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96-M-22 ORDINANCE NO. f~-jJ1-;?;L AN ORDINANCE AUTHORIZING EXECUTION AND DELIVERY OF A DEPOSIT AGREEMENT WITH LIVE OAK HILLS, LTD. RELATING TO PROPOSED STREET IMPROVEMENTS AND OTHER MATTERS IN CONNECTION THEREWITH; AND DECLARING AN EMERGENCY WHEREAS, by Ordinance duly passed and approved on the date hereof the City Council of the City of Schertz, Texas (the City) has agreed to levy certain assessments in connection with the construction of permanent street and paving improvements (the Improvements) in the Live Oak Hills Subdivision (the Subdivision) in accordance with the provisions of Section 2.01 of the City's Home Rule Charter and Chapter 313, as amended, Texas Transportation Code (the Act); WHEREAS, such action has been taken at the request of Live Oak Hills, Ltd., a Texas limited partnership (the Partnership); WHEREAS, the assessments to be levied by the City pursuant to the Act for the Improvements are to be made against property in the Subdivision and the owners thereof; WHEREAS, pursuant to the Act, not more than 9/10 of the cost of the Improvements may be assessed against property in the Subdivision and the owners thereof, and the City shall pay the remainder of the costs of the Improvements; WHEREAS, the Partnership, in consideration of the benefits accruing to the Partnership, has agreed to advance to the City all costs of the Improvements, including an amount of money which will permit the City to pay all costs of the Improvements in addition to the assessments levied against the property in the Subdivision and the owners thereof; WHEREAS, there has been presented to the City Council of the City the form of a Deposit Agreement (the Deposit Agreement) between the City and the Partnership setting forth the agreement of the City and the Partnership with respect to such matters; WHEREAS, the City Council hereby finds and determines that this action is in the best interests of the citizens of the City, now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: SECTION 1: The Deposit Agreement, as presented to the City Council of the City and as attached hereto as Exhibit A is hereby approved, and the City Manager is 0219296 . . hereby authorized to execute and deliver the Deposit Agreement to the Partnership, with such non-substantial changes to the Deposit Agreement as may be determined by the City Manager, as evidenced by his execution of the Deposit Agreement, with the advice of the City Attorney. SECTION 2: The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Ordinance for all purposes and are adopted as a part of the judgment and findings of the City Council. SECTION 3: All ordinances and resolutions, or parts thereof, which are in conflict or inconsistent with any provisions of this Ordinance are hereby repealed to the extent of such conflict, and the provisions of this Ordinance shall be and remain controlling as to the matters resolved herein. SECTION 4: This Ordinance shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 5: If any provision of this Ordinance or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Ordinance and the application of such provision to other persons and circumstances shall nevertheless be valid, and this City Council hereby declares that this Ordinance would have been enacted without such invalid provision. SECTION 6: It is officially found, determined, and declared that the meeting at which this Ordinance 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 Ordinance, was given, all as required by Chapter 551, as amended, Texas Government Code. SECTION 7: The Council hereby determines that an emergency exists requiring immediate action, and this Ordinance is hereby passed as an emergency measure to be effective immediately upon its passage, and the enactment of this Ordinance as an emergency measure in accordance with the provisions of Section 4.09(e) of the City's Home Rule Charter will contribute to the preservation of the public peace, health, or safety. [The remainder of this page intentionally left blank.] 0219296 -2- PASSED, ADOPTED AND APPROVED on the 18th day of June, 1996. Mayor ATTEST: ~~~ City Secretary (CITY SEAL) 0219296 -3- , . Exhibit A DEPOSIT AGREEMENT THIS DEPOSIT AGREEMENT, dated as of June 18, 1996 (together with any amendments hereto, this Agreement), is between the City of Schertz, Texas, a duly organized and existing home rule municipality and political subdivision of the State of Texas (the City), and Live Oak Hills, Ltd., a Texas limited partnership (the Partnership) . W I T N E .s .s E T H: WHEREAS, the Partnership has requested the City to undertake the construction of permanent street and paving improvements (the Improvements) in the Live Oak Hills Subdivision, Phase I (the Subdivision), and to make assessments for the payment of a portion thereof in accordance with the provisions of Section 2.01 of the City's Home Rule Charter and Chapter 313, as amended, Texas Transportation Code (the Act); WHEREAS, the assessments to be levied by the City pursuant to the Act for the Improvements are to be made against property in the Subdivision and the owners thereof; WHEREAS, pursuant to an ordinance adopted on the date hereof (the Ordinance) the City Council of the City (the Council) has taken certain action to authorize the levy of the special assessments relating to the Improvements in accordance with the Act; WHEREA~, purstlant t~ t,he Act~ Il?t.~~r~f~an '811 of the cost of the Improvements ~___'~~~~~r:'i~"'.,.may b~, ~~sesf)e~ ,against property in the Subdivision and the owners thereof, and thelOity.8III'~"he i~kJ(t~~y,_. .~"~ltlle' IfilPrJj~entSf WHEREAS, the Partnership, in consideration of the benefits accruiBg to th~ partnership, :has agreed, pursuant to this Agreement, to~I~""i.iM~l~J' :t_.~.~.t.",., including an amount of money which will permit the City to pay all costs of the Improvements in addition to the assessments levied against the property in the Subdivision and the owners thereof; WHEREAS, the City will enter into an Assignment Agreement with the Partnership and the contractor for the construction of the Improvements, pursuant to which the City will agree to the assignment by the contractor to the Partnership 0219296 A-I of the assessment benefit certificates to be issued by the City under the Act relating to the Improvements; NOW, THEREFORE, in consideration of the mutual undertakings, promises, and agreements herein contained, the sufficiency of which hereby is acknowledged, the City and the Partnership mutually undertake, promise, and agree for themselves and their respective representatives and successors, as follows: ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1.01. Definitions. Unless the context clearly indicates otherwise, the following terms shall have the meanings assigned to them below when they are used in this Agreement: Act means Chapter 313, as amended, Texas Transportation Code. Agreement means this Deposit Agreement, together with any amendments hereto. Assignment Agreement means the Assignment Agreement to be executed on or before the Contract Date among the City, the Partnership, and the contractor for the construction of the street improvements relating to the assessment benefit certificates to be issued under the Act relating to the Improvements. Bank means Schertz Bank & Trust Company, Schertz, Texas. City means the City of Schertz, Texas. Construction Contract means the contract for construction of the Improvements expected to be awarded by the City on the Contract Date. Contract Date means the date on which the City awards the Construction Contract, currently expected to be November 20, 1996, or such later date as may be agreed to in writing by the City and the Partnership. Deposit Fund means the special fund established pursuant to Section 3.01 of this Agreement. Deposit Date means October 16, 1996, or such later date as may be agreed to in writing by the City and the Partnership. Depository Agreement means the Depository Agreement dated February 1, 1995 between the City and the Bank. Improvements mean the permanent street and paving improvements in the Subdivision described in the Ordinance. 0219296 A-2 Ordinance means the Ordinance of the City adopted on the date hereof relating to the Improvements. Partnership means Live Oak Hills, Ltd., a Texas limited partnership. Subdivision means the Live Oak Hills Subdivision, Phase I, located in the City. Termination Date means January 8,1997, or such later date as may be agreed to in writing by the City and the Partnership. Section 1.02. Interpretations. The titles and headings of the Articles and Sections of this Agreement have been inserted for convenience and reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE II DEPOSIT OF FUNDS Section 2.01. Deposit by the Partnership. On or before the Deposit Date, the Partnership shall deposit with the City $1,125,000, or such lesser or greater amount as is agreed by the City and the Partnership prior to the Deposit Date which is the full estimated cost of the Improvements, including all City costs related thereto (the Deposit) in immediately available funds to be held, invested, and disbursed by the City in accordance with the terms of this Agreement. If such amount is not deposited with the City by noon, Central Daylight Time, on the Deposit Date, this Agreement shall terminate and be of no further force and effect. The Partnership agrees that the Deposit is not an assessment against the Partnership or the property in the Subdivision owned by the Partnership, and the Partnership confirms that it has requested the City to undertake the Improvements under the terms of the Act and this Agreement. The Partnership further acknowledges that the City will not solicit bids for construction of the Improvements unless the City and the Partnership have finally agreed on the amount of the Deposit. ARTICLE III CREATION AND OPERATION OF DEPOSIT Section 3.01. Deposit Fund. (a) The City shall establish a special fund to be known as the "City of Schertz, Texas Street Improvement Deposit Fund" (the Deposit Fund) to be held, invested, and disbursed by the City in accordance with the terms of this Agreement. The City shall establish the Deposit Fund at the City's depository bank, Schertz Bank & Trust Company, Schertz, Texas (the Bank) to be held by the Bank in accordance with the terms of the City's depository agreement (the Depository Agreement) with the Bank. 0219296 A-3 (b) The City agrees that it will not authorize the disbursement of any amounts in the Deposit Fund until the Contract Date, except as otherwise provided herein. On and after the Contract Date, the City may disburse all amounts held for the credit of the Deposit Fund for payment of amounts under the Construction Contract, for other costs relating to the Improvements, or for any other lawful purpose of the City as might relate to the Improvements. (c) If the Contract Date has not occurred prior to the Termination Date, the Partnership may notify the City in writing that it wishes to terminate this Agreement, and the City shall promptly pay to the Partnership all amounts in the Deposit Fund, less all reasonable out-of-pocket costs of the City incurred to such date relating to the proposed Improvements (including, but not limited to, the cost of legal notices, the cost of filing liens, the cost of preparation and filing of releases of liens, and the charges of the City's engineer, financial advisor, and legal counsel). (d) If the Assignment Agreement has not been executed on or before the Contract Date, the Partnership may notify the City in writing that it wishes to terminate this Agreement, and the City shall promptly pay to the Partnership all amounts in the Deposit Fund, less all reasonable out-of-pocket costs of the City incurred to such date relating to the proposed Improvements (including, but not limited to, the cost of legal notices, the cost of filing liens, the cost of preparation and filing of releases of liens, and the charges of the City's engineer, financial advisor, and legal counsel). Section 3.02. Sufficiency of Deposit Fund. The City and the Partnership believe that the Deposit is sufficient to provide the City with all amounts due from the Partnership pursuant to the provisions of this Agreement, but the Partnership unconditionally guarantees that it will promptly pay any additional amounts required as the result of a change order or other increase in the total cost of the Improvement project. The Partnership further agrees that it will, on the request of the City, secure similar payment guarantees for the benefit of the City from its general partners and/or principals, all in form satisfactory to the City. Section 3.03. Termination of AEITeement. This Agreement shall terminate on the earliest of (i) the disbursement of all amounts held for the credit of the Deposit Fund, (ii) under the circumstances set forth in the last sentence of Section 2.01, or (iii) the failure of the Partnership to perform or take any other action required hereunder. ARTICLE IV INVESTMENTS Section 4.01. Investments and Investment Earnings. The City may direct the investment of amounts held in the Deposit Fund in accordance with the terms of the Depository Agreement. The Partnership agrees that all investment earnings on amounts held for the credit of the Deposit Fund shall be available for use by the City as provided in Section 3.01(b) or shall be paid to the Partnership upon termination of this Agreement as set forth in Section 3.01(c) or Section 3.01(d). The Partnership acknowledges and agrees that all risk of loss on any investments of amounts held for 0219296 A-4 the credit of the Deposit Fund shall be the risk of the City under the circumstances described in Section 3.01(b) and shall be the risk of the Partnership under the circumstances described in Section 3.01(c) and Section 3.01(d). ARTICLE V RECORDS Section 5.01. Records. The City represents to the Partnership that the Depository Agreement requires the Bank to keep books of record and account on which complete and correct entry are made of all transactions relating to the receipts, disbursements, allocations, and application of the money and investments deposited to the credit of the Deposit Fund, and the City will arrange for such books to be available for inspection by the Partnership at reasonable hours and under reasonable conditions. ARTICLE VI MISCELLANEOUS Section 6.01. Notice. Any notice, authorization, request, or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed as follows: To the City: City of Schertz, Texas 1400 Schertz Parkway Schertz, Texas 78154 Attention: City Manager To the Partnership: Live Oak Hills, Ltd. Post Office Box 700253 San Antonio, Texas 78270 Attention: Ron Wood The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Either party hereto may change the address to which notices are to be delivered by giving to the other party not less than ten (10) days prior written notice thereof. Section 6.02. Binding Agreement. This Agreement shall be binding upon the City and the Partnership and shall inure solely to the benefit of the City and the Partnership. 0219296 A-5 .. Section 6.03. Severability. In case anyone or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. Section 6.04. Governing Law. This Agreement shall be deemed to be an agreement made under the laws of the State of Texas and for all purposes shall be governed by and construed in accordance with the laws of the State of Texas and the United States of America. Section 6.05. Amendments and Modifications. This Agreement shall not be amended except in writing by the agreement of the City and the Partnership. Section 6.06. Counterparts. This Agreement may be executed in any number of counterparts, each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. [The remainder of this page intentionally left blank] 0219296 A-6 .. , . EXECUTED as of the date first written above. CITY OF SCHERTZ, TEXAS By City Manager LNE OAK HILLS, LTD. By General Partner 0219296 A-7 .,. PUBLISHER'S AFFIDAVIT qt / (fJ /fl ~ fl;J ( / .o~t() ~ () f'IA"JJJ1lJ .~ _ LI:J lY1:~ fJ1r 8J- ~ rP; ;J' y;Y THE STATE OF TEXAS, County of Guadalupe Before me, the undersigned authority, on this date personally appeared L. A. REYNOLDS known to me, who, being by me duly sworn, on his oath deposes and says that he is the Publisher of The Seguin Gazette-Enterprise, a newspaper published in said county; that a copy of the within and foregoing AD was published in said newspaper 2 times before the return day named therein, such publications being on the following dates: .:lUNE 23, 1996 JUNE 27, 1996 and a newspaper copy of which is hereto attached. ~ Sworn to and subscribed before me, this 28th day of JUNE A.D., 19 96 ~;'~\ll f?*">-'-"'~~\ RUTH AYERS f . ('" " j . i No1ary Public, S1al! 01 TelGIs , \ ~ / J MyC(IfI\misllionElqlnsl2-21-191ll , "..~, ......:... ~ I~"'~~"",,,,-,, }>'J "'\\~~~""- Notary Public, Guadalupe County, Texas ORDINANCE NO. ~M- 22 AN ORDINANCE AU- THORIZING EXECUTION AND DELIVERY OF A DE- POSIT AGREEMENT WITH LIVE OAK HILLS LTD. RELATING TO PRO- POSED STREET IM- PROVEMENTS AND OTHER MATTERS IN CONNECTION THERE- WITH; AND DECLARING AN EMERGENCY. Passed, APproved and Adopted the 18th day of June, 1996. Norma Althouse, City Sec- retary . .". ~,r------- ORDINANqNO.96oM- a..., AN ORDI~lNCE AU. THORIZING EXECUTION AND DELIVERY OF APE- POSIT AGREEMENT WITH LIVE OAK HILLS LTD. RELATING TO PRO- POSED STREET IM- 'PROVEMENTS AND OTHER MATTERS IN , CONNECTION THERE- WITH; AND DeCLARING AN EMERGENCY. Passed, Approvt)d and Adopted the 18th day of June, 1996. Norma Althouse, City Sec- retary .