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01/02/2018-CC-Agenda Packet-RegularBANGER *TEXAS AGENDA CITY COUNCIL REGULAR MEETING TUESDAY, JANUARY 2, 2018 7:00 PM 502 ELM STREET SANGER, TEXAS 1. Call Meeting to Order, Invocation, Pledge of Allegiance. Citizens Input: (Citizens are allowed 3 minutes to speak. The City Council is unable to respond or to discuss any issues brought up during this section). CONSENT AGEN a) Approval of Minutes: 1. City Council Work Session, December 18, 2017 2. City Council Regular Meeting, December 18, 2017 b) Disbursements 4. Consider any Items Removed from Consent Agenda. REGULAR AGENDA 5. Consider, Discuss and Act on the Preliminary Plat of the Prairie Ranch Estates Addition Being 42.52 Acres in the William Mason Survey, Abstract Number 801, Generally Located South of Lois Road and East of Metz Road. 6. Consider, Discuss and Act on the Final Plat of the Prairie Ranch Estates Addition Phase 1, Being 7.38 Acres Generally Located South of Lois Road and East of Metz Road. 7. Consider a Resolution Approving a Hotel Occupancy Tax Grant and Economic Development Incentive Agreement with Sanger Lodging, LLC; and, Authorize the Mayor to Execute Agreement. 8. INFORMATION ITEMS: a) Financial and Investment Report: 1. November 30, 2017 b) Capital Projects Reports: 2. December 26, 2017 9. ADJOURN. I, the undersigned authority, do hereby certify that this Notice of Meeting was posted on the bulletin board, at the City Hall of the City of Sanger, Texas, a place convenient and readily accessibl to the general lic t a I times, and said notice was posted on the following date and time: at .p rA . m. and shall remain posted until meeting is adjourned. F S J;e'ria6-a Staton, Deputy City Secretary s City of Sanger, Texas s e TEXAS �!!!ltHf.l6 This facility is wheelchair accessible and accessible parking spaces are available. Requests for accommodations or interpretive services must be made 48 hours prior to this meeting. Please contact the City Secretary's office at (940) 458-7930 for further information. CITY OF SANGER, TEXAS MINUTES: CITY COUNCIL WORK SESSION December 18, 2017 — 6:00 p.m. 502 Elm Street, Sanger, Texas 76266 COUNCIL MEMBERS PRESENT: Mayor Thomas Muir, Councilman Bill Boutwell, Councilman Lee Allison, Councilman David Clark, Councilman Gary Bilyeu, Councilman Alan Chick COUNCIL MEMBERS ABSENT: None The Mayor and all Council Members were present constituting a quorum. 1. Call Meeting to Order. The City Council Work Session for December 18, 2017 was called to order by Mayor Muir at 6:03 p.m. 2. EXECUTIVE SESSION: CLOSED MEETING Pursuant to the Open Meetings Act, Chapter 551, the City Council Will Meet in a Closed Executive Session in Accordance with the Texas Government Code: - Section 551.071 —Consult with City Attorney - Consult with City Attorney Regarding Utility Matters The City Council convened into closed Executive Session at 6:03 p.m. 3. RECONVENE: OPEN MEETING Any Action Taken. The City Council reconvened at 7:31 p.m. No action was taken. 4. Overview of Items on Regular Agenda. None. There being no further discussion, Mayor Muir adjourned the Work Session at 7:31 p.m. CITY OF SANGER, TEXAS MINUTES: REGULAR CITY COUNCIL MEETING December 18, 2017, 7:00 p.m. 502 Elm Street, Sanger, Texas COUNCIL MEMBERS PRESENT: Mayor Thomas Muir, Councilman Bill Boutwell, Councilman David Clark, Councilman Allen Chick, Councilman Gary Bilyeu, Councilman Lee Allison COUNCIL MEMBERS ABSENT: None The Mayor and all Council Members were present constituting a quorum. STAFF MEMBERS PRESENT: Acting City Manager Alina Ciocan, City Secretary Cheryl Price, Neal Welch, Director of Public Works 1. Call Meeting to Order, Invocation, Pledge of Allegiance. Mayor Muir called the Regular City Council Meeting to order on December 18, 2017 at 7:31 p.m. Councilman Allison gave the invocation and Councilman Chick led the Pledge of Allegiance. 2. Citizens Input: (Citizens are allowed 3 minutes to speak. The City Council is unable to respond or to discuss any issues brought up during this section). No citizens present who wished to speak. 3. CONSENT AGENDA: a) Approval of Minutes: 1. City Council Work Session, December 4, 2017 2. City Council Regular Meeting, December 4, 2017 b) Disbursements Councilman Boutwell had a few questions regarding disbursements which were answered to satisfaction by Acting City Manager Alina Ciocan. A motion made by Councilman Boutwell to approve the consent agenda as presented. The motion was seconded by Councilman Bilyeu. The motion carried unanimously (5-0 vote). 4. Consider any Items Removed from Consent Agenda. 1► •* REGULAR AGENDA 5. Consider, Discuss, and Possibly Act on Approving and Authorizing the Acting City Manager to Sign Change Order #1 Between the City of Sanger and Felix Construction Regarding the Contract for the Wastewater Treatment Plan Construction. Public Works Director, Neal Welch was recognized to present the change orders. He noted that some items have been added, subtracted and adjustments made. On Change Order #1 we take back $64,800 for adjustments that were made at the wastewater treatment plant. Mayor Muir noted that the discussion will be on both Items #5 (Change Order #1) and #6 (Change Order #2) but Council will vote on each item separately. Public Works Director Neal Welch noted that Change Order #2 is the same thing. Councilman Bilyeu noted that he saw the financial part, but also noted there were 15 days added and asked for clarification on what the extra time was for, if there was a completion date. Jeff Caffey, Alan Plummer and Associates was recognized, and summarized that the project has three phases. The first phase is rehabilitating Plant 1, building the new pump station, peak flow storage basin, clarifiers to go in Plant 1, and UV. This is a major part of the work, which takes approximately 16 months to substantial completion, and then we have 4 months to rehab plants 2 and 3. We are about 8 months in so we have 260 days left and that is where we add the 15 days. The timeline includes building everything, starting it up and running it for 30 days before handing it over. For completion of Phase I, they will probably start it up in about 6 months. Then Phase II, around July 4th and Phase III, around August 3, 2019. Councilman Boutwell noted that on Change Order #1 there would be an adjustment in our favor of $64,800 but in Change Order 2 we would owe more money. Neal Welch, Public Works Director noted that there are some more changes coming in our favor but we do not know the exact figures yet. Mr. Caffey noted that there is a large bid item of $100,000 in reserve for unseen things. Typically, we would use it first before doing the change orders, but on this project the contractor is rehabbing Plant 1 and we would like to reserve the $100,000 until we are done with Plant 1. That is why you are seeing the $122,000, but we would have normally used the $100,000. Instead you are seeing it first so we can use the bid item later. Mr. Caffey noted that the contractor is doing a really good job and have been a pleasure to work with. They have been working with them even to the point of brainstorming on savings items. One of the credits back was where Felix Construction got a cut from the manufacturer after they turned in their bid. They didn't have to tell us about that and could have kept that money to themselves but they brought it to the table. Councilman Allison noted that these are most difficult types of contracts to administer and noted he appreciated everybody's involvement and having this discussion. That it helps keep everyone up to date and straightforward. It helps the Council be accountable to the public. Councilman Chick asked if Council could get a summary of the changes. Mr. Caffey summarized some of the changes in relation to cost and credits. He noted on cost, the Peak flow basin floor valves (CMRA) $28,000 — when they realized that costs were going high because they underestimated rock excavation. They redesigned the peak -flow storage basin and raised it up out of the rock layer. We were anchoring it down with rock anchors and debated a more expensive design. When they dug it, it was not consistent at the top it was breaking apart and we had to go to a more expensive way to relieve the hydrostatic pressure with pop - off valves and you have to put rock down to move the water to the pop -off valves, so it was a little more expensive. The next item, the largest expense is the four -channel rotary press. It is a dewatering press (sludge press) this was an attempt on their part to save some money. You need a 4-channel press when you are at design capacity of 1.86 mgd. Right now, the plant is at about .7 and they thought they could do two channels now, and add the additional two channels later. But there are trade- offs with the two -channel press you only have half of the capacity and it has to run twice as long, more wear and tear, and more labor costs. He noted that Felix Construction has worked with them in that the cost is mainly from the manufacturer to add the two channels and that would be cost we would have to pay in the future, and they are going to have it install it anyway. Since they bid it they have been running the press full time. With full capacity of the four -channel press, the system could be run within regular hours. He noted that Felix Construction has not done any markup on the manufacturers costs except for bond markup which is about 3- 1/2 % and is required by the insurance company. He noted you would not get this any cheaper, and that is where Felix Construction has been very beneficial. Councilman Allision noted that he thought there was a typo on the Description of Change Order No. 2 it says "Per CMR No. 10, Contractor shall provide a four - channel rotary press in lieu of a two -channel rotary press"; however, on the II. EFFECT OF CHANGE it says "e. CMR-10 Peak Flow Berm Width Reduction Lump Sum". Mr. Caffey noted that Councilman Allison was correct and it is a typo and he will have it corrected. It was noted the amount is correct but the description for CMR-10 is wrong in the cost amount summary and would be corrected by Alan Plummer. It was noted that CMR 5 is the Peak Flow Berm Width Reduction (Change Order 1). Mr. Caffey summarized the next largest change which is the clarifiers and the dewatering building. This is his error, and he said that he should have caught it earlier. Some of the sheets had detail and others did not so they bid it and did not have the select fill under the structures. They did look at ways to do it without having it but, but have determined it is necessary. Mr. Caffey explained the fence grounding. The spec for grounding goes out to about every 1000 feet but our electrical engineer advised when you have fence running where there is overhead you need to ground it because you can get discharges from it. Typically, he does that and in the original design would normally bury the line, but when Sanger Electric saw it, they told them they could not bury the line because it still serves a couple of houses down the way. By addendum it was changed but they did not go back and put the grounding for the overhead in. On the electrical valve operator, the 12-inch plug valve is an important valve. When they raised up the storage basin they originally had one line feeding the storage basin by gravity and one line draining it by gravity. It was a deep line and they had a side gate on the structure to control flow of coming back in. The slide gate had an actuator on it and when they raided the valve they could use the same line and were pumping in and could use it to drain back out. The electrical engineer did not catch to move the valve and this is a critical path item and takes some extra days. Councilman Clark asked where the water escaped to. Mr. Caffey stated it does not escape. It is a pressure controlled valve so when you have hydrostatic pressure underneath it is going to open up and the water is going flow into the basin. If there is water in the basin it is going to be closed, so water can escape out but it can not come in. There will be nine valves in the slab on the floor. There was additional technical discussion between Mr. Caffey and Councilman Clark. Mr. Caffey noted that the good news is that they have been through all of the major equipment. He summarized credits noting that there are three credits that he currently knows of that will come back to the City. There was a redesign on the UV structure and they should have that back to them this week which should be between a $30,000 and $40,000 credit. They allowed them to do shock crete on the sides of the peak and they are doing the work this week and we should be getting a price for what they spent on that. They proposed changing some of the routing on the 24" line (the new line coming in for the pump station) and they are going to be able to do less bypass pumping related to that tie-in and once they do that they are going to give us a credit back on bypass pumping. The need to know how much they actually spend on that before they give us a credit back. Mayor Muir summarized noting that this all just keeps the process rolling and things are staying on course for the most part. It was noted with all of the credits coming that we are pretty close to even right now. He noted that there may still be some things that will come up. Councilman Chick noted he was impressed that the contractor came back with some cost savings. Councilman Clark noted that Felix Construction has a pretty good track record. A motion was made by Councilman Bilyeu to approve and authorize the Acting City Manager to sign Change Order #1 Between the City of Sanger and Felix Construction Regarding the Contract for the Wastewater Treatment Plant Construction. The motion was seconded by Councilman Boutwell. The motion carried unanimously (5-0 vote). 6. Consider, Discuss and Possibly Act on Approving and Authorizing the Acting City Manager to Sign Change Order #2 Between the City of Sanger and Felix Construction Regarding the Contract for the Wastewater Treatment Plant. See discussion on Item No. 5 above. Discussion on Items No. 5 and No. 6 were combined but the motions to approve were made separately. A motion was made by Councilman Bilyeu to approve and authorize the Acting City Manager to sign Change Order #2 between the City of Sanger and Felix Construction regarding the contract for the wastewater treatment plant. The motion was seconded by Councilman Allison. The motion carried unanimously (5.0 vote). 7. Consider, Discuss, and Possibly Act on Approving and Authorizing the Mayor to Sign Change Order #1 with Pavecon Construction. Neal Welch Director of Public Works was recognized and noted this is where the contractor got the wrong slope on 1100 feet of concrete pavement and it sloped one way instead of having a crown in the middle. We agreed to allow them to leave it after the engineer assured us that it would work and not interfere with the structure. They gave us a $70,000 credit, so with the $70,000 credit we approached them about using the credit to improve one of our streets and they agreed to do it with an additional cost. Mayor Muir noted the last time the Council visited on this that there was discussion on the prep work and it was noted that this has all been addressed. It was noted that it would be 6 inches of asphalt. Councilman Allision wanted to know if someone is setting the lines and grades. Mr. Welch advised that they will have to change the west railroad track and raise it up with the east one which is going to change all of the grades. The contractor will have to meet the new grade with the railroad and the existing grade with the concrete. The grades will be defined and they will have to match them. This is being done so the tractor trailers do not drag when they are going across the track. Councilman Allison asked if an engineer would be looking at it for drainage. Mr. Welch advised there should not be a problem because the asphalt is already higher than the ditch is right now, but we can get the engineer to look at. There were additional technical questions regarding the construction. It was noted since we were raising the track that the railroad would work with us on the flagger which is required by insurance. There was brief discussion regarding future street construction funding. A motion was made by Councilman Allison to approve and authorize the Mayor to sign Change Order #1 with Pavecon Construction in the amount of a net cost of $88,969.04. The motion was seconded by Councilman Bilyeu. The motion carried unanimously (5-0 vote). 8. Consider, Discuss and Possibly Act on Approving the Fourth Amendment To Option To Lease and Water Tower Lease Agreement Between the City of Sanger and New Cingular Wireless PCS, LLC.; and, Authorize the Mayor to Sign Contract. Alina Ciocan, Acting City Manager summarized the request. This is an agreement that was actually worked on by Mike Brice. The contracts were sent for signature and it seemed to have not been approved by the Council nor reviewed by the City Attorney. The City Attorney, Rob Dillard has reviewed the contract and made some changes, mainly related to our ability to terminate the agreement. He added a paragraph which gives us a little more flexibility should we choose to terminate. We have had this agreement since 1998. They are currently renting space on our water tower on Acker for their antennas, and have had them there for 20 years. This agreement is for an initial term of 5 years, with six additional terms, lumped all together, you are looking at 30 years, if we choose to continue the agreement. It provides for a rent increase of about 10% more than what we are currently receiving; and, at the expiration of every 5 years it will go up an additional 10%. It has been reviewed by Rob Dillard, our legal attorney and he did not have any other concerns. Councilman Boutwell noted that he read in the contract that it could be paid in one lump sum or in a monthly rate and asked how is was being paid now. Ms. Ciocan noted that the previous contract was monthly but would have to check with our Finance Director to see how we were receiving the payment. It was noted that it brings the City about $19,586 per year. Councilman Clark asked what kind of language we had in the contract for when we go to paint the tower because we have it on our list of projects. He noted concern regarding the antennas having to be removed and perhaps affecting their service, etc. Councilman Allision noted we could use the money we get from this trying to protect the antennas while we are painting. Acting City Manager Alina Ciocan advised that she would contact AT&T. She noted that they were anticipating the contract would be completed by the end of the year. The current agreement does allow for us to continue to get our current payment amount. If we want to terminate the agreement we have to give them 180 days notice to terminate. It was noted after lengthy discussion on this item there would be no action taken in order to give staff and legal time to have discussion with AT&T about the language necessary to address the concerns brought up and move forward with the contract. No action was taken. a) Financial Investment Report b) All American Dogs Update There was no discussion on Information items. 10. ADJOURN. There being no further discussion, Mayor Muir adjourned the meeting at 8:25 p.m. BANGER *TEXAS COUNCIL AGENDA ITEM AGENDA TYPE ® Regular ❑ Special ❑ Consent Reviewed by ❑ Yes ® Not Applicable ❑ Workshop ❑ Executive ❑ Public Hearing Finance Reviewed by Legal ❑ Yes ® Not Applicable COUNCIL MEETING DATE: SUBMITTED BY: January 2, 2018 Alina Ciocan, Director of Economic & Community Development City Manager Reviewed/Approval Initials Date (, „q2p) ACTION REQUESTED: ❑ORDINANCE ❑ RESOLUTION M APPROVAL ❑ CHANGE ORDER ❑ AGREEMENT ❑ APPROVAL OF BID ❑ AWARD OF CONTRACT ❑ CONSENSUS ❑ REAPPOINTMENTS AGENDA CAPTION Consider, Discuss and Act on the Preliminary Plat of the Prairie Ranch Estates Addition Being 42.52 Acres in the William Mason Survey, Abstract Number 801, Generally Located South of Lois Road and East of Metz Road. FINANCIAL SUMMARY ®N/A ❑GRANT FUNDS ❑OPERATING EXPENSE ❑REVENUE [:]CI P []BUDGETED ❑NON -BUDGETED PRIOR CURRENT FUTURE FISCAL YEAR: YEAR YEAR YEARS TOTALS Pro osed Expenditure Amount Encumbered Amount BALANCE FUND(S) TO BE USED: General ❑$ Utility ❑ $ Special ❑ $ BACKGROUND/SUMMARY OF ITEM This is a preliminary plat for a proposed residential subdivision located in the city's extraterritorial jurisdiction (33 lots). STAFF OPTIONS & RECOMMENDATION Staff recommends approval of the proposed plat. List of Supporting Documents/Exhibits Attached: Prior Action/Review by Council, Boards, Commissions or Other Agencies: • Staff Report • Location Map The Planning & Zoning Commission unanimously • Plat approved the proposed plat at their regular meeting on December 11, 2017. g cr)® � � � •)/{!, . / ):\12 �\!,r ) Am � c § z \ � \\§\ n Ul @ � $ _ 75 (Z � E § 1 « 4-J f '« � ) i§ Ln } ƒ / / o f U � CL m ± / 7 � $ § k k § § a � \ L Q Q � \ J co k , �l 2 B � � � t � § / � SANGER *TEXAS STAFF REPORT Meeting Date: January 2, 2018 Case #: 17SANZON-0030 Case Coordinator: Alina Ciocan, Director of Economic & Community Development Request: Consider, Discuss and Act on the Preliminary Plat of the Prairie Ranch Estates Addition Being 42.52 Acres in the William Mason Survey, Abstract Number 801, Generally Located South of Lois Road and East of Metz Road. Applicant: Daphne Zollinger Case Overview This is a preliminary plat for a proposed residential subdivision located in the city's extraterritorial jurisdiction (33 lots). The water service is provided by Bolivar Water. The sewer service will be handled by private facilities approved by the Denton County Health Department. Any proposed public improvements associated with this project will be processed through Denton County. Staff Recommendation Staff has found the plat to be in compliance with the requirements of the Subdivision Ordinance. Planning & Zoning Commission The Planning & Zoning Commission approved the plat as presented at their meeting on December 11, 2017. Meeting Date: January 2, 2018 Case #: 17SANZON-0030 Case Coordinator: Alina Ciocan, Director of Economic & Community Development Request: Consider, Discuss and Act on the Preliminary Plat of the Prairie Ranch Estates Addition Being 42.52 Acres in the William Mason Survey, Abstract Number 801, Generally Located South of Lois Road and East of Metz Road. Applicant: Daphne Zollinger Case Overview This is a preliminary plat for a proposed residential subdivision located in the city's extraterritorial jurisdiction (33 lots). The water service is provided by Bolivar Water. The sewer service will be handled by private facilities approved by the Denton County Health Department. Any proposed public improvements associated with this project will be processed through Denton County. Staff Recommendation Staff has found the plat to be in compliance with the requirements of the Subdivision Ordinance. Planning & Zoning Commission The Planning & Zoning Commission approved the plat as presented at their meeting on December 11, 2017. W Yet ig Hfi O w tg Se f E2o g ° g8 pE � i � R Yew W asa a EO ., 3 6 — zgj �a' �s a fig' got z 33 zW oo�. 3 z 'aACL `g LLEa of ;g p; g 7 yo 0 2 € g igW�o€o .19 zE 5� 's � �� m a o E Q P$ waoa LLI aqa Co 08�9 °e Nz� E N x$x §gk° a Sal $ ;gel g y3�dG � G ,gill � � o a gg y g €IL p� ix a3 lsisn n,.lu I ��S � O! 0 1 _ S a rx� � 3NHO SlNdA _---- _ _ _ 3- 11 nw mom_ m�3r II ¢�a 3.w�cmx II I "li g oa Aa I x� II g m I 11 alb � RII �3 oY Y E sxc F a.nvax I - II - r"`asnncrx .. w� � rm�i �� al II Y I4- ; all V2{ F—I mea ernmx m �c S� �3 � it Il �I b� ,rm mm mu, mm mx x. msn ,rm II II 4 � II u II u l II mmc a_�.nmx R R R �I II R II II R R. d� • g o� R �I� II k � �p nF �I II EE II II fia - m:..-T' � � a s8c d�$ woe zi3n ter» Icmrr g33 kft 9' BANGER fit- T E X A S COUNCIL AGENDA ITEM AGENDA TYPE ® Regular ❑ Special ❑ Consent Reviewed by ❑ Yes ® Not Applicable ❑ Workshop ❑ Executive ❑ Public Hearing Finance Reviewed by Legal ❑ Yes ® Not Applicable COUNCIL MEETING DATE: SUBMITTED BY: January 2, 2018 Alina Ciocan, Director of Economic & Community Development City Manager Reviewed/Approval Initials Date NO// ACTION REQUESTED: ❑ORDINANCE ❑ RESOLUTION ® APPROVAL ❑ CHANGE ORDER ❑ AGREEMENT ❑ APPROVAL OF BID ❑ AWARD OF CONTRACT ❑ CONSENSUS ❑ REAPPOINTMENTS AGENDA CAPTION Consider, Discuss and Act on the Final Plat of the Prairie Ranch Estates Addition Phase I, Being 7.38 Acres in the William Mason Survey, Abstract Number 801, Generally Located South of Lois Road and East of Metz Road. FINANCIAL SUMMARY ®N/A ❑GRANT FUNDS [—]OPERATING EXPENSE ❑REVENUE [:]CI P ❑BUDGETED ❑NON -BUDGETED FISCAL YEAR: PRIOR YEAR CURRENT YEAR FUTURE YEARS TOTALS Pro osed Expenditure Amount Encumbered Amount BALANCE FUND(S) TO BE USED: General ❑$ Utility ❑ $ Special ❑ $ BACKGROUND/SUMMARY OF ITEM This is a final plat for the first phase of the Prairie Ranch Estates Addition located in the city's extraterritorial jurisdiction (ETJ). The purpose of this plat is to create 5 residential lots of record. STAFF OPTIONS & RECOMMENDATION Staff recommends approval of the proposed plat. List of Supporting Documents/Exhibits Attached: Prior Action/Review by Council, Boards, Commissions or Other Agencies: • Staff Report • Location Map • Plat The Planning & Zoning Commission unanimously approved the proposed plat at their regular meeting on December 11, 2017. m � � s o esNaQ� agE CD •� 4-j N V JI lr I cz 0 O O r W o C U U) 0) � n L s c7 M1 M Of • r--� Lax - — — -- asZALIJ 0 co CD 0 P f" r .r. U t. to co o co co iV T 1 U u m °w 6O r E10 u z ICJ AMMM— n a BANGER *TEXAS STAFF REPORT Meeting Date: January 2, 2018 Case #: 17SANZON-0031 Case Coordinator: Alina Ciocan, Director of Economic & Community Development Request: Consider, Discuss and Act on the Final Plat of the Prairie Ranch Estates Addition Phase I, Being 7.38 Acres in the William Mason Survey, Abstract Number 801, Generally Located South of Lois Road and East of Metz Road. Applicant: Daphne Zollinger Case Overview This is a final plat for the first phase of the Prairie Ranch Estates Addition located in the city's extraterritorial jurisdiction (ETJ). The purpose of this plat is to create 5 residential lots of record. The water service is provided by Bolivar Water. The sewer service will be handled by private facilities approved by the Denton County Health Department. Any proposed public improvements associated with this project will be processed through Denton County. Staff Recommendation Staff has found the plat to be in compliance with the requirements of the Subdivision Ordinance. Planning & Zoning Commission The Planning & Zoning Commission approved the plat as presented at their meeting on December 11, 2017. bsO 9 "5a8 e z;9 o�� 5 $ $ s a-e 9ad2 ;ho 63 S 95€95 R y aR ?�JII agW 9 §a a" @° k 80 k Nzd W �rcw �_ez x _9 e f LL5o k a 3 z< � € o o i. 2� I0�09 _—€ off' �zg wE�i= 'a$� "� z � m 96�= 8 p2. 3 33 §OR o10 — y a _ g e @ awn 3r� yy8 o E asgF�qF�2rLL 1€ 1 B� yyw� o_ psp . °E y i? BHA i $ o -EL"71. k€ OG ik cs may f 5 Assn= so k's oA Eg o a ?Q�i?x 3nrca snvoia aanini g � $ � S 3 .wru m urat.o- -------------- Ze LLI I g a Nip p$ —3 o BANGER * T E X A S COUNCIL AGENDA ITEM AGENDA TYPE ® Regular ❑ Special ❑ Consent Reviewed by ❑ Yes ® Not Applicable ❑ Workshop ❑ Executive ❑ Public Hearing Finance Reviewed by Legal ® Yes ❑ Not Applicable COUNCIL MEETING DATE: SUBMITTED BY: January 2, 2018 Alina Ciocan, Director of Economic & Community Development City Manager Reviewed/Approval Initials Date ACTION REQUESTED: ❑ORDINANCE ® RESOLUTION ® APPROVAL ❑ CHANGE ORDER ❑ AGREEMENT ❑ APPROVAL OF BID ❑ AWARD OF CONTRACT ❑ CONSENSUS ❑ REAPPOINTMENTS AGENDA CAPTION Consider a Resolution Approving a Hotel Occupancy Tax Grant and Economic Development Incentive Agreement with Sanger Lodging, LLC; and, Authorize the Mayor to Execute Agreement. FINANCIAL SUMMARY ®N/A ❑GRANT FUNDS ❑OPERATING EXPENSE ❑REVENUE [:]Cl P []BUDGETED ❑NON -BUDGETED PRIOR CURRENT FUTURE FISCAL YEAR: YEAR YEAR YEAR(S) TOTALS Proposed Expenditure Amount Encumbered Amount BALANCE FUND(S) TO BE USED: General ❑$ Utility ❑ $ Special ❑ $ BACKGROUND/SUMMARY OF ITEM Sanger Lodging, LLC has requested economic development incentives to build a 77-room Holiday Inn Express hotel in Sanger. The approximate cost of this development is $8,000,000. The proposed economic development agreement would provide for: • Real and personal property tax rebate — 50 % for a period of seven (7) years, This is based upon enhanced value, so no existing tax revenue will be lost due to this grant. • Hotel Occupancy Tax (HOT) rebate — 75 % for Grant Years 1-3; and 50% for Grant Years 4-7. Likewise, this is revenue that the City is not currently receiving. • Site improvements as described in the agreement in an amount not to exceed $100,000. This project is aligned with the City's goal of enhancing the tax base through new development, therefore, adding to the sustainability of the entire community. STAFF OPTIONS & RECOMMENDATION Staff recommends approval of the Resolution and the attached economic development agreement. List of Supporting Documents/Exhibits Attached: Prior Action/Review by Council, Boards, Commissions or Other • Resolution Agencies: N/A • Exhibit A - Agreement RESOLUTION NO. 12-27-17 A RESOLUTION APPROVING THE TERMS AND CONDITIONS OF AN AGREEMENT BY AND BETWEEN THE CITY OF SANGER AND SANGER LODGING, LLC, ESTABLISHING A PROGRAM OF GRANTS IN AMOUNTS EQUAL TO A PERCENTAGE OF REAL AND PERSONAL PROPERTY TAXES PAID ON CERTAIN DESCRIBED PROPERTY FOR A MAXIMUM PERIOD OF SEVEN YEARS, A REBATE ON MUNICIPAL HOTEL OCCUPANCY TAXES FOR A PERIOD OF SEVEN YEARS, AND SITE IMPROVEMENTS IN AN AMOUNT NOT TO EXCEED $100,000 TO PROMOTE LOCAL ECONOMIC DEVELOPMENT AND STIMULATE BUSINESS AND COMMERCIAL ACTIVITY WITHIN THE CITY; AUTHORIZING ITS EXECUTION BY THE MAYOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council has been presented a proposed Agreement, which is attached hereto as Exhibit A, between the City of Sanger, Texas and Sanger Lodging, LLC, establishing a program of grants in amounts equal to a percentage of real and personal property taxes paid on certain premises located near Interstate 35 and Maple Street, for a maximum period of seven years for 50 % of the City of Sanger real and personal property taxes assessed and paid, a rebate on Municipal Hotel Occupancy Taxes paid for a period of seven years, and site improvements in an amount not to exceed $100,000 as described in the Agreement in order to promote local economic development and stimulate business and commercial activity within the City of Sanger, Texas; and WHEREAS, upon full review and consideration of the Agreement, and all matters attendant and related thereto, the City Council is of the opinion that the terms and conditions thereof should be approved, and that the Mayor shall be authorized to execute it on behalf of the City of Sanger; and NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF SANGER, TEXAS: Section 1 That the terms and conditions of the attached Agreement and Exhibits having been reviewed by the City Council of the City of Sanger, Texas and found to be acceptable and in the best interests of the City of Sanger and its citizens, are hereby in all things approved. Section 2 That the Mayor is hereby authorized to execute the attached Agreement, and all other documents in connection therewith, on behalf of the City of Sanger. 1 Resolution No. 12-27-17 Section I That this Resolution shall take effect upon passage. PASSED AND APPROVED ON January 2, 2018. ATTEST: CITY OF SANGER, TEXAS Cheryl Price, City Secretary Thomas E. Muir, Mayor HOTEL OCCUPANCY TAX GRANT AND ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT This Hotel Occupancy Tax Grant and Economic Development Incentive Agreement ("Agreement") is made between the City of Sanger, Texas (the "City"), and Sanger Lodging, LLC, a Texas limited partnership ("Company"), acting by and through their respective authorized officers and representatives. WITNESSETH: WHEREAS, the Company is engaged in the hospitality business and intends to develop a hotel located on one parcel of land totaling approximately 2.637 acres (the "Property") as further described in Exhibit "A"; and WHEREAS, the City currently levies a local hotel occupancy tax pursuant to Chapter 351, Texas Tax Code (the "Hotel Occupancy Tax" or "HOT"); and WHEREAS, Company shall develop, construct, occupy and operate a 77-unit hotel on the Property, which hotel will, when operating, be subject to the Hotel Occupancy Tax; and WHEREAS, the City is authorized by Texas Local Government Code § 380.001, et seq. to provide economic development grants to promote local economic development and to stimulate business and commercial activity in the City; and WHEREAS, the City is authorized to use Hotel Occupancy Tax funds for advertising to promote tourism and the hotel industry pursuant to Section 35 1. 101 (a)(3) of the Texas Tax Code; and WHEREAS, the City Council of the City of Sanger finds that it is in the best interest of the City to grant Hotel Occupancy Tax funds and economic development incentives to the Company for the development of said hotel. NOW THEREFORE, in consideration of the foregoing and the premises, mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficient of which are hereby acknowledged, the City and Company, intending to be legally bound, hereby covenant and agree as follows: Article I Definitions For purposes of this Agreement, each of the following terms shall have the meaning set forth herein unless the context clearly indicates otherwise: "Base Year Value" shall mean the assessed value of the Taxable Property, as defined below, on the Property effective January 1, 2017. "Effective Date" shall mean the date on which all the parties hereto have executed this Agreement. "Event of Force Majeure" shall mean any contingency or cause beyond the reasonable control of a party including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, government or de facto governmental action (unless caused by the intentionally wrongful acts or omissions of the party), fires, explosions or floods, strikes, slowdowns or work stoppages any of which event(s) directly and significantly impact the Company's operations in the City. An economic downturn shall not constitute an Event of Force Majeure. "Grant Year" shall mean, for purposes of the Hotel Occupancy Tax grant, a period beginning January 1 and ending December 31, of each year for the grant period, as applicable. "Property" shall include the value of land and improvements on the Property as defined by the Texas Property Tax Code. "Taxable Property" shall include the real and personal property of the Hotel subject to City of Sanger- taxes for the Term of this Agreement. "Taxable Value" shall be the same as the assessed value of the Taxable Property as determined annually by the Denton Central Appraisal District, subject to the appeal procedures set forth in the V.T.C.A. Tax Code. Any change in the Taxable Value after appeal will require recalculation and adjustment of the appropriate amount of the grant from the City under this Agreement. If the City has issued the grant to the Company based on a greater value before appeal, refund of any overpayment by the Company to the City of such difference shall be remitted to the City within 60 days after final determination of the appeal. Article II Term The Term of this Agreement ("Term") shall begin on the Effective Date and continue until December 31, 2027, unless sooner terminated as provided herein. Article III Obligations of Company In consideration for the grant of public funds as set forth in Article IV and Article V below, the Company agrees to perform the following: 3.1 Occupancy and Operation. Company shall, during the Term of this Agreement, construct, occupy, operate and have open to the public one (1) hotel that consists of the following: (1) The hotel shall have a minimum of 77 guest rooms. The brand will be Holiday Inn Express ("Hotel"). (2) A building permit must be applied for and issued, and construction of the Hotel must commence on or before June 1, 2018. The Hotel must have been issued a Certificate of Occupancy by the City within twenty four (24) months after a building pen -nit is issued. Failure to meet these deadlines will terminate this Agreement. 3.2 Performance. Company agrees and covenants that it will diligently and faithfully, in a good and workmanlike manner, make improvements to the Property, including, but not limited to, the construction and operation of the Hotel, in accordance with all applicable state and local laws and regulations. 3.3 Improvements. Company shall, during the Term of this Agreement, make real and personal property improvements in and on the Property at a cost to Owner of approximately $8,000,000, and will continuously during the Tenn own, operate, occupy and maintain the Property and all Taxable Property in furtherance of the services incident to the Hotel. Article IV Economic Development Grant 4.1 Grant. (A) City agrees to provide the Company economic development grants in an amount equal to 50% of that portion of annual City ad valorem tax, assessed to and paid by Company, such amount being calculated on the Taxable Value for that Grant Year, less the Base Year Value, times the City's tax rate for that Grant Year, for seven (7) Grant Years, or the Termination of this Agreement, whichever is sooner. The Grant Years shall commence in the year in which the Taxable Value is assessed on the Hotel after the Certificate of Occupancy is issued and will continue during the Term of this Agreement if the Company meets each of the obligations set forth in this Agreement and complies with the certification schedule and requirements set out in Section 4.2 below. (B) The City shall, at its sole cost and expense in an amount not to exceed $100,000 and in accordance with all applicable City standards, furnish, install and complete improvements that benefit the Property as follows: (1) A loop of the water lines to serve the Property by connecting an existing 8" water line on the east side of 1 Oth Street to a 6" water line located on the side of the IH-35 service road, through an 8" line on the Property; and (2) Install 3 phase, underground, loop primary electrical service to the Hotel facility, including transformer and meter -set. Should the Company not develop the Hotel as set forth in this Agreement, Company shall reimburse the City for all costs associated with the improvements made on Property as detailed in Section 4.1 (B). 4.2 Grant Payment Requirements and Schedule. (A) Subject to compliance with Article III above, Company may request grant funds in accordance with the terms of section 4.1. (B) City shall remit the grant funds under this Article IV to the Company within sixty (60) days of the receipt by the City of documentary evidence of the Company's annual property tax payment from Denton County or other taxing entity collecting ad valorem taxes for the City. Article V Hotel Occupancy Tax Grant 5.1 Grant. The City agrees to provide the Company a grant to be paid from Company's Hotel Occupancy Tax remittance (the "HOT Grant Funds"), beginning on the date of the issuance of the certificate of occupancy for the hotel, and payable on a quarterly basis during each Grant Year thereafter, subject to the Company complying with the obligations set forth in this Article and Article VI, below, and ding of the annual certification, as set out in Section 5.3 below, to be paid as follows: (1) 75% for Grant Years 1 — 3; and (2) 50% for Grant Years 4-7. 5.2 Funds Maintenance. All HOT Grant Funds provided to the Company by the City pursuant to this Agreement shall be maintained and expended by the Company in compliance with the requirements of Chapter 351 of the Texas Tax Code, and shall be used solely for purposes of this Agreement. 5.3 Annual Certification. Beginning January 1, 2018, the Company must submit an annual certification on the form attached hereto as Exhibit "B" and must submit the form not later than December 1 of each year for the duration of this Agreement certifying compliance with the obligations set out in Article VI below. A FAILURE TO FILE THE ANNUAL CERTIFICATION BY THE DECEMBER 1 DEADLINE SHALL BE AN EVENT OF DEFAULT AND, IF NOT CURED AS SET FORTH IN SECTION 8.1(2) BELOW, SHALL RESULT IN THE COMPANY'S FORFEITURE OF ANY UNPAID HOT FUNDS AND INVOKE THE CITY'S RIGHT TO TERMINATE, AS SET OUT BELOW. 5.4 Grant Payment Requirements and Schedule. (A) Subject to compliance with Article III above, Company may submit itemized documents setting forth the HOT funds collected by Company during the previous quarter and remitted to the City. Company may request HOT Grant Funds in accordance with the terms of Section 4.2. Failure to comply with this Section 5.4 shall not subject the grant in Section 5.1 to forfeiture. (B) City shall remit the HOT Grant Funds under this Article V to the Company within thirty (30) days of the receipt of Company's HOT payment, in compliance with Section 5.4 (A). Article VI Hotel Occupancy Tax Funds 6.1 Use of Funds. The Company's use of the HOT Grant Funds shall be limited to the following: (1) Expenditure of the HOT Grant Funds shall be in conformance with (i) Section 351.101(a)(3) of the Texas Tax Code and as further amended by the legislature during the Term of this Agreement, including advertising, solicitation, and marketing programs to promote tourism and the convention and hotel industry to attract tourists and convention delegates or registrants to Sanger- and/or the Hotel; and (2) Expenditure of the HOT Grant Funds shall be in conformance with the Annual Budget submitted by the Company to the City pursuant to Article VII herein. 6.2 Hotel Tax Payment. (A) FAILURE BY COMPANY TO REMIT THE MINIMUM HOT PAYMENT TO THE CITY REQUIRED BY THIS ARTICLE VI SHALL BE AN EVENT OF DEFAULT AND, IF NOT CURED AS SET FORTH IN SECTION 8.1(2) BELOW, SHALL RESULT IN THE COMPANY'S FORFEITURE OF ANY UNPAID HOT GRAN FUNDS AND INVOKE THE CITY'S RIGHT TO TERMINATE, AS SET OUT BELOW. (B) The Company shall timely remit all money owed to the City pursuant to the Company's responsibility to collect and make HOT payments as required by the City of Sanger Code of Ordinances and as further amended by the City during the Term. The Company shall not become delinquent in its HOT payments to the City. FAILURE BY COMPANY TO TIMELY MAKE HOT PAYMENTS TO THE CITY AS REQUIRED BY THIS ARTICLE VI SHALL BE AN EVENT OF DEFAULT AND, IF NOT CURED AS SET FORTH IN SECTION 8.1(2) BELOW, SHALL RESULT IN THE COMPANY'S FORFEITURE OF ANY UNPAID HOT GRANT FUNDS AND INVOKE THE CITY'S RIGHT TO TERMINATE, AS SET OUT BELOW. Article VII HOT Annual Plan and Budget 7.1 Preparation of Proposed Annual Plan and Budget. On an annual basis, no later than December 1, the Company shall prepare and submit to the City a proposed Annual Plan and Budget itemizing the use of the HOT Grant Funds for the forthcoming January 1" until December 31" period (the "Grant Year"), prior to HOT Grant Funds being distributed. The proposed Annual Plan and Budget shall be submitted to the City immediately prior to commencement of each Grant Year, with the initial proposed Annual Plan and Budget submitted on or before December 1, 2018, for the forthcoming Grant Year beginning on January 1, 2019, until December 31, 2019, and on December- 1 of each year thereafter- during the Term. The proposed Annual Plan and Budget shall include, at a minimum, a line item budget detailing the use of the HOT Grant Funds for the upcoming Grant Year, the amount of expenditure for each item and a description of the item indicating how it complies with the requirements in Section 351.101(a)(3) of the Texas Tax Code and as further amended by the legislature during the Term of this Agreement. FAILURE TO SUBMIT THE PROPOSED ANNUAL PLAN AND BUDGET BY THE DECEMBER 1 DEADLINE SHALL BE AN EVENT OF DEFAULT AND, IF NOT CURED AS SET FORTH IN SECTION 8.1(2) BELOW, SHALL RESULT IN THE COMPANY'S FORFEITURE OF ANY UNPAID HOT GRANT FUNDS AND INVOKE THE CITY'S RIGHT TO TERMINATE, AS SET OUT BELOW. 7.2 Annual Plan and Budget. The Company shall submit an Annual Plan and Budget to the City Manager or his designee prior to disbursement of HOT Grant Funds for the upcoming Grant Year. The City shall have the right to request reasonable modifications to the Annual Plan and Budget. 7.3 Alternatives, The Company may submit one or more alternative programs in the overall Annual Plan and Budget for a Grant Year, so long as all applicable alternatives are in conformance with the authorized uses pursuant to Section 351.101(a)(3) of the Texas Tax Code and as further amended by the legislature during the Term of this Agreement. 7.4 Effect of Submission. Submission to the City of the Annual Plan and Budget does not alleviate the Company's responsibility to spend the HOT Grant Funds within the limitations of Section 351.101(a)(3) of the Texas Tax Code and as further amended by the legislature during the Term of this Agreement. The Company acknowledges that, pursuant to the terms of the Agreement and Section 351.101(a) (3) of the Texas Tax Code and as further amended by the legislature during the Term of the Agreement, the Company has a fiduciary duty to the City with respect to its handling and use of the HOT Grant Funds provided to the company under this Agreement. COMPANY HEREBY INDEMNIFIES AND HOLDS THE CITY HARMLESS FROM ANY AND ALL CLAIMS RELATING TO THE EXPENDITURE, HANDLING AND USE BY COMPANY OF HOT GRANT FUNDS. 7.5 Permitted Limited Reallocations. The City recognizes that the tourism and hotel industry is a dynamic one, and that prudence dictates that the Company retain the ability to make certain minimal adjustments from time to time within the confines of the Annual Plan and Budget. Accordingly, the City agrees that the Company may, in its professional judgment and mindful of its fiduciary responsibility to the City: (i) reduce expenditures below the level approved in the Annual Plan and Budget for all or any particular categories as the Company deems appropriate subject to Section 7.7 below, (ii) reallocate an amount in any category in the Annual Plan and Budget to another category, so as to allow a reasonable shift in emphasis as the Grant Year develops, and (iii) allocate any amount included in an "alternative" category in the Annual Plan and Budget to any other approved category. However, the Company acknowledges and agrees that the HOT Grant Funds may not be allocated or used for any activity or program that is not within the permitted activities of Section 351.101(a)(3) of the Texas Tax Code and as further amended by the legislature during the Term of the Agreement. The Company shall notify the City in writing of any material changes made to the Annual Plan and Budget pursuant to this Section 7.5 within thirty (30) days of making a change. 7.6 Annual Plan and BudIlet Amendments. Should the provision of Section 7.5 above be determined by the Company to provide insufficient flexibility to address applicable facts and circumstances as they develop during a Grant Year, the Company may, at any time, submit to the City an amendment to the Annual Plan and Budget for the Grant Year in question. No such amendment shall be effective until received by the City Manager. 7.7 Unexpended and Unencumbered Funds. Unexpended and unencumbered HOT Grant Funds that remain with the Company after December 31 of each Grant Year will revert to the City and the Company must return said HOT Grant Funds to the City on or before January 31 of the immediately following year. Encumbered HOT Grant Funds are those funds which the Company has received and obligated for payment by written agreement or contract to expend on approved projects listed in the Annual Plan and Budget. Requests to encumber HOT Grant Funds for projects, as approved in the Annual Plan and Budget completed after December 31 of a Grant Year, shall be submitted to the City for review and approval by December 1 of that same Grant Year. If approved by the City, the encumbered HOT Grant Fund expenditure for specific projects must be completed by December 31 of the year of the request and authorization for encumbrance. An additional annual compliance certification, in accordance with the form set forth in Section 5.3 herein, must be submitted to the City no later than April 30 in the year immediately following the year of the authorized encumbrance. HOT Grant Funds may only be encumbered for the projects that have commenced prior to December 1 of the Grant Year for which the HOT Grant Funds were issued. Article VIII Default; Termination 8.1 Events of Termination. This Agreement terminates upon any one or more of the following: (1) By expiration of the Term and where no defaults have occurred; or (2) If a party defaults or breaches any of the terms or condition of this Agreement and such default or breach is not cured within ten (10) days after written notice thereof by the non -defaulting party unless a longer period is provided. Any default under this provision and right to recover any claims, refunds, damages and/or expenses shall survive the termination of the Agreement. The City Manager is authorized on behalf of the City to send notice of default and to terminate this Agreement for any default that is not cured. 8.2 Effect of Termination/Survival of Obligations. The rights, responsibilities and liabilities of the parties under this Agreement shall be extinguished upon the applicable effective date of termination of this Agreement, except for any obligations or defaults) that existed prior to such termination or as otherwise provided herein and those liabilities and obligations shall survive the termination of this Agreement, including the refund provision, maintenance of records, and access thereto. 8.3 Refund/Default. (A) Subject to an Event of Force Majeure, if the Company fails to occupy the Property at any time during the Term of the Agreement, Company shall refund to the City an amount equal to the total grant money paid to the Company by the City of Taxable Property pursuant to Section 4.1(A) and (B) above. A failure to make the refund payment promptly upon notification of such refund becoming due shall constitute an event of default. (B) If the Company defaults under any provision of this Agreement, and fails to remedy such default within ten (10) days of the date of written notice of such default, the City will not make a grant to Company under Articles IV or V, for the calendar year during which the default occurred or any years thereafter, but here shall be no recapture of grants that were issued to Company in prior years. (C) If City defaults under the provisions of Article V, the Company shall be entitled to a credit of the HOT Grant Funds on future HOT due to the City, if the provisions of Section 5.4 are complied with. 8.4 Cross Default. If the Hotel is now or hereafter owned by separate person or entities, any of the events of default described in this Article VIII will be applied and individually and independently to each such person or entity, as applicable, and will not be a "cross default" of the separate, unrelated person or entity, which would otherwise qualify as an assigned under Article X of this Agreement. Article IX Retention and Accessibility of Records 9.1 Records. Company shall maintain the fiscal records and supporting documentation for expenditures of funds associated with this Agreement. Company shall retain such records, and any supporting documentation for the greater of. (1) Five (5) years from the end of the Agreement Period; or (2) The period required by other applicable laws and regulations. 9.2 Accessibility. Company gives City, its designee, or any of their duly authorized representatives, access to and the right to examine relevant books, accounts, records, audit reports, reports, files, documents, written or photographic material, videotape and other papers, things, or personal and Real Property belonging to or in use by Company pertaining to the Economic Development Program Grant (the "Records") upon receipt of ten (10) business days written notice for the City. The City's access to Company's books and records will be limited to information needed to verify that Company is and has been complying with the terms of this Agreement. Any information that is not required by law to be made public shall be kept confidential by City. In no event shall City's access to Company's Records include any access to any personal and/or medical data of any employees of Company except to confirm payroll information compliance for Full - Time Job Equivalents. Company shall not be required to disclose to the City any information that by law Company is required to keep confidential. Should any good faith dispute or question arise as to the validity of the date provided, the city reserves the right to require Company to obtain an independent firm to verify the information. This certified statement by an independent firm shall be provided at the sole cost of Company. The rights to access the Records shall terminate five (5) years after the termination or expiration of this Agreement. Failure to provide reasonable access to the Records to authorized City representatives shall give the City the right to suspend or terminate this Agreement as provided for in Section 8.1 above, or any portion thereof, for reason of default. All Records shall be retained by Company for a period of five (5) years after all performance requirements are achieved for audit purposes until such audits or other administrative, civil or criminal matters including, but not limited to, investigations, lawsuits administrative inquiries and open record requests are completed. Company agrees to maintain the Records in an accessible location. Article X Assignment This Agreement may not be assigned without the express written consent of the non - assigning party, except that the Company may assign this Agreement without obtaining the City's consent (a) to one of its wholly owned or controlled affiliates, or (b) to any person or entity that directly or indirectly acquires, through merger, sale of stock, purchase or otherwise, all or more than (90) percent of the assets of the Company as long as the Company gives sixty (60) days prior written notice to the City and the assignee executes an agreement with the City to be bound to all the terms and conditions of this Agreement and be responsible for any default(s) that occurred prior to or after the assignment. For any assignment not covered by (a) or (b) in the preceding paragraph, the Company must obtain the prior approval of the City through its City Manager, which will not be unreasonably withheld or delayed, and the assignee must agree to be bound to all the terms and conditions of this Agreement and to accept all liability for any default that occurred prior to and/or after the assignment. Any assignment agreement must be furnished in a form acceptable to the City and be provided at least (30) days prior to the effective assignment date. City agrees to notify the potential assignee of any known default, but such notification shall not excuse defaults that are not yet know to the City. Article XI Miscellaneous 11.1 No Joint Venture. It is acknowledged and agreed by the parties that the terms of this Agreement are not intended to and shall not be deemed to create a partnership or joint venture amount the parties. Neither party shall have any authority to act on behalf of the other party under any circumstances by virtue of this Agreement. 11.2 Notice of Bankruptcy. In the event Company files for bankruptcy, whether involuntarily or voluntary, Company shall provide written notice to the City within three (3) business days of such event. 11.3 Authorization. Each party represents that it has full capacity and authority to grant all rights and assume all obligations that are granted and assumed under this Agreement. 11.4 Notice. Any notice required or permitted to be delivered hereunder shall be deemed received three (3) days thereafter sent by United States Mail, postage prepaid, certified mail, return receipt requested, addressed to the party at the address set forth below (or such other address as such party may subsequently designate in writing) or on the day received if sent by courier or otherwise hand delivered. If intended for the City: City of Sanger Attention: City Manager P.O. Box 1729 Sanger, Texas 76266 With a Copy to: Sanger Lodging LLC Attention: Chetan Patel 1400 N. Stemmons St Sanger, Texas 76266 11.5 Entire Agreement. This Agreement is the entire agreement between the parties with respect to the subject matter covered in this Agreement. There is no other collateral oral or written agreement between the parties that in any manner relates to the subject matter of this Agreement. 11.6 Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Texas, without giving effect to any conflicts of law rule or principle that might result in the application of the laws of another jurisdiction. Venue for any action concerning this Agreement, the transactions contemplated hereby or the liabilities or obligations imposed hereunder shall be in the State District Court of Denton County Texas. 11.7 Amendment. This Agreement may only be amended by the mutual written agreement of the parties. 11.8 Severability. In the event any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect other provisions, and it is the intention of the parties to this Agreement that in lieu of each provision that is found to be illegal, invalid, or unenforceable and is as similar in terms as possible to the provision found to be illegal, invalid or unenforceable. 11.9 Recitals. The recitals to this Agreement are incorporated herein. 11.10 Authorized to Bind. The persons who execute their signatures to this Agreement and any certifications related to this Agreement represent and agree that they are authorized to sign and bind their respective parties to all the terms and condition contained herein. 11.11 Compliance. Under Chapter 2264 of the Texas Government Code, Company has submitted the required certification that the business, or a branch, division, or department of the business, does not and will not knowingly employ an undocumented worker. An undocumented worked means an individual who, at the time of employment, is not lawfully admitted for permanent residence to the United States or authorized under the law to be employed in that manner in the United States. If after receiving this public subsidy/grant from the City, the Company, or a branch, division, or department of the business, is convicted of a violation under 8 U.S.C. Section 1324a(f), the Company shall repay the amount of the grant from the City with interest, at a rate of 5% according to the terms provided by this Agreement under Section 2264.053, but not later than the 120th day after the date the public agency state or local taxing jurisdiction, or economic development corporation notifies the Company of the violation. City may exercise all rights to enforce this recovery as allowed by Subchapter C of Chapter 2264 or any other laws. 11.12 Counterparts. This Agreement may be executed in counterparts. Each of the counterparts shall be deemed an original instrument, but all the counterparts shall constitute one and the same instrument. EXECUTED the day of ATTEST: CITY OF SANGER, TEXAS Cheryl Price, City Secretary Thomas E. Muir, Mayor APPROVED AS TO FORM: Robert L. Dillard III, City Attorney COMPANY: Sanger Lodging LLC By: Name: Title: STATE OF TEXAS COUNTY OF DENTON BEFORE ME, the undersigned authority, on this day personally appeared of , known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he/she executed the same for the purposes and considerations therein expressed, in the capacity therein stated and as the act and deed of said limited liability company. GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of SEAL Notary Public State of Texas B 1 NN �QK�<"'� mZ. G �rpKmEo a es ° itsN`.2 s o� 4 4 UHMI a k8�i y €3i0uoF 'MI 8 ' € �MH z T xo $ -min EXHIBIT B ANNUAL CERTIFICATE OF COMPLIANCE Please select one of the options below before signing and returning the certification: a. I hereby certify that follows each applicable term as set forth in the Agreement and has received grant payments in accordance with the terns and conditions set out forth in Articles IV and V. b. I hereby certify that is not in compliance with each applicable term as set forth in the Agreement and has received grant payments. ATTEST: COMPANY By: _ Name: Title: Date: NOTE: This form is due by December 1 of each year as set forth in the Agreement, and if this Agreement is in effect. This Certificate of Compliance should be mailed to: City of Sanger Economic Development Department P.O. Box 1729 Sanger, Texas 76266 INFORMATION ITEMS C 0 E ca C :a a) C U Q. 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