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BylawsBY-LAWS OF THE SCHERTZ/SEGUIN LOCAL CORPORATION ARTICLE I PURPOSE AND POWERS Section 1.1 Name. The natne of the nonprofit corporation is the SCBERTZ/SEGUIN LOCAL GOVERNMENT CORPORATION. 2 of 11 ARTICLE 11 -NWWkWi* (a) The property and affairs of the Corporation shall be. managed and controlled by a Board of Directors (the "Boardg 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. Two (2) directors shall be appointed initially by a resolution adopted by the Schertz City Council and three (3) directors shall be appointed initially by a resolution adopted by dae Seguin City Council. These initial directors shall be appointed by, serve the initial terms, be replaced by, and have the subsequent terms as disclosed in the following table: In addition, a member of the Schertz City Council and the Seguin City Council, i:t-cluding either Mayor, 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 Schertz City Council or Seguin City Council, as appropriate. These ex-officio members shall be appointed by, be replaced by, and be sub' ject to removal by the Schertz City Council or Seguin City Council, as appropriate. (c) The Schertz City Council and the Seguin City Council are referred to herein as the "Governing Bodies". Initially Length of Replacement Length of Replacement Place Appo inted By Initial Ter m---AppaWtp," 1 Seguin 1 Year Schertz 5 Years Seguin 2 Schertz 2 Years Seguin 5 Years Schertz 3 Seguin 3 Years Schertz 5 Years Seguin 4 Schertz 4 Years Seguin 5 years Schertz 5 Seguin 5 Years Schertz 5 Years Seguin In addition, a member of the Schertz City Council and the Seguin City Council, i:t-cluding either Mayor, 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 Schertz City Council or Seguin City Council, as appropriate. These ex-officio members shall be appointed by, be replaced by, and be sub' ject to removal by the Schertz City Council or Seguin City Council, as appropriate. (c) The Schertz City Council and the Seguin City Council are referred to herein as the "Governing Bodies". (d) The number of directors may be changed by amendment to these Bylaws, but / number must be Any such amendments • the Bylaws r r; t: the methodot- V, for the appointment and terms of dae directors. (e) The directors constituting the initial Board shall be those 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 or + tirnewithout cause. O In case of a vacancy in the Board through death, resignation, disqualification, or other cause or incapacity, a successor to hold office shall be appointed by the appropriate Governing Body. directors or waiver • notice of such meetin& 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 drae stated therein, shall be deemed equivalent to the giving of such notice. Section 2.4 OOM Motigas, Art All meetings and deliberations • 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, as amended, Chapter 551, Texas Government Code. Section 2.5 Quorum. A majo-tity of the entire membership of the Board shall constitute a quorum to conduct official business of the Corporation. 'Ihe act of a majority of the Board resent at a meeting at which a uorum is in attendance shall constitute the act of the Board and of 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. (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- I (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 general manager, treasurer, and any assistant secretary may, at the option • the Board, be employees • either Schertz • Seguin and each member • the Board with the exception of the president, vice president or secretary, may be appointed as assistant secretaries. Section 2.8 CLOM84fitid ��f Djtkfdrs. 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. I (a) The officers of the Corporation shall be a president, a vice president, treasurer, and a secretary, 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 shaU not hold the office of secretary. Officers shall serve for thtee-yeat terms or until his or her successor is elected or appointed. Upon the expiration of the terms, each officer shall have the right to be reappointed or reelected. (b) AU officers shall be subject to removal from office at any time by a vote of a majority of the Board. III' oftlagg its W6164,1we L7*U 1.!j I R A Kgq a Section 3.2 powers AnA INties of die The president shall be the chief operating executive officer. of the Corporation, and subject to the authority of the Board, the president shall be m" general charge of the properties and affairs of the Corporation, and execute all contracts, conveyances, franchises, bondsY deeds, assignments, mortgages, notes and other instruments in the name of the Corporation. The President shall preside over the meetings of the Corporation. Section 3.3 )Eig-e Pigiidght. The vice president shall have such powers and duties as may be prescribed by the Board and shA 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 • the duties • the president shall be conclusive evidence of the absence or inability to act of the president at the time such action was taken. ARTICLE IV FUNCTIONAL CORPORATE DUTIES AND REQUIREMENTS Corporation r, r and properly maintain t accordance with r accepting accounting principles, • f f books, . a accounts, a financial u t pertaining to its corporate funds, activities, and affairs. (b) At the direction of each Governing Body, the books, records, accounts, and financial state• the Corporation may , r •. maintained for f <- Corporation f r the accountants, staff and personnel of the either Schertz and/or Seguin. PRATU re, V J L X UL'aMy YM-Poixamr- 11117 TIN ar ME 11MV-6 MZ;ju I.MMeNg Body Section 4.4 D (a) All proceeds from loans • from the issuance • bons • other debt Mistruments ('Obli ga e• by the Corporation in acco •ance e provisions of fc Act shall be deposited and invested as provided in the resolution, order, 'indenture, or other documents authorizing or -relating to their execution or issuance. Section 4.5ti�Atowqw te, , 1tgjt!!bnM 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 • Obligations, may be expended by the Corporation for any of the purposes authorized by the Act, subject to the following limitations: 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 usuance� of Oblikdom 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 ki6�� (a) The principal office and the registered office of the Corporation shall be located at 600 River Drive West, Seguin, Texas 78155. (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 1" and shall conclude on September 30'h of each year. Section 5.3 Seal. The seal, if any, of the Corporation shall be determined by the Board. Section 5.4 Any director or officer may resign at any time. Such resignation shall- be made in writing and shaU 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 To the extent that these Bylaws refer to any approval by the Governing Body or refer to advice and consent by the Governing Body, such advice and consent shall. be evidenced by a certified copy of a resolution, order, ordinance, or motion duly adopted by the Governing Body. Section 5.6 Ind (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 ate governmental functions. num'-wrord �j Section 6.1. Effective Date. These Bylaws shall become effective upon the occurrence of the following events: (1) the approval of these Bylaws by each Governing Body, which approval majr be granted prior to the creation • the Corporation; and 13011 '� Section 6.2 Amendments to Articles d luc�cirdfi� and �M� The Articles of Incow,co r• n • f�i in the Articles of Incorporation and the Act Section 6.4 Diasolution. 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 Schertz and Seguin, on an equal basis. 11 of 11 0 a W 9 9 MIMI 0 L"I h'A 01 M., I I M 0 ff I WHEREAS, it is in the best interest of the Corporation to amend the By-Laws of the Corporation; and WHEREAS, the Corporation By-Laws were amended to incorporate the position of General Manager; and -Tfi_e_C'j7ty__6t NeguiJP, Texas as follows: L The By-Laws attached hereto as Exhibit "A" and incorporated herein for all purposes represents the proposed amendments of the Schertz-Seguin Local Government Corporation and are hereby approved. MAY I(. ETTY ANN MATTHIES ATTEST: Thalia Patlan Stautzenberger, City Sere try 12-06-05 05R-157 City of Sche State of Texas County of Guadalupe RESOLUTION No. 05 --R =24 - • i � i • •; - -•" • WHEREAS, it is in - best interest of - Schertz Seguin • Government Corporation to amend the of • •• • Manager. WHEREAS, subject to approval by the City Councils of Schertz and Seguin ' thi� Corporation By-Laws are hereby amended to incorporate the position of General attached WHEREAS, the By-Laws hereto as Exhibit ' and incorporated herein for purposes r-• - - - proposed - • - of - Schertz Seguin s Government • •• •; NOW, THEREFORE, BE IT RESOLVED and ORDERED by the City Council of the City of Schertz that: 1. The City of Council of the City of Schertz hereby approves the amended By -Laws of the Schertz Seguin Local Government Corporation. 2. The By -Laws of the Schertz Seguin Local Government Corporation are hereby amended. PASSED AND APPROVED THIS, Ag'tb DAY OF �Ydy Tokar, City Secretary BY-LAWS OF THE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION 91M Section 1.1 Name. The name ofthe nonprofit corporation is the SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION. Section 1.2 Purpose. The Schertz/Seguin Local Government Corporation (the "Corporation") is incorporated for the purposes set forth in Article IV ofits Articles of Incorporation, the same to be accomplished on behalf of the City of Schertz, Texas ( "Schertz ") and the City of Seguin, Texas ( "Seguin ") as their duly constituted authority and instrumentality in accordance with Subchapter D of Chapter 431, as amended, Texas Transportation Code (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 Corporation. 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 Schertz and Seguin (collectively, the "Cities "). t:•ALr • a 011 IR awe Section 2.1 Powers, Number and Term of Office, (a) The property and affairs of the Corporation shall be managed and controlled by Board ofDirectors (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. Two (2) directors shall be appointed initially by a resolution adopted by the Schertz City Council and three (3) directors shall be appointed initially by a resolution adopted by the Seguin City Council. These initial directors shall be appointed by, serve the initial terms, be replaced by, and have the subsequent terms as disclosed in the following table: 519770.2 Thereafter, each member of the Board shall be appointed for five -year terms on a rotating basis by Schertz or Seguin, as appropriate, until the Corporation is dissolved. A director is subject to reappointment but must be a resident of either Schertz or Seguin, as appropriate. If any member of the Board is unable to complete his or her term of office by reason of death, resignation, disqualification, failure to be a resident of Schertz or Seguin, as appropriate, or for any other incapacity, a replacement director shall be appointed by the Schertz City Council or Seguin City Council, as appropriate, based upon the Governing Body that initially appointed the person to the Board. This replacement director shall be appointed within thirty (30) days of written notice by the Executive Director, or his designee, to either the Schertz City Council or the Seguin City Council, as appropriate, of the need for a replacement director. In addition, a member of the Schertz City Council and the Seguin City Council, including either Mayor, 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 Schertz City Council or Seguin City Council, as appropriate. These ex -officio members shall be appointed by, be replaced by, and be subject to removal by the Schertz City Council or Seguin City Council, as appropriate. (c) The Schertz City Council and the Seguin City Council are referred to herein as the "Governing Bodies ". (d) The number of directors may be changed by amendment to these Bylaws, but such number must be at least three (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 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. 519770.2 -2- Initially Length of Replacement Length of Replacement Place Appointed By Initial Term Appointed By Term Appointed By 1 Seguin 1 Year Schertz 5 Years Seguin 2 Schertz 2 Years Seguin 5 Years Schertz 3 Seguin 3 Yearn Schertz 5 Years Seguin 4 Schertz 4 Years Seguin 5 years Schertz 5 Seguin 5 Years Schertz 5 Years Seguin Thereafter, each member of the Board shall be appointed for five -year terms on a rotating basis by Schertz or Seguin, as appropriate, until the Corporation is dissolved. A director is subject to reappointment but must be a resident of either Schertz or Seguin, as appropriate. If any member of the Board is unable to complete his or her term of office by reason of death, resignation, disqualification, failure to be a resident of Schertz or Seguin, as appropriate, or for any other incapacity, a replacement director shall be appointed by the Schertz City Council or Seguin City Council, as appropriate, based upon the Governing Body that initially appointed the person to the Board. This replacement director shall be appointed within thirty (30) days of written notice by the Executive Director, or his designee, to either the Schertz City Council or the Seguin City Council, as appropriate, of the need for a replacement director. In addition, a member of the Schertz City Council and the Seguin City Council, including either Mayor, 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 Schertz City Council or Seguin City Council, as appropriate. These ex -officio members shall be appointed by, be replaced by, and be subject to removal by the Schertz City Council or Seguin City Council, as appropriate. (c) The Schertz City Council and the Seguin City Council are referred to herein as the "Governing Bodies ". (d) The number of directors may be changed by amendment to these Bylaws, but such number must be at least three (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 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. 519770.2 -2- (g) In case of a vacancy in the Board through death, resignation, disqualification, or other cause or incapacity, a successor to hold office shall be appointed by the appropriate Governing Body. 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. Section 2.3 Meetings ofDirectors. (a) The directors may hold their meetings at such place or places in Guadalupe County, Texas as the Board 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 thereafter. 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 either Governing Body. (b) Subject to Section 2.4 hereof, the secretary shall give notice to each director of each special meeting in person or my mail, telephone or telegraph, at least two (2) hours before the meeting. Unless otherwise indicated in the notice thereof, any and all matters pertaining to the purposes of the Corporation may be considered and acted upon at a special meeting. At any meeting at which every director shall be present, even though without any notice, any matter pertaining to the purpose of the Corporation may be considered and acted upon consistent with applicable law. (c) Subject to Section 2.4 hereof, 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 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 ofthe Corporation, and such notice shall be deemed to have been given on the day of such 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 Gen Igetin' s 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, as amended, Chapter 551, Texas Government Code. Section 2.5 Quorum. A majority of the entire membership of the Board shall constitute a quorum to conduct official business of the Corporation. The act of a majority of the Board present 519770.2 -3- 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. (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 either Schertz or Seguin 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 ofthe 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, as amended, Chapter 551, Texas Government Code, 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. • Section 3.1 Titles and Terms of Office. (a) The officers ofthe Corporation shall be a president, a vice president, treasurer, and a secretary, and such other officers as the Board may from time to time elect to fill a vacancy. One person may hold more than one office, except that the president shall not hold the office of secretary. Officers shall serve for three year terms or until his or her successor is elected or appointed. Upon the expiration of the terms, each officer shall have the right to be reappointed or reelected. 519770.2 -4- (b) All officers shall be subject to removal from office at anytime by a vote of a majority of the Board. (c) A vacancy in the office of any director shall be filled by a vote of a majority of the Board; Section 3.2 Powers and Duties ofthe 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. Section 3.3 Vice President. The vice president shall have such powers and duties as may be prescribed by the Board and shall exercise the powers ofthe 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. 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 treasurer 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. The office of Treasurer shall initially be held by the City Manager of Seguin. This office shall rotate every two years to be held by the City Manager of Schertz and vice versa. 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. Section 3.6 Executive Director. The City Manager of Schertz will serve as the initial Executive Director ofthe Corporation to provide administrative support services forthe Corporation, 519770.2 -5- and perform duties as prescribed by Board. This office shall rotate every two years to be held by the City Manager of Seguin and vice versa. Section 3.7 Additional Provisions Relating to Officers. The president, vice president, and the secretary shall be named from among the members of the Board. The executive director, treasurer, and any assistant secretary may, at option ofthe Board, be employees of Schertz and/or Seguin. The Executive Director shall retain legal counsel and financial advisors for the Corporation, subject to the approval of the majority of the Board. Section 3.8 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 performance of their official duties as officers. ARTICLE IV • • CO ,' ' • 1, •, I. Section 4.1 Schertz/Seggin Local government ent Co oration Plan. (a) It shall be the duty and obligation of the Board to establish, finance, and implement the Schertz/Seguin 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 either 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. (a) The Corporation shall keep and properly maintain in accordance with generally accepting accounting principles, complete books, records, accounts, and financial statements pertaining to its corporate funds, activities, and affairs. 519770.2 -6- (b) At the direction of each Governing Body, the books, records, accounts, and financial statements of the Corporation may be maintained for the Corporation by the accountants, staff and personnel of the either Schertz and/or Seguin. (c) The Corporation, or the person selected above, ifthe 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 and shall be delivered to each Governing Body within 150 days of the end of the fiscal year of the Corporation. (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. (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 ofCorporate 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 the Corporation for any of the purposes authorized by the Act, subject to the following limitations: (i) 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 519770.2 -7- (ii) 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 of0bligations. 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 principal office and the registered office of the Corporation shall be the registered office of the Corporation located at 210 East Gonzales, Seguin, Texas 78156. (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 I' and shall conclude on September 30`h of each year. Section 5.3 Seal. The seal, if any, of the Corporation shall be determined by the Board. Section 5.4 Resignations. 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 coal or Advice and Consent of the Governing3ody. To the extent that these Bylaws refer to any approval by the Governing Body or refer to advice and consent by the Governing Body, such advice and consent shall be evidenced by a certified copy of a resolution, order, ordinance, or motion duly adopted by the Governing Body. Section 5.7 Indemnification of Directors Officers and Employees. (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, incurred by any of such persons by reason of any actions or omissions that may arise out of the sanctions and activities ofthe Corporation; provided, however, that the Corporation may not provide 519770.2 -8- 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 MV--, D,4,TF-- 4,1j1FXTW1JFW -,Fj J, 7- RC Section 6.1. 'Effective Date. These Bylaws shall become effective upon the occurrence of the following events: (1) the approval of these Bylaws by each Governing Body, which approval may be granted prior to the creation of the Corporation; and (2) the adoption of the Bylaws by the Board. Section 6.2 Amendments to Articles of IncoWoration 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 6.4 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 Schertz and Seguin, on an equal basis. 519770.2