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Home My WebLink About08-25-99 La Porte Reinvestment Zone Number One l JO' Tax Increment Reinvestment Zone Number One, La Porte, Texas Board Minutes August 25, 1999 Board Members in Attendance: Alton Porter, Chairman Peggy Antone Deotis Gay Horace Leopard Lindsay Pfeiffer David Webb Zone Staff: John Joerns, Assistant City Manager David Hawes, Administrator 1. Call to order Chairman Alton Porter called the meeting to order at 6:05 PM. Chairman Porter established that a quorum was present. 2. Approve minutes of the August 11, 1999 Board of Directors meeting On a motion made by Director Pfeiffer and a second by Director Gay, the board voted to approve the minutes with six (6) votes yes, zero (0) votes no, and no (0) abstentions. 3. Election of Officers Director Gay nominated the following individuals to serve as officers of the Zone: Director Antone Director Webb Director Gay Secretary Assistant Secretary Assistant Secretary The board voted to elect the above officers with six (6) votes yes, zero (0) votes no, and no (0) abstentions 4. Staff Reports Mr. Joerns gave a report that he had made a presentation to the LPISD on Tuesday and to City Council on Monday with regard to the Interlocal Agreement with the LPISD. Mr. Joerns stated that the City Council has set aside $100,000 from the City's Economic Development Fund to assist with TIRZ matters. Items that could be funded from these monies are the "Master Watershed Plan and providing in-kind street ROW work and detention basin. La Porte TIRZO 1 August 25 1999 Board Minutes ~~ .' ~'. 5. Discuss and take appropriate action with regard to the Interlocal Agreement between the City of La Porte, La Porte Independent School District and Reinvestment Zone Number One, City of La Porte, Texas. Mr. Joerns and Mr. Hawes gave a report on the conditions stated within the Interlocal Agreement. On a motion made by Director Pfeiffer and a second by Director Gay, the board voted to approve the minutes with six (5) votes yes, zero (0) votes no, and one (1) abstentions (Director Webb). 6. Adjournment. Upon a motion to adjourn the meeting at 6:40 PM by Director Pfieffer and with a second by Director Webb, the board voted to adjourn the meeting with six (6) votes yes, zero (0) votes no, and no (0) abstentions. APPROVED: ~p~ Alton Porter Chairman, Tax Increment Reinvestment Zone Number One, La Porte, Texas ATTEST: ~~a~ Secretary, Tax Increment Reinvestment Zone Number One, City of La Porte, Texas La Porte TIRZ01 August 25 1999 Board Minutes 2 . ~, ,; PRE AGENDA ITEM: THE ATTACHED (STATEMENT OF APPOINTED OFFICER) FORM MUST BE COMPLETED AND FORWARDED BY THE CITY SECRETARY TO THE SECRETARY OF STATE PRIOR TO THE NEW AND REAPPOINTED BOARDMEMBERS TAKING THE OATH OF OFFICE. EACH OF THE NEW BOARDMEMBERS AND RE-APPOINTMENTS TO THE BOARD WILL NEED TO FILL OUT AND EXECUTE THE FORM. THE CITY SECRETARY WILL ATTEND THE MEETING TO ASSIST IN COMPLETING THE FORM. AGENDA ITEM 1 CALL TO ORDER AGENDA ITEM 2 OATH OF OFFICE THE OATH OF OFFICE WILL BE GIVEN TO BOTH THE NEW MEMBERS AND THE MEMBERS RE-APPOINTED IN JULY 2000. AGENDA ITEM 3 CONSIDER APPROVAL OF MINUTES OF THE AUGUST 25, 1999 BOARD OF DIRECTORS MEETING The minutes are being prepared by David Hawes and will be soon forwarded to the Board once completed. AGENDA ITEM 4: REVIEW AND CONSIDER APPROVAL OF INTERLOCAL AGREEMENT BETWEEN CITY OF LA PORTE, HARRIS COUNTY, AND REINVESTMENT ZONE NUMBER ONE (CITY OF LA PORTE, TEXAS) On October 24,2000, the Harris County Commissioners Court approved the interlocal agreement which describes the County's participation in the City of La Porte TIRZ #1. The document (as with the LPISD Agreement) is a 3 party agreement between the City of La Porte, Reinvestment Zone Number One (City of La Porte, Texas), and Harris County. . .~ j. The document, with changes made by Harris County, was previously forwarded to the Board. A copy of the agreement executed by Harris County is provided in your package. After the Board's consideration and approval, this document will be forwarded to City Council for their consideration. ACTION REQUESTED Approve the Interlocal Agreement between City of La Porte, Harris County, and Reinvestment Zone Number One (City of La Porte, Texas) and forward to City Council for their consideration. AGENDA ITEM 5: REVIEW AND CONSIDER APPROVAL OF THE FOLLOWING DOCUMENTS: .:. APPLICATION TO THE MAYOR AND CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS, FOR CREATION OF THE LA PORTE REDEVELOPMENT AUTHORITY, AND APPROVAL OF ARTICLES OF INCORPORATION AND BYLAWS THEREOF. .:. ARTICLES OF INCORPORATION OF THE LA PORTE REDEVELOPMENT AUTHORITY .:. BYLAWS OF THE LA PORTE REDEVELOPMENT AUTHORITY Since these documents were mailed to you in June 2000, they have been reviewed by the following staff and consultants. .:. Robert T. Herrera, City Manager .:. John Joerns, Assistant City Manager .:. David Hawes, Consultant, Hawes, Hill, and Associates .:. John Armstrong, Assistant City Attorney .:. Cynthia Alexander, Director of Finance .:. Louis Rigby, Director of Administrative Services In addition they were circulated to Mayor and City Council and reviewed with the Mayor and a Councilman that had some questions and comments. The documents included in your package are substantially the same as those circulated in June. The changes (except typos etc.) are shown as strike through and underlines. Clean documents will be provided at the meeting. BACKGROUND The TIRZ Project Plan anticipates creating a Redevelopment Authority for the purpose of aiding, assisting, and acting on behalf of the City and TIRZ Board in certain areas. Also, a Redevelopment Authority has broader powers than those granted to a TIRZ Board. It is anticipated that the Redevelopment Authority (with Council's approval) will be active in the following areas: .? ,: .:. in the implementation of the Project Plan and Financing Plan for the La Porte Reinvestment Zone and the preparation and implementation of amendments thereto. .:. in the development of a policy to finance development and redevelopment of residential, educational facilities, commercial, and park/open space properties in the La Porte area; and .:. in the development and implementation of a redevelopment policy for the La Porte area, including the acquisition of land for redevelopment purposes. .:. issue bonds, notes or other obligations. .:. acquisition of land. .:. negotiate and enter development agreements. It is Council's intent that the TIRZ Boardmembers also serve on the Redevelopment Authority. Therefore, we are reviewing these documents with you so that you may become familiar and comfortable with the purpose and proposed Bylaws of the Redevelopment Authority. The creation of the Redevelopment Authority will require three (3) applicants for the application to create the authority and three incorporators for the Articles of Incorporation of the La Porte Redevelopment Authority. These persons must be a citizen of the State of Texas, a resident of the City over the age of eighteen years. It is suggested that these applicants/incorporators not be Councilmembers since they will be voting on the creation of the Authority. Therefore, we will ask that qualified TIRZ Boardmembers volunteer as applicants/incorporators. ACTION REQUESTED Recommend to City Council the creation of a Redevelopment Authority and recommend the form of the following documents: .:. Application to the Mayor and City Council of the City of La Porte, Texas, for Creation of the La Porte Redevelopment Authority, and Approval of Articles of Incorporation and Bylaws Thereof. .:. Articles ofIncorporation of the La Porte Redevelopment Authority .:. Bylaws of the La Porte Redevelopment Authority After the Board's consideration we will ask for volunteers to sign the Application to the Mayor and City Council of the City of La Porte, Texas, for Creation of the La Porte Redevelopment Authority, and Approval of Articles of Incorporation and Bylaws Thereof for creation of the Redevelopment Authority and the Articles of Incorporation. I. j' AGENDA ITEM 6: OPEN DISCUSSION/QUESTIONS .:. DISCUSS THREE PARTY AGREEMENT BETWEEN CITY OF LA PORTE, TAX REINVESTMENT ZONE NUMBER ONE, CITY OF LA PORTE, TEXAS, AND LA PORTE REDEVELOPMENT AUTHORITY .:. After City Council considers and approves the Redevelopment Authority, the City, TIRZ Board, and the Redevelopment Authority will need to approve a three party agreement that further describes their relationship. .:. Once this document has been drafted by Hawes, Hill, and Associates, and reviewed by staff it will be circulated to Mayor and City Council and the TIRZ Board. .:. UPDATE ON DEVELOPMENT POSSIBILITIES WITHIN THE TAX INCREMENT REINVESTMENT ZONE .f ,; I TEM2 .'1 j" r---- I I I I ~ -= I - 0 I ~ CI I ~ ! I -ts;: o _ = . CD I ~!f-= I . .::: 0 I .c~~ I =~o I I I !2'llr~ I I ~ --tP --- I -- I ..: .... I OJ ----- I E!.2 I t.J ;::~;; I :p ':;ID= I t=t: ~ 0_ I ~E= I 0 I ~~8 I -0 ! ~ co-~ E I ~ alQo I cll;l_ ~ ::l\.== ~ I C) ==~ ~ I ~ S c: ~ I ~ -100- --- I ii== ;! y I .s -0(5 ':a I ts oUe. ii S ~ I coQg, CiS ....... I 0 o-c 0 '2 ';l-=~ ~ ..... iii I .... :"1 ~ Q) C ~ ~ I CD_ S I = ~ E~ - 0 U - I ~~ .; I I I ~ I 1... I ~ ~ 00 I JS .. - I 0 !i I ~ I z~ I ~ . E! 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'? ," OATH OF OmCE I, , do solemnly swear (or affrrm), that I will faithfully execute the duties of the office of . of the City of La Porte, State of Texas, and will to the best of my ability preserve, protect and defend the consti~tion and Jaws of the United States and of this State and the Charter and ordinances of this City; and I furthermore solemnly swear (or affirm) that I have not directly or indirectly paid, offered, or promised to contribute any money, or valuable thing, or promised any public office or employment, as a reward to secure my appointment or the confirmation thereof. So help me God. Sworn to and subscnOed before me this the day of Notary Public in and for the State of Texas .C? ," I TEM3 .l ,;' Tax Increment Reinvestment Zone Number One, La Porte, Texas Board Minutes August 25, 1999 Board Members in Attendance: Alton Porter, Chairman Peggy Antone Deotis Gay Horace Leopard Lindsay Pfeiffer David Webb Zone Staff: John Joerns, Assistant City Manager David Hawes, Administrator 1. Call to order Chairman Alton Porter called the meeting to order at 6:05 PM. Chairman Porter established that a quorum was present. 2. Approve minutes of the August 11, 1999 Board of Directors meeting On a motion made by Director Pfeiffer and a second by Director Gay, the board voted to approve the minutes with six (6) votes yes, zero (0) votes no, and no (0) abstentions. 3. Election of Officers Director Gay nominated the following individuals to serve as officers of the Zone: Director Antone Director Webb Director Gay Secretary Assistant Secretary Assistant Secretary The board voted to elect the above officers with six (6) votes yes, zero (0) votes no, and no (0) abstentions 4. Staff Reports Mr. Joerns gave a report that he had made a presentation to the LPISD on Tuesday and to City Council on Monday with regard to the Interlocal Agreement with the LPISD. Mr. Joerns stated that the City Council has set aside $100,000 from the City's Economic Development Fund to assist with TIRZ matters. Items that could be funded from these monies are the "Master Watershed Plan and providing in-kind street ROW work and detention basin. La Porte TIRZO 1 August 25 1999 Board Minutes " j.' 5. Discuss and take appropriate action with regard to the Interlocal Agreement between the City of La Porte, La Porte Independent School District and Reinvestment Zone Number One, City of La Porte, Texas. Mr. Joerns and Mr. Hawes gave a report on the conditions stated within the Interlocal Agreement. On a motion made by Director Pfeiffer and a second by Director Gay, the board voted to approve the minutes with six (5) votes yes, zero (0) votes no, and one (1) abstentions (Director Webb). 6. Adjournment. Upon a motion to adjourn the meeting at 6:40 PM by Director Pfieffer and with a second by Director Webb, the board voted to adjourn the meeting with six (6) votes yes, zero (0) votes no, and no (0) abstentions. APPROVED: Alton Porter Chairman, Tax Increment Reinvestment Zone Number One, La Porte, Texas ATTEST: Secretary, Tax Increment Reinvestment Zone Number One, City of La Porte, Texas La Porte TIRZO 1 August 25 1999 Board Minutes 2 l ,: I TEM4 ? J; THE STATE OF TEXAS ~ ~ COUNTY OF HARRIS ~ INTERLOCAL AGREEMENT I. PARTIES A. Address THIS INTERLOCAL AGREEMENT ("Agreement") is made by and between the CITY OF LA PORTE, TEXAS ("City"), a municipal corporation and home-rule city of the State of Texas principally situated in Harris County, acting by and through its governing body, the City Council; HARRIS COUNTY, a body corporate and politic under the laws of the State of Texas, acting by and through its governing body, the Harris County Commissioners Court ("Harris County"), and REINVESTMENT ZONE NUMBER ONE, CITY OF LA PORTE, TEXAS (''La Porte Zone"), a reinvestment zone created by the City of La Porte pursuant to Chapter 311 of the Texas Tax Code, acting by and through its Board of Directors. This Agreement is made pursuant to Chapter 791 of the Texas Government Code and Chapter 311 of the Texas Tax Code. The initial addresses of the parties, which any party may change by giving written notice of its changed address to the other parties, are as follows: City City Manager City of La Porte . 604 West Fairmont Parkway P.O. Box 1115 La Porte, Texas 77572-1115 La Porte Zone Harris County Harris County . Harris County Administration Building 1001 Preston Avenue, Ninth Floor Houston, Texas 77002 Attention: Director, Department of Management Services Reinvestment Zone Number One, City of La Porte, Texas c/o City Manager 604 West Fairmont Parkway P.O. Box 1115 La Porte, Texas 77572-1115 Attention: John Joems 't J: B. Index The City, Harris County and the La Porte Zone hereby agree to the terms and conditions of this Agreement. This Agreement consists of the following sections: Section Description Page I. Parties 1 II. Definitions 2 III. Background 3 IV. Obligations of Harris County 4 V. Obligations of City and La Porte Zone 6 VI. Term and Termination 7 VII. Miscellaneous 8 c. Parts Incorporated All of the above described sections and documents are hereby incorporated into this Agreement by this reference for all purposes. II. DEFINITIONS As used in this Agreement, the following terms shall have the meanings set out below: "Agreement" means this agreement between the City, Harris County and the La Porte Zone. "Agreement Term" is defined in Section VI. "Captured Appraised Value" means the captured appraised value of the La Porte Zone, as defined by Chapter 311, Texas Tax Code. "City" is defined in Section I of this Agreement and includes its successors and assigns. "Harris County" is defined in Section I of this Agreement and includes Harris County and its successors and assigns. 2 .1 j:' "Harris County Tax Increment Participation" means the amount of the Harris County tax contribution to the La Porte Zone pursuant to Section IV of this Agreement. "La Porte Zone" means Reinvestment Zone Number One, City of La Porte, Texas, created by the City on May 24, 1999 by Ordinance No. 99-2325, and enlarged by Ordinance No. 99-2350, and includes its successors and assigns. "Project Plan" means the project plan and reinvestment zone financing plan for the La Porte Zone adopted by the board of directors of the La Porte Zone and approved by the City Council of the City on August 23, 1999 by City of La Porte Ordinance No.99-2352. ''Tax Increment Fund" means the tax increment fund created by the City in the City Treasury for the La Porte Zone. Otherwise, the terms used herein have the meanings ascribed to them in Chapter 311, Texas Tax Code. III. BACKGROUND On May 24, 1999, the City created the La Porte Zone by adoption of City of La Porte Ordinance No. 99-2325, for the purposes of development and redevelopment in the La Porte Area. On August 9, 1999, the City approved the enlargement of the La Porte Zone by adoption of City of La Porte Ordinance No.99-2350. The Board of Directors of the La Porte Zone initially adopted a project plan and. reinvestment zone financing plan, which was approved by the City on August 23, 1999 by City of La Porte Ordinance No.99-2352. The City has agreed to participate in the La Porte Zone by contributing tax increments produced in the La Porte Zone to the Tax Increm~nt Fund. Harris County now desires to enter into a formal agreement with the La Porte Zone in consideration for the agreements set forth below. 3 t. j' IV. OBLIGATIONS OF HARRIS COUNTY A. Tax Increment Participation by Harris County For and in consideration of the agreements of the parties set forth herein, and subject to the remaining subsections of this section, the parties agree that Harris County's participation in the La Porte Zone is a contribution, to the extent authorized by law, to the Tax Increment Fund during the term of this Agreement of seventy-five percent (75%) of the tax increment attributed to the Captured Appraised Value in the La Porte Zone attributable to Harris County for the period January 1,2001 through December 31, 2029; and that the contributions of the Port of Houston Authority of Harris County, Texas, the Harris County Flo.od Control District, the Harris County Hospital District, the Harris County Department of Education, and any other taxing entity for whom Harris County imposes taxes, either now or in the future, shall be zero percent (0%) of the tax increment attributed to the Captured Appraised Value in the La Porte Zone attributable to the Port of Houston Authority of Harris County, Texas, the Harris County Flood Control District, the Harris County Hospital District, the Harris County Department of Education, and any other taxing entity for whom Harris County imposes taxes, either now or in the future. Harris County's participation and use of funds is limited to the projects described in Exhibit A to this Agreement. In addition, Harris County, at its option, may choose to manage the construction of any project to which it will contribute. All increments contributed by Harris County shall be restricted for use only on those projects and in the amounts set out in Exhibit A, attached hereto and made a part hereof. In the event of bond financing, Harris County's tax increments may be dedicated to bond repayment, however, in that event, a portion of the bond proceeds equal to the total of all of Harris County's proposed participation set out in Exhibit A, shall be restricted for use only on those projects and in the amounts set out in Exhibit A. 4 'f" j. B. Tax Increment Limitation Harris County is not obligated to pay its Harris County Tax Increment Participation from any source other than taxes collected by Harris County on the Captured Appraised Value. Furthermore, Harris County has no duty or obligation to pay the Harris County Tax Increment Participation from any other Harris County taxes or revenues, or until the Harris County Tax Increment Participation in the La Porte Zone is actually collected. Any portion of the taxes representing the Harris County Tax Increment Participation that are paid to Harris County and subsequently refunded pursuant to the provisions of the Texas Tax Code shall be offs~t against future payments to the Tax Increment Fund. The obligation to pay the H~s County Tax Increment Participation accrues, as taxes representing the Harris County Tax Increment Participation are collected by Harris County, and payment shall be due as provided in section 31 1.0 13 (c) of the Texas Tax Code. No interest or penalty will be charged to Harris County for any late payment received from Harris County; provided however, that penalty and interest received by Harris Co.unty on any delinquent taxes from the Harris County Tax Increment Participation shall be paid to the Tax Increment Fund in the amounts required by section 3ll.0l3(c) of the Texas Tax Code. C. Expansion of La Porte Zone The obligation of Harris County to participate in the La Porte Zone is limited to the area described in City of La Porte Ordinance Nos. 99-2325 and 99-2350. Harris County's participation does not extend to the tax increment on any additional property added to the La Porte Zone by the City or any amendment to the Project Plan by the La Porte Zone and the City that would increase the total amount of project costs unless Harris County specifically agrees to participate in the additional area or amendment to the Project Plan. In addition, Harris County's participation does 5 " i: not extend to any dedication of revenue from the Tax Increment Fund by the La Porte Zone for projects outside the La Porte Zone, unless Harris County agrees to participate in the dedication. D. Board of Directors Notwithstanding anything to the contrary in City of La Porte Ordinance No. 99-2325, which created the La Porte Zone, pursuant to the provisions of Section 311.009( a), Texas Tax Code, Harris County shall have the unequivocal right to appoint and thereafter at all times maintain one (1) member on the La Porte Zone Board of Directors. Harris County may also appoint and maintain as many non-voting ex officio members on the La Porte Zone Board of Directors as Harris County may desire. V. OBLIGATIONS OF CITY AND LA PORTE ZONE A. Project Plan Any member of the Harris County Commissioners Court may review and comment upon any amendment to the Project Plan before any amendments thereto are submitted to the City Council for City approval. The City agrees to provide Harris County with a copy of any proposed amendments at least 14 days prior to their submission to the City Council for approval. B. Disposition of Tax Increments Upon termination of the La Porte Zone, and after all bonded indebtedness of the La Porte Zone has been paid, the City and the La Porte Zone shall pay to Harris County, within sixty (60) days of said termination, all monies remaining in the Tax Increment Fund that are attributable to the Harris County Tax Increment Participation paid by Harris County into the Tax Increment Fund. C. Audits The City shall provide to Harris County a copy of each of the audits required by the Agreement by and between the City of La Porte, Texas, Reinvestment Zone Number One, City of 6 . 't, j. La Porte, Texas and the La Porte Redevelopment Authority approved by City of La Porte Ordinance No. , as it may be amended from time to time, within thirty (30) days of receipt of each audit. In addition, the City shall provide to Harris County a copy of all reports, studies and analyses prepared by the City, the Redevelopment Authority or others that concern the expenditure of Tax . Increment Funds of said Zone. VI. TERM AND TERMINATION A. Agreement Term This Agreement becomes effective as of the date of the fmal signature hereto. The term of this Agreement shall commence with. the tax year beginning on January 1, 2001. This Agreement shall terminate on the earlier of December 31,2029, or when Harris County contributions are no longer required to cover bond debt service, unless earlier terminated by the parties hereto, or when the increments contributed by all participating taxing entities total $46,444,762, or when the increments contributed by Harris County total $10,054,000, whichever occurs first. In the event bonds are issued, Harris County's participation may increase by 11 % of the bond financing cost, not to exceed $5,429,000. It is the intent of the parties that Harris County's participation in the La Porte Zone, or any expansion thereof, is limited to the term stated herein. Nothing in this Agreement, however, limits the authority of the Harris County Commissioners Court to extend the term of this Agreement or increase the amount of the Harris County Tax Increment Participation in the La Porte Zone, as set forth in Section IV of this Agreement. Upon termination of this Agreement, the obligation of Harris County to contribute to the Tax Increment Fund for the La Porte Zone shall end. However, the obligations of the City and the La Porte Zone to refund any overpayment by Harris County shall survive such termination. 7 l J." B. Early Termination The La Porte Zone may terminate pursuant to the provisions of Texas Tax Code Section 311.017. VII. MISCELLANEOUS A. Severability In the event any term, covenant or condition herein contained is held to be invalid by any court of competent jurisdiction, such invalidity shall not affect any other term, covenant or condition herein contained. In the event any term, covenant or condition shall be held invalid and affects in any manner the limitations on Harris County's, or any other party's contributions or participation, then neither Harris County nor any other party shall have any liability for any incremental or other payments as may otherwise be provided for in this Agreement. B. Entire Agreement This Agreement merges the prior negotiations and understandings ofthe parties hereto and embodies the entire agreement of the parties, and there are no other agreements, assurances, conditions, covenants (express or implied) or other terms with respect to the covenants, whether written or verbal, antecedent or contemporaneous, with the execution hereof. C. Written Amendment Unless otherwise provided herein, this Agreement may be amended only by written instrument duly executed on behalf of each party. 8 '1 ,J"" D. Notices All notices required or permitted hereunder shall be in writing and shall be deemed delivered when actually received or, if earlier, on the third (3rd) day following deposit in a United States Postal Service post office or receptacle with proper postage affixed (certified mail, return receipt requested) addressed to the respective other party at the address prescribed in Section I of this Agreement or at such other address as the receiving party may have theretofore prescribed by notice to the sending party. E. Non-Waiver Failure of any party hereto to iJ..1Sist on the strict performance of any of the agreements herein or to exercise any rights or remedies accruing hereunder upon default or failure of performance shall not be considered a waiver of the right to insist on, and to enforce by any appropriate remedy, strict compliance with any other obligation hereunder or to exercise any other right or remedy occurring as a result of any future default or failure of performance. F. Assignment No party shall assign this Agreement at law or otherwise without the prior written consent of the other parties. No party shall delegate any portion of its performance under this Agreement without the written consent of the other parties. G. Successors This Agreement shall bind and benefit the parties and their legal successors. This Agreement does not create any personal liability on the part of any officer, agent or employee of the City, the La Porte Zone or Harris County. 9 t. i' H. No Waiver of Immunity No party hereto waives or relinquishes any immunity or defense on behalf of itself, officers, employees, and agents as a result of its execution of this Agreement and performance of the covenants contained herein. IN WITNESS WHEREOF, the City, Harris County and the La Porte Zone have made and executed this Agreement in multiple copies, each of which is an original.. ATTEST/SEAL: CITY OF LA PORTE By Martha A. Gillett City Secretary Norman L. Malone Mayor Date Signed: APPROVED AS TO FORM: City Attorney APPROVED AS TO FORM: HARRIS COUNTY NUCHAELP.FLENITNG coun~ty~ttomey ..p, ~~ By ~ ~ By CHOLAS J. L YKOS ERT S Assistant County Attorney County Judge OCT 24 2000 Date Signed: 10 .t, ~'. REINVESTMENT ZONE NUMBER ONE, CITY OF LA PORTE, TEXAS (La Porte Zone) By Name: Chairman, Board of Directors Date Signed: ATTEST/SEAL: By Name: Secretary, Board of Directors [The remainder of this page is intentionally left blank.] 11 -'1 J" EXHIBIT A l ,: Project Description Projected Cost Powell Road 4 lane concrete roadway with curb and gutter and center median Length of roadway: 7,700 linear feet Lime stabilization: 41,100 sq. yds. Concrete paving: 10" thick; 41,100 sq. yds. Storm sewer: '3,850 linear feet Curb and gutter: 30,800 linear feet Powell Road South 2 lane concrete roadway with curb and gutter Length of roadway: 2,200 linear feet Lime stabilization: 8,800 sq. yds. Concrete paving: 10" thick; 8,800 sq. yds. Storm sewer: 1,100 linear feet Curb and gutter: 4,400 linear feet McCabe Road (east of SH146) 4 lane concrete roadway with curb and gutter Length of roadway: 4,300 linear feet . Lime stabilization: 22,900 sq. yds. Concrete paving: 10" thick; 22,900 sq. yds. Storm sewer: 2,150 linear feet Curb and gutter: 8,600 linear feet McCabe Road (west of SH146) 2 lane concrete roadway with curb and gutter Length of roadway: 1,200 linear feet Lime stabilization: 4,800 sq. yds. Concrete paving: 10" thick; 4,800 sq. yds. Storm sewer: 600 linear feet Curb and gutter: 2,400 linear feet San Jacinto Street from Main to Park 4 lane concrete roadway with curb and gutter Length of roadway: 4,700 linear feet Lime stabilization: 25,600 sq. yds. Concrete paving: 10" thick; 25,600 sq. yds. Storm sewer: 2,350 linear feet Curb and gutter: 9,400 linear feet Park Street from San Jacinto to Garfield 2 lane concrete roadway with curb and gutter Length of roadway: 3,400 linear feet Lime stabilization: 13,600 sq. yds. Concrete paving: 7" thick; 13,600 sq. yds Storm sewer: 1,700 linear feet Curb and gutter: 6,800 linear feet $ 3,000,000 $ 1,170,000 $ 2,200,000 $ 605,000 $ 2,400,000 $1,700,000 Bayshore Drive 2 lane concrete roadway with curb and gutter Length of roadway: 3,600 linear feet Lime stabilization: 13,600 sq. yds. Concrete paving: 7" thick; 13,600 sq. yds. Storm sewer: 1,700 linear feet Curb and gutter: 6,800 linear feet $ 1,700,000 County Participation $1,000,000 390,000 733,000 202,000 800,000 567,000 . 567,000 t. i' Sens Road (26th Street) from Spencer Hwy. To Avenue D $ 1,010,000 5 lane concrete roadway with curb and gutter Length of roadway: 2,000 linear feet Lime stabilization: 13,350 sq. yds. Concrete paving: 10" thick; 13,350 sq. yds. Storm sewer: 1,000 linear feet Curb and gutter: 4,000 linear feet Broadway Street from McCabe Road to Main Street $ 1,960,250 4 lane concrete roadway with curb and gutter and center median Length of roadway: 8,000 linear feet Lime stabilization: 42,700 sq. yds. Concrete paving: 10" thick; 42, 700 sq. yds. Storm sewer: 4,000 linear feet Curb and gutter: 32,000 linear feet Note: the cost estimate for Broadway only reflects contributions from the TIRZ. Other agencies are anticipated to participate in this project. Fairmont Parkway Overpass $ 4,250,000 Construction of a grade separation ( overpass) of Fairmont Parkway over Union Pacific Railroad right-of-way. Project contributions from other agencies are anticipated. Sylvan Beach Shoreline Protection $1,750,000 Sylvan Beach Park has approximately 2,500 linear feet of shoreline. Much of this shoreline is either unprotected or has an aged and failing bulkhead. This project would provide new shoreline protection. Sylvan Beach Park Entrance Improvements $ 500,000 Improvements to roadway entrance to Sylvan Beach Park, landscaping, marquee and signage, etc. Sylvan Beach Park Facility Improvements $ 750,000 Various improvements to Sylvan Beach Park. Proposed projects include parking lot improvements, traffic circulation improvements, pedestrian walkways, marina, boat launch improvements, gazebos, etc. Buffer Walls $1,695,000 Buffer walls along SH146, Weems Boulevard and Mc Cabe Road to isolate anticipated residential areas from these high traffic corridors. Sidewalks $ 975,000 Sidewalks for pedestrian movements are proposed along major roadways in residential and business/commercial areas. Drainage Projects $ 4,095,000 Extension of Harris County Flood Control District facilities and acquisition/construction of detention basin(s) necessary to provide efficient drainage and flood protection for increased stormwater runoff due to development within the TIRZ. Zone Administration (over 30 year life of Zone) Zone Creation Costs $ 324,000 $ 75.000 Total Without Bond Financing Bond Financing Costs (Contingent upon issuance of Bonds) Total With Bond Financing 337,000 653,000 1,417,000 583,000 167,000 250,000 565,000 3'25,000 1,365,000 108,000 25.000 $ 30,159,250 10,054,000 $ 16.285.512 5.429.000 $ 46,444,762 15,483,000 "}, THE STATE OF TEXAS ~ ~ COUNTY OF HARRIS ~ The Commissioners Court of Harris County, convened at a meeting of said Court at the Harris County Administration Building in the City of Houston, Texas, on the day of l.O..CL.2A...2.2000, with the following members present, to-wit: - Robert Eckels EI Franco Lee James Fonteno Steve Radack Jerry Eversole County Judge Commissioner, Precinct No.1 Commissioner, Precinct No.2 Commissioner, Precinct No.3 Commissioner, Precinct No.4 and the following members absent, to-wit: ~ quorum, when among other business, the following was transacted: , constituting a ORDER APPROVING TAX INCREMENT CONTRIBUTION TO REINVESTMENT ZONE NUMBER ONE, CITY OF LA PORTE, TEXAS Commissioner ~L introduced an order and made a motion that the same be adopted. Commissioner "'9--Al,t--a- D' 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: Vote of the court: AYES: 4 (Commissioners lee, Fonteno, Radack, and Eversole) NOES: 0 . ABSTENTIONS: 1 (Judge Eckels) ......-- ..... ~_...----:-.-~ 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: R Eel TAL S: On or about May 18,1999, the City of La Porte, Texas, pursuant to TEX. TAX CODE ANN. ~ 311.003(f), made a formal presentation to the Commissioners Court of Harris County concerning the proposed creation of a tax increment zone located in the City of La Porte, Texas; and On or aboutMay 24, 1999, the City Council of the City of La Porte, Texas, pursuant to chapter 311 of the Texas Tax Code, adopted Ordinance No. 99-2325 designating a certain area as Reinvestment Zone Number One, City of La Porte, Texas and describing the boundaries of said Zone; and Presented to Commissioners' Court OCT 2 4 2000 APPROVE Recorded Vol_Page_ f, j. On or about August 9, 1999, the City Council of the City of La Porte, Texas, pursuant to chapter 311 of the Texas Tax Code, adopted Ordinance No. 99-2350 enlarging the boundaries of Reinvestment Zone Number One, City of La Porte, Texas; and On or about August 9, 1999, the City Council of the City of La Porte, Texas adopted Ordinance No. 99-2352 approving a project plan and reinvestment zone financing plan for Reinvestment Zone Number One, City of La Porte, Texas; and The Commissioners Court of Harris County, pursuant to TEX. TAX CODE ANN.' 9 311.013, makes the determination on behalf of Harris County only and not on behalf of any other political subdivision within Harris County, to pay to the Tax Increment Fund, to the extent authorized by law, seventy-five percent (75%) of the tax increment attributed to the taxes collected by Harris County on the Captured Appraised Value in Reinvestment Zone Number One, City of La Porte, Texas, for the tax years commencing on January 1,2001 and terminating on December 31,2029; and The Commissioners Court of Har:ris County desires to approve the County's entering into an interlocal agreement with the City of La Porte, Texas and Reinvestment Zone Number One, City of La Porte, Texas based on the aforesaid representations. 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: The Interlocal Agreement is approved and the County Judge of Harris County or his designee is authorized to execute the Interlocal Agreement with the City of La Porte, Texas and Reinvestment Zone Number One, City of La Porte, Texas for the thirty-year period commencing on January 1, 2001 and terminating on December 31, 2029. The Agreement is attached hereto and made a part hereof for all purposes. Section 3: The Clerk of Commissioners Court shall transmit a copy of this Order to the Harris County Appraisal District, the Assessor and Collector of Taxes for Harris County, the Mayor and City Council of the City of La Porte, Texas and the Board of Directors of Reinvestment Zone Number One, City of La Porte, Texas. 2 .~t j.... ITEM 5 . 'f. ji APPLICATION TO THE MAYOR AND CITY COUNCIL OF THE CITY OF LA PORTE, TEXAS, FOR CREATION OF THE LA PORTE REDEVELOPMENT AUTHORITY, AND APPROVAL OF ARTICLES OF INCORPORATION AND BYLAWS THEREOF Section 7 of Chapter 1241, Acts of the 71 st Legislature of Texas, Regular Session, 1989 (now codified as Subchapter D of Chapter 431, Texas Transportation Code), authorizes the creation and organization of public non-profit local government corporations to act as a duly constituted authority of a city to aid and assist the city in the performance of one or more governmental or proprietary functions. A local government corporation is created pursuant to the provisions of Chapter 394, Vernon's Texas Codes Annotated, Local Government Code (the "Local Government Code"). A local government corporation may have and exercise all of the powers prescribed by Article 1396, Vernon's Texas Civil Statutes and Chapter 431, Texas Transportation Code. A local government corporation's articles of incorporation and bylaws shall be in the form and be executed, approved, and filed in the manner prescribed by Chapter 394, Local Government Code. Chapter 394 of the Local Government Code requires as a condition to the creation of a local government corporation that at lease three (3) residents of the city who are citizens of the state and at least eighteen (18) years of age, submit a written application for the incorporation of the local government corporation. NOW, THEREFORE, the undersigned petition and make application to the honorable Mayor and City Council of the City of La Porte, Texas, (the "City") and represent to the City as follows: 1. Pursuant to and in accordance with Chapter 394, Local Government Code, the undersigned individuals, each of whom is a citizen of the State of Texas, a resident of the City and over the age of eighteen (18) years, make application to and request the Honorable Mayor and City Council of the City, to approve and authorize the creation of a public non-profit local government corporation to be designated and known as the La Porte Redevelopment Authority (the ~'Corporation"). The corporation shall have and exercise all of the powers prescribed by Article 1396, Vernon's Texas Civil Statutes and Chapter 431, Texas Transportation Code. 2. The undersigned further request the City Council of the City to approve the incorporation of the Corporation with Articles of Incorporation and Bylaws in substantially the form attached hereto as Exhibits "A" and "B" respectively. 3. The undersigned further represent that duly executed original counterparts of this application have been presented to and filed with the City Council of the City in proper and due time, form, and manner, that this Application . I .I: constitutes a proper and sufficient application to the City Council of the City for approval and authorization of the creation of a public non-profit local government corporation as required by Chapter 394, Local Government Code, and that the City Council of the City may properly consider and act upon this Application. WHEREFORE, the undersigned respectfully request the Honorable Mayor and City Council of the City to approve this Application in all respects and to grant the relief requested and to take such further and additional actions and proceedings as may be deemed necessary and proper in connection therewith. Submitted this _ day of ,2000. Name #1 Name #2 Name #3 THE STATE OF TEXAS COUNTY OF HARRIS BEFORE ME, the undersigned authority, on this day personally appeared , known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that she executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the_ day of ,2000. Notary Public in and for The State of Texas (SEAL) 2 'l j'.... THE STATE OF TEXAS COUNTY OF HARRIS BEFORE ME, the undersigned authority, on this day personally appeared , known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the_ day of ,2000. Notary Public in and for The State of Texas (SEAL) THE STATE OF TEXAS COUNTY OF HARRIS BEFORE ME, the undersigned authority, on this day personally appeared . known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _ day of ,2000. Notary Public in and for The State of Texas (SEAL) 3 . .~ I'" EXHIBIT A ARTICLES OF INCORPORATION OF THE LA PORTE REDEVELOPMENT AUTHORITY We, the undersigned natural persons, each of whom is at least eighteen (18) years of age or more, and a resident and a qualified voter of the City of La Porte, Texas (the "City") and a citizen of the State of Texas, acting as incorporators of a corporation under the provisions of Subchapter D of Chapter 431, Texas Transportation Code (the "Act"), and Chapter 394, Vernon's Texas Codes Annotated, Texas Local Government Code (the "Local Government Code"), do hereby adopt the following Articles of Incorporation for such corporation: ARTICLE I The name of the corporation is LA PORTE REDEVELOPMENT AUTHORlTY (the " Authority"). ARTICLE II The Authority is a public non-profit corporation. ARTICLE III The period of duration of the Authority shall be perpetual. ARTICLE IV The Authority is organized for the purpose of aiding, assisting, and acting on behalf of the City in the performance of its governmental functions to promote the common good and general welfare of the area included in Reinvestment Zone Number One, City of La Porte, Texas (the "La Porte Reinvestment Zone") and neighboring areas, as more particularly described in City Ordinance No. 99-2..3.25 and Ordinance No. 99-215Q, and as the boundaries may be amended from time to time (the " Area"); to promote, develop, encourage and maintain housing, educational facilities, employment, commerce and economic development in the City. The Authority is further organized to aid, assist and act on behalf of the City and the Board of Directors of the La Porte Reinvestment Zone: (a) in the implementation of the Project Plan and a Financing Plan for the La Porte Reinvestment Zone and the preparation and implementation of amendments thereto; (b) in the development of a policy to finance development and redevelopment of residential, 1 .* i''" educational facilities, commercial, and park/open space properties in the La Porte area; and (c) in the development and implementation of a redevelopment policy for the La Porte area, including the acquisition of land for redevelopment purposes. The Authority is formed pursuant to the provisions of the Act as it now or may hereafter be amended, and Chapter 394, Texas Local Government Code, which authorizes the Authority to assist and act on behalf of the City and to engage in activities in the furtherance of the purposes for its creation, provided that the Authority shall not be authorized to make or acquire home mortgages, or to make loans to lending institutions, the proceeds of which are to be used to make home mortgages or to make loans on residential developments. The Authority shall have and exercise all of the rights, powers, privileges, authority, and functions given by the general laws of Texas to non-profit corporations incorporated under the Act including, without limitation, Article 1396, Vernon's Texas Civil Statutes. The Authority shall have all other powers of a like or different nature not prohibited by law which are available to non-profit corporations in Texas and which are necessary or useful to enable the Authority to perform the purposes for which it is created, including the power to issue bonds, notes or other obligations, and otherwise exercise its borrowing power to accomplish the purposes for which it was created, provided that the Authority shall not issue bonds without the consent of the City Council of the City. The Authority is created as a local government corporation pursuant to the Act and shall be a governmental unit within the meaning of Subdivision (2), Section 101.001, Texas Civil Practice and Remedies Code. The operations of the Authority are governmental and not proprietary functions for purposes of the Texas Tort Claims Act, Section 101.001 et seq ., Texas Civil Practice and Remedies Code. The Authority shall have the power to acquire land in accordance with the Act as amended from time to time. ARTICLE V The Authority shall have no members and shall have no stock. ARTICLE VI All powers of the Authority shall be vested in a Board composed of the same persons as those appointed to the Board of Directors of the La Porte Reinvestment Zone. An appointment of a director to the La Porte Reinvestment Zone shall constitute an appointment to serve as Director of the Authority. The Authority in accordance with the provisions of the Bylaws may add additional persons to the Board. The Board shall initially consist of nine (9) directors, and the initial directors of the Authority ("Director" or "Directors") shall be those persons named in Article Vill. Each initial Director named in Article Vill hereof shall serve for the term prescribed in the Bylaws. Subsequent Directors shall be appointed by position to the Board as prescribed in the Bylaws. Except as provided in the Articles of Incorporation, each Director shall serve for the term provided in the Bylaws. Any Director may be removed from office at any time, with or without cause, by the 2 '~ ,: City Council. The initial Chairperson shall be Alton Porter, and the Mayor of the City shall designate each subsequent Chairperson of the Board. If cluy {)f The followine persons, is not sel v iLig as cl llllJulbel of tile Board, he 01 she or their clesle.neeJ sh~lI serve ~s an ex-officio, non-voting members ofthe Board. (1) City Manager; (2) Assistant City Manager (3) Director of Finance; and (4) City Attorney; In addition, the Board of Directors of the Authority may designate one or more representatives of the La Porte Independent School District, Harris County or other political subdivisions as ex officio, non-voting members of the Board of Directors. All other matters pertaining to the internal affairs of the Authority shall be governed by the Bylaws of the Authority, so long as such Bylaws are not inconsistent with these Articles of Incorporation, or the laws of the State of Texas. ARTICLE VII The street address of the initial registered office of the Authority is 604 W. Fairmont Parkway, La Porte, Texas, 77572, and the name of its initial registered agent at such address is John J oems. ARTICLE VIII The number of Directors initially constituting the Board is nine (9). The names, addresses, and positions of the nine (9) initial Directors, each of who resides within the City are as follows: N~me ~ncl Aclclress Peggy Antone P.O. Box 1115 La Porte, Texas 77572-1115 Position One Deotis Gay P.O. Box 1115 La Porte, Texas 77572-1115 Position Two 3 .:f ,.' Alton Porter, Chairman P.O. Box 1115 La Porte, Texas 77572-1115 Position Three Horace Leopard P.O. Box 1115 La Porte, Texas 77572-1115 Position Four Norman S. Cook P.O. Box 1115 La Porte, Texas 77572-1115 Position Five Lindsay R. Pfeiffer P.O. Box 1115 La Porte, Texas 77572-1115 Position Six David Webb P.O. Box 1115 La Porte, Texas 77572-1115 Position Seven Chester Pool P.O. Box 1115 La Porte, Texas 77572-1115 Position Eight John Black P.O. Box 1115 La Porte, Texas 77572-1115 Position Nine ARTICLE IX The names and street addresses of the incorporators, each of whom resides within the City are as follows: NHm~ Hnrl Arlclr~!';!'; Name Home Address La Porte, Texas 77571 Name Home Address La Porte, Texas 77571 Name Home Address La Porte, Texas 77571 4 l j" ARTICLE X Resolution No. approving the form of these Articles ofIncorporation has been adopted by the City Council of the City on ,2000. ARTICLE XI No Director shall be liable to the Authority for monetary damages for an act or omission in the Director's capacity as a Director, except for liability (i) for any breach of the Director's duty of loyalty to the Authority, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) for any transaction from which the Director received an improper benefit, whether or not the benefit resulted from an act taken within the scope of the Director's office, or (iv) for acts or omissions for which the liability of a Director is expressly provided by statute. Any repeal or amendment of this Article by the Directors shall be prospective only, and shall not adversely affect any limitation on the personal liability of a Director existing at the time of such repeal or amendment. In addition to the circumstances in which a Director is not personally liable as set forth in the preceding sentences, a Director shall not be liable to the fullest extent permitted by any amendment to the Texas statutes hereafter enacted that further limits the liability of a Director. ARTICLE XII In accordance with the provisions of Section 501(c)(3) of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), and regardless of any other provisions of these Articles of Incorporation or the laws of the State of Texas, the Authority: (a) shall not permit any part of the net earnings of the Authority to inure to the benefit of any private individual (except that reasonable compensation may be paid for personal services rendered to or for the Authority in effecting one or more of its purposes); (b) shall not devote more than an insubstantial part of its activities to attempting to influence legislation by plOpaganda lohhyine or otherwise; (c) shall not participate in, or intervene in (including the publication or distribution of statements), any political campaign on behalf of any candidate for public office; and (d) shall not attempt to influence the outcome of any election for public office or to carry on, directly or indirectly, any voter registration drives. Any income earned by the Authority after payment of reasonable expenses, debt and establishing a reserve shall accrue to the City. The City shall, at all times, have an unrestricted right to receive any income earned by the Authority, exclusive of amounts needed to cover reasonable expenditures and reasonable reserves for future activities. Unless otherwise directed by the City, any income of the Authority received by the City shall be deposited into the Reinvestment Zone Number Twenty, City of La Porte, Texas, Tax Increment Fund, or its successor. No part of the Authority's income shall inure to the benefit of any private interests. If the Board of Directors determines by resolution that the purposes for which the Authority was formed have been substantially met and all bonds issued by and all obligations incurred by the Authority have been fully paid, the Board shall execute a certificate of dissolution which states those facts and declares the Authority dissolved in accordance with the requirements of Sec- tion 394.026 of Vernon's Texas Codes Annotated, Local Government Code, or with applicable law 5 . I j: then in existence. In the event of dissolution or liquidation of the Authority, all assets will be turned over to the Finance and Administration Department of the City, or its successor, for deposit into the Reinvestment Zone Number One, City of La Porte, Texas, Tax Increment Fund unless the City Council shall otherwise direct. Any capitalproject(s) of the Authority as well as all plans and specifications of any improvement to be made by the Authority shall be approved by the Director of the Department of Public Works and Planning of the City. ARTICLE XIll If the Authority is a private foundation within the meaning of Section 509(a) of the Code, the Authority: (a) shall distribute its income for each taxable year at such time and in such manner as not to become subject to the tax on undistributed income imposed by Section 4942 of the Code; (b) shall not engage in any act of self-dealing as defined in Section 4941 (d) of the Code; (c) shall not retain any excess business holdings as defined in Section 4943(c) of the Code; (d) shall not make any investments in such manner as to subject it to tax under Section 4944 of the Code; and (e) shall not make any taxable expenditures as defmed in Section 4945(d) of the Code. ARTICLE XIV The City Council may at any time consider and approve an ordinance directing the Board to proceed with the dissolution of the Authority, at which time the Board shall proceed with the dissolution of the Authority in accordance with applicable state law. The failure of the Board to proceed with the dissolution of the Authority in accordance with this Section shall be deemed a cause for the removal from office of any or all of the Directors as permitted by Article VI of these Articles of Incorporation. ARTICLE XV These Articles may not be changed or amended unless approved by the City Council of the City. IN WIlNESS WHEREOF, we have hereunto set our hands this _ day of ,2000. , Incorporator , Incorporator , Incorporator 6 . '~ ," THE STATE OF TEXAS COUNTY OF HARRIS BEFORE ME, the undersigned authority, on this day personally appeared , known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that she executed the same for the purposes and consideration therein expressed. ' GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of ,2000. Notary Public in and for The State of Texas (SEAL) THE STATE OF TEXAS . , COUNTY OF HARRIS BEFORE ME, the undersigned authority, on this day personally appeared known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of , 2000. Notary Public in and for The State of Texas (SEAL) THE STATE OF TEXAS COUNTY OF HARRIS BEFORE ME, the undersigned authority, on this day personally appeared known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _ day of , 2000. (SEAL) Notary Public in and for The State of Texas 7 "1 $" Exhibit B BYLAWS OF THE LA PORTE REDEVELOPMENT AUTHORITY A Texas Local Government Corporation (Created on behalf of the City of La Porte) Date of Adoption: ,2000 '"1 J'. TABLE OF CONTENTS ARTICLE I PU RPOSES....................................................................................................................................... 1 ARTICLE II BOARD OF DIRECTORS ................................................................................................................2 Section 1. Appointment, Classes, Powers, Number, and Term of Office ................................... 2 Section 2. Meetings of Directors .................................................................................................. 3 Section 3. Annual Meetings......................... ........................... ................ ........... ................ ........... 3 Section 4. Regular Meetings .................................................................. ...................................... 3 Section 5. Special and Emergency Meetings .............................................................................. 3 Section 6. Quorum.... ..................................... ... .... .... .... .......... ...... ..... ...... .......... .......... ........ ......... 4 Section 7. Conduct of Business ...................................................................................................4 Section 8. Executive Committee, Other Committees .................................................................. 4 Section 9. Compensation of Directors ......................................................................................... 5 Section 10. Director's Reliance on Consultant Information ...........................................................5 ARTICLE III OFFiCERS...................................................................................................................................... 5 Section 1. Titles and Term of Office............................................................................................. 5 Section 2. Powers and Duties of the Chairperson....................................................................... 5 Section 3. Powers and Duties of the Vice Chairperson............................................................... 6 Section 4. Powers and Duties of the President ...........................................................................6 Section 5. Vice Presidents ........................... ..................... ...................... ........ ........ ...................... 6 Section 6. Treasurer..................................................................................................................... 6 Section 7. Secretary.................................... ................................................................................. 6 Section 8. Compensation ............................................................................................................. 7 Section 9. Officer's Reliance on Consultant Information ............................................................. 7 ARTICLE IV MISCELLANEOUS PROVISIONS ................................................................................................. 7 Section 1. Fiscal Year and Audits ................................................................................................ 7 Section 2. Seal....... .......................................... ............................................................................. 8 Section 3. Notice and Waiver of Notice ....................................................................................... 8 Section 4. Resignations................................................................................................................ 8 Section 5. Gender......... .......... ...................... ................................................................................ 8 Section 6. Appropriations and Grants .......................................................................................... 8 ARTICLE V INDEMNIFICATION OF DIRECTORS AND OFFICERS ............................................................... 8 Section 1. Right to Indemnification.............................................................. ......... .......... ....... ....... 8 Section 2. Advance Payment ................................. ......................... ................... ................ ........... 9 Section 3. Indemnification of Employees and Agents ................................................................. 9 Section 4. Appearance as a Witness...........................................................................................9 Section 5. Non-e~clusivity of Rights..................................... .................. .................................... 10 Section 6. Insurance........ ............. .............................................................................................. 10 Section 7. Notification................................................ ................................................................. 10 Section 8. . Savings Clause ........................................................ ..... ............................................ 10 ARTICLE VI PROVISIONS RELATING TO MINORITY CONTRACTING....................................................... 10 ARTICLE VII CODE OF ETHICS ...................................................................................................................... 11 Section 1. Policy and Purposes.................................................................................... 11 Section 2. Conflicts of Interest...................................................................................... 11 Section 3. Acceptance of Gifts ..................................................................................... 12 Section 4. Bribery...... .............................................................................................. ...... 12 Section 5. Nepotism.................. ................... ........... ..... .... .............. ......... ........... ........... 13 ARTICLE VIII AMENDMENTS ... ..... .................... ................ ....................... ...................................... ..... ... ......... 13 . t I:' ARTICLE I PURPOSES The La Porte Redevelopment Authority (the "Authority") is organized for the purpose of aiding, assisting, and acting on behalf of the City of La Porte, Texas (the "City") in the performance of its governmental functions to promote the common good and general welfare of the area included in Reinvestment Zone Number One, City of La Porte, Texas (the "La Porte Reinvestment Zone") and neighboring areas in La Porte (the" La Porte Area"); to promote, develop, encourage and maintain housing, educational facilities, employment, commerce and economic development in the City. The Authority is further organized to aid, assist and act on behalf of the City and the Board of Directors of the La Porte Reinvestment Zone: (a) in the implementation of the Project Plan and a Financing Plan for the La Porte Reinvestment Zone and the preparation and implementation of amendments thereto; (b) in the development of a policy to finance development and redevelopment of residential, public and commercial properties in the La Porte Area; and (c) in the development and implementation of a redevelopment policy for the La Porte Area, including the acquisition of land for redevelopment purposes. The Authority is formed pursuant to the provisions of the Act as it now or may hereafter be amended, and Chapter 394, Local Government Code, which authorizes the Authority to assist and act on behalf of the City and to engage in activities in the further- ance of the purposes for its creation, provided that the Authority shall not be authorized to make or acquire home mortgages, or to make loans to lending institutions, the proceeds of which are to be used to make home mortgages or to make loans on residential developments. The Authority shall have and exercise all of the rights, powers, privileges, authority, and functions given by the general laws of Texas to non-profit corporations incorporated under the Act including, without limitation, Article 1396, Vernon's Texas Civil Statutes. The Authority shall have all other powers of a like or different nature not prohibited by law which are available to non-profit corporations in Texas and which are necessary or useful to enable the Authority to perform the purposes for which it is created, including the power to issue bonds, notes or other obligations, and otherwise exercise its borrowing power to accomplish the purposes for which it was created, provided that the Authority shall not issue bonds without the consent of the City Council of the City. The Authority is created as a local government corporation pursuant to the Act and 1 'l .I,' shall be a governmental unit within the meaning of Subdivision (2), Section 101.001, Texas Civil Practice and Remedies Code. The operations of the Authority are governmental and not proprietary functions for purposes of the Texas Tort Claims Act, Section 101.001 et seq., Texas Civil Practice and Remedies Code. The Authority shall have the power to acquire land in accordance with the Act as amended from time to time. ARTICLE II BOARD OF DIRECTORS Section 1. Appointment, Classes, Powers, Number, and Term of Office. All powers of the Authority shall be vested in the Board of Directors (the "Board"). The Board shall initially consist of nine (9) persons. The Directors of the Board shall be increased to the number of directors on the board of the La Porte Reinvestment Zone in the event such board is increased to more than nine (9) directors. Directors of the Authority shall be appointed by position to the Board by the Mayor of the City with the consent and approval of City Council and shatl be the same persons appointed to the corresponding position of the board of the La Porte Reinvestment Zone. Appointment of a person to the corresponding position of the board of the La Porte Reinvestment Zone shall constitute appointment of such person to the corresponding position of the Board by the City. Each taxing unit that appoints a directors to the La Porte Reinvestment Zone shall be assigned a position number on the Board corresponding to the position number of that taxing unit appointee on the board of the La Porte Reinvestment Zone. Appointment of a person to the corresponding position of the board of the La Porte Reinvestment Zone by any taxing unit shall constitute nomination of such person to the corresponding position of the Board by such taxing unit. The Mayor of the City shall always appoint the Chairman of the Board. Each Director shall serve for a term which expires on the date set forth below for the position to which such person was appointed, or until his or her successor is appointed by the City unless such Director has been appointed to fill an unexpired term in which case the term of the Director shall expire on the expiration date of the term of the Director whose position he or she was appointed to fill. Any Director may be removed from office at any time, with or without cause, by the City Council. The number of Direc- tors may only be increased or decreased by an amendment to the Bylaws with the consent of the City Council of the City. The term of each position shall be coterminous with the term of the corresponding position on the board of the La Porte Reinvestment Zone as established by City Ordinance 99-2..32.5 as may be amended from time to time. If any of The following persons, is not serving as e member of the Doem, he or she or their designee, shall serve as an ex-officio, non-voting members of the Board. (1) City Manager; 2 ~- I' (2) Assistant City Manager (3) Director of Finance; and (4) City Attorney; Any person designated as an ex-officio member of the Board is entitled to notice of and to attend meetings of the Board. In addition, the Board of Directors of the Authority may designate one or more representatives of the La Porte Independent School District, Harris County or other political subdivisions as ex officio, non-voting members of the Board of Directors. Section 2. Meetings of Directors. The Directors may hold their meetings and may have an office and keep the books of the Authority at such place or places within the City as the Board may from time to time determine; provided, however, in the absence of any such determination, such place shall be the registered office of the Authority in the State of Texas. The Board shall meet in accordance with and file notice of each meeting of the Board for the same length of time and in the same manner and location as is required of a City under Chapter 551, Government Code (the "Open Meetings Act"). The Authority, the Board, and any committee of the Board exercising the powers of the Board are subject to Chapter 552, Government Code (the "Open Records Act"). Section 3. Annual Meetings. The annual meeting of the Board shall be held at the time and at the location in the City designated by the resolution of the Board for the purposes of transacting such business as may be brought before the meeting. Section 4. Regular Meetings. Regular meetings of the Board shall be held at such times and places in the City as shall be designated, from'time to time, by resolution of the Board. Section 5. Special and Emergency Meetings. Special and emergency meetings of the Board shall be held whenever called by the Chairperson of the Board or the Secretary or by a majority of the Directors who are serving duly appointed terms of office at the time the meeting is called. The Secretary shall give notice of each special meeting in person, by telephone, fax, mail or telegraph at least three (3) days before the meeting to each Director and to the public in compliance with the Open Meetings Act. Notice of each emergency meeting shall also be given in the manner required of the City under Section 551.045 of the Open 3 :I.. ,/; Meetings Act. Unless otherwise indicated in the notice thereof, any and all matters pertaining to the purposes of the Authority may be considered and acted upon at a special or emergency meeting. At any meeting at which every Director shall be present, even though without any notice, any matter pertaining to the purposes of the Authority may be considered and acted upon to the extent allowed by the Open Meetings Act. Section 6. Quorum. A majority of the appointed position of the Board shall constitute a quorum for the consideration of matters pertaining to the purposes of the Authority. If at any meeting of the Board there is less than a quorum present, a majority of those present may adjourn the meeting from time to time. The act of a majority of the Directors present and voting at a meeting at which a quorum is in attendance shall constitute the act of the Board, unless the act of a greater number is required by law, by the Articles of Incorporation, or by these Bylaws. A Director who is present at a meeting of the Board at which any corporate action is taken shall be presumed to have assented to such action unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the Authority immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of the action. Section 7. Conduct of Business. At the meetings of the Board, matters pertaining to the purposes of the Authority shall be considered in such order as from time to time the Board may determine. At all meetings of the Board, the Chairperson shall preside, and in the absence of the Chairperson, the Vice Chairperson shall preside. In the absence of the Chairperson and the Vice Chairperson, the Board from among the Directors present shall choose a chairperson. The Secretary of the Authority shall act as secretary of all meetings of the Board, but in the absence of the Secretary, the presiding officer may appoint any person to act as secretary of the meeting. Section 8. Executive Committee, Other Committees. The Board may, by resolution passed by a majority of the Directors, designate three (3) or more Directors to constitute an executive committee or other type of committee. To the extent provided in the authorizing resolution, a committee shall have and may exercise all of the authority of the Board in the management of the Authority, except where action of the Board is specified by statute. A committee shall act in the manner provided in the authorizing resolution. Each committee so designated shall keep regular minutes of the transactions of its meetings and shall cause such minutes to be recorded in books kept for that purpose in the office of the Authority, and shall report the same to the Board from time to time. Committees authorized to exercise the powers of the Board shall. give notice of any 4 . t ," meeting in the manner required for a meeting of the Board. Section 9. Compensation of Directors. Directors, as such, shall not receive any salary or compensation for their services as Directors; provided, that nothing contained herein shall be construed to preclude any Director from receiving compensation which is not excessive and which is at commercially reasonable rates for personal services (rendered in other than a "Director" capacity) which are reasonable and necessary in carrying out the Authority's purposes. Section 1 O. Directors Reliance on Consultant Information. A Director shall not be liable if while acting in good faith and with ordinary care, he relies on information, opinions, reports, or statements, including financial statements and other financial data, concerning the Authority or another person, that were prepared or presented by: (a) one or more other officers or employees of the Authority; (b) legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence; or (c) a committee of the Board of which the Director is not a member. ARTICLE III OFFICERS Section 1. Titles and Term of Office. The officers of the Authority shall be a chairperson of the Board, one or more vice chairpersons of the Board, a president, one or more vice presidents, a secretary, a treasurer, and such other officers as the Board may from time to time elect or appoint. One person may hold more than one office, except that neither the Chairperson of the Board nor the President shall hold the office of Secretary. The term of office for each officer (other than the Chairperson) shall be two (2) years commencing with the date of the annual meeting of the Board at which each such officer is elected. The Chairperson shall serve for the term designated by the Mayor of the City. All officers (other than the Chairperson and the President) shall be subject to removal, with or without cause, at any time by a vote of a majority of the whole Board. A vacancy in the office of any officer (other than the Chairperson and the President) shall be filled by the Board. Section 2. Powers and Duties of the Chairperson. The Chairperson shall be a member of the Board and shall preside at all meetings of the Board. The Mayor of the 5 1. I- City shall designate the Chairperson. He or she shall have such duties as are assigned by the Board. The Chairperson may call special or emergency meetings of the Board. The Chairperson shall also serve as the President Section 3. Powers and Duties of the Vice Chairperson. The Vice Chairperson shall be a member of the Board. The Vice Chairperson shall perform the duties and exercise the powers of the Chairperson upon the Chairperson's death, absence, disability, or resignation, or upon the Chairperson's inability to perform the duties of his or her office. Any action taken by the Vice Chairperson in the performance of the duties of the Chairperson shall be conclusive evidence of the absence or inability to act of the Chairperson at the time such action was taken. The Vice Chairperson shall also serve as a Vice President Section 4. Powers and Duties of the President. The President shall be the principal executive officer of the Authority and, subject to the Board, he or she shall be in general charge of the properties and affairs of the Authority. In furtherance of the purposes of the Authority and subject to the limitations contained in the Articles of Incorporation, the President, Chairperson, or Vice Chairperson may sign and execute all bonds, notes, deeds, conveyances, franchises, assignments, mortgages, notes, contracts and other obligations in the name of the Authority. Section 5. Vice President. A Vice President shall have such powers and duties as may be assigned to him or her by the Board or the President, including the performance of the duties of the President upon the death, absence, disability, or resignation of the President, or upon the President's inability to perform the duties of his or her office. Any action taken by the Vice President in the performance of the duties of the President shall be conclusive evidence of the absence or inability to act of the President at the time such action was taken. Section 6. Treasurer. The Treasurer shall have custody of all the funds and securities of the Authority, which come into his or her hands. When necessary or proper, he or she may endorse, on behalf of the Authority, for collection, checks, notes and other obligations and shall deposit the same to the credit of the Authority in such bank or banks or depositories as shall be designated in the manner prescribed by the Board; he or she may sign all receipts and vouchers for payments made to the Authority, either alone or jointly with such other officer as is designated by the Board; whenever required by the Board, he or she shall render a statement of his or her case account; he or she shall enter or cause to be entered regularly in the books of the Authority to be kept by him or her for that purpose full and accurate accounts of all moneys received and paid out on account of the Authority; he or she shall perform all acts incident to the position of Treasurer subject to the control of the Board; and he or she shall, if required by the Board, give such bond for the faithful discharge of his or her duties in such form as the Board may require. The Treasurer shall also act as Secretary Section 7. Secretary. The Secretary shall keep the minutes of all meetings of 6 x j' the Board in books provided for that purpose; he or she shall attend to the giving and serving of all notices; in furtherance of the purposes of the Authority and subject to the limitations contained in the Articles of Incorporation, he or she may sign with the President in the name of the Authority and/or attest the signatures thereof, all contracts, conveyances, franchises, bonds, deeds, assignments, mortgages, notes and other instruments of the Authority; he or she shall have charge of the Authority's books, records, documents and instruments, except the books of account and financial records and securities of which the Treasurer shall have custody and charge, and such other books and papers as the Board may direct, all of which shall at all reasonable times be open to the inspection of any Director upon application at the office of the Authority during business hours; and, he or she shall in general perform all duties incident to the office of Secretary subject to the control of the Board. Section 8. Compensation. Officers may be entitled to receive such salary or compensation for personal services, which are necessary, and reasonable in carrying out the Authority's purposes as the Board may from time to time determine, provided, that in no event shall the salary or compensation be excessive. Board members, even in their capacity as officers, are not entitled to compensation except as otherwise provided in Article II, Section 9. Section 9. Officer's Reliance on Consultant Information. In the discharge of a duty imposed or power conferred on an officer of the Authority, the officer may in good faith and with ordinary care rely on information, opinions, reports, or statements, including financial statements and other financial data, concerning the Authority or another person, that were prepared or presented by: (a) one or more other officers or employees of the Authority, including members of the Board; or (b) legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence. ARTICLE IV MISCELLANEOUS PROVISIONS Section 1. Fiscal Year And Audit. The fiscal year of the Authority shall begin October 1 of each year. At the end of each fiscal year (beginning with the fiscal year or fraction thereof during which this Agreement is executed), the Authority will have at its own expense an audit prepared by an independent Certified Public Accountant for that fiscal year that shall be submitted to the Authority, the Zone and the City within one hundred twenty (120) days after the end of the fiscal year The Authority shall furnish copies of the audit without cost 7 ..it. I' to the City and the Zone Board Section 2. Seal. The seal of the Authority shall be the Board may approve such as from time to time. Section 3. Notice and Waiver of Notice. Whenever any notice other than public notice of a meeting given to comply with the Open Meetings Act, is required to be given under the provisions of these Bylaws, such notice shall be deemed to be sufficient if given by depositing the same in a post office box in a sealed postpaid wrapper addressed to the person entitled thereto at his or her post office address, as it appears on the books of the Authority, and such notice shall be deemed to have been given on the day of such mailing. A waiver of notice, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Section 4. Resignations. Any Director or officer or Advisory Director may resign at any time. Such resignations shall be made in writing and shall take effect at the time specified therein, or, if no time be specified, at the time of its receipt by the President or Secretary. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. Section 5. Gender. References herein to the masculine gender shall also refer to the feminine in all appropriate cases and vice versa. Section 6. Appropriations and Grants. The Authority shall have the power to request and accept any appropriation, grant, contribution, donation, or other form of aid from the federal government, the State, any political subdivision, or municipality in the State, or from any other source. ARTICLE V INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 1. Right to Indemnification. Subject to the limitations and conditions as provided in this Article V and the Articles of Incorporation, each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative (hereinafter a "proceeding"), or any appeal in such a proceeding or any inquiry or investigation that could lead to such a proceeding, by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a Director or officer of the Authority or while a Director or officer of the Authority is or was serving at the request of the Authority as a director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise shall be indemnified by the Authority to the fullest extent permitted by the 8 . f.. J' Texas Non-Profit Corporation Act, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Authority to provide broader indemnification rights than said law permitted the Authority to provide prior to such amendment) against judgments, penalties (including excise and similar taxes and punitive damages), fines, settlements and reasonable expenses (including, without limitation, attorneys' fees) actually incurred by such person in connection with such proceeding, and indemnification under this Article V shall continue as to a person who has ceased to serve in the capacity which initially entitled such person to indemnity hereunder. The rights granted pursuant to this Article V shall be deemed contract rights, and no amendment, modification or repeal of this Article V shall have the effect of limiting or denying any such rights with respect to actions taken or proceedings arising prior to any such amendment, modification or repeal. It is expressly acknowledged that the indemnification provided in this Article V could involve indemnification for negligence or under theories of strict liability. Section 2. Advance Payment. The right to indemnification conferred in this Article V shall include the right to' be paid in advance or reimbursed by the Authority the reasonable expenses incurred by a person of the type entitled to be indemnified under Section 1 who was, is or is threatened to be made a named defendant or respondent in a proceeding in advance of the final disposition of the proceeding and without any determination as to the person's ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred by any such person in advance of the final disposition of a proceeding, shall be made only upon delivery to the Authority of a written affirmation by such Director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification under this Article V and a written undertaking, by or on behalf of such person, to repay all amounts so advanced if it shall ultimately be determined that such indemnified person is not entitled to be indemnified under this Article V or otherwise. Section 3. Indemnification of Employees and Agents. The Authority, by adoption of a resolution of the Board, may indemnify and advance expenses to an employee or agent of the Authority to the same extent and subject to the same conditions under which it may indemnify and advance expenses to Directors and officers under this Article V; and the Authority may indemnify and advance expenses to persons who are not or were not Directors, officers, employees or agents of the Authority but who are or were serving at the request of the Authority as a Director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, sole proprietorship, trust, employee benefit plan or other enterprise against any liability asserted against him or her and incurred by him or her in such a capacity or arising out of his or her status as such a person to the same extent that it may indemnify and advance expenses to Directors under this Article V. Section 4. Appearance as a Witness. Notwithstanding any other provision of this Article V, the Authority may s.b..a.LI payor reimburse expenses incurred by a Director or officer in connection with his or her appearance as a witness or other participation in a 9 " J'" proceeding involving the Authority or its business at a time when he or she is not a named defendant or respondent in the proceeding. Section 5. Non-exclusivity of Rights. The right to indemnification and the advancement and payment of expenses conferred in this Article V shall not be exclusive of any other right which a Director or officer or other person indemnified pursuant to Sec- tion 3 of this Article V may have or hereafter acquire under any law (common or statutory), provision of the Articles of Incorporation of the Authority or these Bylaws, agreement, vote of shareholders or disinterested Directors or otherwise. Section 6. Insurance. The Authority may purchase and maintain insurance, at its expense, to protect itself and any person who is or was serving as a Director, officer, employee or agent of the Authority or is or was serving at the request of the Authority as a Director, officer, partner, venturer, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership, joint venture, proprietorship, employee benefit plan, trust or other enterprise against any expense, liability or loss, whether or not the Authority would have the power to indemnify such person against such expense, liability or loss under this Article V. Section 7. Notification. Any indemnification of or advance of expenses to a Director or officer in accordance with this Article V shall be reported in writing to the members of the Board with or before the notice of the next regular meeting of the Board and, in any case, within the 12-month period immediately following the date of the indemnification or advance. Section 8. Savings Clause. If this Article V or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Authority shall nevertheless indemnify and hold harmless each Director, officer or any other person indemnified pursuant to this Article V as to costs, charges and expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, to the full extent permitted by any applicable portion of this Article V that shall not have been invalidated and to the fullest extent permitted by applicable law. ARTICLE VI PROVISIONS RELATING TO MINORITY CONTRACTING The Authority shall attempt to stimulate the growth of disadvantaged businesses inside the City by encouraging the full participation of disadvantaged businesses in all phases of its procurement activities and affording those disadvantaged businesses a full and fair opportunity to compete for Authority contracts. The Authority shall establish one or more programs designed to increase participation by disadvantaged businesses in contract awards, which will conform to City approved programs. Any program established 10 l J." by the Authority shall provide that disadvantaged businesses certified by the City shall be the disadvantaged businesses certified for Authority contracts. ARTICLE VII CODE OF ETHICS Section 1. Policy and Purposes. (a) It is the policy of the Authority that Directors and officers conduct themselves in a manner consistent with sound business and ethical practices; that the public interest always be considered in conducting corporate business; that the appearance of impropriety be avoided to ensure and maintain public confidence in the Authority; and that the Board establish policies to control and manage the affairs of the Authority fairly, impartially, and without discrimination. (b) This Code of Ethics' has been adopted as part of the Authority's Bylaws for the following purposes: (a) to encourage high ethical standards in official conduct by Directors and corporate officers; and (b) to establish guidelines for such ethical standards of cond uct. Section 2. Conflicts of Interest. (a) Except as provided in subsection (c), a Director or officer is prohibited from participating in a vote, decision, or award of a contract involving a business entity or real property in which the Director or the officer has a substantial interest, if it is foreseeable that the business entity or real property will be economically benefited by the action. A person has a substantial interest in a business (i) if his or her ownership interest is ten percent or more of the voting stock or shares of the business entity or ownership of $15,000 or more of the fair market value of the business entity, or (ii) if the business entity provides more than ten percent of the person's gross income. A person has a substantial interest in real property if the interest is an equitable or legal ownership with a fair market value of $2,500 or more. An interest of a person related in the second degree by affinity or the third degree by consanguinity to a Director or officer is considered a substantial interest. (b) If a Director or a person related to a Director in the first or second degree by affinity or the first, second, or third degree by consanguinity has a substantial interest in a business entity or real property that would be pecuniarily affected by any official action taken by the Board, such Director, before a vote or decision on the matter, shall file an affidavit stating the nature and extent of the interest. The affidavit shall be filed with the Secretary of the Board. (c) A Director who has. a substantial interest in a business entity that will receive a pecuniary benefit from an action of the Board may vote on that action if a 11 ? J. majority of the Board has a similar interest in the same action or if all other similar business entities in the Authority will receive a similar pecuniary benefit. (d) An employee of a public entity may serve on the Board. Section 3. Acceptance of Gifts. No Director or officer shall accept any benefit as consideration for any decision, opinion, recommendation, vote or other exercise of discretion in carrying out official acts for the Authority. No Director or officer shall solicit, accept, or agree to accept any benefit from a person known to be interested in or likely to become interested in any contract, purchase, payment, claim or transaction involving the exercise of the Director's or officer's discretion. As used here, "benefit" does not include: (a) a fee prescribed by law to be received by a Director or officer or any other benefit to which the Director or officer is lawfully entitled or for which he gives legitimate consideration in a capacity other than as a Director or officer; (b) a gift or other benefit conferred on account of kinship or a personal, profes- sional, or business relationship independent of the official status of the Director or officer; (c) an honorarium in consideration for legitimate services rendered above and beyond official duties and responsibilities if: (1) not more than one honorarium is received from the same person in a calendar year; (2) not more than one honorarium is received for the same ser- vice; and (3) the value of the honorarium does not exceed $250 exclusive of reimbursement for travel, food, and lodging expenses incurred by the Director or officer in performance of the services; (d) a benefit consisting of food, lodging, transportation, or entertainment accepted as a guest is reported as may be required by law. Section 4. Bribery. A Director or officer shall not intentionally or knowingly offer, confer or agree to confer on another, or solicit, accept, or agree to accept from another: (a) any benefit as consideration for the Director's or officer's decision, opinion, recommendation, vote, or other exercise of discretion as a Director or officer; (b) any benefit as consideration for the Director's or officer's decision, vote, recommendation, or other exercise of official discretion in a judicial or administrative proceeding; or 12 l~ I' (c) any benefit as consideration for a violation of a duty imposed by law on the Director or officer. Section 5. Nepotism. No Director or officer shall appoint, or vote for, or confirm the appointment to any office, position, clerkship, employment or duty, of any person related within the second degree by affinity (marriage relationship) or within the third degree of consanguinity (blood relationship) to the Director or officer so appointing, voting or confirming, or to any other Director or officer. This provision shall not prevent the ap- pointment, voting for, or confirmation of any person who shall have been continuously employed in any such office, position, clerkship, employment or duty at least thirty (30) days-1 year prior to the appointment of the Director or officer so appointing or voting. ARTICLE VIII AMENDMENTS A proposal to alter, amend, or repeal these Bylaws shall be made by the affirma- tive vote of a majority of the full Board at any annual or regular meeting, or at any special meeting if notice of the proposed amendment be contained in the notice of said special meeting. However, any proposed change or amendment to the Bylaws must be approved by the City Council of the City to be effective. 13