERAL ORDINANCES >> Chapter 6 - ALCOHOLIC BEVERAGES >> ARTICLE III. - BEER AND WINE >> ARTICLE III. - BEER AND WINE :)El_C_t?~Zf3__QgfiJJJ1~9E;;_ S_E?_t;~____f~1_~Ll___-'.~.QJ.e of -9~~!'".!Q_L~~gJ~J}119J1tLf;,~_~LQ!..SJ!Y :). ec~..fLZf!.._l&r;."tcQQ!'> t9f sal~hR!"LTDil $ee;. eLZ,)... Jd(~rrlQ!JQLl? ~iE;C___ q--,,<3D _1 55 u fJHG~-,-r~Jl~~9.LQfJ!1~nl})1 I Sec. 6-76. - Definitions. The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: Restaurant means a building or portion of a building, not operated as a dining room in connection with a hotel or boarding hotel, where the primary business is the on-premises sale of prepared food, with adequate kitchen facilities for the preparation of the food to be sold, the adequacy of such kitchen facilities to be based upon the seating capacity of the restaurant and the type of menu offered, and where wine and/or beer may be sold under the following conditions: (1) At least 65 percent of the gross income shall be derived from the sale of prepared food. (2) Any outside entrances, outside separate identification, outside signs or other advertising shall not use any of the words "bar," "tavern," "lounge," "ice house" or "beer," or any word of like import, to identify the business. (3) Wine and/or beer shall be served as a beverage only in connection with the service of prepared food to a customer. Whenever the building official on the basis of a sworn complaint from any credible person determines that a violation of this definition exists, he may require any person serving alcoholic beverages as an incidental use to provide the city, within 30 days of notification, a verified audit for each of the preceding four calendar quarters, showing the gross income derived from the sale of alcoholic beverages and the gross income derived from the sale of food. Such verified audit shall be supported by copies of licensee's invoices and canceled checks to substantiate its beer and food purchases. No more than two audits per year shall be required. (Ord. No. 1000-1, ~ 1, 2-10-97) Cross reference-Definitions generally, !j1.2. I Sec. 6-77. - Sale of beer in residential areas of city. The sale of beer is prohibited in residential areas of the city. Cross reference-Residential district regulations, ~ 106-331 et seq. State law reference-Authority to prohibit the sale of alcoholic beverages in residential areas, V.T.C.A., Alcoholic Beverage Code ~ 109.32. Sec. 6-78. - Locations for sales; permit. (a) The sale of wine and/or beer shall be permitted, but only in association with the operation of a restaurant as defined in section 6-76, during the hours set by the general laws of the state, consistent with V.T.C.A., Alcoholic Beverage Code ~~ 105.05 and 105.06, at the following locations in the city by retailers selling wine and/or beer for consumption on-premises: (1) TR 17M, (020*TR A1 Brookglen Reserve A in the W. M. Jones Survey, A0482). (2) Lots 5 and 6, Block 44. (3) Lots 1-31, Block 1110, (4) Lot 20 and east eight feet of Lot 19, Block 58. (5) Lots 25 through 28. Block 108. (6) Lots 17 and 18, Block 179. (7) TR 5, Block 5, Nebraska Syndicate. (8) Lots 6 through 13, Block 181. (9) Lots 21 through 23, Block 56. (10) TR 8e, Block 2, of the W. J. Payne Subdivision in the W. M. Jones Survey, A-482. (11) Tracts 17 through 24, Block 172. (12) Block 1100, Lots 1 through 6 and one-half of Lot 7. (13) Lots 16 through 20, Block 717. (14) Northeast corner of Block 49, containing 254,107 square feet (5.8335 acres) of land. (15) Lots 25 thru 28, Block 108. (16) TRACT 490-A.La Porte Outlot. (17) Lots 1 through 16 and 25 through 32, Block 149. (18) Lot 2, Block 1, Underwood Plaza. (b) The sale of wine and/or beer for consumption on the premises where sold is hereby prohibited in the city, save and except in those areas designated in subsection (a) of this section. (e) No permit for the sale of wine and/or beer for consumption on the premises where sold shall be issued or approved, save and except in the areas designated by subsection (a) of this section. (Ord. No. 1000-1, H 2, 3, 7,2-10-97; Ord. No. 1000-1-8,91, 11-24-97; Ord. No. 1000-1-e, 9 1, 7-13-98; Ord. No. 1000-1-0,91,5-4-99; Ord. No. fOOO-1- E,9 1, 6-28-99; Ord. No. 1000-1-F, 91,10-25-99; Ord. No. 1000-1-G, 9 1, 6-12-00; Ord. No. fOOO-1-H, 91,7-11-00; Ord. No. 1000-1-1,91,4-9-01; Ord. No. 1000-1- T, 9 2, 9-22-08) Cross reference-Food establishments, ~ 22-56 et seq.; zoning district regulations, ~ 106-301 et seq. Sec. 6-79. - Exemptions. The sale of wine and/or beer by retailers, manufacturers or distributors not for consumption on the premises where sold shall not be affected by this article, and such sale shall be made in accordance with the general laws of the state. (Ord. No. fOOO-1, 94, 2-10-97) Sec. 6-80. . Issuance, renewal of permit. (a) Renewals of existing permits, as delineated in section 6-78(a), shall be subject to the terms of this article, and the provisions of V.T.CA, Alcoholic Beverage Code. In addition, no permit shall be issued to or renewed for a retailer selling beer and/or wine for consumption on premises, and no permit shall be issued to gasoline service stations, grocery stores or combination gasoline service station/grocery store businesses. In addition, prior to the issuance of any new permit or renewal of an existing permit under the provisions of this article, the applicant shall make written application to the city secretary stating, among other requirements: (1) His name. (2) Place of residence for the preceding two years. (3) Sex. (4) Age. (5) Customary occupation. (6) A statement by the applicant, verified by the city, that all city and school taxes have been paid by the applicant and owner of the property covered by the application, and that the applicant and property owner are current on their real and personal property taxes located or to be operated within the city. (b) No permit shall be issued or renewed by the city secretary unless all city and school taxes have been paid by the applicant and owner of the property covered by the application, and applicant and property owner are current on their real and personal property taxes located or to be operated within the city. (Ord. No. fOOO-1, 9 5,2-10-97) Sec. 6-81. - Intent; compliance with state law and other regulations. It is the intent of the city council that this article merely permit the sale of wine and/or beer during the hours set by the general laws of the state by retailers selling wine and/or beer for consumption on premises at the locations established in section 6-78(a). This article is not an attempt to create zoning or other land use rights in property owners at such locations, such that the provisions of chapter 106, pertaining to zoning, together with all amendments thereto (as such provisions impose standards on premises or businesses within the city, regardless of whether such businesses or premises are required to have a license or permit under V.T.CA, Alcoholic Beverage Code) govern and supersede the provisions of this article, in the event of a conflict between this article and the provisions of chapter 106. In all future cases, new applications to the city and to the state by retailers selling wine and/or beer for consumption on premises shall be subject to the provisions of: (1) V.T.C.A., Alcoholic Beverage Code; (2) This article insofar as this article does not conflict with the provisions of V.T.CA, Alcoholic Beverage Code; and (3) Chapter 106, as such chapter applies to all businesses within the city, regardless of whether or not such businesses are required to obtain a license or permit under the provisions of V.T.C.A., Alcoholic Beverage Code. (Ord. No. fOOO-1, 9 6, 2-10-97) E No backup given for this item 12 REQUEST FOR CITY COUNCIL AGENDA ITEM Agenda Date Requested: November 8. 2010 Budt!et Requested By: D. Wilmore Source of Funds: Department: Planning Account Number: Report: X Resolution: Ordinance: Amount Budgeted: Amount Requested: Exhibits: Highlight Memo on Inspection Division Activities Budgeted Item: YES NO Exhibits: Proiect Updates Exhibits SUMMARY & RECOMMENDATION Attached is a staff report highlighting Inspection Division activities. Due to the change in the Council date and agenda submittal deadline for the meeting, staff was unable to utilize the typical monthly report. Since the October reporting period is still active at this time, we chose to provide Council with a report that shows recently completed projects and projects under construction. Action Required bv Council: It hlk Date Memo To: From: Mayor and City Council Debbie S. Wilmore, Chief Building Official Ron Bottoms, City Manager; Tim Tie~ens, Director of Planning 10/29/2010 CC: Date: Re: Highlight Memo on Inspection Division Activities The following is our monthly report on some of the highlights of the Inspection Services Division. Since October report information is not available at this time, we have attached a report on completed projects and projects under construction. Neighborhood Assistance - 3101 S. Broadway (Rush Oaks Apts.) · In late August, staff received reports of ongoing nuisance issues at these apartments. We found weeds, overflowing dumpsters, exterior storage and debris around complex and a few unsecured apartments. There was no on-site management and residents advised the owner was defaulting on his loan. Required legal notices were sent and by the end of August, city contractors had abated the violations. By mid-September, the apartments were vacant but residents moving out created more debris and trespassers had broken into many apartments within the complex. City contractors were again dispatched to deal with the debris and securing of most of the complex buildings. Staff has talked with neighbors and the Police Department and requested their assistance in monitoring the complex. In addition, we go by daily to check the property. Neighbors have thanked staff for quick assistance and continued monitoring. Summer 2010 Dangerous Buildings · In working substandard homes, staff found many owners in agreement that their buildings needed to be demolished but lack of funding and/or lack of experience with contractors were an issue. Following numerous phone calls and meetings, staff successfully obtained nine (9) voluntary consent to demolish forms. . Page 2 Highlight Memo Con't. Page 2 The city obtained written quotes and then issued demolition permits in October. Demolition of the (9) homes is currently underway. The locations are as follows: 3130 Weatherford 223 FalkAvenue #6 Pine Bluff 226 So. Y Street 2436 Old Hwy. 146, #17 819 S. Brownell 3241 Andricks Road 9525 Belfast Road 822 Easy Street PROJECTS REPORT RECENTLY COMPLETED: Diesel Fuel Maintenance 1607 W. Main St. June 2010 Maria's Taqueria San Jacinto Day Care/Lab 11001 W. Fairmont Pkwy., #H 3202 Luella Blvd. June 2010 August 2010 Motel 8 702 Hwy. 146 South October 2010 Asian Wok 1434 W. Fairmont Pkwy. October 2010 Wilson Industries 359 Old Underwood Rd., #A October 2010 (9) New, Single Family Detached 33 N Forrest Ave. 37 N Forrest Ave. 3027 Fondren St. 3031 Fondren St 711 S. Blackwell St. 10614 N L St. June 1 st thru October 20th, 2010 54 N Forrest Ave. 2413 Andrews Ct. 11022 N PSt. STILL UNDER CONSTRUCTION: Chocolates by Mark 210 W. Main Smoke's Wings 324 W. Main King's Bar-b-que 521 W. Main North Pole Ice Cream 11001 W. Fairmont Pkwy., #B San Jacinto Medical Group 11006 Spencer Hwy. San Jacinto College/Allied Health 8060 Spencer Hwy. San Jacinto College/Transportation Bldg. 3501 Luella Blvd.