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2010R73-Cibolo Valley Local Government CorporationRESOLUTION N0.10-R-73 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING AND APPROVING THE CREATION OF A NONPROFIT CORPORATION TO ACT ON BEHALF OF THE CITY OF SCHERTZ, TEXAS; AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, Subchapter D of Chapter 431 (Sections 431.101-431.109) of the Texas Transportation Code, as amended {the "Act") authorizes local governments to create Local government corporations to aid, assist, and act on behalf of local governments; and WHEREAS, the City Council {the "City Council") of the City of Schertz, Texas (the "City") has reviewed and approved the Articles of Incorporation attached hereto as Exhibit A and the Bylaws attached hereto as Exhibit B and has determined to authorize and approve the creation of a local government corporation, a nonprofit entity, as its constituted authority and instrumentality to accomplish the specific public purpose of acquiring, constructing, leasing, improving, enlarging, extending, repairing, maintaining, and operating a water utility system (the "Project"), pursuant to the provisions of Chapter 552 of the Texas Local Government Code, as amended, and other applicable Law; and WHEREAS, the City Council hereby finds and determines that the adoption of this Resolution is in the best interests of the citizens of the City; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council has found and determined, and hereby finds and determines, that it is advisable that a nonprofit corporation be authorized and created, with such corporation to be known as the Cibolo Valley Local Government Corporation {the "Corporation"). Section 2. The City Council hereby approves the Articles of Incorporation and Bylaws proposed to be used in organizing the Corporation (copies of which are attached to this Resolution as Exhibit A and Exhibit B, respectively, and nnade a part hereof for alI purposes); hereby grants authority for the Incorporation of the Corporation; and hereby appoints as the City Councilmember to serve Ex Officio with the Corporation. Prior to the filing of the Articles of Incorporation with the Texas Secretary of State, the City Council shall by Resolution appoint the City's initial director on the Corporation's Board of Directors. The Articles of Incorporation and Bylaws shall be modified as required to reflect the participating cities in addition Schertz and all initial directors. Section 3. The public purposes of the City which the Corporation may further on behalf of the City are acquiring, constructing, leasing, improving, enlarging, extending, repairing, maintaining, and operating a water utility system, pursuant to the provisions of Texas law, including, but not limited to, Chapter 552 of the Texas Local Government Code, as amended, and other applicable law, and to take all lawful actions necessary or useful in furthering such public purposes. SU357758.1 - 1 - Section 4. The Corporation is hereby designated as a duly constituted authority and instrumentality of the City (within the meaning of those terms in the regulations of the Treasury and the rulings of the Internal Revenue Service prescribed and promulgated pursuant to section 103 of the Internal Revenue Code of 19$6, as amended) and shall be authorized to act on behalf of the City for the specific public purposes set forth in Section 3 hereof; but the Corporation is not intended to be and shall not be a political subdivision or a political corporation within the meaning of the Constitution and the general laws of the State of Texas {the "State"), including without limitation Article III, Section 52 of the State Constitution, and the City does not delegate to the Corporation any of its attributes of sovereignty, including the power to tax, the power of enninent domain, or the police power. Howevez, for the purposes of the Texas Tort Claims Act (Subchapter A, Chapter 101, Texas Civil Practice and Remedies Code, as amended, the Corporation is intended to be, and shall be, a governmental unit, and its actions are intended to be, and shall be, governmental functions. Section 5. The Corporation may, under the conditions set forth in the Act and in this Resolution, issue, or provide for the issuance of, bonds or notes on behalf of the City, acquire, lease, sell, or convey certain properties, and enter into purchase agreements, lease agreements, credit agreements, and all other agreements necessary or useful in connection with the Project. The City shall not lend its credit or grant any public money or thing of value in aid of the Corporation. Furthermore, bonds or notes issued by the Corporation shall be deemed not to constitute a debt of the State, the City, or of any other political corporation, subdivision, or agency of the State or a pledge of the faith and credit or taxing power of any of them, but such bonds or notes shall be payable solely from the revenues pledged to the payment of such bonds ar notes. In no event shall the Corporation be authorized to Levy ad valorem taxes to pay all or part of the principal of or interest on such bonds or notes. Section 6. Upon dissolution of the Corporation, the City {togethex with other cities participating in the control of the Corporation through director appointments) shall accept, each on an equal basis, title to or other interest in any real or personal property owned by the Corporation at such time. Section 7. This Resolution is adopted for the purpose of satisfying the conditions and requirements of the Act and of section 103 of the Internal Revenue Code of 1986, as amended, and the regulations prescribed thereunder from time to time and for the benefit of the Corporation, the City, the owners or holders from time to time of the bonds or notes of the Corporation, and all other interested persons. Section S. The City Council authorizes the Mayor, or his designee, in consultation with legal counsel and the City's financial advisors to take all actions necessary to call and conduct the organizational meeting of the Cozpo~ration and to file, at the expense of the Corporation, any and all documents with the offices of the Secretary of State, the Comptroller of Public Accounts, and the United States Department of Treasury, as appropriate, to effectuate the creation and organization of the Corporation. Section 9. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. 50357758.1 - 2. - Section 10. All ordinances and resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters ordained herein. Section 11. This Resolution shall be construed and enforced in accordance with the laws of the State and the United States of America. Section 12. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 13. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Section 1~}. This Resolution shall be in force and effect from and after its final passage and it is so resolved. (The remainder of this page intentionally left blank) 50357758.1 - 3 - PASSED AND APPROVED this the 23'~ day of November, 2010. CITY OF SCHF,KTZ, TEXAS Mayor ATTEST: City Secreta2~y (CITY SEAL) 50357758.1 - S-1 EXHIBIT A ARTICLES OF INCORPORATION OF THE CZBOLD VALLEY LOCAL GOVERNMENT CORPORATION 5035?758.] A-1 ARTICLES OF INCORPORATION OF THE CIBOLO VALLEY LOCAL GOVERNMENT CORPORATION We, the undersigned natural persons, each of whom is eighteen (1$) years of age or older, a resident of the City of Cibolo, Texas ("Cibolo"), the City of Converse, Texas {"Converse"), the City of Schertz, Texas ("Schertz"), the City of Seguin, Texas {"Seguin"), or the City of Selma, Texas ("Selma"), and a citizen of the State of Texas {the "State"}, acting as incorporators of a nonprofit corporation {the "Corporation") created in accordance with the provisions of the Texas Transportation Corporation Act, Chapter 431 of the Texas Transportation Code, as amended (the "Act"), and the Texas Housing Finance Corporations Act, Chapter 394 of the Texas Local Government Code, as amended ("Chapter 394"), hereby adopt the following Articles of lncorporation for such Corporation: ARTICLE I The name of the Corporation is the Cibolo Valley Local Government Corporation. ARTICLE II The Corporation is a public, nonprofit corporation. ARTICLE III Subject to the provisions of Article XV hereof, the period of its duration is perpetual. ARTICLE IV The purposes foe- which the Corporation is organized are as follows: (a) to aid, assist, and act on behalf of Cibolo, Converse, Schertz, Seguin, and Selma (collectively, the "Cities"} in acquiring, constructing, leasing, improving, enlarging, extending, repairing, maintaining, and operating a water utility system (the "Project") pursuant #o the provisions of Chapter 552 of the Texas Local Government Code, as amended ("Chapter 552"), and other applicable laws of the State; (b) to aid, assist, and act on behalf of the Cities in accomplishing a governmental purpose of the Cities in the provision of water for public use; (c) to engage in activities permitted under the laws of the State, including, but not limited to, Chapter 552 and to own and operate all property, real, personal, or mixed, and conduct such activities as are now or hereafter permitted under the laws of the Skate, including, but not limited to, Chapter 552, and as are convenient or necessary to the ownership, maintenance, and operation of the Project; (d) to receive, hold, administer, and disburse any money, securities, or other property which may be transferred to the Corporation by gift, devise, bequest, or otherwise, for any of the uses or purposes set forth above, and to invest, lend, conserve, use, and disburse such money, 55631848.7 securities, or other property, and the income derived therefrom, for the uses and purposes herein specified, in accordance with the judgment and discretion of the Board of Directors; (e) to purchase, exchange, contract for, lease, rent, and in any and all other ways acquire, take, own, improve, and hold, and to sell, convey, mortgage, lease, rent to others, or otherwise dispose of real estate, improvements in real estate, interests in real estate, and personal property of every kind, character, and description; (fl to borrow money or raise money and to issue notes, bills, bonds, and other obligations and to mortgage, pledge, hypothecate, or otherwise encumber any and all of the revenues and assets of the Corporation as security therefor for the purpose of carrying out the goals of the Corporation; and (g) to do any and all things necessary or convenient to the accomplishment of any of the purposes or for the exercise of any of the powers herein set forth, whether herein specified or not, either alone or in connection with other firms, individuals, or corporations, whether in the State or throughout the United States, and elsewhere. The Corporation shall have the purposes and powers permitted by the Act, but the Corporation does not have, and shall not exercise the powers of sovereignty of the Cities, including the power to tax, the power of eminent domain, and police power. However, for the purposes of the Texas Tort Claims Act (Subchapter A, Chapter 101, Texas Civil Practice and Remedies Code, as amended), the Corporation is a governmental unit and its actions are governmental functions. The Corporation is formed as a local government corporation pursuant to the provisions of Subchapter D of the Act. ARTICLE V (a) Before the consummation of the sale and delivery of any bonds or notes, the Corporation shall obtain approval by the governing body of each of the Cities (collectively, the "Governing Bodies") as evidenced by the adoption of written resolutions. {b) In the exercise of the powers of the Corporation, the Corporation may enter into loan, lease, trust, or other agreements as authorized by the Act that are necessary and appropriate to the fulfillment of the public pu-pose of the Corporation, all of which agreements, and the specific uses, and the method of withdrawals and expenditure of the proceeds of the bonds or notes, and must be included as a part of the approval process of the Governing Bodies rewired by paragraph {a) above. ARTICLE VI The Corporation shall have no members and shall be a nonstoclc corporation. 55631898.7 2 ARTICLE VII The Governing Bodies have, by resolutions adapted on February 22, 2011 (Cibolo), June 14, 2011 (Converse), March 15, 2011 (Schertz), December 21, 2010 (Seguin), and June 7, 2011 (Selma), authorized the creation of the Corporation and approved these Articles of Incorporation and the Corporation's Bylaws pursuant to Subchapter D of the Act. The Corporation shall have and exercise all of the rights, powers, privileges, authority, and functions given under the Act, Chapter 394, Chapter 552, and under the general laws of the State to nonprofit corporations incorporated under the Texas Nonprofit Corporation Law (now known as Chapter 22 of Title 1 of the Texas Business Organizations Code, as amended) which are consistent with the provisions of the Act with respect to the development and operation of the Project together with all powers incidental thereto or necessary therefor. The Corporation shall have all other powers of a like or different nature not prohibited by law which are available to nonprofit corporations in the Skate and which are necessary or useful for the development and operation of the Project. The Corporation is a constituted authority and a public instrumentality within the meaning of the regulations of the United States Treasury Department and the rulings of the Internal Revenue Service prescribed and promulgated pursuant to section 103 of the Internat Revenue Cade of 1986, as amended, and the Corporation is authorized to act on behalf of the Cities as provided in these Articles of Incorporation. However, the Corporation is not a political subdivision or political corporation of the State within the meaning of its constitution and laws, including, without limitation, Article III, Section 52 of the constitution, and no agreements, bonds, debts, or obligations of the Corporation are or shall ever be deemed to be the agreements, bonds, debts, or obligations, or the lending of credit, or a grant of public money or thing of value, of or by the Cities or any other political corporation, subdivision, or agency of the State, or a pledge of the faith and credit of any of them. However, for the purposes of the Texas Tort Claims Act (Subchapter A, Chapter 101, Texas Civil Practice and Remedies Code, as amended), the Corporation is a governmental unit and its actions are governmental functions. ARTICLE VIII These Articles of Incorporation may at any time and from time to time be amended as provided in the Act and Chapter 394 so as to make any changes therein and add any provisions thereto which might have been included in the Articles of Incorporation in the first instance. Any such amendment shall be effected in either of the following manners: (i) the members of the Board of Directors of the Corporation shall file with each of the Governing Bodies, a written application requesting permission to amend the Articles of Incorporation, specifying in such application the amendments proposed to be made, the Governing Bodies may consider such application and, if they shall each by appropriate resolution duly find and determine that it is advisable that the proposed amendments be made and shall approve the form of the proposed amendments, then the Boal-d of Directors of the Corporation may amend the Articles of Incorporation by adopting such amendments at a meeting of the Board of Directors and delivering the articles of amendment to the Secretary of Stake; or (ii) the Governing Bodies may collectively, at their sole discretion, and at any time, amend these Articles of Incorporation, and 55631698.7 change the structure, organization, programs, or activities of the Corporation, or terminate or dissolve the Corporation (subject to the provisions of the Act and any limitation provided by the Constitution and general laws of the State and the United States of America on the impairment of contracts entered into by the Corporation}, 6y written resolution adopting the amendment to the Articles of Incorporation of the Corporation or articles of dissolution at a meeting of each of the Governing Bodies and delivering articles of amendment or dissolution to the Secretary of State, as provided in the Act and Chapter 394. Restated articles of incorporation may be filed with the Secretary of State as provided in the Act and Chapter 394. ARTICLE IX The Corporation shall be subject to the Open Meetings Act, Chapter 551 of the Texas Government Code, as amended, and the Public Information Act, Chapter 552 of the Texas Government Code, as amended. ARTICLE X The street address of the initial registered office of the Corporation is 600 River Drive West, Seguin, TX 78155, and the name of its initial registered agent at such address is R. Alan Cockerell. ARTICLE XI The initial Bylaws of the Corporation shall be adopted by the Corporation's Board of Directors and shall, togethel• with these Articles of Incorporation, govern the initial affairs of the Corporation until and unless amended in accordance with the provisions of the Act and Chapter 394 and these Articles of Incorporation. The Bylaws and each amendment and repeal of the Bylaws must be approved by each ofthe Governing Bodies by resolution. ARTICLE XII The number of directors constituting the initial Board of Directors of the Corporation is five {S). One (1) director has initially been appointed by each of the Governing Bodies. The names and addresses of the persons who are to serve as the initial Board of Directors, each of whom is a resident of one of the Cities are as follows: Leslie Pedde 200 South Main Cibolo, Texas 78]08 Shawna Dowell 403 South Seguin Converse, Texas 78109 Justin Murc•ay 1400 Schertz Parkway Schertz, Texas 78154 Robert Crabb 205 North River Street Seguin, Texas 78156 55631898.7 4 William Weeper 9375 Corporate Drive Selma, Texas 78154-1250 ARTICLE XIII The name and street address of each incorporator, each of whom is a resident of one of the Cities are as follows: rennife~• Hartman 200 South Main Cibolo, Texas 78108 Al Suarez 403 South Seguin Converse, Texas 78109 Hal Baldwin 1400 Schertz Parkway Schertz, Texas 781 S4 Betty Ann Matthies 20S North River Street Seguin, Texas 781 S6 Tam Daly 9375 Corporate Drive Selma, Texas 78154-1250 ARTICLE XIV No director shall be liable to the Corporation for monetary damages for an act or omission in the director's capacity as a director, except to the extent the director is found liable, {i) for any breach of the director's duty of loyalty to the Corporation, {ii) for acts or omissions not in good faith that constitute a breach of duty or which involve intentional misconduct of the director or a knowing violatiaii 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 Board of Directors shall be prospective only, and shall not adversely affect any ]imitation 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 shat! not be liable to the fullest extent permitted by an amendment to the State statutes hereafter enacted that further limits the liability of a director. ARTICLE XV {a} The Governing Bodies, by written resolutions, may authorize and direct the dissolution ofthe Corporation, However, the Corporation shall not be dissolved, and its business shall not be terminated, by act of the Governing Bodies or otherwise, so long as the Corporation shall be obligated to pay any bonds, notes, or other obligations. {b) No action shall be taken pursuant to paragraph {a) of this Article or pursuant to paragraph {b} of Article XVI of these AZ-ticles of Incorporation, in any manner or at any time that 55631698.7 5 would impair any contract, lease, right, or other obligation theretofore executed, granted, or incurred by the Corporation. ARTICLE XVI (a) All properties owned by the Corporation shall be held for the use and benefit of the public on a nondiscriminatory basis. No dividends shall ever be paid by the Corporation and no part of its net earnings remaining after payment of its expenses and other obligations shall be distributed to or inure to the benefit of its directors or officers, or any individual, private firm, or private corporation or association, except in reasonable amounts for services rendered. {b) If, after the close of any fiscal year {as determined by the Bylaws), the Board of Directors shall determine that sufficient provision has been made for the full payment of all current expenses, together with all amounts payable on the contracts, agreements, bonds, notes, and other obligations of the Corporation, and that all of the terms, provisions, and covenants therein have been met, then any net earnings derived from sources thereafter accruing in connection with public facilities financed pursuant to the Act, and revenues received in connection with public facilities fnanced pursuant to the Act shall be used solely for the purposes permitted by the Act and these At•ticles of Incorporation. (c) If the Corporation ever should be dissolved when it has, or is entitled to, any interest in any funds or property of any kind, real, personal or mixed, such funds or property or rights thereto shall not be transferred to private ownership, but shall be transferred and delivered to the Cities, on an equal basis, after satisfaction of debts and claims. ARTICLE XVII The Corporation may indemnify any director, off cer, employee or agent or former director, officer, employee, or agent of the Corporation for expenses and costs, including attorney's fees, actually or necessarily incun•ed by the person in connection with any claim asserted against the person, by action in court or other forum, by reason of such person having been a director, officer, employee or other agent, except that the Corporation may not provide indemnity in a matter if the director, officer, employee, or agent is guilty of negligence or misconduct in relation to the matter. The remainder of 11tis page intentionally left bla~rk] 55631898.7 IN WITNESS WHEREOF, we have hereunto set our hands this day of 2011. Jennifer H man, Incorporator AI Suarez, u Hal Baldwin, Incorporator 1 Betty A Matthies, Incorporator _~ ._ Tom Daly, Incorporator 55631898.7 EXHIBIT B BYLAWS OF THE CIBOLO VALLEY LOCAL GOVERNiVIENT CORPORATION 50357758.1 $- ]