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CVLGC By-LawsBYLAWS OF THE CIBOLO VALLEY LOCAL GOVERNMENT CORPORATION ARTICLE I PURPOSE AND POWERS Section 1.1. Name. The name of the nonprofit corporation is the Cibolo Valley Local Government Corporation (the "Corporation"). Section 1.2. Purpose. The Corporation is incorporated for the purposes set forth in Article IV of its Articles of Incorporation, the same to be accomplished on behalf 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"), and the City of Selma, Texas ("Selma"), as their duly constituted authority and insriumentality in accordance with Subchapter D of Chapter 431, Texas Transportation Code, as amended (the "Act"), and other applicable laws of the State of Texas (the "State"). Section 1.3. Powers. In the fulfillment of its corporate purpose, the Corporation shall be governed by the Act, and shall have all the powers set forth and conferred in its Articles of Incorporation, in the Act, and in other applicable law, subject to the limitations prescribed therein and herein and to the provisions thereof and hereof. Section 1.4. Nonprofit Cor oration. The Corporation shall be a public, nonprofit corporation, and no part of its net earnings remaining after payment of its bonds and expenses shall inure to the benefit of any person other than Cibolo, Converse, Schertz, Seguin, and Selma (collectively, the "Cities"). ARTICLE II BOARD OF DIRECTORS Section 2.1. Powers. Number, and Term of Office. (a) The property and affairs of the Corporation shall be managed and controlled by a Board of Directors (the "Board") subject to the restrictions imposed by law, the Act, the Articles of Incorporation, and these Bylaws, the Board shall exercise all of the powers of the Corporation. (b) The Board shall consist of five (5) directors, each of whom must at all times while serving as director be a resident of the City that appointed such director. Each City shall appoint one (1) director. One (1) director has been appointed as an initial director by resolution of the governing body of each of the Cities (collectively, the "Governing Bodies"), and such persons and the City appointing him or her• are as follows, and such persons shall serve the following terms as initial directors. 55631899.7 Initially Place Name Appointed By 1/nd of Initial Term 1 Leslie Pedde Cibolo September 30, 2011 2 Shawna Dowell Converse September 30, 2012 3 Justin Murray Schertz September 30, 2012 4 Robert Crabb Seguin September 30, 2013 5 William Weeper Selma September 30, 2013 Thereafter, each member of the Board shall be appointed for afour-year term until the Corporation is dissolved. A director may be reappointed. (c) A member of each Governing Body, selected by such Governing Body, shall serve as an ex-officio, non-voting member of the Board for the purpose of serving as a liaison between the Board and the Governing Bodies, as appropriate. These ex- officio members shall be appointed by, be replaced by, and be subject to removal by the appropriate Governing Body. (d) The number of directors may be changed by amendment to these Bylaws, but such number must be at least tluee (3). Any such amendments to the Bylaws shall establish the methodology for• the appointment and terms of the directors. (e) The directors constituting the initial Board shall be those persons set forth in Section 2.1(b) above, who are the initial directors named in the Articles of Incorporation. Successor directors shall have the qualifications and shall be appointed to the terms set forth herein. (f) Any director may be removed from office by the Governing Body that appointed the director for cause or• at any time without cause. (g) In case of a vacancy in the Board through removal or by reason of death, resignation, failure to be a resident of his or• her appointing City or other disqualification, or other cause or incapacity, a successor to hold office for the remainder of the former director's term shall be appointed by the appropriate Governing Body. This replacement director shall be appointed within thirty (30) days after written notice by the Executive Director, or his designee, to the appropriate Governing Body of the need for a replacement director. Section 2.2. Additional Powers. In addition to the powers and authorities by these Bylaws expressly conferred upon them, the Board may exercise all such powers of the Corporation and do all lawful acts and things as are not by statute, other law, or by these Bylaws prohibited. Without prejudice to such general powers and other powers conferred by statute, other law, and by these Bylaws, it is hereby expressly declared the Board shall have the powers set forth in the Act. 55631899.7 2 Section 2.3. Meetings of Directors (a) The directors may hold their meetings at such place or places inside the State as the Boazd may from time to time determine; provided, however, in the absence of any such determination by the Board, the meetings shall be held at the principal office of the Corporation as specified in Section 5.1(a) of these Bylaws. The Corporation shall also conduct at least one annual regular meeting of the Corporation on September 1 or the next business day thereaftet•. In addition, regular meetings of the Board shall be held without the necessity of notice to directors at such times and places as shall be designated from time to time by the Board. Special meetings of the Board shall be held whenever called by the President, by the Secretary, by a majority of the directors, or by a majority of the Governing Bodies. (b) In addition to notices provided pursuant to Section 2.4, the Secretary shall give notice to each director of each meeting in person or by mail or telephone at least twenty-four (24) hours before the meeting. In the event of an emergency meeting, such notice shall be in person or• by telephone at least two (2) hours before the meeting. (c) In addition to notices provided pursuant to Section 2.4, except for an emergency meeting, whenever any notice is required to be given to the Board, said notice shall be deemed to be sufficient if given to an e-mail address provided by a director or 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 Corporation, and such notice shall be deemed to have been given on the day of such e- mail delivery ot• mailing. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except attendance of a director at a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called or convened. Neither the business to be transacted at nor the purpose of any regular or special meeting of the Board need be specified in the notice to directors or waiver of notice of such meeting, unless required by the Board. A waiver of notice in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Section 2.4. Open Meetings Act. All meetings and deliberations of the Board shall be called, convened, held, and conducted, and notice shall be given to the public, in accordance with the Texas Open Meetings Act, Chaptet• 551, Texas Government Code, as amended. Section 2.5. uorum. A majority of the entice membership of the Board shall constitute a quorum to conduct official business of the Corporation. The act of a majority of the Boat•d present at a meeting at which a quorum is in attendance shall constitute the act of the Board and of the Corporation, unless the act of a greater number is required by law. Section 2.6. Conduct of Business. (a) At the meetings of the Board, matters pertaining to the business of the Corporation shall be considered in accordance with rules of procedure as from time to time prescribed by the Board. 55631899.7 (b) At all meetings of the Board, the President shall preside. In the absence of the President, the Vice President shall preside. In the absence of both the President and Vice President, a member of the Board selected by the members present, shall preside. (c) The President shall be a voting member of the Board. (d) The Secretary of the Corporation 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. The Executive Director, Treasurer, and any Assistant Secretary may, at the option of the Board, be employees of any one of the Cities and each member of the Board with the exception of the President, Vice President, or Secretary, may be appointed as Assistant Secretaries. Section 2.7. Committees of the Board. The Board may designate two (2) or more directors to constitute an official committee of the Board to exercise such authority, as approved by resolution of the Board. It is provided, however, that all final, official actions of the Corporation may be exercised only by the Board. 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 principal office of the Corporation and any such meetings must be conducted in accordance with the provisions of the Texas Open Meetings Act, Chapter 551, Texas Government Code, as amended, if applicable. Section 2.8. Compensation of Directors. Directors shall not receive any salary or compensation for their services as directors. However, they shall be reimbursed for their actual expenses incurred in the performance of their official duties as directors. ARTICLE III OFFICERS Section 3.1. Titles and Terms of Office. (a) The officers of the Corporation shall be a President, a Vice President, Treasurer, a Secretary, an Assistant Secretary, an Executive Director, and such other officers as the Board may from time to time elect. One person may hold more than one office, except that the President shall not hold the office of Secretary or Assistant Secretary. Officers shall serve for terms ending on the next September 30 or until his or her successor is elected or appointed; provided, the initial officers shall serve until September 30, 2011 or until their successors are elected. Upon the expiration of the terms, each officer shall have the right to be reelected. (b) All officers shall be subject to removal from office at any time by a vote of a majority of the Board. (c) A vacancy in any office shall be filled by a vote of a majority of the Board. 55631899.7 4 Section 3.2. Powers and Duties of the President. The President shall be the chief operating executive officer of the Corporation, and subject to the authority of the Board, the President shall be in general charge of the properties and affairs of the Corporation, and execute all contracts, conveyances, franchises, bonds, deeds, assignments, mortgages, notes and other instruments in the name of the Corporation. The President shall preside over the meetings of the Corporation. In naming the President, the Board should endeavor (but is not required) to appoint the same person who served as Vice President for the previous year and to appoint the representative of a different City each year, rotating through all of the Cities. Section 33. Vice President. The Vice President shall have such powers and duties as may be prescribed by the Board and shall exercise the powers of the President during that officer's absence or inability to act, in their respective order. 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. Subject to the second paragraph of Section 3.2 and the following sentence, the Vice President shall serve as President-elect, in order to maintain consistency in the management of the Corporation. In naming the Vice President, the Board should endeavor (but is not required) to appoint the representative of a different City each year, rotating through all of the Cities. Section 3.4. Treasurer. The Treasurer shall be the chief fiscal officer of the Corporation, and shall have the responsibility to see to the handling, custody, and security of all funds and securities of the Corporation in accordance with these Bylaws. When necessary or proper, the Treasurer may endorse and sign, on behalf of the Corporation, for collection or issuance, checks, notes, and other obligations in or drawn upon such bank, banks or depositories as shall be designated by the Board consistent with these Bylaws. The Tr•easurer• shall see to the entry in the books of the Corporation full and accurate accounts of all money received and paid out on account of the Corporation. The Treasurer shall, at the expense of the Corporation, give such bond for the faithful discharge of his/her duties in such form, and amount as the Board may require. All check writing authority will follow all applicable policies adopted by the Governing Bodies concerning authorizations, signatures and disbursements. It is intended that all checks, drafts, or other payment obligations of the Corporation must be approved by the President or Vice President of the Board and the Executive Director and Treasurer. Section 3.5. Secretary. The Secretary shall keep the minutes of all meetings of the Board and books provided for that purpose, shall give and serve all notices, may sign with the President in the name of the Corporation, and/or attest the signature thereto, all contracts, conveyances, franchises, bonds, deeds, assignments, mortgages, notes and other instruments of the Corporation, shall have charge of the corporate books, records, documents and instruments, except the books of account and financial records and securities, and such other books and papers as the Board may direct, all of which shall at all reasonable times be open to public inspection upon application at the office of the Corporation during business hours, and shall in general perform all duties incident to the office of Secretary subject to the control of the Board. 55631899.7 5 Section 3.6. Assistant Secretary. The Assistant Secretary (one or more) shall act as Secretary in the event of the absence or unavailability of the Secretary. Section 3.7. Executive Director. Alan Cockerell will serve as the initial Executive Director of the Corporation to provide administrative support services for the Corporation and to perform other duties as prescribed by Board. Section 3.8. Additional Provisions Relating to Officers. The President, Vice President, and Secretary shall be named from among the members of the Board. The Executive Director, Treasurer, and any additional Assistant Secretary may, at the option of the Board, be employees of the Cities. The Executive Director shall retain legal counsel and financial advisors for the Corporation, subject to the approval of the majority of the Board. Section 3.9. Compensation. Officers who are members of the Board shall not receive any salary or compensation for their services, except that they shall be reimbursed for the actual expenses incurred in the perfor7rrance of their official duties as officers. ARTICLE IV FUNCTIONAL CORPORATE DUTIES AND REQUIREMENTS Section 4.1. Cibolo Valley Local Government Corporation Plan. (a) It shall be the duty and obligation of the Board to establish, finance, and implement the Cibolo Valley Local Government Corporation Plan, subject to approval or disapproval by each Governing Body. (b) In carrying out its obligations under subsection (a), the Corporation shall be authorized to exercise all rights and powers granted under the Act. (c) The Board shall submit an annual report to each Governing Body as to the status of its activities in carrying out its obligations under this Section and shall report periodically as requested in writing by any Governing Body. (d) Any and all agreements between the Corporation and other parties shall be authorized, executed, and approved, and delivered in accordance with applicable law. Section 4.2. Annual Corporate Budeet. Prior to the commencement of each fiscal year of the Corporation, the Board shall adopt a proposed budget of expected revenues fiom sources set out in Section 4.5 of this article and proposed expenditures for the next ensuing fiscal year. The budget shall contain such classifications and shall be in such form as may be prescribed from time to time by any Governing Body. The budget shall not be effective until the same has been approved by each Governing Body, which approval shall not be unreasonably withheld. 55631899.7 6 Section 43. Books, Records, Audits. (a) The Corporation shall keep and properly maintain in accordance with generally accepting accounting principles, complete books, records, accounts, and financial statements pertairring to its corporate funds, activities, and affairs. (b) At the direction of each Governing Body, the books, records, accounts, and financial statements of the Corporation maybe maintained for the Corporation by the accountants, staff, and personnel of any of the Cities. (c) The Corporation, or the person selected above, if the option of subsection (b) is selected, shall cause its books, records, accounts, and financial statements to be studied at least once each fiscal year by an outside, independent auditing and accounting firm selected by each Governing Body and approved by the Board. Such an audit shall be at the expense of the Corporation. A copy of the Corporation's annual audit shall be delivered to each Governing Body within ten (10) days after it is approved by the Board, but in no event later than 150 days after the end of the fiscal year of the Corporation. A copy of each quarterly unaudited financial statement of the Corporation shall be provided to each Governing Body within thirty (30) days after the end of each fiscal quarter. (d) All books and records of the Corporation may be inspected by any director or his or her agent or attorney for any purpose at any reasonable time and at all times each Governing Body shall have access to the books, records, and financial statements of the Corporation. Section 4.4. Deposit and Investment of Corporation Funds. (a) All proceeds from loans or from the issuance of bonds, notes, or other debt instruments ("Obligations") issued by the Corporation in accordance with the provisions of the Act shall be deposited and invested as provided in the resolution, order, indenture, or other documents authorizing or relating to their execution or issuance. (b) Subject to the requirements of contracts, loan agreements, indentures or other agreements securing Obligations, all other money of the Corporation, if any, shall be deposited, secured, and/or invested in the manner provided for the deposit, security, and/or investment of the public funds of Texas municipalities. The Board shall designate the accounts and depositories to be created and designated for such purposes, and the methods of withdrawal of funds therefrom for use by and for the purposes of the corporation upon the signature of its Treasurer and such other persons as the Board designates. The accounts, reconciliation, and investment of such funds and accounts shall be performed by the Executive Director, or his designee. Section 4.5. Expenditure of Corporate Money. The proceeds from the investment of funds of the Corporation, the proceeds from the sale of property, revenues generated by and payable to the Corporation pursuant to the Act or any other source of revenues that are payable to the Corporation, and the proceeds derived from the sale of Obligations, may be expended by 55631599.7 ~] the Corporation for any of the purposes authorized by the Act, subject to the following limitations: (a) Expenditures that may be made from a fund created with the proceeds of Obligations, and expenditures of money derived from sources other than the proceeds of Obligations may be used for the purpose of financing or otherwise providing for the acquisition, construction, rehabilitation, renovation, repair, equipping, furnishing and placement in service of public facilities of the Corporation under the terms of the Act; or (b) All other proposed expenditures shall be made in accordance with and shall be set forth in the annual budget required by Section 4.2 or in contracts meeting the requirements of Section 4.1(d) of this Article. Section 4.6. Issuance of Obli ations. No Obligations, including refunding obligations, shall be authorized or sold and delivered by the Corporation unless each Governing Body approves such Obligations by action taken prior to the date of initial delivery of the Obligations to the initial purchasers thereof. ARTICLE V MISCELLANEOUS PROVISIONS Section 5.1. Principal Office. (a) The registered office of the Corporation shall be the Corporation's principal office. (b) The Corporation shall have and shall continually designate a registered agent at its office, as required by the Act. Section 5.2. Fiscal Year. The fiscal year of the Corporation shall commence on October 151 and shall conclude on September 30`h of each year. Section 5.3. Seal. The Corporation shall not have a corporate seal. Section 5.4. Resi nations. Any director or officer may resign at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or, if no time is specified, at the time of its receipt by the President or Secretary. The acceptance of resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. Section 5.5. Approval or Advice and Consent of a Governing Bodv. To the extent that these Bylaws refer to any approval by a Governing Body or refer to advice and consent by a Governing Body, such advice and consent shall be evidenced by a certified copy of a resolution, order, ordinance, or motion duly adopted by a Governing Body. 55631899.7 Section 5.6. Indemnification of Directors. Officers and Em loyees. (a) The Corporation is, for the purposes of the Texas Tort Claims Act (Subchapter A, Chapter 101, Texas Civil Practices and Remedies Code), a governmental unit and its actions are governmental functions. (b) The Corporation shall indemnify each and every member of the Board, its officers and its employees and each member of the Board and each employee of the Corporation, to the fullest extent permitted by law, against any and all liability or expense, including attorneys fees, incun~ed by any of such persons by reason of any actions or omissions that may arise out of the sanctions and activities of the Corporation; provided, however, that the Corporation may not provide indemnity in any manner if the director, officer, employee, or agent is guilty of negligence or misconduct in relation to the matter. The legal counsel for• the Corporation is authorized to provide a defense for members of the Board, officers, and employees of the Corporation. ARTICLE VI EFFECTIVE DATE, AMENDMENTS; MISCELLANEOUS Section 6.1. Effective Date. These Bylaws shall become effective upon the occun~ence of the following events: (a) the approval of these Bylaws by each Governing Body, which approval may be granted prior to the creation of the Corporation; and (b) the adoption of the Bylaws by the Board. Section 6.2. Amendments to Articles of Incomoration and Bylaws. The Articles of Incorporation of the Corporation and these Bylaws may be amended only in the manner provided in the Articles of Incorporation and the Act. Section 6.3. Interroretation of Bvlaws. These Bylaws shall be liberally construed to effectuate the purposes set forth herein. If any word, plu~ase, clause, sentence, paragraph, section or other part of these Bylaws, or the application thereof to any person or circumstances, shall ever be held to be invalid or• unconstitutional by any court of competent jurisdiction, the remainder of these Bylaws and the application of such word, phrase, clause, sentence, paragraph, section or other part of these Bylaws to any other person or circumstance shall not be affected thereby. Section 6.4. Dissolution. Upon the dissolution of the Corporation after payment of all obligations of the Corporation, all remaining assets of the Corporation shall be transferred to the Cities, on an equal basis. Adopted: July 28, 2011 55671899.7 9