City of Baytown

CITY OF BAYTOWN

NOTICE OF MEETING

CITY COUNCIL REGULAR MEETING THURSDAY, JANUARY 26, 2012 6:30 P.M. CITY COUNCIL CHAMBER 2401 MARKET STREET BAYTOWN, TEXAS 77520

AGENDA

CALL TO ORDER AND ANNOUNCEMENT OF QUORUM

PLEDGE AND INVOCATION Council Member Scott Sheley, District No. 2

1. MINUTES

a. Consider Approving the Minutes of the City Council Regular Meeting for January 12, 2012 - City Clerk. Consider approving the minutes of the City Council Regular Meeting held on January 12, 2012.

2. RECOGNITIONS AND CITIZEN COMMUNICATIONS

a. Citizen Communication: Joan Martin. Ms. Joan Martin requests to address Council to persuade the Council to pass and enforce rules to stop dogs from running loose.

b. Years of Service Awards - Human Resources. Recognize City of Baytown employees for their Years of Service (5, 10, 15 plus years).

c. Employee and Team of the Month - Human Resources. Present the Employee and Team of the Month for the month of December.

d. Recognition: Daniel Adam Crespo - Administration. Present a Recognition to Daniel Adam Crespo for his outstanding community service and achievement of the Eagle Scout rank.

3. PROPOSED ORDINANCES

a. Consider Authorizing the Issuance of General Obligation and Refunding Bonds Series 2012 - Finance. Consider an ordinance authorizing the issuance of the City of Baytown, General Obligation and Refunding Bonds, Series 2012 and taking other action related thereto.

4. PUBLIC HEARINGS

a. First Public Hearing: Regarding a Strategic Partnership Agreement Related to a Limited Purpose Annexation with Chambers County Improvement District No. 3 for Approximately 948 Acres of Land in the City's Extraterritorial Jurisdiction, Generally Located East and West of Texas State Highway 99 and Needlepoint Road (FM 2354) Approximately 1,900 Feet South of Interstate 10 in Chambers County, Texas - Planning and Development Services. Conduct the first public hearing regarding a strategic partnership agreement related to a limited purpose annexation with Chambers County Improvement District No. 3 for approximately 948 acres of land in the City's extraterritorial jurisdiction, generally located east and west of Texas State Highway 99 and Needlepoint Road (FM 2354) approximately 1,900 feet south of Interstate 10 in Chambers County, Texas.

b. Second Public Hearing: Regarding a Strategic Partnership Agreement Related to a Limited Purpose Annexation with Chambers County Improvement District No. 3 for Approximately 948 Acres of Land in the City's Extraterritorial Jurisdiction, Generally Located East and West of Texas State Highway 99 and Needlepoint Road (FM 2354) Approximately 1,900 Feet South of Interstate 10 in Chambers County, Texas - Planning and Development Services. Conduct the second public hearing regarding a strategic partnership agreement related to a limited purpose annexation with Chambers County Improvement District No. 3 for approximately 948 acres of land in the City's extraterritorial jurisdiction, generally located east and west of Texas State Highway 99 and Needlepoint Road (FM 2354) approximately 1,900 feet south of Interstate 10 in Chambers County, Texas.

c. First Public Hearing: Regarding a Proposed Limited Purpose Annexation Through a Strategic Partnership Agreement for Approximately 948 Acres, Located East and West of Texas State Highway 99 and Needlepoint Road (FM 2354) Approximately 1,900 Feet South of Interstate 10 in Chambers County, Texas - Planning and Development Services. Conduct the first public hearing regarding the proposed limited purpose annexation through a strategic partnership agreement for approximately 948 acres of land in the City's extraterritorial jurisdiction, generally located east and west of Texas State Highway 99 and Needlepoint Road (FM 2354) approximately 1,900 feet south of Interstate 10 in Chambers County, Texas.

d. Second Public Hearing: Regarding a Proposed Limited Purpose Annexation Through a Strategic Partnership Agreement for Approximately 948 Acres, Located East and West of Texas State Highway 99 and Needlepoint Road (FM 2354) Approximately 1,900 Feet South of Interstate 10 in Chambers County, Texas - Planning and Development Services. Conduct the second public hearing regarding the proposed limited purpose annexation through a strategic partnership agreement for approximately 948 acres of land in the City's extraterritorial jurisdiction, generally located east and west of Texas State Highway 99 and Needlepoint Road (FM 2354) approximately 1,900 feet south of Interstate 10 in Chambers County, Texas.

e. Public Hearing: Regarding Amendments to Chapter 130 "Zoning" of the Code of Ordinances, Baytown, Texas, that Separates the Variance and Special Exception Processes and Adopts New Processes and Regulations for Variances, Non-Conforming Land Uses, and Non-Complying Structures - Planning and Development Services. Hold a public hearing regarding proposed amendments to Chapter 130 "Zoning" of the Code of Ordinances, Baytown, Texas, that separates the variance and special exception processes and adopts new processes and regulations for variances, non-conforming land uses, and non-complying structures.

f. Ordinance: Consider an Amendment to Chapter 130 "Zoning" of the Code of Ordinances, Baytown, Texas, that Separates the Variance and Special Exception Processes and Adopts New Processes and Regulations for Variances, Non-Conforming Land Uses, and Non-Complying Structures - Planning and Development Services. Consider an ordinance amending Chapter 130 "Zoning" of the Code of Ordinances, Baytown, Texas, that separates the variance and special exception processes and adopts new processes and regulations for variances, non-conforming land uses, and non-complying structures.

g. Public Hearing: Rezoning of Approximately 7.33 Acres from NC to MU - Planning and Development Services. Hold a public hearing giving all interested parties the right to appear and be heard regarding the application of Rene and Patricia Gharibeh to rezone approximately 7.33 acres from Neighborhood Conservation (NC) District to Mixed Use (MU) District, being Tracts 1A-2 and 1A-3 of the W. Ritchie Survey, Abstract No. 683, located between Sjolander Road and Crosby Cedar-Bayou Road along the south right-of-way of Interstate 10, Harris County, Texas.

h. Ordinance: Consider an Application by Rene and Patricia Gharibeh to Rezone Approximately 7.33 Acres of Land from Neighborhood Conservation (NC) District to Mixed Use (MU) District - Planning and Development Services. Consider the application of Rene and Patricia Gharibeh to rezone approximately 7.33 acres from Neighborhood Conservation (NC) District to Mixed Use (MU) District, being Tracts 1A-2 and 1A-3 of the W. Ritchie Survey, Abstract No. 683, located between Sjolander Road and Crosby Cedar-Bayou Road along the south right-of-way of Interstate 10, Harris County, Texas.

i. First Public Hearing: Regarding the Proposed Annexation of 608 Acres of Land in the ETJ - Planning and Development Services. Conduct the first public hearing regarding the proposed annexation of approximately 608 acres of land in the City's extraterritorial jurisdiction, generally located between Interstate 10 to the north, East Cedar Bayou-Lynchburg Road to the south, Garth Road on the west, North Main Street to the east, as well as the unincorporated property located approximately 500 feet east of North Main Street between Interstate 10 and West Cedar Bayou-Lynchburg Road in Harris County, Texas.

5. REPORTS

a. Receive the City of Baytown's Comprehensive Annual Financial Report and Single Audit Report - Finance. Receive the City of Baytown's Comprehensive Annual Financial Report and Single Audit Report for the fiscal year ending September 30, 2011.

b. Receive City of Baytown's Financial and Investment Reports for the Quarter Ending December 31, 2011 - Finance. Receive City of Baytown's Financial and Investment Reports for the Quarter Ending December 31, 2011.

6. CONSENT All Consent Agenda items listed are considered to be routine by the City Council and will be enacted by one motion. There will be no separate discussion of these items unless a Council Member requests, in which event the item will be removed from the Consent Agenda and considered in its normal sequence on the agenda.

a. Ordinance: Consider Authorizing the Sole Source Purchase of LED Freeway Lighting Fixtures from Ruud Lighting, Inc. - Finance. Consider an ordinance authorizing the sole source purchase of LED Freeway Lighting Fixtures from Ruud Lighting, Inc.

b. Ordinance: Consider Purchasing One (1) 2012 Frazer Ambulance with Dodge Chassis - Health. Consider an ordinance authorizing the purchase of one (1) 2012 Frazer Ambulance with Dodge Ram 4500 6.7-liter Diesel Chassis from Dallas Dodge Chrysler Jeep through the Houston-Galveston Area Council for the Baytown Health Department.

c. Ordinance: Consider Purchasing One (1) 2012 Case Wheel Loader for Solid Waste Division - Public Works. Consider an ordinance authorizing the purchase of one (1) 2012 Case 521 Wheel Loader from Hi-Way Equipment Company, LLC, through the Houston-Galveston Area Council.

d. Ordinance: Consider Purchasing One (1) 2013 Freightliner Truck for Solid Waste Division - Public Works. Consider an ordinance authorizing the purchase of one (1) 2013 Freightliner M2 106-80 truck with trash body and Prentice loader through the Houston-Galveston Area Council.

e. Ordinance: Consider Approving the installation of Two (2) Permanent Stop Signs on North Fifth Street and Ruth Avenue and Two (2) Permanent Stop Signs on North Sixth Street at Ruth Avenue - Public Works. Consider an ordinance amending Chapter 94 “Traffic and Vehicles,” Article IV “Specific Street Regulations,” Section 94-121 "Schedules enumerated" of the Code of Ordinances, Baytown, Texas, to authorize the installation of two (2) permanent stop signs to be placed on North Fifth Street at its intersection with Ruth Avenue and two (2) permanent stop signs on North Sixth Street at its intersection with Ruth Avenue.

f. Ordinance: Consider Approving the Installation of Two (2) Permanent Stop Signs on West Jack Avenue at its Intersection with North Whiting Street - Public Works. Consider an ordinance amending Chapter 94 “Traffic and Vehicles,” Article IV “Specific Street Regulations,” Section 94-121 "Schedules enumerated" of the Code of Ordinances, Baytown, Texas, to authorize the installation of two (2) permanent stop signs to be placed on West Jack Avenue at its intersection with North Whiting Street.

g. Ordinance: Consider Authorizing Remaining Funds for Year 2 of the Audit Contract with Belt Harris Pechacek, LLLP - Finance. Consider an ordinance authorizing remaining funds for Year 2 of the Agreement for Financial Auditing Services with Belt Harris Pechacek, LLLP.

h. Ordinance: CDBG Housing Reconstruction Projects for 517 1/2 N. Second Street and 318 N. HWY 146 - Planning and Development Services. Consider an ordinance awarding the housing reconstruction projects located at 517 1/2 N. Second Street and 318 N. HWY 146 to MLG Construction Company.

7. APPOINTMENTS

a. Appointments: Community Development Advisory Committee Appointments - Planning and Development Services. Discuss four (4) reappointments and two (2) appointments to the Community Development Advisory Committee (CDAC).

8. MANAGER'S REPORT Notice is hereby given in accordance with Section 551.0415 of the Texas Government Code, the City Council of the City of Baytown may receive a report about items of community interest from City staff and/or a member of the City Council, but no action or possible action shall be taken or discussed concerning the subject of such report, except as provided by Section 551.042 of the Texas Government Code.

a. Present the 11th Annual "Daddy and Me" Valentine's Dance - Parks and Recreation. The 11th Annual "Daddy and Me" Valentine's Dance will be held on Friday, February 3, 2012, from 7:00 p.m. until 10:00 p.m. at the Baytown Community Center.

b. Upcoming City Council Retreat, January 31, 2012 - Administration. The City Council will hold its Council Retreat, Tuesday, January 31, 2012, at 4:00 p.m. at the Spring Hill Suites located on Garth Road, north of I-10.

AIR-5501 1. a. BAYTOWN CITY COUNCIL MEETING Meeting Date: 01/26/2012 Consider Approving the Minutes of the City Council Regular Meeting for January 12, 2012 - City Clerk. Prepared for: Leticia Brysch Prepared by: Omega Jones, City Clerk's Office Department: City Clerk's Office

Information ITEM Consider approving the minutes of the City Council Regular Meeting held on January 12, 2012.

PREFACE Consider approving the minutes of the City Council Regular Meeting held on January 12, 2012.

RECOMMENDATION Staff recommends approval.

Fiscal Impact Fiscal Year: Acct Code: Source of Funds (Operating/Capital/Bonds): Funds Budgeted Y/N: Amount Needed: Fiscal Impact (Additional Information): There is no fiscal impact associated with this item.

Attachments City Council Regular Meeting Minutes - January 12, 2012 D R A F T MINUTES OF THE REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF BAYTOWN

January 12, 2012

The City Council of the City of Baytown, Texas, met in a Regular Meeting on January 12, 2012, at 6:30 P.M. in the Council Chamber of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance:

Brandon Capetillo Council Member Robert Hoskins Council Member David McCartney Council Member Mercedes Renteria Council Member Terry Sain Council Member Scott Sheley Council Member

Stephen H. DonCarlos Mayor

Robert D. Leiper City Manager Kevin Troller Assistant City Manager Ignacio Ramirez City Attorney Leticia Brysch City Clerk Keith Dougherty Sergeant at Arms

Mayor DonCarlos convened the January 12, 2012, City Council Regular Meeting with a quorum present at 6:30 P.M., all members were present.

Pledge of Allegiance, Texas Pledge, and Invocation was led by Council Member Renteria.

1. MINUTES

Mayor DonCarlos recommended considering items 1.a., 1.b., and 1.c. together.

a. Consider Approving the Minutes of the City Council Special Meeting held on November 21, 2011 - City Clerk.

b. Consider Approving the Minutes of the City Council Regular Meeting held on December 08, 2011 - City Clerk.

c. Consider Approving the Minutes of the City Council Special Emergency Meeting held on December 16, 2011 - City Clerk.

City Council Regular Meeting Minutes January 12, 2012 Page 2 of 30

A motion was made by Council Member Terry Sain and seconded by Council Member David McCartney approving the November 21, 2011 City Council Special Meeting, December 08, 2011, City Council Regular Meeting, and the December 16, 2011, City Council Special Emergency Meeting minutes. The vote was as follows:

Ayes: Mayor Stephen DonCarlos, Council Member Brandon Capetillo, Council Member Robert C. Hoskins, Council Member David McCartney, Council Member Mercedes Renteria III, Council Member Terry Sain, Council Member Scott Sheley

Nays: None

Approved

2. RECOGNITIONS AND CITIZEN COMMUNICATIONS

a. Citizen Communication: Michelle Reeves Phillips.

Ms. Michelle Reeves Phillips requested to address Council to thank the Council for its participation in the 2011 toy drive and request the date of December 22, 2012, for the next Crusin' Texas Toy Drive.

b. Resolution: Consider Accepting a Donation from ExxonMobil for Development of the Children’s Nature Discovery Area at the Baytown Nature Center - Parks and Recreation.

City Manager Leiper presented the agenda item and stated that Resolution No. 2176 accepts a $25,000 contribution from ExxonMobil for the development of the Children’s Nature Discovery Area. The funds will pay for a new “Blue Crab” climber in addition to other improvements to the Children’s Nature Discovery Area located in the Baytown Nature Center. The contribution also recognizes the Baytown Nature Center’s 10th anniversary. A ribbon cutting for the Children’s Nature Discovery Area will be planned in early spring. This donation was accepted but no formal vote was taken this item.

3. PUBLIC HEARINGS

a. Public Hearing: Regarding Proposed Amendments to Chapter 126, Redefining Subdivision and Modifying Enforcement and Penalties Section - Planning and Development Services.

At 6:41 P.M., Mayor DonCarlos opened the public hearing on a proposed ordinance amending Chapter 126 "Subdivisions," Article I "In General," Section 126-1 "Definitions," and Section 126-5 "Enforcement; Penalties" of the Code of Ordinances to exempt certain divisions of land from the subdivision regulations and to allow in certain instances the construction of improvements on property for which a final plat has not been approved by the Planning and Zoning Commission. City Council Regular Meeting Minutes January 12, 2012 Page 3 of 30

City Manager Leiper stated that this hearing deals with an ordinance that would amend the definition of subdivision and modify the enforcement and penalties section in order to exempt certain divisions of land from the subdivision regulations and to allow in certain instances the construction of improvements on property for which a final plat has not been approved by the Planning and Zoning Commission. This ordinance will exempt from platting the following:

1. a division of land into parts greater than five acres, where each part has access and no public improvement is being dedicated as described hereinabove; 2. a division of land owned by the city; 3. a division of land created solely by the city’s acquisition of a portion thereof; 4. a division of land created by order of a court of competent jurisdiction; 5. construction of up to four (4) model homes; 6. property subdivided prior to July 13, 1978; 7. construction of an accessory building on the same lot as a single family dwelling if no drainage improvements are required by Code; or 8. an addition or alteration to a single family dwelling existing on January 22, 2012 provided no drainage improvements are required by the code.

With there being no one registered to speak, Mayor DonCarlos closed the public hearing and reconvened the open meeting at 6:46 P.M. b. Ordinance: Consider Amendments to Chapter 126, Redefining Subdivision and Modifying Enforcement and Penalties Section - Planning and Development Services.

City Manager Leiper stated that the Planning and Zoning Commission discussed this item at their January 04, 2012 meeting and recommends approval.

A motion was made by Council Member Scott Sheley and seconded by Council Member Brandon Capetillo approving Ordinance No. 11,822. The vote was as follows:

Nays: None

Approved

City Council Regular Meeting Minutes January 12, 2012 Page 4 of 30

ORDINANCE NO. 11,822

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AMENDING CHAPTER 126 “SUBDIVISIONS,” ARTICLE I “IN GENERAL,” SECTION 126-1 “DEFINITIONS,” AND SECTION 126-5 “ENFORCEMENT; PENALTIES,” SUBSECTION (G) OF THE CODE OF ORDINANCES, BAYTOWN, TEXAS, TO EXEMPT CERTAIN DIVISIONS OF LAND FROM THE SUBDIVISION REGULATIONS AND TO ALLOW IN CERTAIN INSTANCES THE CONSTRUCTION OF IMPROVEMENTS ON PROPERTY FOR WHICH A FINAL PLAT HAS NOT BEEN APPROVED BY THE PLANNING AND ZONING COMMISSION; PRESCRIBING A MAXIMUM OF FIVE HUNDRED AND NO/100 DOLLARS ($500.00) FOR ALL OTHER VIOLATIONS; PROVIDING A REPEALING CLAUSE; CONTAINING A SAVINGS CLAUSE; AND PROVIDING FOR THE PUBLICATION AND EFFECTIVE DATE THEREOF.

4. PROPOSED ORDINANCES

a. Consider Authorizing Sale of a Portion of the Old Fire Station No. 5 Property - Administration.

City Manger Leiper presented the agenda item and stated that Ordinance No. 11,823 authorizes the sale of a portion of the property on which the old Fire Station No. 5 is located at 7210 Bayway Drive to Navarre-Robbins Partnership for $51,500, contingent upon a plat acceptable to the City Manager and approved by the Planning and Zoning Commission.

The City was contacted by a representative of EMAX General Contractors, Inc., regarding the possible purchase of the old Fire Station No. 5 property. However, an elevated storage tank is located on a portion such property, therefore, the City was not willing to sell the entire tract. The City and EMAX entered into an agreement to have that portion of the property not containing the tower appraised at EMAX's expense. Such property, being approximately 17,811 square feet of land, was appraised by Chet Theiss at $90,000. After receiving the appraisal, the City sought offers for the purchase of such property.

City Manager Leiper stated that two (2) invitations to bid were picked up and one (1) bid was received. Should the City Council wish to accept the offer to purchase, the buyer will be obligated to plat the property at its sole cost and expense.

A motion was made by Council Member Brandon Capetillo and seconded by Council Member Terry Sain approving Ordinance No.11,823. The vote was as follows:

Ayes: Mayor Stephen DonCarlos, Council Member Brandon Capetillo, Council Member Robert C. Hoskins, Council Member David City Council Regular Meeting Minutes January 12, 2012 Page 5 of 30

McCartney, Council Member Mercedes Renteria III, Council Member Terry Sain, Council Member Scott Sheley

Nays: None

Approved

ORDINANCE NO.11,823

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE SALE OF A PORTION OF THE PROPERTY ON WHICH THE OLD FIRE STATION NO. 5 IS LOCATED AT 7210 BAYWAY DRIVE TO NAVARRE-ROBBINS PARTNERSHIP FOR FIFTY-ONE THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($51,500.00), CONTINGENT UPON A PLAT ACCEPTABLE TO THE CITY MANAGER AND APPROVED BY THE BAYTOWN PLANNING AND ZONING COMMISSION; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Consider Authorizing Partial Release of Retainage to Angel Brothers Enterprises, Ltd., for the Hunt Road Extension Phase 1 Project - Engineering.

City Manager Leiper presented the agenda item and stated that Ordinance No.11,824 authorizes a partial release of retainage in the amount of $29,027.17 to Angel Brothers Enterprises, Ltd., for the Hunt Road Extension Phase 1 Project. The Hunt Road Extension Phase 1 Project extended and/or widened Hunt Road approximately 1,000 linear feet to the west of Garth Road and approximately 300 linear feet to the east of Garth Road. The original contract price of this project was $1,098,072.00. To date, change orders totaling $196,513.00 (adding the traffic signal to this contract) have been approved by the City Manager and/or the City Council. Therefore, the current contract cost is $1,294,585.00.

This construction project is complete with the exception of 400 linear feet of roadway and utility extensions (or approximately 75 % of the project) which is from the main Academy driveway on Hunt Road to Academy's western property line. The disagreement with a pipeline company regarding the party responsible to pay for lowering its pipeline in the vicinity is preventing this remaining portion from being constructed.

Since the completed portion of the project is operational and deemed acceptable, Angel Brothers Enterprise, Ltd. has requested that the retainage for only the completed portion of the project be reduced from 5% to 2%. As neither the City nor Angel Brothers Enterprises, Ltd. is responsible for this construction delay, staff is agreeable with reducing the retainage for only the completed portion of the project to 2%. The remaining retainage will be held in typical fashion until the construction project is 100% complete and eligible to be closed out. To date, the contractor has been paid $887,607.16. When the project is completed the contractor will be paid the balance of the contract amount or approximately $400,000. City Council Regular Meeting Minutes January 12, 2012 Page 6 of 30

A motion was made by Council Member David McCartney and seconded by Council Member Mercedes Renteria III approving Ordinance No.11,824. The vote was as follows:

Nays: None

Approved

ORDINANCE NO. 11,824

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING A PARTIAL RELEASE OF RETAINAGE IN THE AMOUNT OF TWENTY-NINE THOUSAND TWENTY-SEVEN AND 17/100 DOLLARS ($29,027.17) TO ANGEL BROTHERS ENTERPRISES, LTD., FOR THE HUNT ROAD EXTENSION PHASE 1 PROJECT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. c. Consider Authorizing the Closeout of Texas Avenue Streetscape Project - Engineering.

City Manager Leiper presented the agenda item and stated that Ordinance No.11,825 provides for the acceptance of the Texas Avenue Streetscape Project and the release of final payment to Stewart Builders, Inc. in the amount of $17,947.81. The original contract price of this project was $1,067,755.00; three (3) change orders were issued totaling $11,467.70, bringing the revised contract amount to $1,079.222.70. The contractor completed the contract on time with satisfactory workmanship.

A motion was made by Council Member Robert C. Hoskins and seconded by Council Member Scott Sheley approving Ordinance No. 11,825. The vote was as follows:

Nays: None

Approved

City Council Regular Meeting Minutes January 12, 2012 Page 7 of 30

ORDINANCE NO. 11,825

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, ACCEPTING THE TEXAS AVENUE STREETSCAPE PROJECT; AUTHORIZING FINAL PAYMENT OF THE SUM OF SEVENTEEN THOUSAND NINE HUNDRED FORTY- SEVEN AND 81/100 DOLLARS ($17,947.81) TO STEWART BUILDERS, INC., FOR SAID PROJECT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. d. Consider Amending Chapter 14 to Address the Classifying of Dangerous Animals and their Impoundment and Disposition - Health & EMS.

City Manager Leiper presented the agenda item. Mr. Mike Lester stated that Ordinance No.11,826 amends Chapter 14 "Animals” of the Code of Ordinances, Baytown, Texas, to add a new article to be numbered and entitled Article V "Dangerous Animals" to address the classifying of dangerous animals and their impoundment and disposition. Mr. Lester stated that this proposed new article to Chapter 14 reflects the State of Texas "Dangerous Dog" Law with the following significant modifications:

 refers to "animals" in general and not solely dogs;  includes attacks by an animal on another animal and not solely humans; and  requires the Animal Control Authority to report the incident to the municipal court for a hearing if the Animal Control Authority believes the animal is a dangerous animal.

The Animal Control Advisory Committee reviewed the proposed ordinance at its meeting on January 4th and recommends approval of the same.

During the discussion, there was an inquiry of this possibly overloading the municipal courts. City Manager Leiper stated that once a call is made in regards to an animal running loose, staff always tries to work with the owner before it goes to the court, so he didn't feel it would overload the municipal court.

A motion was made by Council Member David McCartney and seconded by Council Member Terry Sain approving Ordinance No. 11,826. The vote was as follows:

Nays: None

Approved

City Council Regular Meeting Minutes January 12, 2012 Page 8 of 30

ORDINANCE NO. 11,826

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AMENDING CHAPTER 14 “ANIMALS,” OF THE CODE OF ORDINANCES, BAYTOWN, TEXAS, TO ADD A NEW ARTICLE TO BE NUMBERED AND ENTITLED ARTICLE V “DANGEROUS ANIMALS” TO ADDRESS THE CLASSIFYING OF DANGEROUS ANIMALS AND THEIR IMPOUNDMENT AND DISPOSITION; PRESCRIBING A MAXIMUM OF FIVE HUNDRED AND NO/100 DOLLARS ($500.00) FOR ALL OTHER VIOLATIONS; PROVIDING A REPEALING CLAUSE; CONTAINING A SAVINGS CLAUSE; AND PROVIDING FOR THE PUBLICATION AND EFFECTIVE DATE THEREOF.

5. PROPOSED RESOLUTIONS

a. Consider a Resolution Approving the Issuance of Bonds by the Baytown Area Water Authority - Finance.

City Manager Leiper presented the agenda item and stated that Resolution No. 2177 approves the issuance of Bonds by the Baytown Area Water Authority ("BAWA").There is an opportunity for BAWA to refund certain of its outstanding obligations in order to achieve a present value debt service savings, which savings under current market conditions are estimated to be approximately $240,000. Additionally, the City and BAWA have identified a need for BAWA to acquire and construct certain equipment and improvements.

State law requires that the City Council approve the issuance of bonds by BAWA. Therefore, Resolution No. 2176 approves such issuance for the purposes of (i) refunding certain outstanding obligations of BAWA in an amount not to exceed $2,500,000 to achieve debt service savings, (ii) acquiring and constructing certain authorized equipment and improvements in an amount not to exceed $6,000,000, and (iii) paying the costs of issuing the bonds.

City Manager Leiper stated that in February and March, the same process will take place to issue City Bonds to refund about $7.3 million dollars worth of City debt which will save the City about $600,000.

A motion was made by Council Member David McCartney and seconded by Council Member Scott Sheley approving Resolution No. 2176. The vote was as follows:

City Council Regular Meeting Minutes January 12, 2012 Page 9 of 30

Nays: None

Approved

RESOLUTION NO. 2176

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, APPROVING THE ISSUANCE OF BONDS BY THE BAYTOWN AREA WATER AUTHORITY; AUTHORIZING REPRESENTATIVES TO TAKE FURTHER ACTION ASSOCIATED WITH THE ISSUANCE OF THE BONDS; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Consider a Resolution Acknowledging Receipt of a Federal Award for the FY2010 Urban Area Security Initiative (UASI) Grant Program - Fire.

City Manager Leiper presented the agenda item and stated that Resolution No. 2177 authorizes the City Manager to acknowledge receipt of and accept a Federal UASI Award in the amount of $522,680 from the State of Texas through the Texas Department of Public Safety for the FY2010 Urban Area Security Initiative (UASI) grant program funded by the U.S. Department of Homeland Security.

The funds will be used for implementation of the CBRNE and Regional Structural Collapse projects, as previously authorized by the Houston Urban Area Working Group's Executive Committee.

Project Details Grant Management & Administration $ 15,680 CBRNE Investment (Continuation) $235,000 Regional Structural Collapse (Phase V) $270,000 Award Total: $520,680

The grant period began August 01, 2010 and will end on July 31, 2012.

A motion was made by Council Member Scott Sheley and seconded by Council Member David McCartney approving Resolution No. 2177. The vote was as follows:

Nays: None

Approved

City Council Regular Meeting Minutes January 12, 2012 Page 10 of 30

RESOLUTION NO. 2177

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, ACKNOWLEDGING THE RECEIPT OF AND AUTHORIZING THE CITY MANAGER TO ACCEPT A FEDERAL UASI AWARD IN THE AMOUNT OF FIVE HUNDRED TWENTY- TWO THOUSAND SIX HUNDRED EIGHTY AND NO/100 DOLLARS ($522,680.00) FROM THE STATE OF TEXAS THROUGH THE TEXAS DEPARTMENT OF PUBLIC SAFETY FOR THE FY2010 URBAN AREA SECURITY INITIATIVE (UASI) GRANT PROGRAM FUNDED BY THE U.S. DEPARTMENT OF HOMELAND SECURITY; DESIGNATING AN AUTHORIZED REPRESENTATIVE; AUTHORIZING THE REPRESENTATIVE TO TAKE FURTHER ACTION ASSOCIATED WITH THE GRANT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. c. Consider a resolution granting the petition of Wolfgang Dominique, Inc., requesting annexation of a 0.4943 acre tract of land located near 5810 Garth Road, Harris County, Texas (El Toro Restaurant) - Planning and Development Services.

Mayor DonCarlos stated that the annexation for this item will be covered by the general annexation being done in the area and requested that this be withdrawn.

6. DISCUSSIONS

a. Discuss a Proposed LED Streetlight Replacement Project - Administration.

City Manager Leiper presented the agenda item to discuss a proposed LED streetlight replacement program and stated that TXDOT approved the LED lights based on the pilot project data that the city provided. City Manager Leiper stated that there is approximately $329,000 from the red light camera funds available for this project. He stated that the cost of material and installation will be $325,000. City Manager Leiper stated this will allow the replacement of every controlled access freeway light in Baytown to LED which will also save $35,000 a year in electricity and provides guaranteed 10 year life longevity on the lights.

City Manager Leiper stated that public works will provide the installation of the lights. During the discussion, there was an inquiry of what would be done with the old bulbs. City Manager Leiper stated that the option is to resell the old bulbs and put the money back into the general fund. City Manager Leiper stated that this item will be put on the next agenda for action

City Council Regular Meeting Minutes January 12, 2012 Page 11 of 30

7. REPORTS

a. Report on 2011 City of Baytown Community Service Initiatives - Administration.

Assistant to City Manager Nick Woolery presented a report on community service initiatives by City of Baytown employees during the 2011 calendar year and stated that there were over 40 community service and charitable giving initiatives in the year of 2011. The list is as follows:

 Habitat for Humanity - 36 volunteers with 144 volunteer hours;  Mayor and ExxonMobil Summer Youth Work Program;  Special Olympics-volunteers from multiple departments;  Angel Tree- Assisted 23 families with presents for 54 children;  R.A.P (Respect, Accountability, and Pride) Program;  Emergency Preparedness Boy Scout Merit Badges;  Public Works Adopt-A-Street;  Toys for Tots-Police compete in a Tournament in Pearland;  Police Explorers- PD sponsors kids and provides mentorship;  Wounded Warriors;  Child Safety Seat Program;  Teen Life Skills Academy;  Relay for Life;  Pennies for Justice;  Domestic Violence Cell Phone Program;  Jail Break Run;  Blue Santa;  Fill the Boot Campaign;  Fire Scholarships);  Fire Golf Tournament;  Pink Heals Tour;  Share Your Christmas Food Drive;  Adopt a Family;  Food for Fines;  Donation Drive; and  United Way b. Receive 2011 Grant Report - Administration.

Leasa Lopez, City of Baytown Grant Coordinator, presented Council with the 2011 Grant Report and stated that the report summarizes a compilation of state, federal, and other grants. Mrs. Lopez provided definitions for the following terms for understanding purposes:

City Council Regular Meeting Minutes January 12, 2012 Page 12 of 30

 Pass-Through Grants- refers to awards from a funder to any entity that is then passed on through to the City as a sub award;  Direct Awards-are monies for which the City applies to and receives directly from the funder;  Formula Grants-is one in which the funder basis the amount for which the City may apply on grant specific criteria such as population or crime rate.

Mrs. Lopez stated that the lists of grants are as follows:

Federal Grant Awards: DOJ: VOCA Family Violence $239,853 DOJ: Bulletproof Vests $17,942 DOJ: ARRA JAG: DashCams $156,991 DOJ: JAG Grants: FATS/OT $105,107 ONDCP: HIDTA $4,049,660 DOE: EECBG Sidewalks $672,300 HUD: CDBG Ike $12,059,464 HUD: CDBG, ARRA CDBG $1,120,583 US DHS: UASI, EM, Ike $7,159,783 US DHS: SAFER/AFG $1,023,995 Total $26,605,678

State Grant Awards: TxDOT: Traffic Signals $13,470 TCEQ: Baytown Nature Ctr. $189,760 OOG-CJD/H-GAC: BP Academy $23,446 TSLAC: Loan Star Libraries $28,417 TxDSHS: EMS Local Projects $14,686_ Total $269,779

Awards Since 09-30-2011 BZPP 201 (BPD) $190,000 CMP (Texas GLO) $81,000 TxDOT STEP Grant $86,032 UASI 2010 (BFD) $540,706 UASI/SHSP 2011 (BFD) $10,403 HUD/CDBG-R Ike 2.1 (P&D) $5,197,849 HUD/CDBG-R Ike 2.2 (P&D) $16,102,898 Total $22,308,888

Other 2011 Grants submitted BPD $1,772,905 BFD $1,015,340 BHD $293,250 OEM $602,500 P&R $581,000 City Council Regular Meeting Minutes January 12, 2012 Page 13 of 30

ADM $121,816

Mrs. Lopez stated that the other 2011 grants submitted included bomb squad equipment, mobile command vehicle, beautification/graffiti abatement (KTB), PPE, fire station alert system, sidewalks, two (2) new vehicles (BHD), fire extinguisher training equipment, oxygen boost system (EMS), and a safe route to school mini-grant (Lamar Elem.)

8. CONSENT

All Consent Agenda items listed are considered to be routine by the City Council and will be enacted by one motion. There will be no separate discussion of these items unless a Council Member requests, in which event the item will be removed from the Consent Agenda and considered in its normal sequence on the agenda.

A motion was made by Council Member Scott Sheley and seconded by Council Member David McCartney approving consent items 8.a., 8.b., 8.c., 8.d., 8.e., 8.f., 8.g., 8.h., 8.j., 8.k., 8.l., 8.m., 8.n., 8.o., 8.p., 8.q., 8.r., and 8.s. The vote was as follows:

Nays: None

Approved a. Ordinance No. 11,827: Pre-Event Emergency Debris Monitoring Contract Renewal - Emergency Management.

Ordinance No.11,827 authorizes the renewal of the pre-event contract for emergency debris monitoring services with Malcolm Pirnie, Inc., if a hurricane or other disaster were to occur in the City of Baytown. Malcolm Pirnie submitted a written request to renew its contract for another year for the same pricing, terms and conditions. This standby contract would be eligible for activation upon the declaration of a state of emergency by the Mayor, City Manager, or Emergency Management Coordinator, in accordance with Chapter 22 of the Baytown Code of Ordinances and is to be utilized in the event of an emergency whereby it is necessary to monitor and supervise the debris clearance of our streets and public lands, as well as, to monitor the removal and disposal of potentially millions of cubic yards of demolished trees, building materials, hazardous wastes, furniture, and vehicles from Baytown. This contract requires the contractor to validate each load, provide daily, weekly and monthly reconciliation reports and billing statements, and establish quantity-based pricing for services.

FEMA requires that any contracts executed to remove disaster debris from streets, lands, and waterways must be publicly advertised and awarded to ensure competitive and fair City Council Regular Meeting Minutes January 12, 2012 Page 14 of 30

pricing. By complying with FEMA's requirements, the city remains eligible for post- disaster financial assistance, in the amount of up to 75% of eligible costs in the aftermath of a presidentially declared disaster. No monies are attached to this contract unless activated due to a state of emergency.

ORDINANCE NO.11,827

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, RENEWING THE AGREEMENT TO MONITOR PERFORMANCE OF DEBRIS REMOVAL CONTRACTS WITH MALCOLM PIRNIE, INC.; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Ordinance No. 11,828: Pre-Event Emergency Debris Monitoring Contract Renewal - Emergency Management.

Ordinance No.11,828 authorizes the renewal of the pre-event contract for emergency debris monitoring services with Neel-Schaffer, Inc., as contractor if a hurricane or other disaster were to occur in the City of Baytown. Neel-Schaffer submitted a written request to renew its contract for another year for the same pricing, terms and conditions. The standby contract would be eligible to be activated upon the declaration of a state of emergency by the Mayor, City Manager, or Emergency Management Coordinator in accordance with Chapter 22 of the Baytown Code of Ordinances and is to be utilized in the event an emergency occurs whereby it is necessary to monitor and supervise the debris clearance of our streets and public lands and then to monitor the removal and disposal of potentially millions of cubic yards of demolished trees, building materials, hazardous wastes, furniture, and vehicles from Baytown after any disaster, particularly a hurricane. This contract requires the contractor to validate each load, provide daily, weekly and monthly reconciliation reports and billing statements and establish quantity- based pricing for services.

FEMA requires that any contracts executed to remove disaster debris from our streets, lands, and waterways must be publicly advertised and awarded to ensure competition and fair pricing. By complying with FEMA requirements, we remain eligible for post-disaster financial assistance, in the amount of up to 75% of eligible costs in the aftermath of a presidentially declared disaster. No monies are attached to this contract unless activated due to a state of emergency.

ORDINANCE NO.11,828

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, RENEWING THE AGREEMENT TO MONITOR PERFORMANCE OF DEBRIS REMOVAL CONTRACTS WITH NEEL-SCHAFFER, INC.; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.

City Council Regular Meeting Minutes January 12, 2012 Page 15 of 30 c. Ordinance No. 11,829: Pre-Event Emergency Debris Removal Contract Renewal - Emergency Management.

Ordinance No.11,829 authorizes the renewal of the primary pre-event contract for emergency debris removal services with BAMACO, Inc., as primary contractor if a hurricane or other disaster were to occur in the City of Baytown. BAMACO submitted a written request to renew its contract for another year for the same pricing, terms and conditions. The standby contract would be eligible to be activated upon the declaration of a state of emergency by the Mayor, City Manager, or Emergency Management Coordinator in accordance with Chapter 22 of the Baytown Code of Ordinances and is to be utilized in the event an emergency occurs whereby it is necessary to clear, remove and dispose of all debris from our streets, lands, ditches, and shorelines after a hurricane or other disaster. The contract establishes quantity-based pricing for services which will depend upon the amount of debris picked up, transported, disposed of, and/or time and supplies for equipment or services used.

FEMA requires that any contracts executed to remove disaster debris from streets, lands, and waterways must be publicly advertised and awarded to ensure competitive and fair pricing. By complying with FEMA's requirements, we remain eligible for post-disaster financial assistance, in the amount of up to 75% of eligible costs in the aftermath of a presidentially declared disaster. No monies are attached to this contract unless activated due to a state of emergency.

BAMACO performed excellent services after Hurricane Ike.

ORDINANCE NO.11,829

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, RENEWING THE EMERGENCY DEBRIS REMOVAL PRE-EVENT CONTRACT WITH BAMACO, INC.; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. d. Ordinance No. 11,830: Pre-Event Emergency Debris Removal Contract Renewal - Emergency Management.

Ordinance No.11,830 authorizes the renewal of the secondary pre-event contract for emergency debris removal services with Grubbs Emergency Services, LLC, as secondary contractor if a hurricane or other disaster were to occur in the City of Baytown. Grubbs submitted a written request to renew its contract for another year for the same pricing, terms and conditions. The standby contract would be eligible to be activated upon the declaration of a state of emergency by the Mayor, City Manager, or Emergency Management Coordinator in accordance with Chapter 22 of the Baytown Code of Ordinances and is to be utilized in the event an emergency occurs whereby it is necessary to clear, remove and dispose of all debris from the streets, lands, ditches, and shorelines after a hurricane or other disaster. The contract establishes quantity-based pricing for City Council Regular Meeting Minutes January 12, 2012 Page 16 of 30

services which will depend upon the amount of debris picked up, transported, disposed of, and/or time and supplies for equipment or services used.

FEMA requires that any contracts executed to remove disaster debris from streets, lands, and waterways must be publicly advertised and awarded to ensure competitive and fair pricing. By complying with FEMA's requirements, the city remains eligible for post- disaster financial assistance, in the amount of up to 75% of eligible costs in the aftermath of a presidentially declared disaster. No monies are attached to this contract unless activated due to a state of emergency.

ORDINANCE NO.11,830

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, RENEWING THE EMERGENCY DEBRIS REMOVAL PRE-EVENT CONTRACT WITH GRUBBS EMERGENCY SERVICES, LLC; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. e. Ordinance No. 11,831: Pre-Event Emergency Services for Food and Supplies Contract Renewal - Emergency Management.

Ordinance No.11,831 authorizes the renewal of the pre-event contract for standby emergency services for food and supplies with Sysco Food Services of Houston L.P., as supplier if a hurricane or other disaster were to occur in the City of Baytown. Sysco submitted a written request to renew its contract for another year for the same terms and conditions. The standby contract would be eligible to be activated upon the declaration of a state of emergency by the Mayor, City Manager, or Emergency Management Coordinator in accordance with Chapter 22 of the Baytown Code of Ordinances and is to be utilized in the event an emergency occurs whereby it is necessary to obtain food and supplies after a hurricane or other disaster. The contract establishes quantity-based pricing for food and supplies to be delivered and utilized by the City.

FEMA requires that any contracts executed to purchase food and related emergency supplies in preparation for or in the aftermath of a disaster must be publicly advertised and awarded to ensure competition and fair pricing. By complying with FEMA’s requirements, we remain eligible for post-disaster financial assistance, in the amount of up to 75% of eligible costs in the aftermath of a presidentially declared disaster. No monies are attached to this contract unless activated due to a state of emergency.

Sysco performed excellent services during and after Hurricane Ike.

ORDINANCE NO.11,831

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, RENEWING THE EMERGENCY SERVICES FOR FOOD AND SUPPLIES PRE-EVENT AGREEMENT WITH City Council Regular Meeting Minutes January 12, 2012 Page 17 of 30

SYSCO FOOD SERVICES OF HOUSTON L.P.; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.

f. Ordinance No. 11,832: Pre-Event Emergency Repair of Stormwater Collections Contract Renewal - Emergency Management.

Ordinance No.11,832 authorizes the renewal of the pre-event contract for emergency restoration and repair of stormwater collection systems with Environmental Management Resources, Inc., (EMR) as primary contractor if a hurricane or other disaster were to occur in the City of Baytown. EMR submitted a written request to renew their contract for another year for the same pricing, terms and conditions. This standby contract is to be utilized in the event an emergency occurs whereby it is necessary to clear, remove and dispose of all debris from the City’s stormwater collection, conveyance and discharge system after a hurricane or other disaster. The contract establishes firm pricing for all services, the majority of which will depend upon the size and linear feet of collections systems to be cleaned out.

The standby contract would be eligible to be activated upon the declaration of a state of emergency by the Mayor, City Manager, or Emergency Management Coordinator in accordance with Chapter 22 of the Baytown Code of Ordinances. No monies are attached to this contract unless activated due to a state of emergency.

ORDINANCE NO.11,832

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, RENEWING THE EMERGENCY SEWER PUMPING AND DISPOSAL AGREEMENT WITH ENVIRONMENTAL MANAGEMENT RESOURCES, INC.; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. g. Ordinance No. 11,833: Annual Roll-off Containers Services Contract Renewal - Finance.

Ordinance No.11,833 authorizes the fourth renewal of the Annual Roll-off Container Services contract with Waste Management of Texas, in the amount of $195,650. Waste Management submitted a written request to renew the current contract for the same pricing, terms and conditions. The original contract was awarded for $156,520. The new award total includes the same amount as last renewal inclusive of a 25% change order. Additional hauls for 30 and/or 40 yard containers, which haul price includes the delivery, pickup, rental, transportation, disposal and all other related costs, is for the Green Center City Council Regular Meeting Minutes January 12, 2012 Page 18 of 30

to operate an extra day per week and for the Clean Team Project. Containers will be used (i) by the public for collection of junk, heavy trash, and building materials at the Green Center; (ii) for special events throughout the year; and (iii) by various departments on a routine basis. Waste Management provides excellent service.

ORDINANCE NO.11,833

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, RENEWING THE CONTRACT WITH WASTE MANAGEMENT OF TEXAS, INC., SUCCESSOR IN INTEREST TO CITY WASTE, INC., FOR THE ANNUAL ROLL-OFF CONTAINER SERVICES AND AUTHORIZING PAYMENT BY THE CITY OF BAYTOWN, THE SUM OF ONE HUNDRED NINETY-FIVE THOUSAND SIX HUNDRED FIFTY AND NO/100 DOLLARS ($195,650.00); AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. h. Ordinance No. 11,834: Consider Authorizing the Annual Cement Stabilized Sand Contract Renewal - Finance.

Ordinance No. 11,834 authorizes the renewal of the Annual Cement Stabilized Sand Contract to Megasand Enterprises, Inc., in the amount of $174,714.98. Megasand Enterprises, Inc., submitted a written request to renew the current contract for another term with a 3.4% CPI increase. Cement stabilized sand is used by the Public Works and Parks and Recreation Department for various projects throughout the City. Megasand continues to provide excellent service.

ORDINANCE NO.11,834

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, RENEWING THE ANNUAL CEMENT STABILIZED SAND CONTRACT WITH MEGASAND ENTERPRISES, INC.; AUTHORIZING PAYMENT BY THE CITY OF BAYTOWN FOR THE SUM OF ONE HUNDRED SEVENTY-FOUR THOUSAND SEVEN HUNDRED FOURTEEN AND 98/100 DOLLARS ($174,714.98); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.

i. Ordinance No. 11,835: Consider Authorizing an Interlocal Agreement with Tarrant County for Cooperative Purchasing - Finance.

Ordinance No.11,835 authorizes an interlocal agreement with Tarrant County for cooperative purchasing. This will allow the City to take advantage of savings realized by the purchasing practices of Tarrant County. This is similar to agreements into which the City has entered with City of Pasadena, Goose Creek Consolidated Independent School District, and the City of Fort Worth. There is no fee to utilize the agreement. City Council Regular Meeting Minutes January 12, 2012 Page 19 of 30

ORDINANCE NO.11, 835

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AN INTERLOCAL AGREEMENT WITH TARRANT COUNTY FOR COOPERATIVE PURCHASING; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. j. Ordinance No. 11,836: Consider Authorizing the Harris County Appraisal District Annual Assessment - Finance.

Ordinance No.11,836 authorizes the payment of an annual assessment to the Harris County Appraisal District (HCAD) for appraisal services for the 2012 tax year. The HCAD assessment is made in accordance with Chapter 6, Section 6.06 of the Texas Property Tax Code to all participating entities. The City of Baytown is taxing unit 51 and is shown on page 1 of Harris County's assessment detail with an estimated payment of $147,928. The assessment is paid quarterly with the first payment being due prior to January 1, 2012. Such payment has been made. Therefore, this proposed ordinance encumbers $110,946, the funds necessary for the remaining three payments for the 2012 tax year.

Since all units have not levied for 2011, the statement uses the tax levy for 2010, in calculation of the 2012 assessment as required by Section 6.06 (e) of the Texas Property Tax Code. The 2012 second quarter statement will reflect a recalculation and adjustment of the assessment using the 2011 levy.

ORDINANCE NO.11,836

AN ORDINANCE OF THE CITY COUNCIL, CITY OF BAYTOWN, TEXAS, AUTHORIZING THE PAYMENT OF AN ANNUAL ASSESSMENT TO HARRIS COUNTY APPRAISAL DISTRICT FOR APPRAISAL SERVICES FOR THE 2012 TAX YEAR IN AN AMOUNT NOT TO EXCEED ONE HUNDRED TEN THOUSAND NINE HUNDRED FORTY-SIX AND NO/100 DOLLARS ($110,946.00); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. k. Ordinance No. 11,837: Authorizing an Earnest Money Contract with Ronnie G. Hill for Purchase of 220 W. Pearce Street - Administration.

Ordinance No.11,837 authorizes an Earnest Money Contract with Ronnie G. Hill for the purchase of property located at 220 W. Pearce Street, Baytown, Texas. The acquisition is contingent upon (i) the Seller authorizing the demolition of the structure on the property, (ii) obtaining partial releases in a form satisfactory to the City from all of the taxing entities that have liens against or extending to the property, (iii) an environmental site City Council Regular Meeting Minutes January 12, 2012 Page 20 of 30

assessment, and (iv) the City Council's approval of the earnest money agreement. The property will be used for municipal purposes. The proposed earnest money contract establishes a sales price of $84,000.00 and sets the closing date as January 31, 2012.

ORDINANCE NO.11,837

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AN EARNEST MONEY CONTRACT WITH RONNIE G. HILL FOR PROPERTY LOCATED AT 220 W. PEARCE STREET FOR MUNICIPAL PURPOSES; AUTHORIZING PAYMENT OF A PURCHASE PRICE FOR SUCH PROPERTY IN AN AMOUNT NOT TO EXCEED EIGHTY-FOUR THOUSAND AND NO/100 DOLLARS ($84,000.00); AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. l. Ordinance No. 11,838: Consider Authorizing the City Manager to Negotiate and Execute an Engagement Letter with Bracewell & Giuliani, LLP, to Perform Legal Services as the City's Bond Counsel and to Take Appropriate Action to Transfer the City's Files, Records, and Documents from Vinson & Elkins, LLP, to Bracewell & Giuliani, LLP, and Approving Similar Action to be Taken by the Baytown Area Water Authority - Administration.

Ordinance No.11,838 authorizes the City Manager to negotiate and execute an engagement letter with Bracewell & Giuliani, LLP, to perform legal services as the City's bond counsel and to take appropriate action to transfer the City's files, records, and documents from Vinson & Elkins, LLP, to Bracewell & Giuliani, LLP, and approves similar action to be taken by the Baytown Area Water Authority ("BAWA"). The engagement letter will contain terms and conditions acceptable to the City Manager and the City Attorney.

Vinson & Elkins is dissolving its public finance practice. The public finance attorneys will move on or about January 13, 2012, to Bracewell & Giuliani, LLP. Therefore, this proposed resolution is to facilitate a smooth transition and ensure uninterrupted service to the City and to BAWA.

ORDINANCE NO.11,838

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND EXECUTE AN ENGAGEMENT LETTER WITH BRACEWELL & GIULIANI, LLP, TO PERFORM LEGAL SERVICES AS THE CITY'S BOND COUNSEL AND TO TAKE APPROPRIATE ACTION TO TRANSFER THE CITY'S FILES, RECORDS, AND DOCUMENTS FROM VINSON & ELKINS, LLP, TO BRACEWELL & GIULIANI, LLP, AND APPROVING SIMILAR ACTION TO BE City Council Regular Meeting Minutes January 12, 2012 Page 21 of 30

TAKEN BY THE BAYTOWN AREA WATER AUTHORITY; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. m. Ordinance No. 11,839: Authorizing an Interlocal Agreement with the Baytown Municipal Development District to Provide Administrative Services to the District - Administration.

Ordinance No.11,839 authorizes an Interlocal Agreement between the Baytown Municipal Development District (the "MDD") and the City of Baytown for Administrative Services. Under the agreement the City will develop, organize and manage the MDD's projects. Currently, the City of Baytown and the MDD in most cases enter into interlocal for funding of certain agreements. Such practice is expected to continue; however, should the District desire to contact directly with a third party for a development project, this contract provides for the administration of such project. The agreement also designates the City as the purchasing agent for the MDD. Those persons working on projects of the MDD will be City employees and the City assumes responsibility for the supervision and control of its employees.

The agreement will be funded in accordance with the amount allocated by the MDD each year through its budget process. The MDD will not be obligated under the agreement to pay more than what it collects in sales and use tax for a given year. The agreement has a term of two years with automatic renewals and may be terminated for cause by either party after providing a 30-day cure period. The MDD approved the agreement at its January 5th meeting.

ORDINANCE NO.11,839

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE AND THE CITY CLERK TO ATTEST TO AN INTERLOCAL AGREEMENT WITH THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT FOR ADMINISTRATIVE SERVICES; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. n. Ordinance No. 11,840: Consider Authorizing the Closeout of West District Wastewater Treatment Plant - Force Main Project - Engineering.

Ordinance No.11,840 provides for acceptance of the West District Wastewater Treatment Plant - Force Main Project and release final payment in the amount of $58,055.86 to EP Brady. The original contract price of this project was $1,149,525.20; four change orders were issued resulting in a total deduction of $18,923.70, bringing the revised contract amount to $1,130,601.50. The contractor completed the contract on time with satisfactory workmanship.

City Council Regular Meeting Minutes January 12, 2012 Page 22 of 30

ORDINANCE NO.11,840

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, ACCEPTING THE WEST DISTRICT WASTEWATER TREATMENT PLANT FORCE MAIN PROJECT; AUTHORIZING FINAL PAYMENT OF THE SUM OF FIFTY-EIGHT THOUSAND FIFTY-FIVE AND 86/100 DOLLARS ($58,055.86) TO E.P. BRADY, LTD, FOR SAID PROJECT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. o. Ordinance No. 11,841: Consider Authorizing Change Order No. 4 for Fire Station No. 6 - Engineering.

Ordinance No. 11,841 authorizes Change Order No. 4 to the construction contract with Hassell Construction Company, Inc., for the Fire Station No. 6 Project. This deductive change order in the amount ($26,450.00) is a credit for the stained floors and unused funds from the Owners Betterment Allowance.

ORDINANCE NO.11,841

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING CHANGE ORDER NO. 4 WITH HASSELL CONSTRUCTION COMPANY FOR THE FIRE STATION NO. 6 PROJECT DEDUCTING THE SUM OF TWENTY-SIX THOUSAND FOUR HUNDRED FIFTY AND NO/100 DOLLARS ($26,450.00) AS A CREDIT FOR THE UNACCEPTABLE STAINED FLOORS AND UNUSED FUNDS FROM THE BETTERMENT ALLOWANCE; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. p. Ordinance No. 11,842: Consider Authorizing Change Order No. 3 for North Main/I-10 Utility Project - Engineering.

Ordinance No. 11,842 authorizes Change Order No. 3 to the North Main/I-10 Utility Project Phase 2 with E.P. Brady, LTD, in the amount of $37,572.90. The contractor encountered unknown obstruction under IH-10 (likely an old footing from the previous overpasses on the freeway). This change order will allow the contractor to re-work the existing tunnel shaft and excavate a new tunnel shaft. This change order also includes additional dewatering and surveying, and bulk heading the existing 48" casing, grout fill and abandon in place. This is necessary to complete the project.

ORDINANCE NO.11,842

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING CHANGE ORDER NO. 3 WITH City Council Regular Meeting Minutes January 12, 2012 Page 23 of 30

E.P. BRADY, LTD, FOR THE NORTH MAIN/I-10 UTILITY PROJECT: PHASE 2; AUTHORIZING PAYMENT BY THE CITY OF BAYTOWN, THE SUM OF THIRTY-SEVEN THOUSAND FIVE HUNDRED SEVENTY-TWO AND 90/100 DOLLARS ($37,572.90); AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. q. Ordinance No. 11,843: Consider Authorizing Change Order No. 2 for CDBG Non-Housing Wastewater Emergency Power Project: Auxiliary Pumps and Lift Station- Engineering.

Ordinance No.11,843 authorizes Change Order No. 2 to the CDBG Non-Housing Wastewater Emergency Power Project: Auxiliary Pumps and Lift Station contract with Nunn Constructors, Inc., subject to approval by the General Land Office. While the vast majority of this project is funded by CDBG Funds, we have exceeded the grant amounts and this change order is being funded by Water and Sewer Fund bond interest funds in an amount not to exceed $278,870. This change order is for removal of an abandoned force main that conflicts with pier placement and cap at the lift station located at James Street and also to construct a new lift station at the Point Royale site near Natchez Drive. The current contract amount is $1,435,868 and this change order increases the new contract total to $1,714,738.

ORDINANCE NO.11,843

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING CHANGE ORDER NO. 2 WITH NUNN CONSTRUCTORS, INC., FOR THE CDBG NON-HOUSING WASTEWATER EMERGENCY POWER PROJECT: AUXILIARY PUMPS & LIFT STATION SUBJECT TO APPROVAL BY THE TEXAS GENERAL LAND OFFICE; AUTHORIZING PAYMENT BY THE CITY OF BAYTOWN, THE SUM OF TWO HUNDRED SEVENTY-EIGHT THOUSAND EIGHT HUNDRED SEVENTY AND NO/100 DOLLARS ($278,870.00); AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. r. Ordinance No. 11,844: Consider Authorizing the Annual Harris County Radio Airtime Payment - ITS.

Ordinance No. 11,844 authorizes payment in the amount of $132,081.49 for annual radio airtime lease with Harris County. This payment is for the term commencing on October 01, 2011, and ending September 30, 2012. The City has an interlocal agreement with Harris County for providing radio services for Public Safety, Public Works, Parks & Recreation, Engineering and Health Departments on their 800 MHz radio system. Harris County ITC manages all radio functionality and coordinates with the City on usage requirements, radio configuration and operations. The City provides and programs the actual hardware devices. City Council Regular Meeting Minutes January 12, 2012 Page 24 of 30

ORDINANCE NO. 11,844

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE PAYMENT IN THE AMOUNT OF ONE HUNDRED THIRTY-TWO THOUSAND EIGHTY- ONE AND 49/100 DOLLARS ($132,081.49) TO HARRIS COUNTY FOR ITS RADIO AIRTIME LEASE FOR THE PERIOD COMMENCING ON OCTOBER 1, 2011, AND ENDING SEPTEMBER 30, 2012; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.

s. Ordinance No. 11,845: Purchase Sole Source Purchase Firefighter Protective Clothing - Fire.

Ordinance No.11,845 authorizes the sole source purchase of Firefighting Protective Clothing from Casco Industries, Inc., in the amount of $54,158.00. The Fire Department will purchase bunker gear for twenty-six firefighters in order to maintain our existing replacement program to enable us to comply with NFPA 1851. Casco Industries, Inc., is the sole source distributor for Globe bunker gear in the State of Texas and surrounding states.

The National Fire Protection Association (NFPA) 1851, entitled "Standard on Selection, Care and Maintenance of Protective Ensembles for Structural Fire Fighting and Proximity Fire Fighting," was implemented by the Texas Commission on Fire Protection and requires that all structural personal protective equipment must be maintained, cared and retired per the standard minimum specified.

ORDINANCE NO.11,845

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE PAYMENT OF THE SUM OF FIFTY-FOUR THOUSAND ONE HUNDRED FIFTY-EIGHT AND NO/100 DOLLARS ($54,158.00) TO CASCO INDUSTRIES, INC., FOR THE PURCHASE OF FIREFIGHTING PROTECTIVE CLOTHING; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF.

9. EXECUTIVE SESSION

a. Executive Session: City Manager's Annual Performance Evaluation - City Council.

b. Executive Session: Municipal Court Judge Annual Performance Evaluation - City Council. City Council Regular Meeting Minutes January 12, 2012 Page 25 of 30

At 7:54 P.M., Mayor DonCarlos recessed into and conducted an executive session pursuant to Section 551.074 of the Texas Government Code to deliberate the annual performance evaluation of the City Manager and the Municipal Court Judge.

At 8:18 P.M., Mayor DonCarlos reconvened the Open Meeting of the City Council Regular Meeting and announced that in accordance with Section 551.102 of the Texas Open Meetings Act, no action was taken in the Executive Session.

10. MOTIONS

a. Discuss and Take Appropriate Action regarding the City Manager's Annual Performance Evaluation - City Council.

Mayor DonCarlos presented the agenda item to discuss and take appropriate action regarding the City Manager Robert D. Leiper's Annual Performance Evaluation during the past year. Mayor DonCarlos stated that Council unanimously agreed that Mr. Leiper's performance as City Manager was great and they are pleased with the direction in which the City is going. Additionally, in accordance with Mr. Leiper's wishes, he did not accept a raise as the City employee's did not receive a raise, but will participate in the city employee’s bonus program.

b. Discuss and Take Appropriate Action regarding the Municipal Court Judge's Annual Performance Evaluation - City Council.

City Manager Leiper presented the agenda item to discuss and take appropriate action regarding the Municipal Court Judge Julie Escalante's annual performance evaluation during the past year. Mayor DonCarlos stated that Council unanimously agreed that Judge Escalante is doing a great job and encouraged her to make her request known in regards to help she would need to make her job easier as she is tasked with additional responsibility as the court of records.

11. APPOINTMENTS

a. Confirmation: City Manager's Appointment of Deputy City Manager - Administration.

City Manager Leiper presented the agenda item and stated that the Baytown City Charter requires that the City Council confirm the appointment of department heads, which are presented to Council by the City Manager.

City Manager Leiper is presented Mr. Ron Bottoms for Council's confirmation as Deputy City Manager. Mr. Bottoms has almost 20 years of municipal management experience including 12 years as a city manager, most recently in the city of LaPorte, TX, as well as hands-on experience with public works and capital project management. Mr. Bottoms served for eight years as a Captain in the United States Air Force, is very familiar with City Council Regular Meeting Minutes January 12, 2012 Page 26 of 30

our geographical area and has well established relationships with area partners such as Harris County and the Port of Houston.

A motion was made by Council Member Robert C. Hoskins and seconded by Council Member David McCartney confirming the City Manager’s appointment of Deputy City Manager to Mr. Ron Bottoms. The vote was as follows:

Nays: None

Approved b. Appointment: Municipal Court Judge - City Council.

City Manager Leiper presented the agenda item to consider the appointment of Julie Escalante as Municipal Court Judge for a term of office beginning February 01, 2012, and ending on January 31, 2014.

A motion was made by Council Member Terry Sain and seconded by Council Member David McCartney approving the appointment of Municipal Court Judge to Julie Escalante. The vote was as follows:

Nays: None

Approved

c. Appointment: Associate Municipal Court Judges - City Council.

City Manager Leiper presented the agenda item to consider the Appointment of Kelly Benavides, Michael Marks, Oshea Spencer and Andy Helms as Associate Municipal Court Judges for the term of office, which begins February 01, 2012, and ends on January 31, 2014.

Council Member Capetillo filed a Conflict of Interest Form with the City Clerk's Office and did not vote on this item.

City Council Regular Meeting Minutes January 12, 2012 Page 27 of 30

A motion was made by Council Member Mercedes Renteria III and seconded by Council Member Robert C. Hoskins approving the appointment of Associate Municipal Court Judge to Kelly Benavides, Michael Marks, Oshea Spencer, and Andy Helms. The vote was a follows:

Ayes: Mayor Stephen DonCarlos, Council Member Robert C. Hoskins, Council Member David McCartney, Council Member Mercedes Renteria III, Council Member Terry Sain, Council Member Scott Sheley

Nays: None

Approved d. Appointment: Citizens Charter Review Committee - Administration.

City Manager Leiper presented the agenda item to consider Council Member Sheley's nomination of Mr. Gary Erwin as his appointment to the Citizens Charter Review Committee.

A motion was made by Council Member Scott Sheley and seconded by Council Member Mercedes Renteria III approving the appointment of Mr. Gary Erwin to the Citizens Charter Review Committee. The vote was as follows:

Nays: None

Approved

e. Appointment: Planning and Zoning Commission - City Clerk.

City Manager Leiper presented the agenda item to consider appointments to the Planning and Zoning Commission. There are currently three (3) openings on this Commission at this time:

 District 1 appointment,  City Manager appointment for a real estate/developer and  Ex Officio Youth City Council Regular Meeting Minutes January 12, 2012 Page 28 of 30

City Manager Leiper stated that Ms. Lisa Clary is his nomination to the board for a real estate/developer, which would complete the unexpired term of Ms. Mary Flores set to expire on December 31.

Council Member Renteria nominated Shawn McDonald as his nomination to the board as the District 1 appointment.

A motion was made by Council Member Robert C. Hoskins and seconded by Council Member Brandon Capetillo approving the appointment of Ms. Lisa Clary to the Planning and Zoning Commission. The vote was as follows:

Nays: None

Approved

A motion was made by Council Member Mercedes Renteria III and seconded by Council Member Robert C. Hoskins approving the appointment of Mr. Shawn McDonald to the Planning and Zoning Commission. The vote was as follows:

Nays: None

Approved

12. MANAGER'S REPORT

a. Discuss Upcoming Council Chamber Improvements - Administration.

City Manager Leiper presented the agenda item to discuss upcoming Council Chamber improvements.

The City received PEG (public, educational, government) funds as part of its cable franchise fees. These funds can only be used for capital costs associated with our ability to broadcast of our municipal channel (Channel 16).

City Manager Leiper stated that the City has accumulated sufficient funding to make some much needed improvements in the Council Chamber which will enhance the City Council Regular Meeting Minutes January 12, 2012 Page 29 of 30

city's ability to share the Council meeting experience with at home viewers. The enhancements include: (1) new cameras and video controls, (2) improved audio, (3) a new dais with built-in electronics and (4) improvement to the the chamber's lighting and wall surfaces to help better video quality.

City Manager Leiper stated that with consensus from the Council to move forward, staff talked with the A&E Committee and elected PGAL to do a redesign in the Council Chamber. City Manager Leiper stated that the PEG funds will also purchase mobile camera equipment and that limited City funds will provide for purchase that are non PEG eligible such as chairs. City Manager Leiper stated that a request will be made to the President of Lee College to host Council Meetings there while the Chamber is under construction and if Lee College doesn't have anything available, the Community Center is available.

Council Member Capetillo inquired if the PEG is a one time opportunity. City Manager Leiper stated that this is a recurring revenue in which can be suspended.

b. Upcoming City Council Retreat, January 31, 2012 - Administration.

City Manager Leiper presented the agenda item to discuss the upcoming City Council Retreat and stated that the City Council retreat will be on Tuesday, January 31, 2012 starting at 4:00 P.M. at the Spring Hill Suites on Garth Road, north of I-10. City Manager Leiper asked Council to review the list of topics and let him know if they had any suggestions for additional topics.

1. Discuss possible Charter issues 2. Discuss the development and adoption of the zoning map following adoption of the ULDC 3. Review Mayor DonCarlos's presentation at the Mayor's Institute of City Design

Discuss potential economic development projects, including the mall area/town center and/or master planned communities in the area.

c. City Offices Closed for Martin Luther King, Jr. Holiday - Administration.

City Manager Leiper presented the agenda item and stated that the City Offices will be closed on Monday, January 16, 2012 in observance of the Martin Luther King, Jr. Holiday.

13. ADJOURN

With there being no further business to discuss, Mayor DonCarlos adjourned the January 12, 2012, City Council Regular Meeting at 8:36 P.M.

City Council Regular Meeting Minutes January 12, 2012 Page 30 of 30

______Leticia Brysch, City Clerk City of Baytown

AIR-5608 2. a. BAYTOWN CITY COUNCIL MEETING Meeting Date: 01/26/2012 Citizen Communication: Joan Martin. Prepared for: Leticia Brysch Prepared by: Jason Cozza, City Clerk's Office Department: City Clerk's Office

Information ITEM Ms. Joan Martin requests to address Council to persuade the Council to pass and enforce rules to stop dogs from running loose.

PREFACE The City Clerk's Office received a request to address Council from Ms. Joan Martin on January 13, 2012. A letter notifying Ms. Martin of her placement on the agenda was sent to her via ground mail on January 19, 2012. Both documents are attached for your review.

RECOMMENDATION

Attachments Request to Address Council Letter Notifying Placement on the Agenda

AIR-5577 2. b. BAYTOWN CITY COUNCIL MEETING Meeting Date: 01/26/2012 Years of Service Awards - Human Resources. Prepared for: Carol Flynt Prepared by: Samantha Villalon, Human Resources Department: Human Resources

Information ITEM Recognize City of Baytown employees for their Years of Service (5, 10, 15 plus years).

PREFACE 5 YEAR: Robert Brown, Finance, Accountant II Mikel Marino, Parks & Recreation, Heavy Equipment Operator I Vance Comeaux, Public Works, Wastewater Operator III Charles Waite, Firefighter

10 YEAR: Brandy Enciso, Police, Administrative Assistant Maria Alcantar, Police, Administrative Assistant

15 YEAR: Hugo Garza, Firefighter

20 YEAR: Mark Street, Police, Patrol Offier

30 YEAR: Larry Lewis, Police, Patrol Officer Terry Seely, Public Works, BAWA Laboratory Technician

35 YEAR: Shon Blake, Fire Chief

RECOMMENDATION

Attachments Larry Lewis Larry Lewis 30 Years of Service

Larry was born in Carriere, Mississippi. He served his country for 3 years in the United States Army where he was assigned to maintain and repair “Hawk Eye” missile launchers.

Larry began his law enforcement career with the Harris County Sherriff’s Department in June of 1977. In 1981, he became employed with the Baytown Police Department.

During his career, he has been assigned to both the Patrol and Detective Divisions. He has solved numerous high profile cases, which included a 1996 Capital Murder case, which took he and his partner approximately 2 years to investigate and solve; resulting in several suspects be charged and convicted.

Over his career, Larry has received many awards and letters of appreciation from citizens for his true service to the City of Baytown. He is respected by his peers, because of his knowledge and experience.

Larry has over 2,900 hours of law enforcement training and holds a Master Peace Officer certificate with the Texas Commission on Law Enforcement Standards & Education. In addition, he has an Associates Degree in Criminal Justice and is a certified Investigative Hypnotist.

AIR-5578 2. c. BAYTOWN CITY COUNCIL MEETING Meeting Date: 01/26/2012 Employee and Team of the Month - Human Resources. Prepared for: Carol Flynt Prepared by: Samantha Villalon, Human Resources Department: Human Resources

Information ITEM Present the Employee and Team of the Month for the month of December.

PREFACE DECEMBER EMPLOYEE OF THE MONTH - Nancy Neal

DECEMBER TEAM OF THE MONTH - Tiffany Foster and John DuPuis

RECOMMENDATION

Attachments Employee of the Month Team of the Month CITY OF BAYTOWN EMPLOYEE RECOGNITION NOMINATION FORM

OUTSTANDING ACHIEVEMENT DURING THE MONTH OF December 2011

Employee Nominee Information Name: Job Title Phone Number: Nancy Neal X 2044 Division/Department: Division Director: Phone Number: EMS/Health Dana Dalbey X 5381

Please check the Core Values below that apply to this nomination.

Leadership - “We show others the way”. Know your job. Set, live and enforce high standards. Provide feedback and take initiative. Operate in the spirit of continuous improvement.

Competence - “We do the job right”. Understand the facts, develop options and make recommendations. Demonstrate knowledge, discipline and efficiency in performing all aspects of our job.

Teamwork - “We work together”. Support one another. Build a positive climate within the department and across the organization. Present a united front.

Integrity - “We are responsible”. Do the right thing. Be honest, truthful and consider the trust that the citizens have given us. Take responsibility for our actions.

Service - “We listen and respond”. Exceed expectations using customer-focused judgment. Deliver on promises. Develop customer-friendly solutions.

Respect - “We care”. Communicate with courtesy. Treat others with fairness. Appreciate diversity. Value others by listening.

Detail in the box below their accomplishments this month. Nancy Neal is a leader in making sure our department morale stays up. She continuously comes up with creative ways to get coworkers from all the many divisions together in fun, positive ways (teamwork). Her work ethic is exemplary, as evidenced by her competence & integrity. She is almost always to be found smiling & helpful, even when dealing with challenging situations (service & respect). We are a better department because Nancy is a part of it!

Nominator Information Name: Date: Wendy Vola October 31, 2011 Job Title: Phone Number: Neighborhood Protection Coordinator X 5365 Department: Division: Health & EMS Neighborhood Protection

Submit this form to the Human Resources Department, attn: Samantha Villalon. If you have questions about completing this form, please call Samantha at (281) 420-7138. CITY OF BAYTOWN TEAM RECOGNITION NOMINATION FORM

OUTSTANDING ACHIEVEMENT DURING THE MONTH OF _December______

Team Nominee Information Names: Job Titles: John DuPruis& Tiffany Foster Division/Department(s): Division Director(s): Planning & Engineering Kelly Carpenter & Jose Pastrana Please check the Core Values below that apply to this nomination.  Leadership - “We show others the way”. Know your job. Set, live and enforce high standards. Provide feedback and take initiative. Operate in the spirit of continuous improvement.  Competence - “We do the job right”. Understand the facts, develop options and make recommendations. Demonstrate knowledge, discipline and efficiency in performing all aspects of our job.  Teamwork - “We work together”. Support one another. Build a positive climate within the department and across the organization. Present a united front.  Integrity - “We are responsible”. Do the right thing. Be honest, truthful and consider the trust that the citizens have given us. Take responsibility for our actions.  Service - “We listen and respond”. Exceed expectations using customer-focused judgment. Deliver on promises. Develop customer-friendly solutions.  Respect - “We care”. Communicate with courtesy. Treat others with fairness. Appreciate diversity. Value others by listening. Detail in the box below their accomplishments this month. There is a little known team in City Hall, the IKE CDBG team, with two special members: Tiffany Foster and John Dupuis (an unlikely pair). These two have worked since December 2008 on the IKE CDBG grant funding for the city of Baytown. (Teamwork) The first round netted $9 million for the city which we are using for generators for lift stations and for hardening critical buildings (that means roof improvements, shutters and the like).

The State of Texas has passed this program in its three years of life from TDHCA (Texas Department of Housing and Community Affairs), to TDRA (Texas Department of Rural Affairs) and now to GLO (General Land Office). In the midst of preparing our application for over $15 million for a reconstruction of the central wastewater treatment plant (to remove it from the floodplain), the State transferred the program from TDRA to GLO. These two professionals galloped through the triple learning curves of three agencies. Our intrepid planner and engineer didn’t loose a beat however and kept our applications moving forward. The city just received in December the document confirming that we have been awarded the $15 million grant.

Why does this warrant consideration for team of the month? Tiffany has another job: she’s assistant director of planning with all that entails including budget and HR, neighborhood planning, as well leadership and mentoring. John has another job too: he is the primary development review engineer as well as a designer on capital projects. This demonstrates their commitment and exemplary performance of SERVICE for the city of Baytown. Tiffany is a Cowboys fan; and John is an LSU fan; while they have football in common, they also have competence and service to the city in common. And what a team they make, with Tiffany working the regulatory details and John performing the engineering work on this massive project. This demonstrates their RESPECT for each other as professionals. The award of the IKE CDBG grants demonstrates the competence of each of these professionals and the two of them as a team. The have built a positive climate in which to work together, learning each others work patterns, strengths and weaknesses demonstrating. Teamwork. Were we to search among our employees for two who do the right thing and take responsibility, we would be hard pressed to find examples better than John and Tiffany.

These two professionals have exceeded expectations and performed above the call of duty while winning $24 million in much needed grant funding for sewage treatment, generators and facility hardening.

Nominator Information Name: Date: Kelly Carpenter 12/23/11 Job Title: Phone Number: Director Ext. 5397 Department: Division: Planning & Community Development Submit this form to the Human Resources Department, attn: Samantha Villalon If you have questions about completing this form, please call Samantha at (281) 420-7138.

AIR-5541 2. d. BAYTOWN CITY COUNCIL MEETING Meeting Date: 01/26/2012 Recognition: Daniel Adam Crespo - Administration. Prepared for: Robert D. Leiper Prepared by: Rachel Philo, Administration Department: Administration

Information ITEM Present a Recognition to Daniel Adam Crespo for his outstanding community service and achievement of the Eagle Scout rank.

PREFACE Daniel Adam Crespo, is a member of Boy Scout Troop 93 and was awarded his Eagle rank on October 20, 2011. The beneficiary of his community service project, Hill of Rest Cemetery, was in dire need of restoration and repairs to its grounds. The project’s scope of work included replacing missing/vandalized signage, designing and creating a rock garden at the cemetery’s main entrance, straightening and painting corner posts, removing dead tree stumps, power washing the maintenance shed, and repairing the shed’s overhead door which was damaged during Hurricane Ike.

Daniel is a senior at Sterling High School, and is a member of the varsity football team, wind ensemble, and Key Club. Upon graduation this spring, he looks forward to furthering his education and pursuing a career in sports broadcasting.

RECOMMENDATION

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE ISSUANCE OF CITY OF BAYTOWN, TEXAS GENERAL OBLIGATION AND REFUNDING BONDS, SERIES 2012; LEVYING A TAX IN PAYMENT THEREOF; SETTING CERTAIN PARAMETERS FOR THE BONDS; AUTHORIZING THE AUTHORIZED OFFICER TO APPROVE THE AMOUNT, THE INTEREST RATE, PRICE AND CERTAIN OTHER TERMS THEREOF; AUTHORIZING THE REDEMPTION PRIOR TO MATURITY OF CERTAIN OUTSTANDING BONDS; AUTHORIZING THE EXECUTION AND DELIVERY OF A BOND PURCHASE AGREEMENT, AN ESCROW AGREEMENT AND A PAYING AGENT/REGISTRAR AGREEMENT RELATING TO SUCH BONDS; APPROVING THE PREPARATION AND DISTRIBUTION OF AN OFFICIAL STATEMENT; AND ENACTING OTHER PROVISIONS RELATING THERETO; AND PROVIDING FOR THE EFFECT WE DATE THEREOF.

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WHEREAS, the City of Baytown, Texas (the “City”) has heretofore issued the obligations described on the attached Schedule I (the “Refunded Obligations Candidates”); and

WHEREAS, the City desires to refund a portion of the Refunded Obligations Candidates in order to achieve a present value savings in debt service; and

WHEREAS, it is intended that all or a portion of the Refunded Obligation Candidates shall be designated as Refunded Obligations (as hereinafter defined) in the Pricing Certificate (as hereinafter defined) and shall be refunded pursuant to this Ordinance and the Pricing Certificate; and

WHEREAS, Chapter 1207, Texas Government Code, as amended, authorizes the City to issue refunding bonds for the purpose of refunding the Refunded Obligations in advance of their maturities, and to accomplish such refunding by depositing directly with a paying agent for the Refunded Obligations (or other qualified escrow agent), the proceeds of such refunding bonds, together with other available funds or securities, in an amount sufficient to provide for the payment or redemption of the Refunded Obligations, and provides that such deposit shall constitute the making of firm banking and financial arrangements for the discharge and final payment or redemption of the Refunded Obligations; and

WHEREAS, the City desires to authorize the execution of an escrow agreement, if necessary, in order to provide for the deposit of proceeds of the refunding bonds and, to the extent specified pursuant hereto, other lawfully available funds of the City, to pay the redemption price of the Refunded Obligations when due; and

WHEREAS, upon the issuance of the refunding bonds herein authorized and the deposit of funds referred to above, the Refunded Obligations shall no longer be regarded as being outstanding, except for the purpose of being paid pursuant to such deposit, and the pledges, liens, trusts and all other covenants, provisions, terms and conditions of the ordinances authorizing the

#3932095.1 issuance of the Refunded Obligations shall be, with respect to the Refunded Obligations, discharged, terminated and defeased; and

WHEREAS, the City hereby finds and determines that the issuance and delivery of the refunding bonds hereinafter authorized is necessary and in the public interest and the use of the proceeds in the manner herein specified constitutes a valid public purpose; and

WHEREAS, the City hereby finds and determines that the refunding contemplated in this Ordinance will benefit the City by providing a present value saving in the debt service payable by the City, and that such benefit is sufficient consideration for the refunding of the Refunded Obligations; and

WHEREAS, the City hereby finds and determines that the manner in which the refunding is being executed does not make it practicable to make the determination described by Section 1207.008(a)(2) of Chapter 1207; and

WHEREAS, the bonds hereinafter authorized were duly and favorably voted at an election in the City on November 6, 2007 (the “Election”); and

WHEREAS, at the Election, the voters authorized an amount of bonds for the purposes set forth in the following schedule, such schedule showing amounts previously issued pursuant to such voted authorization:

Amount Purpose Authorized Previously Issued Unissued

Streets, Sidewalks, Drainage $36,850,000 $10,421,000 $26,429,000 and Utilities Improvements

Public Safety, EMS and Fire $22,995,000 $7,162,000 $15,833,000 Fighting Facilities and Equipment

Park Improvements and $10,940,000 $7,530,000 $3,410,000 Citywide Beautification

Extension of East Baker $7,170,000 $630,000 $6,540,000 Road

Drainage Improvements $2,020,000 $1,072,000 $948,000

TOTAL $79,975,000 $26,815,000 $53,160,000

WHEREAS, the amounts from such authorizations being issued pursuant to this ordinance, and the balance that remains unissued after the issuance of the bonds herein authorized shall be indicated in the Pricing Certificate (defined herein); and

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#3932095.1 WHEREAS, the City is a home-rule municipality that has adopted a charter under Article XI, Section 5 of the Texas Constitution, has a population in excess of 50,000 and has outstanding indebtedness that is rated by a nationally recognized rating agency for municipal securities in one of the four highest rating categories for a long-term obligation; and

WHEREAS, the City has a principal amount of at least $100,000,000 in a combination of outstanding long-term indebtedness and long-term indebtedness proposed to be issued, and some amount of such long-term indebtedness is rated in one of the four highest rating categories for long-term debt instruments by a nationally recognized rating agency for municipal securities without regard to the effect of any credit agreement or other form of credit enhancement entered into in connection with the obligation; and

WHEREAS, pursuant to Sections 1207.007 and 1371.053, Texas Government Code, as amended, the City desires to delegate the authority to effect the sale of the bonds to the Authorized Officer (hereinafter defined); and

WHEREAS, the meeting at which this Ordinance is being considered is open to the public as required by law, and the public notice of the time, place and purpose of said meeting was given as required by Chapter 551, Texas Government Code; Now, Therefore

BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS:

ARTICLE I

DEFINITIONS AND OTHER PRELIMINARY MATTERS

Section 1.01 Definitions.

Unless otherwise expressly provided in this Ordinance or unless the context clearly requires otherwise, the following terms shall have the meanings specified below:

“Accreted Value” means, with respect to the Capital Appreciation Bonds, the original principal amount of such Bond plus the initial premium, if any, paid therefor, with interest thereon compounded semiannually, as set forth in the Pricing Certificate.

“Authorized Officer” means the Mayor or the City Manager of the City, who are authorized to act on behalf of the City in selling and delivering the Bonds, or such other officers of the City as designated in writing.

“Bond” means any of the Bonds.

“Bonds” means the City’s bonds authorized to be issued by Section 3.01 of this Ordinance and designated as “City of Baytown, Texas, General Obligation and Refunding Bonds, Series 2012” and such other series or subseries as may be designated in the Pricing Certificate.

“Bond Counsel” means Bracewell & Giuliani LLP. -3-

#3932095.1 “Business Day” means a day that is not a Saturday, Sunday, legal holiday or other day on which banking institutions in the city where the Designated Payment/Transfer Office is located are required or authorized by law or executive order to close.

“Capital Appreciation Bonds” means, collectively, the Bonds designated as Capital Appreciation Bonds in the Pricing Certificate, if any, and with respect to which interest is compounded semiannually and is payable only at Maturity.

“City” means the City of Baytown, Texas.

“Closing Date” means the date of the initial delivery of and payment for the Bonds.

“Code” means the Internal Revenue Code of 1986, as amended, including applicable regulations, published rulings and court decisions.

“Current Interest Bonds” means, collectively, the Bonds designated as Current Interest Bonds in the Pricing Certificate and with respect to which interest is payable on each Interest Payment Date.

“Dated Date” means the date of the Bonds as designated in the Pricing Certificate.

“Debt Service” means the collectively, all amounts due and payable with respect to the Bonds representing the principal of the Current Interest Bonds and the interest thereon and the Maturity Amount of the Capital Appreciation Bonds, in each case, payable at the times and in the manner provided herein and in the Pricing Certificate.

“Designated Payment/Transfer Office” means (i) with respect to the initial Paying Agent/Registrar, its corporate trust office in Dallas, Texas or such other location designated by the Paying Agent/Registrar, and (ii) with respect to any successor Paying Agent/Registrar, the office of such successor designated and located as may be agreed upon by the City and such successor.

“DTC” means The Depository Trust Company of New York, New York, or any successor securities depository.

“DTC Participant” means brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on whose behalf DTC was created to hold securities to facilitate the clearance and settlement of securities transactions among DTC Participants.

“Escrow Agent” means The Bank of New Mellon Trust Company, N.A, unless otherwise designated in the Pricing Certificate.

“Escrow Agreement” means the escrow agreement by and between the City and the Escrow Agent relating to the Refunded Obligations.

“Escrow Fund” means the fund or funds established by the Escrow Agreement to hold cash and securities for the payment of debt service on the Refunded Obligations.

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#3932095.1 “Escrow Securities” means (1) direct noncallable obligations of the United States, including obligations that are unconditionally guaranteed by the United States; (2) noncallable obligations of an agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of hereof, are rated as to investment quality by a nationally recognized investment rating firm not less than “AAA” or its equivalent; and (3) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date hereof, are rated as to investment quality by a nationally recognized investment rating firm not less than “AAA” or its equivalent.

“Fiscal Year” means such fiscal year of the City as shall be set from time to time by the City Council.

“Initial Bonds” means the Initial Current Interest Bond and the Initial Capital Appreciation Bond.

“Initial Current Interest Bond” means the Initial Current Interest Bond authorized by Section 3.04(d).

“Initial Premium Capital Appreciation Bond” means the Initial Premium Capital Appreciation Bond authorized by Section 3.04(d).

“Interest and Sinking Fund” means the interest and sinking fund established by Section 2.02 of this Ordinance.

“Interest Payment Date” means, with respect to the Current Interest Bonds, the date or dates on which interest on the Bonds is scheduled to be paid, as designated in the Pricing Certificate.

“Maturity” means the date on which the principal of the Current Interest Bonds and the Maturity Amount of the Capital Appreciation Bonds become due and payable according to the terms thereof, whether at Stated Maturity or by proceedings for prior redemption.

“Maturity Amount” means, with respect to the Capital Appreciation Bonds, the original principal amount thereof plus the initial premium, if any, paid therefore, plus interest accreted and compounded thereon, as set forth herein and in the Pricing Certificate, and payable at Maturity.

“MSRB” means the Municipal Securities Rulemaking Board.

“Ordinance” means this Ordinance.

“Owner” means the person who is the registered owner of a Bond or Bonds, as shown in the Register.

“Paying Agent/Registrar” means The Bank of New York Mellon Trust Company, N.A.

-5-

#3932095.1 “Paying Agent Registrar Agreement” means the Paying Agent/Registrar Agreement between the Paying Agent/Registrar and the City relating to the Bonds.

“Pricing Certificate” means a certificate or certificates to be signed by the Authorized Officer, in substantially the form attached hereto as Exhibit A with such variations, omissions and insertions as are approved by the Authorized Officer as indicated by his/her signature.

“Purchase Agreement” means the Bond Purchase Agreement between the City and the Underwriters providing for the sale of the Bonds to the Underwriters.

“Record Date” means the fifteenth day of the month next preceding an Interest Payment Date.

“Refunded Obligation Candidates” mean the obligations of the City described in Schedule I attached hereto.

“Refunded Obligations” mean those obligations of the City designated as such in the Pricing Certificate from the list of Refunded Obligation Candidates.

“Register” means the bond register specified in Section 3.06(a).

“Representations Letter” means the Blanket Letter of Representations between the City and DTC.

“Rule” means Rule 15c2-12, as amended from time to time, adopted by the SEC under the Securities Exchange Act of 1934.

“SEC” means the United States Securities and Exchange Commission.

“Special Payment Date” means the date that is fifteen (15) days after the Special Record Date, as described in Section 3.03(e).

“Special Record Date” means the new record date for interest payment established in the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, as described in Section 3.03(e).

“State” means the State of Texas.

“Stated Maturity” means the respective stated maturity dates of the Bonds specified in the Pricing Certificate.

“Unclaimed Payments” means money deposited with the Paying Agent/Registrar for the payment of principal, premium, if any, or interest, or money set aside for the payment of Bonds duly called for redemption prior to Stated Maturity and remaining unclaimed by the Owners of such Bonds for 90 days after the applicable payment or redemption date.

“Underwriters” means the underwriters designated in the Pricing Certificate.

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#3932095.1 Section 1.02 Findings.

The declarations, determinations and findings declared, made and found in the preamble to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof.

Section 1.03 Table of Contents, Titles and Headings.

The table of contents, titles and headings of the articles and sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof and shall never be considered or given any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any question of intent should arise. References to section numbers shall mean sections in this Ordinance.

Section 1.04 Interpretation.

(a) Unless the context requires otherwise, words of the masculine gender shall be construed to include correlative words of the feminine and neuter genders and vice versa, and words of the singular number shall be construed to include correlative words of the plural number and vice versa.

(b) Any action required to be taken on a date which is not a Business Day shall be taken on the next succeeding Business Day and have the same effect as if taken on the date so required.

(c) This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of this Ordinance.

(d) References to section numbers shall mean sections in this Ordinance unless designated otherwise.

ARTICLE II

SECURITY FOR THE BONDS; INTEREST AND SINKING FUND

Section 2.01 Tax Levy.

(a) Pursuant to the authority granted by the Constitution and the laws of the State, there shall be levied and there is hereby levied for the current year and for each succeeding year hereafter while any part of the principal of the Bonds or any interest thereon is outstanding and unpaid, an ad valorem tax on all taxable property within the City, at a rate sufficient, within the limit prescribed by law, to pay the debt service requirements of the Bonds, being (i) the interest on the Bonds, and (ii) a sinking fund for their redemption at maturity or a sinking fund of two percent (2%) per annum (whichever amount is greater), when due and payable, full allowance being made for delinquencies and costs of collection.

(b) The ad valorem tax thus levied shall be assessed and collected each year against all taxable property appearing on the tax rolls of the City most recently approved in accordance -7-

#3932095.1 with law, and the money thus collected shall be deposited as collected to the Interest and Sinking Fund.

(c) Said ad valorem tax, the collections therefrom, and all amounts on deposit in or required hereby to be deposited to the Interest and Sinking Fund are hereby pledged and committed irrevocably to the payment of the principal of and interest on the Bonds when and as due and payable in accordance with their terms and this Ordinance.

(d) To pay debt service on the Bonds coming due prior to receipt of the taxes levied to pay such debt service, there is hereby appropriated from current funds on hand, which are hereby certified to be on hand and available for such purpose, an amount sufficient to pay such debt service, and such amount shall be used for no other purpose.

Section 2.02 Interest and Sinking Fund.

(a) The City hereby establishes a special fund or account to be designated the “City of Baytown, Texas, General Obligation and Refunding Bonds, Series 2012, Interest and Sinking Fund” (the “Interest and Sinking Fund”) said fund to be maintained at an official depository bank of the City separate and apart from all other funds and accounts of the City.

(b) Money on deposit in or required by this Ordinance to be deposited to the Interest and Sinking Fund shall be used solely for the purpose of paying the interest on and principal of the Bonds when and as due and payable in accordance with their terms and this Ordinance.

ARTICLE III

AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE BONDS

Section 3.01 Authorization.

The Bonds are hereby authorized to be issued and delivered in accordance with Chapters 1207, 1331 and 1371, Texas Government Code, as amended. The Bonds shall be issued in a total aggregate principal amount not to exceed $34,500,000, for the purposes of (a) providing funds for the payment of costs of issuing the Bonds, (b) refunding the Refunded Obligations and (c) for the following purposes for which the City has voted authorization:

(i) $11,040,000 for streets, sidewalks, drainage and utilities improvements;

(ii) $970,000 for public safety, EMS and fire fighting facilities and equipment;

(iii) $1,475,000 for park improvements and citywide beautification;

(iv) $120,000 for the extension of East Baker Road; and

(v) $400,000 for drainage facilities.

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#3932095.1 The amounts and purposes identified above in Section 3.01(c)(i)-(v) are subject to adjustment by the Authorized Officer in the Pricing Certificate provided the aggregate principal amount of such purposes shall not exceed $14,005,000. The Bonds shall be issued as Current Interest Bonds, Capital Appreciation Bonds or a combination of Capital Interest Bonds and Capital Appreciation Bonds, as determined by the Authorized Officer and all as identified and designated in the Pricing Certificate,

Section 3.02 Date, Denomination, Maturities, and Interest. (a) The Bonds shall be dated the Dated Date as set forth in the Pricing Certificate, and shall be in fully registered form, without coupons.

(b) The Current Interest Bonds shall be in the aggregate principal amount designated in the Pricing Certificate, shall be in the denomination of $5,000 principal amount or any integral multiple thereof and shall be numbered separately from one upward, except the Initial Current Interest Bond, which shall be numbered ICI-1.

(c) The Current Interest Bonds shall mature on the dates and in the principal amounts and shall bear interest at the per annum rates set forth in the Pricing Certificate.

(d) Interest shall accrue and be paid on each Current Interest Bond, respectively, until the principal amount thereof has been paid or provision for such payment has been made, from the later of (i) the Dated Date or the Closing Date, as set forth in the Pricing Certificate, or (ii) the most recent Interest Payment Date to which interest has been paid or provided for at the rate per annum for each respective maturity specified in the Pricing Certificate. Such interest shall be payable on each Interest Payment Date and shall be computed on the basis of a 360-day year of twelve 30-day months.

(e) The Capital Appreciation Bonds shall be in the aggregate original principal amount and aggregate Maturity Amount designated in the Pricing Certificate, shall be in the Maturity Amounts of $5,000 or any integral multiple thereof, and shall be numbered separately from one upward, except the Initial Capital Appreciation Bond, which shall be numbered ICA-1.

(f) The Capital Appreciation Bonds shall be issued in the original principal amounts and shall bear interest at the per annum rates, calculated on the basis of a 360-day year composed of twelve 30-day months (subject to rounding to the Accreted Values thereof), and shall mature on the dates and in the Maturity Amounts set forth in the Pricing Certificate.

(g) Interest shall accrete on each Capital Appreciation Bond from the Closing Date and shall be compounded semiannually as designated in the Pricing Certificate, until Maturity. The accreted interest on each Capital Appreciation Bond shall be payable at Maturity as a portion of the Maturity Amount.

Section 3.03 Medium, Method and Place of Payment. (a) Debt Service shall be paid in lawful money of the United States of America.

(b) Interest on each Current Interest Bond shall be paid by check dated as of the Interest Payment Date, and sent first class United States mail, postage prepaid, by the Paying Agent/Registrar to each Owner, as shown in the Register at the close of business on the Record -9-

#3932095.1 Date, at the address of each such Owner as such appears in the Register or by such other customary banking arrangements acceptable to the Paying Agent/Registrar and the person to whom interest is to be paid; provided, however, that such person shall bear all risk and expense of such other customary banking arrangements.

(c) The principal of each Current Interest Bond and the Maturity Amount of each Capital Appreciation Bond shall be paid to the Owner thereof at Maturity upon presentation and surrender of such Bond at the Designated Payment/Transfer Office of the Paying Agent/Registrar.

(d) If the date for the payment of Debt Service is not a Business Day, the date for such payment shall be the next succeeding Business Day, and payment on such date shall for all purposes be deemed to have been made on the due date thereof as specified in this Section.

(e) In the event of a nonpayment of interest on a scheduled payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a “Special Record Date”) will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the special payment date of the past due interest (the “Special Payment Date,” which shall be fifteen (15) days after the Special Record Date) shall be sent at least five Business Days prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of each Owner of a Bond appearing on the books of the Paying Agent/Registrar at the close of business on the last Business Day next preceding the date of mailing of such notice.

(f) Payments shall be segregated in a special account and held in trust, uninvested by the Paying Agent/Registrar, for the account of the Owner of the Bonds to which the Unclaimed Payments pertain. Subject to Title 6, Texas Property Code, Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three (3) years after the applicable payment or redemption date shall be applied to the next payment or payments on the Bonds thereafter coming due and, to the extent any such money remains after the retirement of all outstanding Bonds, shall be paid to the City to be used for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar nor any other person shall be liable or responsible to any holders of such Bonds for any further payment of such unclaimed moneys or on account of any such Bonds, subject to Title 6, Texas Property Code.

Section 3.04 Execution and Registration of Bonds.

(a) The Bonds shall be executed on behalf of the City by the Mayor and City Clerk, by their manual or facsimile signatures, and the official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had been manually impressed upon each of the Bonds.

(b) In the event that any officer of the City whose manual or facsimile signature appears on the Bonds ceases to be such officer before the authentication of such Bonds or before

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#3932095.1 the delivery thereof, such signature nevertheless shall be valid and sufficient for all purposes as if such officer had remained in such office.

(c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the Certificate of Paying Agent/Registrar substantially in the form provided herein, duly authenticated by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying Agent/Registrar on all of the Bonds. In lieu of the executed Certificate of Paying Agent/Registrar described above, the Initial Bond delivered at the Closing Date shall have attached thereto the Comptroller’s Registration Certificate substantially in the form provided herein, manually executed by the Comptroller of Public Accounts of the State of Texas, or by her duly authorized agent, which certificate shall be evidence that the Bond has been duly approved by the Attorney General of the State, and that it is a valid and binding obligation of the City, and that it has been registered by the Comptroller of Public Accounts of the State.

(d) On the Closing Date, the Initial Bonds, being (i) a single Initial Current Interest Bond representing the entire principal amount of the Current Interest Bonds designated in the Pricing Certificate and (ii) a single Initial Capital Appreciation Bond representing the aggregate Maturity Amount of the Capital Appreciation Bonds designated in the Pricing Certificate, each such Initial Bond to be payable in stated installments to the Underwriters or their designee, each such Initial Bond to be executed by manual or facsimile signatures of the Mayor and City Clerk, approved by the Attorney General of the State, and registered and manually signed by the Comptroller of Public Accounts of the State, will be delivered to the Underwriters or their designee. Upon payment for the Initial Bonds, the Paying Agent/Registrar shall cancel the Initial Bonds and deliver registered definitive Bonds to DTC in accordance with Section 3.09 hereof. To the extent the Paying Agent/Registrar is eligible to participate in DTC’s FAST System, as evidenced by an agreement between the Paying Agent/Registrar and DTC, the Paying Agent/Registrar shall hold the definitive Bonds in safekeeping for DTC.

Section 3.05 Ownership.

(a) The City, the Paying Agent/Registrar and any other person may treat the Owner as the absolute owner of such Bond for the purpose of making and receiving payment of the principal or Maturity Amount thereof for the further purpose of making and receiving payment of the interest thereon (subject to the provision herein that for the Current Interest Bonds interest is to be paid to the person in whose name the Current Interest Bond is registered on the Record Date or Special Record Date, as applicable), and for all other purposes, whether or not such Bond is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary.

(b) All payments made to the Owner of a Bond shall be valid and effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent of the sums paid.

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#3932095.1 Section 3.06 Registration, Transfer and Exchange.

(a) So long as any Bonds remain outstanding, the City shall cause the Paying Agent/Registrar to keep at its Designated Payment/Transfer Office a bond register (the “Register”) in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of Bonds in accordance with this Ordinance.

(b) The ownership of a Bond may be transferred only upon the presentation and surrender of the Bond to the Paying Agent/Registrar at the Designated Payment/Transfer Office with such endorsement or other evidence of transfer acceptable to the Paying Agent/Registrar. No transfer of any Bond shall be effective until entered in the Register.

(c) The Bonds shall be exchangeable upon the presentation and surrender thereof at the Designated Payment/Transfer Office for a Bond or Bonds of the same maturity and interest rate and in any denomination or denominations of any integral multiple of $5,000 and in an aggregate principal amount (with respect to Current Interest Bonds) or Maturity Amount (with respect to Capital Appreciation Bonds) equal to the unpaid principal amount or Maturity Amount of the Bonds presented for exchange.

(d) The Paying Agent/Registrar is hereby authorized to authenticate and deliver Bonds transferred or exchanged in accordance with this Section. A new Bond or Bonds will be delivered by the Paying Agent/Registrar, in lieu of the Bond being transferred or exchanged, at the Designated Payment/Transfer, or sent by United States mail, first class, postage prepaid, to the Owner or his designee. Each Bond delivered by the Paying Agent/Registrar in accordance with this Section shall constitute an original contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such Bond is delivered.

(e) No service charge shall be made to the Owner for the initial registration, any subsequent transfer, or exchange for a different denomination of any of the Bonds. The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection with the registration, transfer or exchange of a Bond.

(f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or exchange any Bond called for redemption, in whole or in part, within forty-five (45) days prior to the date fixed for redemption; provided, however, such limitation of transfer shall not be applicable to an exchange by the Owner of the uncalled principal balance of a Bond.

Section 3.07 Cancellation. All Bonds paid or redeemed before Stated Maturity in accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in accordance with this Ordinance, shall be cancelled upon the making of proper records regarding such payment, redemption, exchange or replacement. The Paying Agent/Registrar shall dispose of such cancelled Bonds in the manner required by the Securities Exchange Act of 1934, as amended.

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#3932095.1 Section 3.08 Replacement Bonds.

(a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like tenor and principal amount (with respect to the Current Interest Bonds) or Maturity Amount (with respect to the Capital Appreciation Bonds), bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that is authorized to be imposed in connection therewith and any other expenses connected therewith.

(b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall authenticate and deliver a replacement Bond of like tenor and principal amount (with respect to the Current Interest Bonds) or Maturity Amount (with respect to the Capital Appreciation Bonds), bearing a number not contemporaneously outstanding, provided that the Owner first complies with the following requirements:

(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her ownership of and the circumstances of the loss, destruction or theft of such Bond;

(ii) furnishes such security or indemnity as may be required by the Paying Agent/Registrar and the City to save them harmless;

(iii) pays all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar, and any tax or other governmental charge that is authorized to be imposed; and

(iv) satisfies any other reasonable requirements imposed by the City and the Paying Agent/Registrar.

(c) If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu of which such replacement Bond was issued presents for payment such original Bond, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost, or expense incurred by the City or the Paying Agent/Registrar in connection therewith.

(d) In the event that any such mutilated, lost, apparently destroyed, or wrongfully taken Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its discretion, instead of issuing a replacement Bond, may pay such Bond if it has become due and payable or may pay such Bond when it becomes due and payable.

(e) Each replacement Bond delivered in accordance with this Section shall constitute an original additional contractual obligation of the City and shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered. -13-

#3932095.1 Section 3.09 Book-Entry Only System.

(a) Unless otherwise specified in the Pricing Certificate, the definitive Bonds shall be initially issued in the form of a separate fully registered Bond for each of the maturities thereof. Upon initial issuance, the ownership of each such Bond shall be registered in the name of Cede & Co., as nominee of DTC, and except as provided in Section 3.10 hereof, all of the outstanding Bonds shall be registered in the name of Cede & Co., as nominee of DTC.

(b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds, except as provided in this Ordinance. Without limiting the immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant or any other person, other than an Owner of any notice with respect to the Bonds, or (iii) the payment to any DTC Participant or any other person, other than an Owner of any amount with respect to principal of or interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is registered in the Register as the absolute owner of such Bond for the purpose of payment of principal of, premium, if any, and interest on the Bonds for the purpose of giving notices with respect to such Bond, and other matters with respect to such Bond, for the purpose of registering transfer with respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and interest on the Bonds only to or upon the order of the respective Owners, as shown in the Register, as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to payment of premium, if any, principal and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the Register, shall receive a Bond evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions of this Ordinance with respect to interest payments being mailed to the Owner as shown on the Register on the Record Date, the word “Cede & Co.” in this Ordinance shall refer to such new nominee of DTC.

(c) The Representation Letter previously executed and delivered by the City, and applicable to the City’s obligations delivered in book-entry-only form to DTC as securities depository, is hereby ratified and approved for the Bonds.

Section 3.10 Successor Securities Depository; Transfer Outside Book-Entry Only System.

In the event that the City determines that it is in the best interest of the City and of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, or in the event DTC discontinues the services described herein, the City or the Paying Agent/Registrar shall (i) appoint a successor securities depository, qualified to act as such under Section 17(a) of the

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#3932095.1 Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository; or (ii) notify DTC and DTC Participants of the availability through DTC of certificated Bonds and cause the Paying Agent/Registrar to transfer one or more separate registered Bonds to DTC Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of this Ordinance.

Section 3.11 Payments to Cede & Co.

Notwithstanding any other provision of this Ordinance to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices with respect to such Bonds, shall be made and given, respectively, in the manner provided in the Representation Letter of the City to DTC.

ARTICLE IV

REDEMPTION OF BONDS BEFORE MATURITY

Section 4.01 Limitation on Redemption.

The Bonds shall be subject to redemption before Stated Maturity only as provided in this Article IV and in the Pricing Certificate.

Section 4.02 Optional Redemption.

The Bonds shall be subject to redemption prior to the Stated Maturity, at the option of the City at such times, in such amounts, in such manner and at such redemption prices as may be designated and provided for in the Pricing Certificate.

Section 4.03 Mandatory Redemption.

(a) The Bonds designated as “Term Bonds” in the Pricing Certificate (“Term Bonds”), if any, are subject to scheduled mandatory redemption and will be redeemed by the City, in part, at a price equal to the principal amount thereof, without premium, plus accrued interest to the redemption date, out of moneys available for such purpose in the interest and sinking fund, on the dates and in the respective principal amounts as set forth in the Pricing Certificate.

(b) Prior to each scheduled mandatory redemption date, the Paying Agent/Registrar shall select for redemption by lot, or by any other customary method that results in a random selection, a principal amount of Term Bonds equal to the aggregate principal amount of such Term Bonds to be redeemed, shall call such Term Bonds for redemption on such scheduled mandatory redemption date, and shall give notice of such redemption, as provided in Section 4.05. -15-

#3932095.1 (c) The principal amount of the Term Bonds required to be redeemed on any redemption date pursuant to subparagraph (a) of this Section 4.03 shall be reduced, at the option of the City, by the principal amount of any Term Bonds which, at least 45 days prior to the mandatory sinking fund redemption date (i) shall have been acquired by the City at a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, or (ii) shall have been redeemed pursuant to the optional redemption provisions hereof and not previously credited to a mandatory sinking fund redemption.

Section 4.04 Partial Redemption.

(a) If less than all of the Bonds are to be redeemed pursuant to Section 4.02, the City shall determine the maturities and the principal amount thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot or any other customary random selection method such Bonds for redemption.

(b) A portion of a single Bond of a denomination greater than $5,000 may be redeemed, but only in a principal amount equal to $5,000 or any integral multiple thereof. The Paying Agent/Registrar shall treat each $5,000 portion of such Bond as though it were a single Bond for purposes of selection for redemption.

(c) Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate and deliver exchange Bonds in an aggregate principal amount equal to the unredeemed principal amount of the Bond so surrendered, such exchange being without charge.

Section 4.05 Notice of Redemption to Owners.

(a) The Paying Agent/Registrar shall give notice of any redemption of Bonds by sending notice by United States mail, first class, postage prepaid, not less than thirty (30) days before the date fixed for redemption, to the Owner of each Bond (or part thereof) to be redeemed, at the address shown on the Register at the close of business on the Business Day next preceding the date of mailing such notice.

(b) The notice shall state the redemption date, the redemption price, the place at which the Bonds are to be surrendered for payment, and, if less than all the Bonds outstanding are to be redeemed, an identification of the Bonds or portions thereof to be redeemed.

(c) The City reserves the right to give notice of its election or direction to redeem Bonds under Section 4.02 conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date or (ii) that the City retains the right to rescind such notice at any time prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such -16-

#3932095.1 rescission of a conditional notice of redemption to the affected Owners. Any Bonds subject to conditional redemption where redemption has been rescinded shall remain Outstanding.

(d) Any notice given as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice.

Section 4.06 Payment Upon Redemption.

(a) Before or on each redemption date, the City shall deposit with the Paying Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying Agent/Registrar shall make provision for the payment of the Bonds to be redeemed on such date by setting aside and holding in trust such amounts as are received by the Paying Agent/Registrar from the City and shall use such funds solely for the purpose of paying the principal of, redemption premium, if any, and accrued interest on the Bonds being redeemed.

(b) Upon presentation and surrender of any Bond called for redemption to the Paying Agent/Registrar on or after the date fixed for redemption, the Paying Agent/Registrar shall pay the principal of, redemption premium, if any, and accrued interest on such Bond to the date of redemption from the money set aside for such purpose.

Section 4.07 Effect of Redemption.

(a) When Bonds have been called for redemption in whole or in part and due provision has been made to redeem same as herein provided, the Bonds or portions thereof so redeemed shall no longer be regarded as outstanding except for the purpose of receiving payment solely from the funds so provided for redemption, and the rights of the Owners to collect interest which would otherwise accrue after the redemption date on any Bond or portion thereof called for redemption shall terminate on the date fixed for redemption.

(b) If the City shall fail to make provision for payment of all sums due on a redemption date, then any Bond or portion thereof called for redemption shall continue to bear interest at the rate stated on the Bond until due provision is made for the payment of same by the City.

Section 4.08 Lapse of Payment. Money set aside for the redemption of the Bonds and remaining unclaimed by the Owners thereof shall be subject to the provisions of Section 3.03(f) hereof.

ARTICLE V

PAYING AGENT/REGISTRAR

Section 5.01 Appointment of Initial Paying Agent/Registrar.

(a) The Bank of New York Mellon Trust Company, N.A., is hereby selected and appointed as the initial Paying Agent/Registrar for the Bonds.

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#3932095.1 (b) The Authorized Officer is hereby authorized and directed to execute and deliver, or cause the execution and delivery by the Mayor and City Clerk, a Paying Agent/Registrar Agreement, specifying the duties and responsibilities of the City and the Paying Agent/Registrar, in such form as may be approved by the Authorized Officer, such approval to be evidenced by the signature of the appropriate City officials.

Section 5.02 Qualifications.

Each Paying Agent/Registrar shall be a commercial bank or trust company organized under the laws of the State, or any other entity duly qualified and legally authorized to serve as and perform the duties and services of paying agent and registrar for the Bonds.

Section 5.03 Maintaining Paying Agent/Registrar.

(a) At all times while any of the Bonds are outstanding, the City will maintain a Paying Agent/Registrar that is qualified under Section 5.02 of this Ordinance.

(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will promptly appoint a replacement, provided no such resignation shall be effective until a successor Paying Agent/Registrar has accepted the duties of Paying Agent/Registrar for the Bonds.

Section 5.04 Termination.

The City reserves the right to terminate the appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be terminated (i) 45 days written notice of the termination of the appointment and of the Paying Agent/Registrar Agreement, stating the effective date of such termination, and (ii) appointing a successor Paying Agent/Registrar; provided that, no such termination shall be effective until a successor Paying Agent/Registrar has been appointed and has accepted the duties of Paying Agent/Registrar for the Bonds.

Section 5.05 Notice of Change to Owners.

Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will cause notice of the change to be sent to each Owner by first class United States mail, postage prepaid, at the address thereof in the Register, stating the effective date of the change and the name and mailing address of the replacement Paying Agent/Registrar.

Section 5.06 Agreement to Perform Duties and Functions.

By accepting the appointment as Paying Agent/Registrar, and by executing the Paying Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar prescribed herein.

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#3932095.1 Section 5.07 Delivery of Records to Successor.

The Paying Agent/Registrar, promptly upon the appointment of a successor, will deliver the Register (or a copy thereof) and all other pertinent books and records relating to the Bonds to the successor Paying Agent/Registrar,

ARTICLE VI

FORM OF THE BONDS

Section 6.01 Form Generally.

(a) The Bonds, including the Registration Certificate of the Comptroller of Public Accounts of the State to accompany the Initial Bonds, the Certificate of the Paying Agent/Registrar, and the Assignment form which shall accompany, appear on or be attached or affixed to each of the Bonds, (i) shall be substantially in the form set forth below, with such appropriate insertions, omissions, substitutions, and other variations as may be necessary or desirable and not prohibited by this Ordinance and the Pricing Certificate, and (ii) may have such letters, numbers, or other marks of identification (including identifying numbers and letters of the Committee on Uniform Securities Identification Procedures of the American Bankers Association) and such legends and endorsements (including any legend relating to bond insurance for the Bonds or reproduction of an opinion of counsel) as, consistently herewith, may be determined by the Authorized Officer or by the officers executing such Bonds, as evidenced by their execution thereof.

(b) Any portion of the text of any Bonds may be set forth on the reverse side thereof, with an appropriate reference thereto on the face of the Bonds.

(c) The definitive Bonds shall be typewritten, photocopied, printed, lithographed, or engraved, and may be produced by any combination of these methods or produced in any other similar manner, all as determined by the officers executing such Bonds, as evidenced by their execution thereof.

(d) The Initials Bonds submitted to the Attorney General of the State may be typewritten and photocopied or otherwise reproduced.

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#3932095.1 Section 6.02 Form of Current Interest Bond.

(a) Form of Current Interest Bond.

REGISTERED REGISTERED No. ______$______

United States of America State of Texas Counties of Harris and Chambers

CITY OF BAYTOWN, TEXAS GENERAL OBLIGATION AND REFUNDING BOND SERIES 2012

INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP NO.:

______1 ______

The City of Baytown, Texas (the “City”), in the Counties of Harris and Chambers, State of Texas, for value received, hereby promises to pay to

______or registered assigns, on the maturity date specified above, the sum of

______DOLLARS unless the payment of the principal hereof shall have been paid or provided for, and to pay interest on such principal amount from the later of the Dated Date specified above or the most recent interest payment date to which interest has been paid or provided for until payment of such principal amount has been paid or provided for, at the per annum rate of interest specified above, computed on the basis of a 360-day year of twelve 30-day months, such interest to be paid semiannually on February 1 and August 1 of each year, commencing 2 .

The principal of this Bond shall be payable without exchange or collection charges in lawful money of the United States of America upon presentation and surrender of this Bond at the corporate trust office of The Bank of New York Mellon Trust Company, NA., Dallas, Texas, or such other location designated by the Paying Agent/Registrar (the “Designated Payment/Transfer Office”), of the Paying Agent/ Registrar or, with respect to a successor paying agent/registrar, at the Designated Payment/Transfer Office of such successor. Interest on this Bond is payable by check dated as of the interest payment date, mailed by the Paying

1 Insert from Pricing Certificate.

2 Insert from Pricing Certificate.

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#3932095.1 Agent/Registrar to the registered owner at the address shown on the registration books kept by the Paying Agent/Registrar, or by such other customary banking arrangements acceptable to the Paying Agent/Registrar and the person to whom interest is to be paid; provided, however, that such person shall bear all risk and expense of such other customary banking arrangements. For the purpose of the payment of interest on this Bond, the registered owner shall be the person in whose name this Bond is registered at the close of business on the “Record Date,” which shall be the fifteenth day of the month next preceding such interest payment date. In the event of a nonpayment of interest on a scheduled payment date, and for thirty days thereafter, a new record date for such interest payment (a “Special Record Date”) will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the City. Notice of the Special Record Date and of the special payment date of the past due interest (the “Special Payment Date,” which date shall be fifteen days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class, postage prepaid, to the address of each owner of a Bond appearing on the books of the Paying Agent/Registrar at the close of business on the fifteenth day next preceding the date of mailing of such notice.

If the date for the payment of the principal of or interest on this Bond shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall for all purposes be deemed to have been made on the original date payment was due.

This Bond is one of a series of fully registered bonds specified in the title hereof, dated as 3 , issued in the aggregate principal amount of 4 , [in part as (i) 5 original principal amount of Capital Appreciation Bonds, and (ii) 6 principal amount of Current Interest Bonds,]7 pursuant to a certain ordinance (the “Bond Ordinance”) adopted by the City Council of the City and a pricing certificate executed pursuant to the Bond Ordinance (the “Pricing Certificate,” and, together with the Bond Ordinance, the “Ordinance”), for the purposes of refunding certain outstanding obligations of the City; streets, sidewalks, drainage and utilities improvements; public safety, EMS and fire fighting facilities and equipment; park improvements and citywide beautification; the extension of East Baker Road; and drainage facilities; and paying the costs of issuing the Bonds. This Bond is a Current Interest Bond.

3 Insert from Pricing Certificate.

4 Insert from Pricing Certificate.

5 Insert from Pricing Certificate.

6 Insert from Pricing Certificate.

7 Delete if Capital Appreciation Bonds are not issued.

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#3932095.1 The Bonds and the interest thereon are payable from the proceeds of a direct and continuing ad valorem tax levied, within the limits prescribed by law, against all taxable property in the City sufficient, together with certain available funds of the City on deposit in the interest and sinking fund for the Bonds, to provide for the payment of the principal of and interest on the Bonds, as described and provided in the Ordinance.

The City has reserved the option to redeem the Bonds maturing on and after 8 , in whole or in part before their respective scheduled maturity dates, on 9 , or on any date thereafter, at a redemption price equal to the principal amount thereof plus accrued interest to the date of redemption. If less than all of the Bonds are to be redeemed, the City shall determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying Agent/Registrar to call by lot the Bonds, or portions thereof, within such maturity and in such principal amounts, for redemption.

[Mandatory redemption language] 10

Not less than thirty (30) days prior to a redemption date for the Bonds, the City shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the Owners of the Bonds to be redeemed at the address of the Owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the business day next preceding the date of mailing such notice.

In the Ordinance, the City reserves the right, in the case of an optional redemption, to give notice of its election or direction to redeem Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption date, or (ii) that the City retains the right to rescind such notice at any time on or prior to the scheduled redemption date if the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of redemption to the affected Owners. Any Bond subject to conditional redemption for which such redemption has been rescinded shall remain outstanding.

Any notice so mailed shall be conclusively presumed to have been duly given, whether or not the registered owner receives such notice. Notice having been so given and subject, in the case of an optional redemption, to any rights or conditions reserved by the City in the notice, the Bonds called for redemption shall become due and payable on the specified redemption date, and

8 Insert from Pricing Certificate.

9 Insert from Pricing Certificate.

10 Insert from Pricing Certificate.

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#3932095.1 notwithstanding that any Bond or portion thereof has not been surrendered for payment, interest on such Bonds or portions thereof shall cease to accrue.

As provided in the Ordinance, and subject to certain limitations therein set forth, this Bond is transferable upon surrender of this Bond for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying Agent/Registrar; thereupon, one or more new fully registered Bonds of the same stated maturity, of authorized denominations, bearing the same rate of interest, and for the same aggregate principal amount will be issued to the designated transferee or transferees.

The City, the Paying Agent/Registrar, and any other person may treat the person in whose name this Bond is registered as the owner hereof for the purpose of receiving payment as herein provided (except interest shall be paid to the person in whose name this Bond is registered on the Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the City nor the Paying Agent/Registrar shall be affected by notice to the contrary.

IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Bond and the series of which it is a part is duly authorized by law; that all acts, conditions and things required to be done precedent to and in the issuance of the Bonds have been properly done and performed and have happened in regular and due time, form and manner, as required by law; that sufficient and proper provision for the levy and collection of taxes has been made, within the limits prescribed by law, which when collected shall be appropriated exclusively to the timely payment of the principal of and interest on the Bonds; and that the total indebtedness of the City, including the Bonds, does not exceed any constitutional or statutory limitation.

IN WITNESS WHEREOF, the City has caused this Bond to be duly executed under its official seal in accordance with law.

City Clerk Mayor City of Baytown, Texas City of Baytown, Texas

[SEAL]

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#3932095.1 (b) Form of Certificate of Paying Agent/Registrar.

CERTIFICATE OF PAYING AGENT/REGISTRAR

This is one of the Bonds referred to in the within mentioned Ordinance. The series of Bonds of which this Bond is a part was originally issued as one Initial Bond which was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Paying Agent/Registrar

Date: By: Authorized Signatory

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address and Zip Code of transferee):

(Social Security or other identifying number: ) the within Bond and all rights hereunder and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration hereof, with full power of substitution in the premises.

Dated: NOTICE: The signature on this Assignment must correspond with the name of the registered owner as it appears on the face of Signature Guaranteed By: the within Bond in every particular and must be guaranteed in a manner acceptable to the Paying Agent/Registrar. Authorized Signatory

(d) Initial Current Interest Bond Insertions.

(i) The Initial Current Interest Bond shall be in the form set forth in paragraphs (a), (b) and (c) of this Section, except that, in the event there is more than one maturity of Bonds:

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#3932095.1 (A) immediately under the name of the Bond, the headings “INTEREST RATE” and “MATURITY DATE” shall both be completed with the words “As Shown Below” and “CUSIP NO. ______” deleted;

(B) in the first paragraph the words “on the Maturity Date specified above, the sum of ______DOLLARS” shall be deleted and the following will be inserted: “on 11 in the years, in the principal installments and bearing interest at the per annum rates set forth in the following schedule:

(Information to be inserted from the Pricing Certificate); and

(ii) The following Registration Certificate of Comptroller of Public Accounts shall appear on the Initial Bond for the Current Interest Bonds:

REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS

OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO. THE STATE OF TEXAS §

I HEREBY CERTIFY THAT there is on file and of record in my office a certificate to the effect that the Attorney General of the State of Texas has approved this Bond, and that this Bond has been registered this day by me.

WITNESS MY SIGNATURE AND SEAL OF OFFICE this ______.

[SEAL] Comptroller of Public Accounts of the State of Texas

11 Insert from Pricing Certificate.

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#3932095.1 Section 6.03 Form of Capital Appreciation Bond.

(a) Form of Capital Appreciation Bond.

REGISTERED REGISTERED No. ______MATURITY AMOUNT $______

United States of America State of Texas Counties of Harris and Chambers

CITY OF BAYTOWN, TEXAS GENERAL OBLIGATION AND REFUNDING BOND SERIES 2012

ORIGINAL YIELD TO PRINCIPAL MATURITY CLOSING CUSIP MATURITY: AMOUNT: DATE: DATE: NUMBER:

12 13 14 15

The City of Baytown, Texas (the “City”), in the Counties of Harris and Chambers, State of Texas, for value received, hereby promises to pay to

______or registered assigns, on the Maturity Date specified above, the Maturity Amount of this Bond, being the sum of

______DOLLARS

The Maturity Amount represents the total of the Original Principal Amount hereof, plus the initial premium paid hereon, together with interest thereon to the Maturity Date. Interest accretes from the Closing Date specified above, and will compound semiannually on 16

12 Insert from Pricing Certificate.

13 Insert from Pricing Certificate.

14 Insert from Pricing Certificate.

15 Insert from Pricing Certificate.

16 Insert from Pricing Certificate.

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#3932095.1 and on 17 in each year, commencing on 18 . A table of “Accreted Values” per $5,000 Maturity Amount is printed on or attached to this Bond. The term “Accreted Value,” as used herein means the original principal amount of this Bond plus the initial premium, if any, paid therefore with interest thereon accreted and compounded semiannually to the on 19 or 20 next preceding the date of such calculation(or, the date of calculation, if such calculation is made on 21 or 22 ) at a compounding rate which produces the approximate yield to maturity set forth above. For any date other than a 23 or 24 , the Accreted Value of this Bond shall be determined by a straight-line interpolation between the values for the applicable semiannual compounding dates, based on 30-day months.

If the date for the payment of the Maturity Amount on this Bond shall be a Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the Paying Agent/Registrar is located are required or authorized by law or executive order to close, the date for such payment shall be the next succeeding day which is not a Saturday, Sunday, legal holiday, or day on which banking institutions are required or authorized to close, and payment on such date shall for all purposes be deemed to have been made on the Maturity Date.

This Bond is one of a series of fully registered bonds specified in the title hereof, dated as of 25 , issued in the aggregate principal amount of $ 26 , in part as (i) $ 27 original principal amount of Capital Appreciation Bonds, and (ii) $ 28 principal amount of Current Interest Bonds, pursuant to a certain ordinance (the “Bond Ordinance”) adopted by the City Council of the City and a pricing certificate executed pursuant to the Bond Ordinance (the “Pricing Certificate,” and, together with the Bond Ordinance, the “Ordinance”), for the purposes of refunding certain outstanding obligations of the City; streets, sidewalks, drainage and utilities improvements; public safety, EMS and fire fighting facilities and equipment; park improvements

17 Insert from Pricing Certificate.

18 Insert from Pricing Certificate.

19 Insert from Pricing Certificate.

20 Insert from Pricing Certificate.

21 Insert from Pricing Certificate.

22 Insert from Pricing Certificate.

23 Insert from Pricing Certificate.

24 Insert from Pricing Certificate.

25 Insert from Pricing Certificate.

26 Insert from Pricing Certificate.

27 Insert from Pricing Certificate.

28 Insert from Pricing Certificate.

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#3932095.1 and citywide beautification; the extension of East Baker Road; and drainage facilities; and paying the costs of issuing the Bonds. This Bond is a Capital Appreciation Bond payable as to the principal and interest as herein provided.

The Capital Appreciation Bonds are not subject to redemption prior to stated maturity.

The Bonds and the interest thereon are payable from the proceeds of a direct and continuing ad valorem tax levied, within the limits prescribed by law, against all taxable property in the City sufficient, together with certain available funds of the City on deposit in the interest and sinking fund for the Bonds, to provide for the payment of the principal of and interest on the Bonds, as described and provided in the Ordinance.

IN WITNESS WHEREOF, the City has caused this Bond to be duly executed under its official seal in accordance with law.

City Clerk Mayor City of Baytown, Texas City of Baytown, Texas

[SEAL]

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#3932095.1 (b) Form of Certificate of Paying Agent/Registrar.

CERTIFICATE OF PAYING AGENT/REGISTRAR

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Paying Agent/Registrar

Date: By: Authorized Signatory

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print or typewrite name, address and Zip Code of transferee):

(d) Table of Accreted Values.

The Accreted Values29 of the Capital Appreciation Bonds shall be printed on the reverse side of, or attached to, each of the Capital Appreciation Bonds, including the Initial Capital Appreciation Bond.

29 Insert from Pricing Certificate.

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#3932095.1 (e) Initial Capital Appreciation Bond Insertions.

(i) The Initial Capital Appreciation Bond shall be in the form set forth in paragraphs (a), (b), (c) and (d) of this Section, except for the following alterations:

(A) immediately under the name of the Bond, the headings “YIELD TO MATURITY,” “ORIGINAL PRINCIPAL AMOUNT” AND “MATURITY DATE,” shall be completed with the words “As Shown Below” and “CUSIP NO. ______” deleted;

(B) in the first paragraph of the Bond, the words “on the Maturity Date specified above, the Maturity Amount of This Bond being the sum of DOLLARS” shall be deleted and the following will be inserted: “on $ 30 in the years, in the Original Principal Amounts and the Maturity Amounts and with interest at the compounding rates which produce the respective approximate Yield to Maturity set forth in the following schedule:

Original Principal Yield to Maturity Years Amounts Maturity Amounts

(Information to be inserted from the Pricing Certificate); and

30 Insert from Pricing Certificate.

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#3932095.1 (ii) The following Registration Certificate of Comptroller of Public Accounts shall appear on the Initial Bond for the Capital Appreciation Bonds:

REGISTRATION CERTIFICATE OF COMPTROLLER OF PUBLIC ACCOUNTS

OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO. THE STATE OF TEXAS §

WITNESS MY SIGNATURE AND SEAL OF OFFICE this ______.

[SEAL] Comptroller of Public Accounts of the State of Texas

Section 6.04 CUSIP Registration.

The City may secure identification numbers through the CUSIP Service Bureau Division of Standard & Poor’s Ratings Service, a division of the McGraw-Hill Companies, New York, New York, and may authorize the printing of such numbers on the face of the Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds or any errors or omissions in the printing of such number shall be of no significance or effect in regard to the legality thereof and neither the City nor the attorneys approving said Bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed on the Bonds.

Section 6.05 Legal Opinion.

The approving legal opinion of Bond Counsel may be attached to or printed on the reverse side of each Bond.

Section 6.06 Bond Insurance.

If it is determined that the purchase of bond insurance would result in savings to the City, the Authorized Officer is hereby authorized to approve the purchase of and payment of the premium for bond insurance by the City, the terms of commitment for such insurance, if any and any special provisions related to such policy, if any. All officials and representatives of the City are authorized and directed to execute such documents and to do any and all things necessary or desirable to obtain such insurance. A statement relating to the bond insurance obtained for the Bonds, if any, may be printed on or attached to each Bond.

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#3932095.1 ARTICLE VII

DELEGATION OF AUTHORITY, SALE AND DELIVERY OF BONDS, DEPOSIT OF PROCEEDS

Section 7.01 Sale of Bonds; Official Statement.

(a) The Bonds shall be sold to the Underwriters or Purchasers in accordance with the terms of this Ordinance. As authorized by Chapters 1207 and 1371, Texas Government Code, as amended, the Authorized Officer is authorized to act on behalf of the City in selling and delivering the Bonds and in carrying out the other procedures specified in this Ordinance, including determining whether the Bonds will be sold in a negotiated sale, the price at which each of the Bonds will be sold, the number and designation of each series or subseries of Bonds to be issued, the form in which the Bonds shall be issued, the years and dates on which the Bonds will mature, the principal amount (with respect to Current Interest Bonds) and Maturity Amount (with respect to Capital Appreciation Bonds) to mature in each of such years, the aggregate principal amount of Refunded Obligations, the aggregate principal amount (with respect to Current Interest Bonds) and Maturity Amount (with respect to Capital Appreciation Bonds) to be issued by the City, the rate of interest to be borne by each maturity of the Bonds, the yield to Stated Maturity for the Capital Appreciation Bonds, the first interest payment date for the Current Interest Bonds, the first compounding date for the Capital Appreciation Bonds, the dates, prices and terms upon and at which the Bonds shall be subject to redemption prior to maturity at the option of the City and shall be subject to mandatory sinking fund redemption, the designation of the Refunded Obligations from the Schedule of Refunded Obligation Candidates, the selection of an escrow agent, verification agent and bond insurer, if any, and all other matters relating to the issuance, sale and delivery of the Bonds and including the refunding of the Refunded Obligations, all of which shall be specified in the Pricing Certificate; provided that the following conditions can be satisfied:

(i) the price to be paid for the Bonds shall not be less than 90% of the aggregate original principal amount of the Bonds plus accrued interest thereon from their date to their delivery;

(ii) the Bonds shall not bear interest at a rate greater than 5.00%;

(iii) the aggregate principal amount of the Bonds authorized to be issued for the purposes described in Section 3.01 shall not exceed the maximum par amount described in Section 3.01 and shall be in an amount sufficient, in combination with the net premium from the sale of the Bonds, plus other available funds of the City, if any, to provide for the refunding of the maximum amount of the Refunded Obligations and the costs and expenses of issuance of the Bonds, including underwriter’s discount;

(iv) the present value savings in debt service resulting from the refunding of the Refunded Obligations shall be at least 5.00% of the principal amount of the Refunded Obligations, as shown by a table of calculations prepared by the City’s financial advisor and attached to the Pricing Certificate; and

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#3932095.1 (v) no Bond shall mature more than forty (40) years from the date of delivery thereof.

(b) The Authorized Officer is hereby authorized and directed to execute and deliver on behalf of the City a Purchase Agreement providing for the sale of the Bonds to the Underwriters, in such form as determined by the Authorized Officer. The Authorized Officer is hereby authorized and directed to approve the final terms and provisions of the Purchase Agreement in accordance with the terms of the Pricing Certificate and this Ordinance, which final terms shall be determined to be the most advantageous reasonably attainable by the City, such approval and determination being evidenced by its execution thereof by the Authorized Officer. All officers, agents and representatives of the City are hereby authorized to do any and all things necessary or desirable to satisfy the conditions set out therein and to provide for the issuance and delivery of the Bonds. The Initial Bonds shall initially be registered in the name of the Underwriters or their designee or such other entity as may be specified in the Purchase Agreement.

(c) The authority granted to the Authorized Officer under Sections 7.01(a) through 7.01(c) shall expire on a date one year from the date of this Ordinance, unless otherwise extended by the City by separate action.

(d) The City hereby approves the form and content and distribution of the Preliminary Official Statement, and the Preliminary Official Statement (with such addenda, supplements or amendments as may be approved by the Authorized Officer and the Underwriters) is deemed final within the meaning and for the purposes of paragraph (b)(1) of Rule 15c2-12 under the Securities and Exchange Act of 1934. The City hereby authorizes the preparation of a final Official Statement reflecting the terms of the Purchase Agreement and other relevant information. The use of such final Official Statement by the Underwriters (with such appropriate variations as shall be approved by the Authorized Officer and the Underwriters) is hereby approved and authorized and the proper officials of the City are authorized to sign such Official Statement and deliver a certificate pertaining to such Official Statement, if necessary.

(e) The Authorized Officer and all other officers of the City are authorized to take such actions, to obtain such consents or approvals and to execute such documents, agreements, certificates and receipts as they may deem necessary and appropriate in order to consummate the delivery of the Bonds, pay the costs of issuance of the Bonds, and effectuate the terms and provisions of this Ordinance.

Section 7.02 Control and Delivery of Bonds.

(a) The Mayor is hereby authorized to have control of the Initial Bond and all necessary records and proceedings pertaining thereto pending investigation, examination, and approval of the Attorney General of the State of Texas, registration by the Comptroller of Public Accounts of the State of Texas and registration with, and initial exchange or transfer by, the Paying Agent/Registrar.

(b) After registration by the Comptroller of Public Accounts, delivery of the Bonds shall be made to either the Underwriters or the Purchasers under and subject to the general

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#3932095.1 supervision and direction of the Authorized Officer, against receipt by the City of all amounts due to the City under the terms of sale.

Section 7.03 Deposit of Proceeds; Transfer of Funds.

Proceeds from the sale of the Bonds, together with other funds of the City, if any, shall, promptly upon receipt by the City, be applied as set out in the Pricing Certificate. Any proceeds remaining after the accomplishment of such purposes, including interest earnings on the investment of such proceeds, shall be deposited to the Interest and Sinking Fund.

ARTICLE VIII

REPRESENTATIONS AND COVENANTS

Section 8.01 Payment of the Bonds. On or before each date on which principal, premium, if any, or interest is due on the Bonds, there shall be made available to the Paying Agent/Registrar, out of the Interest and Sinking Fund, money sufficient to pay such principal, premium, if any, or interest when due.

Section 8.02 Other Representations and Covenants.

(a) The City will faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Ordinance and in each Bond; the City will promptly pay or cause to be paid the principal of and interest on each Bond on the dates and at the places and manner prescribed in such Bond; and the City will, at the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance.

(b) The City is duly authorized under the laws of the State to issue the Bonds; all action on its part for the creation and issuance of the Bonds has been or will be duly and effectively taken; and the Bonds in the hands of the Owners thereof are and will be valid and enforceable obligations of the City in accordance with their terms.

ARTICLE IX

PROVISIONS CONCERNING FEDERAL INCOME TAX EXCLUSION

Section 9.01 General Tax Covenants.

The City intends that the interest on the Bonds shall be excludable from gross income for purposes of federal income taxation pursuant to sections 103 and 141 through 150 of the Code and the applicable regulations promulgated thereunder (the “Regulations”). The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that if taken or omitted, respectively, would cause the interest on the Bonds to be includable in the gross income, as defined in section 61 of the Code, of the holders thereof for purposes of federal income taxation. In particular, the City covenants and agrees to comply with each requirement of this Article IX, provided, however, that the City shall not be required to comply with any particular requirement of this Article IX if the City has received an opinion of nationally -34-

#3932095.1 recognized bond counsel (“Counsel’s Opinion”) that such noncompliance will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or if the City has received a Counsel’s Opinion to the effect that compliance with some other requirement set forth in this Article IX will satisfy the applicable requirements of the Code, in which case compliance with such other requirement specified in such Counsel’s Opinion shall constitute compliance with the corresponding requirement specified in this Article.

Section 9.02 No Private Use or Payment and No Private Loan Financing.

The City shall certify, through an authorized officer, employee or agent, that, based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, the proceeds of the Refunded Obligations have not been and the Bonds will not be used in a manner that would cause the Bonds to be “private activity bonds” within the meaning of section 141 of the Code and the Regulations. The City covenants and agrees that it will make such use of the proceeds of the Bonds, including interest or other investment income derived from Bond proceeds, regulate the use of property financed, directly or indirectly, with such proceeds, and take such other and further action as may be required so that the Bonds will not be “private activity bonds” within the meaning of section 141 of the Code and the Regulations.

Section 9.03 No Federal Guarantee.

The City covenants and agrees not to take any action, or knowingly omit to take any action within its control, that, if taken or omitted, respectively, would cause the Bonds to be “federally guaranteed” within the meaning of section 149(b) of the Code and the Regulations, except as permitted by section 149(b)(3) of the Code and the Regulations.

Section 9.04 Bonds are not Hedge Bonds.

The City covenants and agrees not to take any action, or knowingly omit to take any action, and has not knowingly omitted and will not knowingly omit to take any action, within its control, that, if taken or omitted, respectively, would cause the Bonds to be “hedge bonds” within the meaning of section 149(g) of the Code and the Regulations.

Section 9.05 No-Arbitrage.

The City covenants and agrees that it will make such use of the proceeds of the Bonds including interest or other investment income derived from Bond proceeds, regulate investments of proceeds of the Bonds, and take such other and further action as may be required so that the Bonds will not be “arbitrage bonds” within the meaning of section 148(a) of the Code and the Regulations. The City will certify, through an authorized officer, employee or agent that based upon all facts and estimates known or reasonably expected to be in existence on the date the Bonds are delivered, the City will reasonably expect that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be “arbitrage bonds” within the meaning of section 148(a) of the Code and the Regulations.

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#3932095.1 Section 9.06 Arbitrage Rebate.

If the City does not qualify for an exception to the requirements of section 148(f) of the Code, the City will take all necessary steps to comply with the requirement that certain amounts earned by the City on the investment of the “gross proceeds” of the Bonds (within the meaning of section 148(f)(6)(B) of the Code) be rebated to the federal government. Specifically, the City will (i) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate the amount earned on the investment of the gross proceeds of the Bonds separately from records of amounts on deposit in the funds and accounts of the City allocable to other bond issue of the City or moneys which do not represent gross proceeds of any bonds of the City, (ii) calculate at such times as are required by the Regulations, the amount earned from the investment of the gross proceeds of the Bonds which is required to be rebated to the federal government, and (iii) pay, not less often than every fifth anniversary date of the delivery of the Bonds or on such other dates as may be permitted under the Regulations, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at arm’s length and had the yield on the issue not been relevant to either party.

Section 9.07 Information Reporting.

The City covenants and agrees to file or cause to be filed with the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the calendar quarter in which the Bonds are issued, an information statement concerning the Bonds, all under and in accordance with section 149(e) of the Code and the Regulations.

Section 9.08 Record Retention.

The City will retain all pertinent and material records relating to the use and expenditure of the proceeds of the Bonds until six years after the last Bond is redeemed, or such shorter period as authorized by subsequent guidance issued by the Department of Treasury, if applicable. All records will be kept in a manner that ensures their complete access throughout the retention period. For this purpose, it is acceptable that such records are kept either as hardcopy books and records or in an electronic storage and retrieval system, provided that such electronic system includes reasonable controls and quality assurance programs that assure the ability of the City to retrieve and reproduce such books and records in the event of an examination of the Bonds by the Internal Revenue Service.

Section 9.09 Registration.

The Bonds will be issued in registered form.

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#3932095.1 Section 9.10 Continuing Obligation.

Notwithstanding any other provision of this Ordinance, the City’s obligations under the covenants and provisions of Article shall survive the defeasance and discharge of the Bonds.

ARTICLE X

DISCHARGE

Section 10.01 Discharge.

The Bonds may be refunded, discharged or defeased in any manner now or hereafter permitted by applicable law.

ARTICLE XI

CONTINUING DISCLOSURE UNDERTAKING

Section 11.01 Annual Reports.

(a) The City will provide certain updated financial information and operating data to the MSRB annually in an electronic format as prescribed by the MSRB. The information to be updated includes certain updated financial information and operating data with respect to the City of the general type included in the final Official Statement in Tables 1 through 7 and 9 through 20 and in Appendix B thereto. The City will update and provide this information within six (6) months of the end of its fiscal years ending in or after 2012. Financial statements so to be provided shall be prepared in accordance with the accounting principles described in the notes to the financial statements for the most recently concluded Fiscal Year, and, audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not complete within such period, the City shall provide notice that audited financial statements are not available and shall provide unaudited financial statements for such Fiscal Year to the MSRB. Thereafter, when and if audited financial statements become available, the City shall provide such audited financial statements as required to the MSRB.

(b) If the City changes its Fiscal Year, it will notify the MSRB of the change (and of the date of the new Fiscal Year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section.

(c) The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document, including an official statement or other offering document, if it is available from the MSRB, that theretofore has been provided to the MSRB or filed with the SEC.

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#3932095.1 Section 11.02 Material Event Notices.

(a) The City shall provide the following to the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of ten (10) business days after the occurrence of the event, notice of any of the following events with respect to the Bonds:

(1) Principal and interest payment delinquencies;

(2) Non-payment related defaults, if material;

(3) Unscheduled draws on debt service reserves reflecting financial difficulties;

(4) Unscheduled draws on credit enhancements reflecting financial difficulties;

(5) Substitution of credit or liquidity providers, or their failure to perform;

(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds;

(7) Modifications to rights of the holders of the Bonds, if material;

(8) Bond calls, if material, and tender offers;

(9) Defeasances;

(10) Release, substitution, or sale of property securing repayment of the Bonds, if material;

(11) Rating changes;

(12) Bankruptcy, insolvency, receivership or similar event of the City;

Note to paragraph 12: For the purposes of the event identified in paragraph 12 of this section, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental

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#3932095.1 authority having supervision or jurisdiction over substantially all of the assets or business of the City.

(13) The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

(14) Appointment of successor or additional trustee or the change of name of a trustee, if material.

(b) The City shall provide to the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner, notice of a failure by the City to provide required annual financial information and notices of material events in accordance with Section 11.01 and section (a) above. All documents provided to the MSRB pursuant to this section shall be accompanied by identifying information as prescribed by the MSRB.

Section 11.03 Limitations, Disclaimers and Amendments.

(a) The City shall be obligated to observe and perform the covenants specified in this Article for so long as, but only for so long as, the City remains an “obligated person” with respect to the Bonds within the meaning of the Rule, except that the City in any event will give notice of any bond calls and any defeasances that cause the City to be no longer an “obligated person”.

(b) The provisions of this Article are for the sole benefit of the Owners and beneficial owners of the Bonds, and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City’s financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Article or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date.

UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.

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#3932095.1 (c) No default by the City in observing or performing its obligations under this Article shall constitute a breach of or default under the Ordinance for purposes of any other provisions of this Ordinance.

(d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws.

(e) The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (i) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (ii) either (A) the Owners of a majority in aggregate principal amount (or any greater amount required by any other provisions of this Ordinance that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or (B) an entity or individual person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Owners and beneficial owners of the Bonds. The provisions of this Article may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid, but only if and to the extent that reservation of the City’s right to do so would not prevent underwriters of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If the City so amends the provisions of this Article, it shall include with any amended financial information or operating data next provided in accordance with Section 11.01 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided.

ARTICLE XII

APPROVAL OF ESCROW AGREEMENT AND RELATED PROVISIONS

Section 12.01 Appointment of Escrow Agent; Approval of Escrow Agreement.

The Bank of New York Mellon Trust Company, N.A., is hereby appointed Escrow Agent for the purpose of refunding the Refunded Obligations. The Authorized Officer is hereby authorized and directed to execute and deliver, or cause the execution and delivery by the Mayor and City Clerk, an Escrow Agreement, having such terms and provisions as are approved by the Authorized Officer as evidenced by the execution thereof by the appropriate City official.

Section 12.02 Purchase of Securities for Escrow Fund.

The Authorized Officer is authorized to make necessary arrangements for the purchase of the Escrow Securities referenced in the Escrow Agreement, including, without limitation, the execution of such documents, certificates or instruments as may be necessary in connection therewith including the execution of subscriptions for the purchase of United States Treasury Securities – State and Local Government Series. All actions of the Authorized Officer taken

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#3932095.1 prior to the date of this Ordinance in connection with making arrangements for the purchase of such Escrow Securities are hereby ratified and affirmed.

Section 12.03 Redemption and Defeasance of Refunded Obligations.

Following the deposit to the Escrow Fund or with the paying agent/registrar for the Refunded Obligations, the Refunded Obligations shall be payable solely from and secured by the cash and securities on deposit in the Escrow Fund or such other fund held by the paying agent/registrar for the Refunded Obligations for the purpose of refunding the Refunded Obligations and shall cease to be payable from ad valorem taxes. The Refunded Obligations are hereby called for redemption prior to maturity on the dates and at the redemption prices set forth in the Pricing Certificate. The City Clerk is hereby authorized and directed to cause to be delivered to the paying agent/registrar for the Refunded Obligations a certified copy of this Ordinance and a copy of the Pricing Certificate calling the Refunded Obligations for redemption. The delivery of this Ordinance and the Pricing Certificate to the paying agent/registrar for the Refunded Obligations shall constitute the giving of notice of redemption to the paying agent/registrar for the Refunded Obligations, and such paying agent/registrar is hereby authorized and directed to give notice of redemption to the owners of the Refunded Obligations in accordance with the requirements of the respective ordinances authorizing the issuance thereof.

ARTICLE XIII

MISCELLANEOUS

Section 13.01 Changes to Ordinance. The City Attorney or Bond Counsel is hereby authorized to make changes to the terms of this Ordinance if necessary or desirable to carry out the purposes hereof or in connection with the approval of the issuance of the Bonds by the Attorney General of Texas.

Section 13.02 Related Matters. To satisfy in a timely manner all of the City’s obligations under this Ordinance, the Mayor, the City Manager, the Finance Director, the City Clerk and all other appropriate officers and agents of the City are hereby authorized and directed to do any and all things necessary and/or convenient to carry out the terms and purposes of this Ordinance.

Section 13.03 Individuals Not Liable. No covenant, stipulation, obligation or agreement herein contained shall be deemed to be a covenant, stipulation, obligation or agreement of any member of City Council or agent or employee of City Council or of the City in his or her individual capacity and neither the members of City Council nor any officer thereof, nor any agent or employee of City Council or of the City, shall be liable personally on the Bonds, or be subject to any personal liability or accountability by reason of the issuance thereof.

Section 13.04 Severability and Savings. If any section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance.

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#3932095.1 Section 13.05 Repealer. All ordinances or resolutions, or parts thereof, heretofore adopted by the City and inconsistent with the provisions of this Ordinance are hereby repealed to the extent of such conflict.

Section 13.06 Force and Effect. This Ordinance shall be in full force and effect from and after its final passage, and it is so ordained.

[Execution Page Follows]

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#3932095.1 INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of Baytown this the _____ day of January, 2012.

STEPHEN H. DONCARLOS, Mayor ATTEST:

LETICIA BRYSCH, City Clerk

APPROVED AS TO FORM:

IGNACIO RAMIREZ, SR., City Attorney

Signature Page to City of Baytown Ordinance No. ______

#3932095.1 SCHEDULE I

SCHEDULE OF REFUNDED OBLIGATION CANDIDATES

City of Baytown, Texas Certificates of Obligation, Series 2003

City of Baytown, Texas General Obligation Bonds, Series 2003

City of Baytown, Texas General Obligation Bonds, Series 2004

City of Baytown, Texas Certificates of Obligation, Series 2004A

Schedule I #3932095.1 EXHIBIT A

Form of Pricing Certificate

Exhibit A to Ordinance A-1 #3932095.1 FORM OF PRICING CERTIFICATE

Re: City of Baytown, Texas General Obligation and Refunding Bonds, Series 2012 (the “Bonds”)

I, the undersigned officer of the City of Baytown, Texas (the “City”), do hereby make and execute this Pricing Certificate pursuant to an ordinance adopted by the City Council of the City on January ___, 2012 (the “Ordinance”) captioned as follows:

As authorized by Section 7.01 of the Ordinance, I have acted on behalf of the City in selling the Bonds to ______(the “Underwriters”) pursuant to the terms of the Purchase Agreement dated as of the date hereof. The Bonds shall have the terms set forth in this Pricing Certificate.

A. The Bonds shall have a Dated Date of ______, 2012 and shall be issued in the aggregate principal amount of $______, for the purposes specified in Section 3.01 in the Ordinance. The Bonds have a scheduled Closing Date of ______, 2011.

B. The [Current Interest] Bonds shall bear interest from the Closing Date. The Bonds shall mature on February 1 in each of the years, in the principal amounts and shall bear interest at the per annum rates set forth in the following schedule:

Exhibit A to Ordinance A-2 #3932095.1

Stated Principal Interest Stated Principal Interest Maturity Amount Rate Maturity Amount Rate

2011 $ % 2022 $ % 2012 2023 2013 2024 2014 2025 2015 2026 2016 2027 2017 2028 2018 2029 2019 2030 2020 2031 2021 2032

C. [Capital Appreciation Bonds, if any]

D. [Optional Redemption]

E. [Mandatory Redemption]

F. The yield on the Bonds as calculated for federal arbitrage purposes is approximately ______%, as determined by the City’s financial advisor, First Southwest Company.

G. The Refunded Obligation Candidates to be refunded with a portion of the proceeds of the Bonds are set forth in Schedule I hereto. The Refunded Obligations are hereby called for redemption on redemption dates specified in Schedule I. The Refunded Obligations shall be redeemed at a redemption price equal to the principal amount thereof plus interest accrued thereon to the redemption date therefor.

H. In accordance with the other parameters contained in Section 7.01 of the Ordinance, the undersigned does hereby find, certify and represent that the foregoing terms of the Bonds satisfy the following requirements and parameters contained within such Section 7.01:

(i) the price to be paid for the Bonds is not less than 90% of the aggregate original principal amount of the Bonds plus accrued interest thereon from their date to their delivery;

(ii) the Bonds do not bear interest at a rate greater than the maximum rate of ______%;

(iii) the aggregate principal amount of the Bonds authorized to be issued for the purposes described in Section 3.01 of the Ordinance does not exceed $34,500,000 and is in an amount sufficient, in combination with the net premium from the sale of the Exhibit A to Ordinance A-3

#3932095.1 Bonds, plus other available funds of the City, if any, to provide for the refunding of the maximum amount of the Refunded Obligations selected from the Refunded Obligation Candidates and the costs and expenses of issuance of the Bonds, including underwriter’s discount;

(iv) the refunding of the Refunded Obligations results in a present value debt service savings of %. A copy of the table provided by the City’s financial advisor, First Southwest Company, and showing the debt service savings is attached hereto as Exhibit B; and

(v) no Bond shall mature more than forty (40) years from the date of delivery thereof.

I. The proceeds of the Bonds and other available funds shall be applied as follows:

(i) the amount of $______, consisting of $______principal amount of Bond proceeds, plus $______net premium received from the sale of the Bonds, [plus available funds from the City in the amount of $______,] shall be used to pay the redemption price of the Refunded Obligations;

(ii) the amount of $______, consisting of $______principal amount of Bond proceeds and $______net premium received from the sale of the Bonds shall be used;

(iii) net premium received from the sale of the Bonds in the amount of $______shall be used to pay the costs of issuance;

(iv) net premium received from the sale of the Bonds in the amount of $______shall be used the pay the underwriting discount;

(v) accrued interest on the Bonds in the amount of $______shall be deposited to the Interest and Sinking Fund for the Bonds; and

(vi) any amounts remaining after accomplishing the above described purposes shall be deposited to the Interest and Sinking Fund.

J. [Insurance Provisions]

Exhibit A to Ordinance A-4

#3932095.1 K. The voters of the City authorized the amount of bonds for the purposes set forth in the following schedule, such schedule reflects the Bonds and the amounts previously issued for such purposes:

Amount Previously Authorized but Purpose Authorized Issued Unissued The Bonds Unissued

Streets, Sidewalks, $36,850,000 $10,421,000 $26,429,000 $______$______Drainage and Utilities Improvements

Public Safety, EMS and $22,995,000 $7,162,000 $15,833,000 $______$______Fire Fighting Facilities and Equipment

Park Improvements and $10,940,000 $7,530,000 $3,410,000 $______$______Citywide Beautification

Extension of East Baker $7,170,000 $630,000 $6,540,000 $______$______Road

Drainage Improvements $2,020,000 $1,072,000 $948,000 $______$______

TOTAL $79,975,000 $26,815,000 $53,160,000 $______$______

L. The form of Pricing Certificate attached to the Ordinance shall be replaced with this Pricing Certificate.

[Signature Page Follows]

Exhibit A to Ordinance A-5

#3932095.1 This Pricing Certificate for the City of Baytown, Texas, General Obligation and Refunding Bonds, Series 2012, is executed on the _____ day of ______, 2012.

Authorized Officer City of Baytown, Texas

Exhibit A to Ordinance A-6

#3932095.1

AIR-5603 4. a. BAYTOWN CITY COUNCIL MEETING Meeting Date: 01/26/2012 First Public Hearing: Regarding a Strategic Partnership Agreement Related to a Limited Purpose Annexation with Chambers County Improvement District Prepared for: Kelly Carpenter Prepared by: Andrew Allemand, Planning and Development Services Department: Planning and Development Services

Information ITEM Conduct the first public hearing regarding a strategic partnership agreement related to a limited purpose annexation with Chambers County Improvement District No. 3 for approximately 948 acres of land in the City's extraterritorial jurisdiction, generally located east and west of Texas State Highway 99 and Needlepoint Road (FM 2354) approximately 1,900 feet south of Interstate 10 in Chambers County, Texas.

PREFACE The Strategic Partnership Agreement ("SPA") between the City of Baytown and Chambers County Improvement District No. 3 ("CCID#3) provides for the limited purpose annexation of the area within CCID#3's boundaries, which contain approximately 948 acres of land generally located on the east and west sides of the Grand Parkway along the alignment of Kilgore Parkway. This area is contiguous to the city limits of Baytown, is currently vacant and without residents, and is proposed by the owner for industrial and business park purposes. A map is included in the packet showing the location of the property.

The SPA sets forth the services which will be provided by the City and the District. Under the SPA, the City will: 1. will collect sales taxes, 2. will provide utility services under a separate utility agreement, 3. will apply the following ordinances: zoning; junk yards; signs;and sexually oriented businesses, 4. will not annex for full purposes during the term of the agreement without the approval of the District, 5. will not collect ad valorem taxes, and 6. will not provide city services unless specifically agreed upon by both parties. The City has several limited purpose annexation areas and strategic partnership agreements with Chambers County MUD No. 1 and Lake MUD. This item supports the City’s Vision Statement of providing for a strong employment base with a long-term industry presence.

Notice of the first and second public hearings was published in the January 6, 2012, issue of the Baytown Sun and posted on the City of Baytown’s notice board and website on January 4, 2012.

RECOMMENDATION

Attachments Bay 10 Annexation Map SPA Exhibit "A" Draft: 12/09/2011

STRATEGIC PARTNERSHIP AGREEMENT BETWEEN THE CITY OF BAYTOWN, TEXAS, AND CHAMBERS COUNTY IMPROVEMENT DISTRICT NO.3

THE STATE OF TEXAS § § COUNTY OF CHAMBERS §

This STRATEGIC PARTNERSHIP AGREEMENT (this "Agreement") is made and entered into as of the Effective Date by and between the CITY OF BAYTOWN, TEXAS, a municipal corporation situated in Harris and Chambers Counties, Texas, acting by and through its governing body, the City Council of the City of Baytown, Texas (the "City"), and CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 3 (the "District"), a conservation and reclamation district created pursuant to Article XVI, Section 59, Texas Constitution and operating pursuant to Chapters 49 and 54, Texas Water Code. RECITALS

WHEREAS, Texas Local Government Code, §43.0751 (the "Act") authorizes the City and certain utility districts to negotiate and enter into a strategic partnership agreement by mutual consent, and the City and the District wish to enter into such an agreement; and

WHEREAS, this Agreement provides for the annexation of a tract of land in the District, as more specifically described in Exhibit "A," by the City for the limited purposes of applying certain of the City’s ordinances to the Tract; and

WHEREAS, as required by the Act, the City held public hearings on ______, and ______, at City Council Chamber, City Hall, 2401 Market Street, Baytown, Texas 77520, and the District held a public hearing on ______, at 19500 Needlepoint Road, Baytown, Chambers County, Texas, and another public hearing on ______, at 1300 Post Oak Boulevard, Suite 1400, Houston, Texas 77056, at which members of the public were given the opportunity to present testimony or evidence regarding the proposed Agreement, and the City and the District made copies of the proposed Agreement available, and gave notice of the hearings prior to the public hearings in accordance with the terms of the Act; and

WHEREAS, the City and the District wish to enter into a strategic partnership agreement to provide the terms and conditions under which services will be provided by the City and the District and under which the District will continue to exist for an extended period of time after the Tract is annexed for limited purposes; -1-

NOW, THEREFORE, THE PARTIES CONTRACT AND AGREE AS FOLLOWS:

ARTICLE I. FINDINGS

The City and the District hereby find and declare:

1. The Act authorizes the City and the District to enter into this Agreement to define the terms and conditions under which services will be provided to the District and under which the District will continue to exist after the Tract is annexed for limited purposes pursuant to this Agreement;

2. This Agreement does not require the District to provide revenue to the City solely for the purpose of an agreement with the City to forgo annexation of the District;

3. This Agreement provides benefits to the City and the District, including revenue, services, and/or regulations which are reasonable and equitable with regard to the benefits provided to the other Party;

4. All the terms and conditions contained in this Agreement are lawful and appropriate to provide for the provision of municipal services; and

5. The City and the District negotiated this Agreement by mutual consent; the terms and conditions of the Agreement are not a result of the City's Annexation Plan or any arbitration between the City and the District.

ARTICLE II. DEFINITIONS

Unless the context requires otherwise, and in addition to the terms defined above, the following terms and phrases used in this Agreement shall have, solely for the purposes of this Agreement, the meanings set out below:

"Act" means Texas Local Government Code, §43.0751 (Vernon Supp. 2002) and any amendments thereto.

"Agreement" means this strategic partnership agreement by and between the City and the District.

"Applicable Ordinances" shall include the following chapters, articles and/or sections of the Code of Ordinances, Baytown, Texas, along with all amendments thereto:

Chapter 4 "Adult Commercial Establishments," Chapter 42 "Health and Sanitation," Chapter 82 "Secondhand Goods," Article III "Junk and Automotive Wrecking and Salvage,” Chapter 118 "Signs," Article III "Regulations," Division 4 "Location," Subdivision IV "Off-Premise Signs" along with all other provisions regulating Off-Premise Signs, Chapter 114 "Sewer and Water Line Extensions," Article IV "Impact Fees," and -2-

Chapter 130 “Zoning." "Board" means the Board of Directors of the District.

"City" means the City of Baytown, Texas, a municipal corporation situated in Harris and Chambers Counties, Texas.

"City Charter" means the Charter of the City and any amendments thereto. "City Code" means the Code of Ordinances of the City and any amendments thereto. "City Council" means the City Council of the City or any successor governing body. "City Manager" means the City Manager of the City or his designee. "Comptroller" means the Comptroller of Public Accounts of the State of Texas.

"Consent Resolution" means resolutions, including all attachments and exhibits passed by the City Council consenting to the creation of and inclusion of land in the District. "District" means Chambers County Improvement District No. 3. "Effective Date" means the date the City Manager signs this Agreement. "Government Code" means the Texas Government Code and any amendments thereto.

"Implementation Date" means the date the limited-purpose annexation ordinance is passed by City Council pursuant to Section 3.01. "Landowner" means a person that owns real property in the District.

"Local Government Code" means the Texas Local Government Code and any amendments thereto.

"Party" or "Parties" means a party or the parties to this Agreement, being the City and the District.

"Sales and Use Tax" means the sales and use tax authorized to be imposed within the corporate limits of the City lying within Chambers County, including, but not limited to, the sales and use tax authorized to be imposed by Chapters 321 and 327 of the Tax Code, Chapters 344 and 363 of the Texas Local Government Code and those imposed by any other district or entity which may be subsequently created by the City which imposes a sales and use tax within the corporate limits of the City lying within Chambers County. "Tax Code" means the Texas Tax Code and any amendments thereto.

"Tract" means the following property within the boundaries of the District described in Exhibit "A" to this Agreement, which is attached hereto and incorporated herein for all intents and purposes.

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ARTICLE III. LIMITED-PURPOSE ANNEXATION

Section 3.01. Generally

As soon as practicable following the approval of this Agreement by City Council, as authorized by the Act, the City shall annex the Tract for the limited purposes of applying the Applicable Ordinances within the Tract. The District hereby consents to such annexation for limited purposes regardless of whether the Tract is contiguous or non-contiguous to the corporate boundaries of the City. The Applicable Ordinances will be applicable to and enforceable in the Tract upon the date of limited-purpose annexation.

Section 3.02. No Municipal Service

The Parties expressly understand and agree that during the term of this Agreement, the City will only provide those services necessary to apply and enforce the City’s applicable Ordinances within the Tract. The City shall have no obligation to provide or extend any City municipal services not expressly agreed to herein or otherwise agreed in writing in another agreement. Section 3.03. Property Taxes and District Liability for Debts of the City During the term of this Agreement, except if annexed for full purposes pursuant to Article V, ad valorem taxes levied by the City will not be levied on taxable property within the Tract. Section 3.04. Municipal Court's Jurisdiction

Upon the limited-purpose annexation of the Tract, the City's municipal court shall have jurisdiction to adjudicate cases filed under the Applicable Ordinances arising from actions occurring within the Tract.

Section 3.05. Powers and Functions Retained by the District

Except as limited by the Consent Resolution, the District is authorized to exercise all powers and functions of a municipal utility district provided by existing law or any amendments or additions thereto. The District's assets, liabilities, indebtedness, and obligations will remain the responsibility of the District during the period preceding any full-purpose annexation. Disposition or acquisition of additional assets, liabilities, indebtedness, and obligations will be governed by the Consent Resolution.

ARTICLE IV. SALES AND USE TAX AGREEMENT

Section 4.01. Imposition of the Sales and Use Tax

The City and all special districts or entities created or hereinafter created by the City having within its boundaries the corporate limits of the City lying within Chambers County shall impose a Sales and Use Tax within the Tract upon the limited-purpose annexation of the Tract and upon the imposition of any Sales and Use Tax hereinafter adopted. The Sales and Use Tax

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shall be imposed on the receipts from the sale and use at retail of taxable items at the same rate as such tax is imposed on the receipts from the sale and use at retail of taxable items within the corporate limits of the City lying within Chambers County. The Sales and Use Tax shall take effect on the date described in Tax Code §321.102 or such other applicable law. Section 4.02. Notification of Comptroller

The City shall send notice of this Agreement and the limited-purpose annexation of the District to the Comptroller within three days of the Implementation Date in the manner provided by Tax Code §321.102. The City shall send to the District a copy of any notice from the Comptroller delaying the effectiveness of the Sales and Use Tax in the Tract. Section 4.03. City Audit Rights

The District is required by law to prepare an annual audit within 120 days after the close of the District's fiscal year. The District shall provide a copy of its annual audit to the City within 30 days after the audit is completed.

ARTICLE V. FULL-PURPOSE ANNEXATION

Section 5.01. No Full Purpose Annexation During Term of Agreement

The City agrees that it will not annex all or part of the District or commence any action to annex all or part of the District for full purposes during the term of this Agreement, except by mutual agreement of the Parties in accordance with Section 5.02.

Section 5.02. Full Purpose Annexation Options (a) Upon Development of Residential Property. The District agrees that should any portion of the Tract be developed at any time as residential property, the District shall within thirty (30) days of the commencement of the development request that:

1. this Agreement be amended to revise the definition of Tract to exclude such area; and 2. the City disannex such area from its limited purpose annexation.

(b) Upon Termination of Agreement. On or before the third month prior to the expiration of the term or any extended term hereof, the City Manager shall evaluate whether the City should negotiate a new strategic partnership agreement with the District, annex the District for full purposes upon the termination of this Agreement, or allow this Agreement to expire. The City Manager shall make a recommendation to the City Council regarding the negotiation of a new strategic partnership agreement, the full- purpose annexation of the District, or the expiration of this Agreement. If the City Manager recommends that the City negotiate a new strategic partnership agreement or annex the District and the City Council approves such recommendation, the City shall begin proceedings to enter into a new strategic partnership agreement or to annex the District for full purposes at the end of the term of this Agreement as applicable. If the City Manager recommends that the City neither negotiate a new strategic partnership agreement nor annex the District for full purposes, and the City Council agrees or if the -5-

City Council rejects the City Manager's recommendation to negotiate a new strategic partnership agreement or to annex the District for full purposes, the City may begin proceedings to disannex the Tract for limited purposes if authorized under the applicable provision of the Local Government Code. If the City decides to disannex the Tract, the City may institute proceedings to accomplish such disannexation to be effective upon the termination of this Agreement.

ARTICLE VI. BREACH, NOTICE AND REMEDIES

6.01. Notice of District's Default

A. The City shall notify the District in writing of an alleged failure by the District to comply with a provision of this Agreement, describing the alleged failure with reasonable particularity. The District shall, within 30 days after receipt of the notice or a longer period of time as the City may specify in the notice, either cure the alleged failure or, in a written response to the City, either present facts and arguments in refutation or excuse of the alleged failure or state that the alleged failure will be cured and set forth the method and time schedule for accomplishing the cure.

B. The City shall determine (i) whether a failure to comply with a provision has occurred; (ii) whether the failure is excusable; and (iii) whether the failure has been cured or will be cured by the District. The District shall make available to the City, if requested, any records, documents or other information necessary to make the determination.

C. If the City determines that the failure has not occurred, or that the failure either has been or will be cured in a manner and in accordance with a schedule reasonably satisfactory to the City, or that the failure is excusable, the determination shall conclude the investigation.

D. If the City determines that a failure to comply with a provision has occurred and that the failure is not excusable and has not been or will not be cured by the District in a manner and in accordance with a schedule reasonably satisfactory to the City, then the City may exercise the applicable remedy under Section 6.03(A). Section 6.02. Notice of City's Default

A. The District shall notify the City Manager in writing specifying any alleged failure by the City to comply with a provision of this Agreement, describing the alleged failure with reasonable particularity. The City shall, within 30 days after receipt of the notice or the longer period of time as the District may specify in the notice, either cure the alleged failure or, in a written response to the District, either present facts and arguments in refutation or excuse of the alleged failure or state that the alleged failure will be cured and set forth the method and time schedule for accomplishing the cure.

B. The District shall determine (i) whether a failure to comply with a provision has occurred; (ii) whether the failure is excusable; and (iii) whether the failure has been cured or will be cured by the City. The City shall make available to the District, if requested, any records, documents or other information necessary to make the determination.

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C. If the District determines that the failure has not occurred, or that the failure either has been or will be cured in a manner and in accordance with a schedule reasonably satisfactory to the District, or that the failure is excusable, the determination shall conclude the investigation.

D. If the District determines that a failure to comply with a provision has occurred and that the failure is not excusable and has not been or will not be cured by the City in a manner and in accordance with a schedule reasonably satisfactory to the District, then the District may exercise the applicable remedy under Section 6.03(B). Section 6.03. Remedies

A. If the City determines that the District has committed a breach of this Agreement, the City may, and the District explicitly recognizes the City's right to, terminate service under this Agreement and to seek all remedies at law or in equity necessary to enforce the provision(s) violated. Termination of service pursuant to this article shall not limit the City's remedies at law or in equity, including termination of this Agreement, or the Development Agreement.

B. If the District determines that the City has committed a breach of this Agreement, the District may file suit in a court of competent jurisdiction in Harris County, Texas, and seek any relief available at law or in equity, including, but not limited to, an action under the Uniform Declaratory Judgment Act in addition to the monetary awards as may be appropriate.

ARTICLE VII. BINDING AGREEMENT, TERM, AND AMENDMENT Section 7.01. Beneficiaries

This Agreement binds and inures to the benefit of the Parties, their successors and assigns, as well as special districts created by the City and imposing a sales and use tax within that portion of the City lying within Chambers County. The District shall record this Agreement with the County Clerk in the Official Records of Chambers County, Texas. This Agreement binds each owner and each future owner of land included within the Tract in accordance with Subsection (c) of the Act. Section 7.02. Term

This Agreement commences and binds the Parties on the Effective Date and continues until March 3, 2021, unless earlier terminated. This Agreement shall be automatically extended for additional five (5) year terms unless either party gives written notice of termination three months prior to the date of any such automatic extension. However, both parties expressly understand and agree that should any portion of the property involved in this Agreement become annexed by the City of Baytown for full purposes, this Agreement may terminate with respect to such area at the sole option of the City.

Section 7.03. Amendment

The Parties by mutual consent may amend the terms and conditions of this Agreement at anytime.

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ARTICLE VIII. MISCELLANEOUS PROVISIONS

Section 8.01. Force Majeure.

In the event any party is rendered unable, wholly or in part, by force majeure to carry out any of its obligations under this Agreement, it is agreed that on such party's giving notice and full particulars of such force majeure in writing or by telegraph to the other party as soon as possible after the occurrence of the cause relied upon, then the obligations of the party giving such notice, to the extent it is affected by force majeure and to the extent that due diligence is being used to resume performance at the earliest practicable time, shall be suspended during the continuance of any inability but for no longer period. Such cause shall as far as possible be remedied with all reasonable dispatch.

The term "force majeure" as used herein, shall include, but not be limited to acts of God, strikes, lockouts or other industrial disturbances, acts of the public enemy, war, blockades, insurrections, riots, epidemics, landslides, lightening, earthquakes, fires, storms, floods, washouts, droughts, tornadoes, hurricanes, arrests and restraints of governments and people, explosions, breakage or damage to machines or pipelines and any other inabilities of either party, whether similar to those enumerated or otherwise and not within the control of the parties claiming such inability, which by the exercise of due diligence and care such party could not have avoided.

It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the party having the difficulties, and the above-referenced requirement that any force majeure be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to demands of the opposing party when such course is inadvisable in the discretion of the party having the difficulty.

Section 8.02. Approval.

Whenever this Agreement requires or permits approval or consent to be hereinafter given by any party, such approval or consent shall not be unreasonably withheld. Such approval or consent on behalf of a party shall be evidenced by an ordinance or resolution adopted by the governing body of the party, or by an appropriate certificate executed by a person, firm or entity previously authorized to determined and give such approval or consent on behalf of the party pursuant to an ordinance or resolution adopted by the governing body, unless stated otherwise herein.

Section 8.03. Notice

Any formal notices or other communications ("Notice") required to be given by one Party to another by this Agreement shall be given in writing addressed to the Party to be notified at the address set forth below for such Party, (i) by delivering the same in person, (ii) by depositing the same in the United States Mail, certified or registered, return receipt requested, postage prepaid, addressed to the Party to be notified, (iii) by depositing the same with Federal Express or another nationally recognized courier service guaranteeing "next day delivery," addressed to the Party to be notified, or (iv) by sending the same by telefax with confirming copy sent by mail. Notice shall be effective when received by the Party to be

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notified. For the purposes of notice, the addresses of the Parties, until changed as provided below, shall be as follows: All Notices required or permitted hereunder shall be in writing and shall be served on the Parties at the following address:

City: City of Baytown Attn: City Manager P. O. Box 424 Baytown, TX 77522 Fax: (281) 420-5891

District: Chambers County Improvement District No. 3 Attn: Peter T. Harding Schwartz, Page & Harding, L.L.P. 1300 Post Oak Boulevard Suite 1400 Houston, TX 77056 Fax: (713) 623-6143

The Parties shall have the right from time to time to change their respective addresses, and each shall have the right to specify as its address any other address within the United States of America by giving at least five days' written notice to the other Parties. If any date or any period provided in this Agreement ends on a Saturday, Sunday, or legal holiday, the applicable period for calculating the notice shall be extended to the first business day following such. Saturday, Sunday or legal holiday.

Section 8.04. Time

Time is of the essence in all things pertaining to the performance of this Agreement. Section 8.05. Severability

All parties agree that should any provision of this Agreement be determined to be invalid or unenforceable, such determination shall not affect any other term of this Agreement, which shall continue in full force and effect.

Section 8.06. Waiver

Any failure by a Party hereto to insist upon strict performance by the other Party of any material provision of this Agreement shall not be deemed a waiver thereof or of any other provision hereof, and such Party shall have the right at any time thereafter to insist upon strict performance of any and all of the provisions of this Agreement.

Section 8.07. Applicable Law and Venue

The construction and validity of this Agreement shall be governed by the laws of the State of Texas without regard to conflicts of law principles. Venue shall be in Harris County, Texas.

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Section 8.08. Reservation of Rights

To the extent not inconsistent with this Agreement, each Party reserves all rights, privileges, and immunities under applicable laws. Section 8.09. Further Documents

The Parties agree that at any time after execution of this Agreement, they will, upon request of another Party, execute and deliver such further documents and do such further acts and things as the other Party may reasonably request in order to effectuate the terms of this Agreement. Section 8.10. Incorporation of Exhibits and Other Documents by Reference

All Exhibits and other documents attached to or referred to in this Agreement are incorporated herein by reference for the purposes set forth in this Agreement. Section 8.11. Effect of State and Federal Laws

Notwithstanding any other provision of this Agreement, the District shall comply with all applicable statutes, rules, regulations, and ordinances of the United States and the State of Texas, Chambers County as well as the City, as such statutes, rules, regulations and ordinances now exist or as may be hereinafter amended.

Section 8.12. Entire Agreement

This Agreement, including the exhibits hereto, contains all the agreements between the parties hereto with respect to the strategic partnership and may not be modified orally or in any other manner other than by an agreement in writing, signed by all the parties hereto or their respective successors in interest.

Section 8.13. Headings

The headings as to contents or particular articles or sections herein are inserted only for convenience, and they are in no way to be construed as a part of this Agreement or as a limitation on the scope of the particular sections to which they refer. Section 8.14. Ambiguities

In the event of any ambiguity in any of the terms of this Agreement, it shall not be construed for or against any party hereto on the basis that such party did or did not author the same.

Section 8.15. Agreement Read

The parties acknowledge that they have read, understand and intend to be bound by the terms and conditions of this Agreement. It is specifically agreed and understood by the parties hereto, that the Water Supply and Waste Disposal Agreement between the City and the District is hereby superseded by this Agreement and shall have no further force and effect.

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Section 8.16. Multiple Originals

It is understood and agreed that this Agreement may be executed in a number of identical counterparts each of which shall be deemed an original for all purposes. Section 8.17. Authority for Execution

The City hereby certifies, represents, and warrants that the execution of this Agreement is duly authorized and adopted in conformity with the City Charter and City Ordinances. The District hereby certifies, represents, and warrants that the execution of this Agreement is duly authorized and adopted by the Board.

IN WITNESS WHEREOF, the parties have executed this Agreement in multiple copies, each of which shall be an original, as of the ____ day of ______, 2012, the date signed by the City Manager of the City of Baytown.

CHAMBERS COUNTY IMPROVEMENT DISTRICT NO. 3

By:______David W. Hightower President ATTEST:

By:______Elizabeth M. Gilbert Secretary

THE STATE OF TEXAS § § COUNTY OF CHAMBERS §

This instrument was acknowledged before me this ______day of ______, 2011, by David W. Hightower, as President, and Elizabeth M. Gilbert, as Secretary, of Chambers County Improvement District No.3, a political subdivision of the State of Texas, on behalf of said political subdivision.

______Notary Public in and for the State of Texas (NOTARY SEAL)

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CITY OF BAYTOWN, TEXAS

By:______Robert D. Leiper, City Manager

ATTEST:

By:______Leticia Brysch, City Clerk

APPROVED AS TO FORM:

By:______Ignacio Ramirez, Sr., City Attorney

THE STATE OF TEXAS § § COUNTY OF HARRIS §

This instrument was acknowledged before me this _____ day of ______, 2011, by Robert D. Leiper, as City Manager of the City of Baytown, Texas, a municipal corporation, on behalf of said municipal corporation.

______Notary Public in and for the State of Texas (NOTARYSEAL)

\\Cobfs01\legal\Karen\Files\Contracts\CCID #3\SPA FINAL 1-20-2012.docx -12-

AIR-5610 4. b. BAYTOWN CITY COUNCIL MEETING Meeting Date: 01/26/2012 Second Public Hearing: Regarding a strategic partnership agreement related to a limited purpose annexation with Chambers County Improvement District Prepared for: Andrew Allemand Prepared by: Jason Cozza, City Clerk's Office Department: Planning and Development Services

Information ITEM Conduct the second public hearing regarding a strategic partnership agreement related to a limited purpose annexation with Chambers County Improvement District No. 3 for approximately 948 acres of land in the City's extraterritorial jurisdiction, generally located east and west of Texas State Highway 99 and Needlepoint Road (FM 2354) approximately 1,900 feet south of Interstate 10 in Chambers County, Texas.

PREFACE The Strategic Partnership Agreement ("SPA") between the City of Baytown and Chambers County Improvement District No. 3 ("CCID#3) provides for the limited purpose annexation of the area within CCID No. 3's boundaries, which contain approximately 948 acres of land generally located on the east and west sides of the Grand Parkway along the alignment of Kilgore Parkway. This area is contiguous to the city limits of Baytown, is currently vacant and without residents, and is proposed by the owner for industrial and business park purposes. A map is included in the packet showing the location of the property.

The SPA sets forth the services which will be provided by the City and the District. Under the SPA, the City will: will collect sales taxes, will provide utility services under a separate utility agreement, will apply the following ordinances: zoning; junk yards; signs;and sexually oriented businesses, will not annex for full purposes during the term of the agreement without the approval of the District, will not collect ad valorem taxes, and will not provide city services unless specifically agreed upon by both parties. The City has several limited purpose annexation areas and strategic partnership agreements with Chambers County MUD No. 1 and Lake MUD. This item supports the City’s Vision Statement of providing for a strong employment base with a long-term industry presence. Notice of the first and second public hearings was published in the January 6, 2012, issue of the Baytown Sun and posted on the City of Baytown’s notice board and website on January 4, 2012.

RECOMMENDATION

Fiscal Impact Fiscal Year: Acct Code: Source of Funds (Operating/Capital/Bonds): Funds Budgeted Y/N: Amount Needed: Fiscal Impact (Additional Information): The fiscal impact for the proposed Strategic Partnership Agreement is outlined in the agreement and the service plan for limited purpose annexation.

Attachments Bay 10 Business Park Annexation Map SPA Exhibit "A" Draft: 12/09/2011