22-R-112 MOU- Schertz EDC and City of SchertzSEDC RESOLUTION NO.2022-12
A RESOLUTION BY THE CITY OF SCHERTZ ECONOMIC
DEVELOPMENT CORPORATION, TEXAS AUTHORIZING A
MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION AND THE
CITY OF SCHERTZ TEXAS; AND OTHER MATTERS IN CONNECTION
THEREWITH
WHEREAS, the City of Schertz Economic Development Corporation ("SEDC") is a non-
profit industrial development corporation duly established under the Development Corporation
Act of 1979, as amended (Section 501.001 et seq. Texas Local Government Code, formerly the
Development Corporation Act of 1979) (the "Act");
WHEREAS, all of the powers of the corporation are vested in the SEDC Board of Directors
(the "Board") appointed by the governing body of the corporation's authorizing unity; and
WHEREAS, the Act authorizes a development corporation to fund certain projects as
defined by the Act and request development corporations to enter into performance agreements to
establish and provide for the direct incentive or make an expenditure on behalf of a business
enterprise under a project; and
WHEREAS, Section 501.101 authorizes expenditures for land, buildings, equipment,
facilities, expenditures, targeted infrastructure and improvements that are for the creation or
retention of primary jobs and found by the board of directors to be required or suitable for the
development, retention, or expansion of manufacturing and industrial facilities; and
WHEREAS, Section 505.159 of the Act requires that a corporation hold at least one public
hearing on the proposed project before spending money to undertake the project; and
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE
CITY OF SCHERTZ ECONOMIC DEVELOMENT CORPORATION THAT:
Section 1. The Board hereby recommends the approval of the Memorandum of
Understanding for Infrastructure Funding between the SEDC and City and requests authorization
by the City of Schertz City Council for the expenditures associated with the Memorandum of
Understanding attached hereto as Exhibit A.
Section 2. Subject to the authorization of funds by the City of Schertz City Council,
the Board hereby authorizes the President to execute the Memorandum of Understanding.
Section 3. 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 Board.
Section 4. All 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 resolved herein.
A-1
Section 5. This Resolution shall be construed and enforced in accordance with the laws
of the State of Texas and the United States of America.
Section 6. 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 board hereby
declares that this Resolution would have been enacted without such invalid provision.
Section 7. 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 8. This Resolution shall be in force and effect from and after its final passage,
and it is so resolved.
PASSED AND ADOPTED, this 29th day of September, 2022.
ATTEST:
*ammi-!M�`orrill, SEDC Board Secretary
CITY OF SCHERTZ ECONOMIC
DEVELOPME ORPORATION
Paul Macaluso, SEDC Board President
-2-
RESOLUTION NO. 22-R-112
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS AUTHORIZING A MEMORANDUM OF
UNDERSTANDING BETWEEN THE CITY OF SCHERTZ ECONOMIC
DEVELOPMENT CORPORATION AND THE CITY OF SCHERTZ
TEXAS; AND OTHER MATTERS IN CONNECTION THEREWITH
WHEREAS, the Development Corporation Act of 1979, as amended (Section 501.001 et
seq, Texas Local Government Code, formerly the Development Corporation Act of 1979) (the
"Act") authorizes a development corporation to fund certain projects as defined by the Act and
requires development corporation to enter into performance agreements to establish and provide
for the direct incentive or make an expenditure on behalf of a business enterprise under a project;
and
WHEREAS, Section 501.103 authorizes expenditures for certain infrastructure
improvement projects that are found by the board of directors to be required or suitable for
infrastructure necessary to promote or develop new or expanded business enterprises; and
WHEREAS, Section 501.159 of the Act requires that a corporation hold at least one
public hearing on the proposed project before spending money to undertake the project; and
WHEREAS, the SEDC Board of Directors approved SEDC Resolution 2022-12 which,
subject to the authorization of funds by the City of Schertz City Council, approved the
Memorandum of Understanding for Infrastructure Funding attached hereto as Exhibit A between
the SEDC, and the City at the SEDC's Board of Directors meeting on September 29, 2022; and
WHEREAS, Section 501.073 of the Act requires that the corporation's authorizing unit to
approve all programs and expenditures of a corporation; and
WHEREAS, the SEDC has recommended that the City authorize the program and
expenditures associated therewith; and
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS THAT:
Section 1. The City Council hereby authorizes the program and expenditures as
provided for in the Memorandum of Understanding for Infrastructure Funding between the
SEDC and City as set forth in Exhibit A.
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 Resolution for all purposes and are adopted as a
part of the judgment and findings of the City Council.
Section 3. All 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 resolved herein.
Section 4. This Resolution 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 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 6. 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 7. This Resolution shall be in force and effect from and after its final
passage, and it is so resolved.
PASSED AND ADOPTED, this ay of , 2022.
CITY OF SCHERTZ, TEXAS
Ralph u errez . ayor
ATTEST:
Sheila Edmondson Interim City Secretary
EXHIBIT A
DocuSign Envelope ID: 9484852A-4EB5-47E1-BE7A-95D46F75A6DF
MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY OF SCHERTZ TEXAS
AND THE SCHERTZ ECONOMIC DEVELOPMENT CORPORATION FOR THE
FUNDING AND COORDINATION OF TARGETED INFRASTRUCTURE
IMPROVEMENTS NECESSARY TO PROMOTE OR DEVELOP NEW OR EXPANDED
BUSINESS ENTERPRISES
This Memorandum of Understanding between the City of Schertz Texas (City) and the Schertz
Economic Development Corporation (SEDC), collectively (Parties), is entered into for the funding
and coordination of targeted infrastructure improvements necessary to promote or develop new or
expanded business enterprises.
WHEREAS, the City of Schertz Economic Development Corporation ("SEDC") is a non-profit
industrial development corporation duly established under the Development Corporation Act of
1979, as amended (Section 501.001 et seq. Texas Local Government Code, formerly the
Development Corporation Act of 1979) (the "Act"); and,
WHEREAS, the City of Schertz is a Texas home rule municipality of the State of Texas and the
SEDC's authorizing unit required to approve all programs and expenditures of the corporation and
annually review any financial statements of the corporation; and,
WHEREAS, the SEDC has consistently partnered with the City of Schertz to prioritize funding
for projects that fall within the scope and mission of the SEDC as a Type B Economic
Development Corporation, such as expenditures that are found by the board of directors to be
required or suitable for infrastructure necessary to promote or develop new or expanded business
enterprises, including streets and roads, rail spurs, water and sewer utilities, electric utilities, or
gas utilities, drainage, site improvements, and related improvements; and,
WHEREAS, SEDC has shared with Schertz City Council the priorities for use of the SEDC
Reserve Fund and has recently worked with the City Manager's Office on projects such as
investments in Main Street and Tri County Parkway improvements; and,
WHEREAS, in order to ensure the SEDC Board is provided all necessary information to prioritize
and budget for current and future infrastructure funding requests, SEDC staff has coordinated with
the City Manager's Office to formalize a process for requesting funding from the SEDC, providing
status reports, and project closing; and
WHEREAS, the formalization of these processes is to support administration of the SEDC
Reserve Fund and prioritize mutually beneficial projects of the Parties.
NOW THEREFORE THE PARTIES HERETO AGREE TO THE FOLLOWING
PROTOCOLS IN FURTHERANCE OF THE SHARED GOALS AND OBJECTIVES
EXPRESSED HEREIN
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I. SEDC Funding in Partnership with the City of Schertz
1.1 In coordination with the SEDC Board of Directors, SEDC staff may request of City
prioritized capital improvement projects based on the mission of the SEDC through this process.
1.2 City/SEDC staff will provide a project overview to secure SEDC Board conceptual
approval of project. SEDC will consider and act on funding for design of the project through
allocation from existing budget or through a budget amendment taken before City Council.
1.3 Once design of the project is finalized the SEDC will review the final project scope and
consider encumbrance of SEDC Board approved pro rata share of the total project cost and
consider adopting an Infrastructure Funding Agreement for approval by City Council for funding
allocation. This agreement will be in substantially the same form as the attached Exhibit A.
1.4 Important considerations for the SEDC Board include that the City may request additional
funding for any and all projects due to unforeseen costs, expanded scope, or other reasons.
1.5 Only those requested projects that are comprised of an expenditure that is required or
suitable for the infrastructure necessary to promote or develop new or expanded business
enterprise, limited to streets and roads, rail spurs, water and sewer utilities, electric utilities, or gas
utilities, drainage, site improvements, and related improvements, or telecommunications and
internet improvements.
II. Funded Project Status Updates
2.1 SEDC will be provided information for status updates on the project no less than twice a
year regarding allocated funds and more frequently if the project is delayed significantly, project
costs or scope are significantly altered. In addition to a status narrative, this should include:
2.1.1 Total sources and uses of funds for the project to include balances of SEDC funding
encumbered and drawn down for the project.
2.1.2 If project is over $2,000,000 and City chooses to transfer a lump sum in this amount
to City accounts, City will report and transfer any interest earned on those balances to the
SEDC.
2.1.3 If project is delayed more than two years from the date the project is funded for
design, the SEDC may act to unencumber dollars within the SEDC budget or request return
of funds from the City to the SEDC budget for other uses.
III. Project Closing
3.1 City will provide a memo from the City Manager providing a final project description and
total costs with supporting documentation on proof of payment for all costs and final total sources
and uses of funds.
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3.1.1 This memo will affirm that all uses of funds fall within allowed uses under Section
501.103 of the Texas Local Government Code if the project results in a combination of
qualifying and non -qualifying costs.
3.1.2 This memo will also indicate when any unexpended funds and or interest was or will
be returned.
IV. Miscellaneous
4.1 Term: Timeliness. The initial term of this MOU shall begin on the Effective Date and shall
continue until the end of the 2022-2023 fiscal year, September 30, 2023. Thereafter,
provided that the Parties agree, the MOU shall renew on a fiscal year basis unless
terminated by either party by providing written notice 60 days prior to the end of the fiscal
year.
4.2 Severabiliiy. If any provision of this MOU is held to be invalid for any reason by a court
or agency of competent jurisdiction, the remainder of this MOU shall not be affected
thereby, and this MOU shall be construed as if such invalid provision had never been
contained herein, and the remaining enforceable provisions of this MOU are expressly
deemed severable for this purpose.
4.3 Cooperation. The Parties hereto agree to cooperate at all times in good faith to effectuate
the purposes and intent of this MOU.
4.4 Entire Agreement. This MOU contains the entire agreement of the Parties and supersedes
all prior or contemporaneous understandings or representations, whether oral or written,
respecting the subject matter hereof.
4.5 Amendments. Any amendment to this MOU must be in writing and shall be effective only
if signed by the authorized representatives of each Party to this MOU.
4.6 No Third-Partv Beneficiaries. This MOU shall inure only to the benefit of the Parties and
their successors and assigns as permitted by this MOU. No person or entity that is not a
Party to this MOU shall be considered Z 3th rd arty beneficiary of this MOU.
4.7 Effective Date. Effective this the day of , 2022.
CITY: CITY OF SCHERTZ ECONOMIC
DocuSlgned by:
lk#A l4v'6WwG
B�j' J R7RRFO77R77717F
Name: Dr. Mark Browne
Title: City Manager
DEVELOPMENT CORPORATION:
DocuSlgned by:
By 7ned5R17FdRdFdRS
Name: Paul Macaluso
Title: SEDC Board President
DocuSign Envelope ID: 9484852A-4EB5-47E1-BE7A-95D46F75A6DF
Attest:
�DocuSigned by:
By: 15E5CE7D8B02407...
Name: Sheila Edmondson
Title: Interim City Secretary
DocuSigned by:
SAMMI Nl. m(L
By: B79724DDE883482...
Name: Sammi Morrill
Title: SEDC Board Secretary
DocuSign Envelope ID: 9484852A-4EB5-47E1-BE7A-95D46F75A6DF
EXHIBIT A:
FUNDING AGREEMENT
DocuSign Envelope ID: 9484852A-4EB5-47E1-BE7A-95D46F75A6DF
This FUNDING AGREEMENT by and between the SCHERTZ ECONOMIC
DEVELOPMENT CORPORATION, a Texas non-profit corporation (hereinafter referred to as
the "SEDC"), and the CITY OF SCHERTZ, TEXAS, a Texas home -rule municipality
(hereinafter referred to as the "City"), is made and executed on the following recitals, terms, and
conditions.
WHEREAS, the SEDC is a Type B economic development corporation, created pursuant to
Chapter 505 of the Texas Local Government Code, as amended; and
WHEREAS, Section 501.103 authorizes expenditures that are found by the board of directors to
be required or suitable for infrastructure necessary to promote or develop new or expanded
business enterprises, such as streets and roads, rail spurs, water and sewer utilities, electric utilities,
or gas utilities, drainage, site improvements, and related improvements; and
WHEREAS, the SEDC and City of Schertz are partnering to fund
(hereinafter referred to as the "Project"); and
WHEREAS, the SEDC's Board of Directors have determined the financial assistance provided
to City is consistent and meets the definition of "project" as that term is defined in Section
of the Texas Local Government Code; and the definition of "cost" as that term is
defined by Section 501.152 of the Texas Local Government Code; and
WHEREAS, City agrees and understands that Section 501.073(a) of the Texas Local
Government Code requires the City Council of the City of Schertz, Texas, to approve all
programs and expenditures of the SEDC, and accordingly this Agreement is not effective until
City Council has approved this project at a City Council meeting called and held for that
purpose.
NOW, THEREFORE, for and in consideration of the agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the SEDC and City agree as follows:
SECTION 1. FINDINGS INCORPORATED.
The foregoing recitals are hereby incorporated into the body of this Agreement and shall
be considered part of the mutual covenants, consideration and promises that bind the parties.
SECTION 2. TERM.
This Agreement shall be effective as of the Effective Date, as defined herein, and shall
continue thereafter until , unless terminated sooner under the provisions hereof.
SECTION 3. DEFINITIONS.
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The following words shall have the following meanings when used in this Agreement.
(a) Act. The word "Act" means Chapters 501 to 505 of the Texas Local Government Code,
as amended.
(b) Agreement. The word "Agreement' means this Performance Agreement, together with
all exhibits and schedules attached to this Agreement from time to time, if any.
(c) City. The words "City" means the City of Schertz, Texas, a Texas home -rule municipality,
whose address for the purposes of this Agreement is 1400 Schertz Parkway Schertz, Texas
78154.
(d) Effective Date. The words "Effective Date" mean the date of the latter to execute this
Agreement by and between the City and the SEDC.
(e) Event of Default. The words "Event of Default' mean and include any of the Events of
Default set forth below in the section entitled "Events of Default."
(f) SEDC. The term "SEDC" means the Schertz Economic Development Corporation, a
Texas non-profit corporation, its successors and assigns, whose corporate address for the
purposes of this Agreement is 1400 Schertz Parkway Schertz, Texas 78154.
(g) Project. The word "Property" means
(h) Qualified Expenditures. The words "Qualified Expenditures" mean those costs associated
with , and which meet the
definition of "project' as that term is defined in Section 505.152 of the Act, and meet the
definition of "cost' as that term is defined in Section 501.152 of the Act.
(i) Term. The word "Term" means the term of this Agreement as specified in Section 2 of
this Agreement.
SECTION 4. AFFIRMATIVE COVENANTS OF THE CITY.
City covenants and agrees with SEDC that, while this Agreement is in effect, it shall
comply with the following terms and conditions:
(a) Funding. The City shall be entitled to funding from SEDC in the amount not to exceed
for Qualified Expenditures. City covenants and
agrees to submit to the SEDC invoices, receipts, or other documentation of the Qualified
Expenditures in a form acceptable to the SEDC prior to Project acceptance.
(b) Public Purpose. City agrees that the Project contemplated herein represents a public
purpose for which the proposed funds are authorized to be used.
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(c) Performance Conditions. City agrees to provide, make, execute, and deliver to SEDC
such other documents and other agreements as SEDC or its attorneys may reasonably
request to evidence the use of the funds for the Project.
(d) Performance. City agrees to perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in all other instruments and agreements between
City and SEDC.
SECTION 5. AFFIRMATIVE COVENANTS OF SEDC.
SEDC covenants and agrees with City that, while this Agreement is in effect, it shall
comply with the following terms and conditions:
(a) Financial Assistance for Qualified Expenditures. SEDC covenants and agrees to
provide funding in advance or by reimbursement for Qualified Expenditures made by the
City pursuant to Section 4(a) of this Agreement, in an amount not to exceed the lesser of
or the aggregate amount of said invoices, receipts, or
other documentation submitted by the City to SEDC within thirty (30) days of receipt of
said documentation.
(b) Performance. SEDC agrees to perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in all other instruments and agreements by and
between the City and SEDC.
SECTION 6. EVENTS OF DEFAULT.
Each of the following shall constitute an Event of Default under this Agreement:
(a) General Event of Default. Failure of City or SEDC to comply with or to perform any other
term, obligation, covenant or condition contained in this Agreement, or failure of City or
SEDC to comply with or to perform any other term, obligation, covenant or condition
contained in any other agreement by and between City and SEDC is an Event of Default.
(b) False Statements. Any warranty, representation, or statement made or furnished to SEDC
by or on behalf of City under this Agreement that is false or misleading in any material
respect, either now or at the time made or fiarnished is an Event of Default.
SECTION 7. EFFECT OF AN EVENT OF DEFAULT.
In the event of default under Section 6 of this Agreement, the non -defaulting party shall
give written notice to the other party of any default, and the defaulting party shall have thirty
(30) days to cure said default. Should said default remain uncured as of the last day of the
applicable cure period, and the non -defaulting party is not otherwise in default, the non -
defaulting party shall have the right to immediately terminate this Agreement. In the event, City
defaults and is unable or unwilling to cure said default within the prescribed time period, the
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amounts provided by the SEDC to City pursuant to Section 5(a) of this Agreement shall become
immediately due and payable by City to the SEDC.
SECTION 8. MISCELLANEOUS PROVISIONS.
The following miscellaneous provisions are a part of this Agreement:
(a) Amendments. This Agreement constitutes the entire understanding and agreement of the
parties as to the matters set forth in this Agreement. No alteration of or amendment to
this Agreement shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.
(b) Applicable Law and Venue. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, and all obligations of the parties created
hereunder are performable in Guadalupe County, Texas. Venue for any action arising
under this Agreement shall lie in the state district courts of Guadalupe County, Texas.
(c) Assignment. This Agreement may not be assigned without the express written consent
of the other party.
(d) Binding Obligation. This Agreement shall become a binding obligation on the
signatories upon execution by all signatories hereto. City warrants and represents that the
individual or individuals executing this Agreement on behalf of City has full authority to
execute this Agreement and bind City to the same. SEDC warrants and represents that
the individual executing this Agreement on its behalf has full authority to execute this
Agreement and bind it to the same.
(e) Caption Headings. Caption headings in this Agreement are for convenience purposes
only and are not to be used to interpret or define the provisions of the Agreement.
(f) Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which shall constitute one and the same
document.
(g) Notices. All notices required to be given under this Agreement shall be given in writing
and shall be effective when actually delivered or when deposited in the United States mail,
first class, postage prepaid, addressed to the party to whom the notice is to be given at the
address shown in Section 3 of this Agreement. Any party may change its address for
notices under this Agreement by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party's address. For notice
purposes, City agrees to keep SEDC informed at all times of City's current address.
(h) Severability. If a court of competent jurisdiction finds any provision of this Agreement to
be invalid or unenforceable as to any person or circumstance, such finding shall not render
that provision invalid or unenforceable as to any other persons or circumstances. If
feasible, any such offending provision shall be deemed to be modified to be within the
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limits of enforceability or validity; however, if the offending provision cannot be so
modified, it shall be stricken and all other provisions of this Agreement in all other respects
shall remain valid and enforceable.
(i) Time is of the Essence. Time is of the essence in the performance of this Agreement.
[The Remainder of this Page Intentionally Left Blank]
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THE PARTIES ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS
PERFORMANCE AGREEMENT, AND THE PARTIES AGREE TO ITS TERMS. THIS
AGREEMENT IS EFFECTIVE AS OF THE EFFECTIVE DATE AS IS PROVIDED
HEREIN.
CITY:
CITY OF SCHERTZ, TEXAS,
a Texas home -rule municipality,
By:
City Manager
Date Signed:
ATTEST:
Interim City Secretary
SEDC:
SCHERTZ ECONOMIC DEVELOPMENT
CORPORATION,
a Texas non-profit corporation
LE
SEDC Board President
Date Signed:
ATTEST:
SEDC Board Secretary