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03/02/1998-CC-Agenda Packet-RegularAGENDA CITY COUNCIL MONDAY, MARCH 2, 1998 7*00 P.M. 201 BOLIVAR 1. an Meeting to Order, Invocation, Pledge of Allegiance CONSENT AGENDA 2. a) Approve Minutes b) Disbursements 3. Citizens Input. 4. Consider and Possible Action to Receive the Audit for Fiscal Year 1996-1997. S. Consider and Possible Action to Adopt Resolution R03-98 Regarding Public Investment Act. 6. Consider and Possible Action Regarding Appointment for Fiscal Year 1997-1998 Audit. 7. Conduct Public Hearing Regarding Submission of Application to Texas Department of Economic Development/Texas Department of Housing and Community Affairs, 8. Consider and Possible Action to Adopt Resolution R02-98 Regarding Finance of Water Improvements . 9. Consider and Possible Action Regarding Employment of a Paid Fireman. 10. Consider and Possible Action to Issue Election Order for May 2 1998. 11. Consider and Possible Action to Appoint Election Judge/Early Votuig Ballot Board. 12. Consider and Possible Action Approving Ordinance 42-98 Amending Code of Ordinances Appendix A Fee Schedule Index Article 30.000 Utility Reconnect Fees. 13. Executive Session pursuant to the Open Meetings Law, Chapter 551, Govt. Code, Vernon's Texas Codes Annotated, in accordance with the authority contained in Govt. Code Section 551,072 Real Estate Transactions and 551.074 Personnel Matters, 1) Consider Sale or Lease of Real Property. 14. Reconvene into Regular Session and Consider Appropriate Action, if any, as a result of item discussed in Executive Session. 1S. 16. Any Other Such Matters. Adjourn. Rosalie Chavez, City Date and Time Posted CONSENT AGENDA B. a) Approve Minutes b) Disbursements The Minutes from the last Council meeting have not been transcribed yet. They will be available to Council Monday night. Also, we experienced a problem with our Accounts Payable this past week and are not able to print out the disbursements. These will also be available to Council on Monday night. 4. Consider and Possible Action to Receive the Audit for Fiscal Year 19964997. 5. Consider and Possible Action to Adopt Resolution R03-98 Regarding Public Investment Act. 6. Consider and Possible Action Regarding Appointment for Fiscal Year 1997-1998 Audit. Auditor Bill Spore will be here to go over the audit during the workshop, and then present the audit to Council during our regular meeting. Bill Spore is reviewing "Exhibit A" as referred to in Resolution R03-98 (bottom paragraph). This Investment Policy will be available for the meeting Monday. Bill will make a recommendation at that time. Staff recommends appointing Mr. Bill Spore to handle the 1997/1998 City of Sanger audit. RESOLUTION R03498 A RESOLUTION ADOPTING A CITY OF SANGER INVESTMENT POLICY WHEREAS, the 1995 Legislature of the State of Texas enacted House Bi112459 amending the Public Funds Investment Act codified in Government Code Chapters 2256; and WHEREAS, the 1997 Legislature of the State of Texas enacted House bi112799 amending the Public Funds Investment Act; and WHEREAS, the Public Funds Investment Act, as amended, requires the City to adopt an investment policy by rule, order, ordinance or resolution, and WHEREAS, the Public Funds Investment Act, as amended, requires the treasurer, the chief Financial officer if not the treasurer, and the investment officer of the city to attend investment training; and WHEREAS, the City of Sanger approves of the investment training course sponsored by the Texas Municipal League; and WHEREAS, the treasurer, the chief financial officer if not the treasurer, and the investment officer of the city has attended an investment training course sponsored by Texas Municipal League; and as required by the Public Funds Investment Act; and WHEREAS, the attached investment policy and incorporated revisions complies with the Public Funds Investment Act, as amended, and authorizes the investment of City funds in safe and prudent investments. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Sanger: That the City of Sanger has complied with the requirements of the Public Funds Investment Act and the Investment Policy, as amended, attached hereto as "Exhibit A" is hereby adopted as the investment policy of the City effective March 2, 1998. PASSED, ADOPTED AND APPROVED by the City Council of the City of Sanger this the 2nd day of March, 1998. APPROVED: John W. Coker III, Mayor ATTEST: Rosalie Chavez, City Secretary 7. Conduct Public Hearing Regarding Submission of Application to Texas Department of Economic Development/Texas Department of Housing and Community Affairs. The attached information from Municipal Development Services is provided for your review. Kim Lacey will be here to conduct the public hearing regarding the submission of a grant application to Texas Department of Economic Development. I STATEMENT OF QUALIFICATIONS History of Municipal Development Services Municipal Development Services is a new firm bringing together 22 years of experience in providing professional consulting services to Texas cities and political subdivisions. The firm was founded in June, 1996 as a partnership of Kim Lacey and Shelly Green. Both partners have extensye grant experience while employed with cities or as grant project consultants. This experience encompasses all phases of grant programs ranging from the preparation of the application to the administration and close-out. qualifications of Firm Municipal Development Services began its operation concentrating on economic development with plans to expand into community development. We were pleased to be hired to administer our first community development project, under the direction of our new company, by the,,City of Milford late last year. The staff has worked on grant projects including water, wastewater, streets,.drainage, housing rehabilitation and other community development programs. The firm. presently employs an experienced professional staff of two persons. 'The project will be under the immediate direction of Ms. Shelly Green and Ms. Kim Lacey, owners and directors of the firm. Ms. Green and Ms. Lacey will be responsible for all phases of the project. The firm maintains a full office for conducting its business affairs which is located in Mesquite, Texas. The office is fully equipped with the necessary equipment to operate the business. Experience on Federally Funded Proiects The directors of Municipal Development Services have been preparing and administering grants since 1986. The staff has written and/or administered the following Texas Community Development Program projects: Year Client Program Project 1995 Anderson County TCDP ....Economic Development 1993 Angus TCDP Sewer System Improvements 1995 Archer City TCDP Sewer System Improvements 1994 Bardwell TCDP Wastewater Treatment Plant 1992 Bowie TCDP Wastewater Collection Lines 1992 Bowie TCDP Economic Development 1993 Bowie TCDP Sewer System- Improvements 1994 Bowie TCDP Sewer System Improvements 1996 Bowie TCDP Sewer System Improvements 1992 Corsicana TCDP Economic Develoment 1986 Daingerfield TCDP Economic Development 1994 Dublin TCDP Sewer System Improvements 1993 Electra TCDP Water -Lines 1993 Electra TCDP Sewer Lines 1994 Electra . TCDP1 Water Lines 1995 Electra TCDP Economic Development 1993 Ferris ..TCDP Sewer. System Improvements 1995 Ferris TCDP Water System Improvements 1990 Forney TCDP Economic Development 1993 Forney TCDP Economic Development 1993 Forney TCDP Water, System Improvements 1995 Forney TCDP Water, Sewer System Improvements 1996 Forney TCDP Economic Development 1986 Gregg County TCDP Economic Development 1995 Groesbeck TCDP Water System Improvements 1993 Henrietta TCDP Sewer System Improvements 1995 Henrietta TCDP Sewer System Improvements 1993 Hillsboro TCDP Water System Improvements. 1992 Iowa Park TCDP Sewer System Improvements 1993 Iowa Park TCDP Sewer System Improvements 1995 Iowa Park TCDP Economic Development 1996 Iowa Park TCDP Water, SystemImprovements 1993 Keene TCDP Water System Improvements 1992 Kosse TCDP Water Storage Tank 1995 Kosse TCDP Water, Sewer System Improvements 1994 Mexia TCDP Sewer System Improvements 1992 Milford TCDF Water System Improvements 1994 Milford TCDP Sewer System Improvements 1996 Milford TCDP Sewer System Improvements 1993 Nocona TCDP Sewer System Improvements 1994 Nocona TCDP Sewer System Improvements 1993 Olney TCDP Water System Improvements 1995 Olney TCDP Water System Improvements 1993 Quinlan TCDF Water System Improvements 1992 Saint Jo TCDP Water, Sewer Lines 1995 Saint Jo TCDP Water System Improvements 1995 Sanger TCDP Water, Sewer System Improvements 1993 Seymour TCDP Water, Sewer System Improvements . 1994 Seymour TCDP Water System- Improvements 1992 Waxahachie TCDP Water, Sewer System Improvemens 1995 Whitney TCDP Water System Improvements MDS is proud of the strong professional reputation they have developed at all levels of government - local,, state, and federal. The firm strives to provide personal and customized service and client satisfaction. The level of services provided by 1VIDS will ensure that the City's grant program is successfully administered and fully carried out in accordance with the Texas Department of Dousing and Community Affairs rules and regulations. RESUMES Kim Lacey Director Kim Lacey is an owner and director of the firm. Ms. Lacey's primary responsibilities include the preparation of economic development grant applications under the Texas Capital Fund and assisting in the general administration of funded projects. Prior to opening Municipal Development Services, Ms. Lacey served as a grant specialist with Governmental Service Agency, Inca She has also served as the Main Street Director for the cities of Daingerfield and Henderson, and owned her own -grant consulting firm. Ms. Lacey has a Bachelor or Arts degree in English and Communication from East Texas State University and has completed graduate coursework towards a Master of Business Administration. Ms. Lacey is a member of the Texas Industrial Development Commission. References: • David Partlow Director of City Development Corporation City of El Campo (409) 543-2713 Director of Chamber of Commerce City of Waxahachie_ (972) 938-9617 • Jim McConnell City Administrator City of Forney (972) 564-3148 • B. J. Taylor Industrial Development Director Mission Economiccgevelopment Association (800) 4572522 • Lloyd Moss Director, Cleburne Economic Development Foundation City of Cleburne (817) 477-8233 Shelly Green Director Shelly Green is an owner and director of the firm. Prior to the formation of Municipal Development Services, Ms. Green served as an administrative assistant for Governmental Service Agency, Inc. and was the City Secretary for the City of Forney. As administrative assistant for GSA, Ms. Green was responsible for writing and the daily administration of all community development grants and is very experienced in all phases of administration. Ms. Green was certified b�' the �exas Municipal Clerks Association (University of North Texas) in January 1990 and has 39 hours of college coursework at Eastfield Community College and El Centro Community -College -in Dallas in legal and general curriculum courses. References: • Linda Shelton City Secretary City of Bowie (817)872-1114 • Donna Bntchler City Secretary City of Ferris (972) 842-57b1 • Odessa King City Secretary City of Forney (972)564m3148 • Mike Price City. Administrator City of Iowa Park (817)592-2131 • Jack Northrup City Administrator City of Olney (817) 564-2102 I CURRENT CLIENTS The current clients of Municipal Development Services are as follows: Year Client 1996 City of Cleburne 1996 City of Weatherford 1996 City of Ennis 1996 City of Keene 1996 City of Olney 1996 City of Olney 1996 City of Little Elm 1996 City of El Campo 1996 City of El Campo 1996 City of El Campo 1996 City of Seymour 1996 City of El Campo 1996 City of Milford 1997 City of Forney 1997 Wharton County 1997 City of Forney 1997 City of Seymour Business James Hardie Building Products SFX Designs, Inc. Leggett & Platt, Inc. Brandom Manufacturing Cherrydale Farms, Inc. Air Tractor, Inc. Retractable Technology, Inc. I-C Manufacturing, -Inc. Mark's Machine Company, Inc. Wenglar-Erwin, Inc. Hanco, Inc. Shoppa Farm Supply; Inc. Sewer System Improvements Blue Sky Dorian Tool Steve Silver Company Tejas Living Corporation Pxoj ect Infrastructure Grant Reai Estate Development Infrastructure Grant Real Estate Development Real Estate Development Real Estate Development Infrastructure Grant and n Loa Real Estate. Development ` Real Estate Development Real Estate Development Real Estate Development Real Estate Development Real Estate Development Real Estate Development Infrastructure Infrastructure Municipal Development Services is also currently working with the Cities of Corsicana and Cleburne preparing Enterprise Zane applications; the. City of Malone on a FmHA application; and the Cities of Iowa Park and Sanger on park grants. During the 1997-1998 Texas Community Development Program application period, Municipal Development Services prepared applications for the cities of Milford and Keene which have been recommended for funding under the 1998 program year. 8. Consider and Possible Action to Adopt Resolution R02-98 Regarding Finance of water Improvements. The attached resolution will approve the borrowing of funds for our water improvements. CITY OF SANGER RESOLUTION R02-98 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANGER9 DENTON COUNTY, TEXAS, AUTHORIZING THE FINANCING OF WATER IMPROVEMENTS. WHEREAS, the City of Sanger has provided for a ground storage water tank and renovation A the Acker Street Elevated Storage Tank, and WHEREAS, upon advise of the Consulting City Attorney, Section 51.035 and Section 101.005 A the Local Government Code provide that the governing body of a city such as Sanger may borrow money based upon its own credit, and WHEREAS, GNB-Sanger, the City's depository, has agreed to finance up to $325,000 of these water improvements based on 6.5 % interest rate for five annual installments of $65,000 plus interest due beginning December 31, 1998. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Sanger, Denton County, Texas: 1. That the funds borrowed from GNB-Sanger shall be due and payable as provided from the approved operating budgets of the City of Sanger. PASSED AND RESOLVED this 2nd day of March, 1998. APPROVED: John W. Coker III, Mayor ATTEST: Rosalie Chavez, City Secretary 9. Consider and Possible Action Regarding Employment of a Paid Fireman. Fire Chief Jeff Morris has submitted to the attached for Council's consideration. He will address this item to Council during our meeting. February 26, 1998 TO: Honorable Mayor and City Council Members FR: Jeff Morris, Fire Chief After much consideration I would like to propose that the City of Sanger hire a full time paid firefighter. The demands placed upon our volunteer firefighters has reached an all time high. It has in fact reached a point where our volunteers are experiencing low morale which in turn creates unnecessary tension within the department. I have to commend each one of our volunteers as they are doing a good job, but I need you to understand that our volunteer fire department is making over 700 runs per year now. In addition to these runs, our volunteers put in 6 hours a month of training, plus the extra duties of paperwork, truck maintenance, building maintenance, monthly and yearly inspections of SCBA, ladders,all EMS equipment, and ordering/stocking EMS supplies. These are shared responsibilities, and at best, it is like having a second job. I respectfully request that at this time you consider one paid full time firefighter who can relieve the added stress by performing the everyday needs of our fire department which will result in a more reliable department serving the needs of our citizens. Sincerely, eff Morris Fire Chief t CITY OF SANGER, TEXAS - JOB DESCRIPTION IDENTIFICATION Position Title: Department: Division: Immediate Supervisor: FIREFIGHTER/EMT Fire Operations Fire Chief Suppresses fires; performs rescues; removes or stabilizes hazards; provides emergency medical service including basic and/or advanced life support. Promotes and demonstrates fire safety programs. Code Enforcement as per City Code of Ordinances Article 6.100. ESSENTIAL JOB FUNCTIONS Responds to fire alarms, emergency medical service calls and other emergency calls, Performs fire suppression functions including rescue, deploying and operating hose, ventilating roofs, performing salvage work after fires, and other related tasks associated with fire suppression; Administers first aid and emergency medical services to injured persons, Work in an out-of-door environment subject to extremes of temperature, inclement weather, and intermittent exposure to dust, fumes and loud noise intensity 40% of the shift, Maintain physical activity over prolonged periods of time including standing attacking a fire, walking, kneeling and stooping in awkward positions, and moving/lifting heavy objects up to 100 pounds. Inspects, cleans and maintains apparatus, equipment, quarters, and grounds; Conducts inspections of hydrants to ensure compliance with City Ordinances pertaining to fire prevention codes; Participates I n and occasionally conducts fire training classes and drills and studies technical materials suppression and fire prevention Level of performance, Performs training each shift, study maps necessary. OTHER IMPORTANT JOB FUNCTIONS on equipment operation, fire to improve or maintain an effective related duties such as physical to learn the district assigned as May be required to relieve the Driver -Engineer to include driving Fire Apparatus and operating pump; to relieve a Paramedic and function as an ambulance attendant; conduct station tours for school children; perform other duties as directed by supervisor. Responsibilities will also include all functions and duties currently held by Fire Marshall/Code Enforcement. CITY OF SANGER, TEXAS - JOB DESCRIPTION - Page 2 EDUCATION High school diploma or GED required. SPECIAL REQUIREMENTS Valid State of Texas Driver's License Class "B" required. Certified/Certifiable Texas Firefighter and Certified Emergency Medical Technician. Minimum age - 18. Successful completion of the physical examination specified for the position. Candidates are required to pass a background investigation, drug screen, physical agility test, and written examination. Must have visual acuity needed to discern traffic signs and house numbers from approximately 50 ft., often in dim light. Must be able to distinguish between the colors red, yellow, and green. SALARY RANGE $10.48 per hour 10. Consider and Possible Action to Issue Election Order for May 4, 1998. 11. Consider and Possible Action to Appoint Election Judge/Early Voting Ballot Board. In the past Wynema Schertz has served as our Election Judge. Rose has talked with Wynema and she would like to be considered again this year for this appointment. Wynema did mention that DeAnn Burrus indicated she would like to work the election. Wynema would appoint her as Alternate Judge or Clerk depending on whether Mayor Coker decides to seek re-election. Wynema will let us know. Therefore, staff recommends that Wynema be authorized to appoint 2 clerks, one being her Alternate Judge. (There has always been three people working our elections.) 12. Consider and Possible Action Approving Ordinance 02-98 Amending Code of Ordinances Appendix A Fee Schedule Index Article 30.000 Utility Reconnect Fees. The new software that the City has purchased from ncode is not designed to separate the fees. Presently, the charge for disconnect is $20.00 for each service that is disconnected. The majority of our customers have both services with the exception of the Mobile Home Park and most of the apartments. The decision to make is do we charge a combined fee of $40.00 for a disconnect or does Council want to consider lowering the disconnect fee charge to $30.00 as reflected on the new attached ordinance. CITY OF SANGER, TEXAS ORDINANCE No. #02-98 AN ORDINANCE OF THE CITY OF SANGER, DENTON COUNTY, TEXAS, AMENDING CHAPTER 11, ARTICLE 11,1603 AND APPENDIX ARTICLE 30.000 OF THE CITY OF SANGER CODE OF ORDINANCES; AND PROVIDING FOR THE REPEAL OF ORDINANCES IN CONFLICT, PROVIDING A SEVERABILITY CLAUSE; AND, PROVIDING FOR AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SANGER, TEXAS: SECTION I THAT CHAPTER 11, ARTICLE 11.1603 AND APPENDIX ARTICLE 30.000 OF THE CITY OF SANGER CODE OF ORDINANCES IS HEREBY AMENDED TO READ AS FOLLOWS: ARTICLE 30.00 UTILITY RECOI�(NECT FEE5 Service may de discontinued, upon due written notice, to customers having past due bills on the twenty-seventh (27th) day of the month. In addition, a thirty dollar ($30.00) reconnect fee will be assessed to all customers whose service has been discontinued. SECTION II All Ordinances or parts of Ordinances in conflict herewith are, to the extent of such conflict, hereby repealed. SECTION III It is hereby declared to be the intention of the City Council that the sections, paragraphs, sentences, clauses, and phrases of this Ordinance are severable and, if any phrase, clause, sentence, paragraph, or section of this Ordinance shall be declared unconstitutional by the valid judgement or decree of any court of competent jurisdiction, such unconstitutionality shall not affect any of the remaining phrases, clauses, sentences, paragraphs, and sections of this Ordinance, since the same would have been enacted by the City Council without the incorporation in this Ordinance of any such unconstitutional phrase, clause, sentence, paragraph, or section. ORDINANCE 02-98 SECTION IV PAGE 2 This Ordinance will be effective March 2, 1998 from and after its passage and the publication of the caption as the law in such cases provides. PASSED AND APPROVED this 2nd day of March, 1998, by the City Council of the City of Sanger, Texas. APPROVED: John W. Coker III, Mayor ATTEST: Rosalie Chavez, City Secretary 13. Executive Session pursuant to the Open Meetings Law, Chapter 551, Govt. Code, Vernon's Texas Codes Annotated, in accordance with the authority contained in Govt. Code Section 551.072 Real Estate Transactions and 551.074 Personnel Matters. 1) Consider Sale or Lease of Real Property. 14. Reconvene into Regular Session and Consider Appropriate Action, if any, as a result of item discussed in Executive Session. Attached is the second draft of the lease agreement for IESI, together with Louis Nichols comments. FEB 26 '98 11621 FR NICHOLS JCKSON DLLRD 214 965 0010 TO 19404584130 P.02104 NICHOLS, JACKSON, DILLARD, HAGER & SMITH, L.L.P. R09E�T 1. Dit.1.ARD 61 ROoiAf !, HAOrPR PG1fA Q. VAM4 OAVIO %L 0K MAN SFW" A_ $TOCKARD Mr. Larry ICeesler City Administrator City of Sanger 201 Bolivar Street Sanger, Texas 76266 Attorneys & Counselors at Law 1800 Lincoln Plaza S00 North Akard Dallas, Texas 75201 (214)965-9900 Fax (214) 965-0010 e-mail NJDHS(VN,1DHS.c0m February 26, 1998 JOHN i, n6m a in JA60N C. MARSHAU J. pAY� DOOR NI ViA. FACSIMILE 9ao/458-4180 �c REGULAR MAIL Re: Landfill and tNaste Disposal Agreelxlent with Independent Environmental Services, Inc. Dear lvZr. Keesler: This will aclalowledge receipt of the second draft of the proposed Landfill and Waste Disposal Agreement with Independent Environmental Services of Texas, a copy of a draft Lease as exhibit to said Contract; and a copy of a Special Warranty Deed as exhibit to said Contract, After reviewing the documents we make the following comments. Landfill and Waste Disposal Agreement We have reviewed the changes made in the second draft of the Landfill and Waste Disposal Agreement and are of the opinion that the City has the legal authority to enter into such Agreement and such Agreement would be a valid and binding obligation of the City, provided, the City has current revenues to fulfill its obligation to upgrade and pave the Utility Road to the existing landfill. Since the obligation to upgrade and pave the Jtlllty Road must be completed with 150 days, it would be necessary that the City have on hand current revenues sufficient to fund this obligation which would be performed within the current fiscal year. Your attention is again called to the fact that Section 6 of the Agreement provides that WXll provide, without charge, residential trash collection disposal for non- hazardous municipal solid waste for up to 2,000 residences located within the City. This obligation is only so long as the landfill located on the IESI land or the existing landfill is owned or operated by IESI. IESI has the right to assign or transfer this Contract, and in 12951 FEE 26 '98 11:22 FP NICHOLS JCKSOty DLLRD '14 ybS 0010 TO 19404c584430 ?.03`04 February 28 1998 page 2 our opinion, an assignee would not be obligated to provide free trash collection and disposal service which is an obligation only so long as the landfill located on the IESI land or the existing landfill is owned or operated by IESI, Agreement opinion,ur esnoS obligate an the Agreement which authorizes IESI to assign the Agr assignee to provide fires service $ince the obligation to provide free services is only so long as the landfill is owned or operated by IESI. The comments with regard to the right of IESI to assign the Contract is not a legal objection to the City entering into the Contract, however, this condition should be understood by the City when entering into the Agreement. Draft of Lease The Lease Agreement m&Kes the Landfill and i7isposal Waste Agreement a part of the transaction documents and would be considered along wthe Landfill and Disposal ith Waste Agreement in determining the rights and obligations of the parties. Agrcement and It is our opinion that the City has the right to enter into the Lease . such Lease Agreement would be a binding obligation on the part of IESI and the City. Section 4.1 of the Lease Agreement with regard to consideration be paid to the City, makes provision for IESI to provide, without charge, residential trash collection and disposal service for non -hazardous municipal waste for up to 2,00 a residences located within the City. This obligation is subject to the provisions contained in the Landfill Agreement which provides that the obligation shall exist only so long as IESI owns or operates the landfill. In other words, in our opinion, there would be no obligation under the Lease for the providing of residential trash collection disposal service without charge by an assignee or transferee if the landfill is no longer owned or operated by IESI. Under Article XII of the Lease Agreement, IE5I has the right to assign, sublet or transfer the Lease without the necessity Sccobtaining2.2 which p permission ovides theCity City shall not is to be noted that there is a limitation have the right to sale, transfer or assign existing landfill or this Lease or any of the rights and obligations of the City hereunder without the prior written consent of IESI. This limitation would be in effect so long as the Lease is in effect and would be binding on future City Councils. Section 13.3 of Article XIII of the Lease Agreement makes a provision that SI should IESI siuxender the existing landfill to the City, that the City would grant to IE an easement or irrevocable license to enter and cross existing landfill, by vehicle or on foot, for the purpose of accessing any adjacent property or landfill facilities owned by it for commercial operations, maintenance and closure. This would constitute a continuing obligation on the City to grant an easement across its property for an indefinite and unascertained period of time or without fixing the location of such easement or irrevocable license. This obligation would be binding on future City Councils. 16403 IVIC�iQL5, JACKSON, DILLARD, IiAGER &SMITH- I,.L.P. FEB 26 '98 11:22 FR NICHOLS JCKSON DLLRD 214 965 0010 TO 19404584180 P.04104 February 28 1999 Page 3 Special Warranty Deed *al Warranty Deed and find it to be consistent with the We have examined the Spec I,,andfill and Waste Disposal Agreement and the Lease Agreement. In conclusion, the Special Warranty Deed is in satisfactory form. Conclusion Subject to the comments above made, it is our opinion that the City of Sanger has the authority to enter into the Landfill and Disposal Waste Agreement and the Lease of the existing landfill and that the same would constitute a binding obligation on the part of the City of Sanger. If you should have any questions, please let me know. very truly yours, NICHOLS, JACKSON, DILLARD, HAGER & SNUTH, L.L.P. By0 . Louis Nichols HLN/sb i6aoa ** TOTAL PAGE.04 ** f SECOND DRAFT - 2/24/98 ::Mr LANDFILL AND WASTE DISPOSAL AGREEMENT This Landfill and Waste Disposal Agreement ("Agreement") is entered into between the City of Sanger, Texas (the "City") and Independent Environmental Services, Inc., a Texas corporation ("IESI"). RECITALS A. City is the owner and operator of a Type II municipal solid waste landfill located on approximately 25 acres of land as described on Exhibit "A" attached hereto (the "Existing Landfill"). B. IESI has the right to acquire a tract of land comprising approximately 292 acres of land, as described on Exhibit "B" attached hereto, which adjoins the Existing Landfill (the "IESI Land") and IESI may hereafter acquire additional lands that adjoin the IESI Land. C. The City and IESI mutually desire to enter into arrangements, on the terms and conditions of this Agreement, whereby (1) IESI will lease the Existing Landfill from the City, (2) IESI will reopen and operate same as a Type I municipal solid waste landfill and expand said landfill onto a portion of the IESI Land, and (3) IESI will provide non -hazardous waste collection and recycling service within the City. In furtherance of the foregoing, the City and IESI agree and contract as follows: 1. Access for Investigation. Upon signing this Agreement, the City will permit IESI and its representatives, advisors and contractors to have access to (a) all of the City's files and records pertaining to the Existing Landfill, including the right to copy any or all of same at IESI's expense, (b) the Existing Landfill for the purpose of conducting such surveys, tests, inspections and investigation as IESI, in its sole discretion, deems appropriate. IESI also may interview City's employees knowledgeable of the Existing Landfill and City authorizes IESI to communicate with the TNRCC (as defined herein) concerning the Existing Landfill. IESI acknowledges that such investigation will be at IESI's sole cost. If as a result of such investigation IESI determines, in its sole and absolute discretion, that undesirable conditions exist on, under or in the vicinity of the Existing Landfill, or that there are any undesirable conditions relating to the Existing Landfill's operations or compliance status, IESI may so notify the City in writing, and may terminate this Agreement. 2. Permits. The City will proceed in good faith to prepare and file applications with the Texas Natural Resource Conservation Commission ("TNRCC") for a permit or permits ("permits") required to lawfully (1) reopen and operate the Existing Landfill as a Type I municipal solid waste landfill, and (2) expand the landfill onto portions of the IESI Land 213804.5 designated by IESI and/or other lands acquired by IESI adjacent to the IESI Land. IESI will cooperate with the City regarding such permit application process and will pay (or reimburse the City for) all application fees and related engineering and other professional costs. The City will fully support and sponsor such permit application(s) (and any amendments to said application or permits) including, but not limited to, (a) joining and executing such permit application(s) and related documents, including, without limitation, cooperating fully in any required permits transfers, amendments, and approvals relating to both the Existing Landfill and any expansion thereof (b) providing appropriate City representatives to appear in Austin or elsewhere at TNRCC hearings to testify in support of such application(s), and (c) providing appropriate City representatives to appear at local public meetings and hearings to voice support for such applications(s). Upon request by IESI, the City will assign such permits to IESI and will request and support approval of such assignment as may be required by law. Upon issuance of permits in accordance with the foregoing and containing terms and conditions acceptable to IESI, the parties will proceed as set out hereinbelow. 3. Lease. Promptly after issuance of the permits to IESI as set forth in Section 2 above, the City and IESI will enter into a lease covering the Existing Landfill in the form attached hereto as Exhibit "C" ("Lease") under which IESI will operate the Existing Landfill in conjunction with the expansion thereof on adjoining lands. 4. Annexation and Zoning. It is contemplated that following issuance of the permits as set forth in Section 2 above, IESI and the City will initiate appropriate proceedings to have the IESI Land (together with any adjoining lands that may be acquired by IESI) annexed into the City and to have said lands zoned to permit operation of a landfill thereon except for the Golf Course Land (as hereinafter defined) which is expected to be deeded to the City as hereinafter provided. It is understood that the City is not, by this Agreement, obligated to cause such annexation and/or zoning to be accomplished and the City shall in no way be liable to IESI if such annexation and/or zoning is not accomplished, IESI's sole recourse in such event being its right to not proceed with its contingent obligations under Sections 5 and 6 below. 5. Golf Course Land. As part of the consideration for the agreements and covenants of the City hereunder, IESI agrees that, following (a) its receipt of the permits as set forth in Section 2 hereof containing terms and conditions acceptable to IESI, and (b) completion A the annexation and zoning proceedings as set forth in Section 4 hereof, and (c) execution by the City of the Lease, IESI will donate to the City approximately 125 acres of land carved out A the IESI Land and/or adjoining lands acquired by IESI (the "Golf Course Land") for use as a golf course, said conveyance to contain certain restrictive covenants and rights of reversion as set forth in the form of deed attached hereto as Exhibit "D" . The approximate location and configuration of the Golf Course Land is shown on a sketch appended to Exhibit "D" , but it is understood that the final dimensions thereof are subject to alteration, in IESI's sole discretion, and the final description thereof will be established by survey. In connection with the Golf Course Land, the City covenants and agrees. (a) That it will promptly and in good faith undertake to obtain financing (through issuance of bonds or otherwise) for the design and construction of a golf course on the Golf Course Land and, if such financing is obtained, to proceed with such construction, 213804.5 2 �027 (b) That the Golf Course Land will revert to IESI in the event either (i) construction of a golf course on the Golf Course Land is not commenced within six (6) months after the conveyance of the Golf Course Land by IESI, (ii) construction of a golf course on the Golf Course Land is not completed within two (2) years after the commencement of the golf course construction, or (iii) the Golf Course Land ever ceases operation as a golf course or ceases to be used solely for the operation of a golf course for more than either (A) four (4) consecutive months, or (B) more than one hundred twenty (120) days in any three hundred sixty-five (365) day period; and (c) That the City will, in good faith and to the extent it can lawfully do so, offer to Lou Henry Cooper a consulting, employment, royalty, cart rental concession or similar arrangement in relation to the golf course which would yield compensation, consulting fees or other income to Lon Henry Cooper in the amount of at lease $25,000 per year for at least ten (10) years. .It is understood, in regard to the foregoing provisions of this Section 5, that the City is not, by this Agreement, obligated to obtain financing for the construction of a golf course on the Golf Course Land as referred to in Section 5(a) or to accept financing on any basis not acceptable to the City in its sole discretion. The City shall in no way be liable to IESI if such financing is not obtained or the golf course is not constructed, IESI's sole recourse in such event being its right of reverter relating to the Golf Course Land as set forth in the form of deed attached hereto as Exhibit "D" . 6. Other Consideration to be Provided by IESI. Provided that the permits have been issued as set forth in Section 2 hereof, the Lease has been executed by the City, and the annexation and zoning as set forth in Section 4 hereof have been accomplished, IESI will, effective January 1, 19990 (a) Provide, without charge, residential trash collection and disposal service for non- hazardous municipal solid waste ("Waste") to up to two thousand (2000) residences located within the City, provided that such free service will be provided only (i) for so long as the landfill located on the IESI Land or the Existing Landfill is owned or operated by IESI, (ii) for so long as IESI can lawfully accept such Waste for disposal therein, (iii) for so long as IESI holds the exclusive franchise for collection and disposal of non -hazardous residential, industrial and commercial solid waste and recycling within the City, and (iv) in accordance with the terms of the Municipal Service Agreement attached hereto as Exhibit "E"; and (b) Provide at the landfill, for so long as it is owned or operated by IESI, without charge to bona fide residents of the City, a [drop-off recycling center and a citizen collection station - further description to be provided by IESI] and free disposal of non -hazardous household solid waste that can be lawfully accepted at the landfill, it being understood that proof of residency (e.g. current water bill and drivers license) will be required and that no disposal of non -hazardous non- 2tsaoa.s 3 residential or commercial solid waste will be allowed except where such disposal is lawful and on payment of IESI's disposal fees in effect from time to time; and (c) If permits are issued allowing IESI to operate a Type I landfill on the IESI Land and adjoining land acquired by IESI, IESI will pay to the City a royalty of $0.25 per cubic yard deposited in the landfill while it is owned and operated by IESI, provided that such royalty will apply only to Waste accepted for disposal in the landfill for which IESI charges and collects a disposal fee; the royalty will not be payable on free disposal of Waste provided under subsections (a) or (b) above. Such royalty will be calculated and remitted to the City annually and the City will have the right, on reasonable notice, to audit IESI's records to verify such payments, provided, that each remittance shall be conclusively deemed correct unless the City notifies IESI of a claimed deficiency within ninety (90) days after receipt. The royalty payable to the City shall be adjusted annually on each anniversary date of the Effective Date of the Lease (provided for in Section 3 hereof) in the same proportion that the CPI (as defined in the Municipal Service Agreement referred to in Section 6(a) hereof) for the month last preceding such anniversary rate differs from the CPI for the same month of the preceding year; provided, that if such adjustment shall cause an increase in the royalty rate, IESI may deduct from such increased royalty amounts the amount of any increased costs of operations due to increases in permit costs or changes in laws or regulations pertaining to IESI's operation of the landfill. 7. Other Consideration to be Provided by the City. (a) Within 150 days after the execution of this Agreement, the City will extend its water and sewer lines to a location designated by IESI on the Existing Landfill and the City will upgrade and pave Utility Road to the Existing Landfill, such work to result in a paved, all-weather roadway designed and constructed to withstand regular usage by vehicles weighing up to 80,000 pounds. (b) The City will permit IESI to dispose of and discharge into the City's sewer system all leachate from the Existing Landfill or any expansions of the landfill, other wastewater associated with the Existing Landfill or any expansions of the landfill, and IESI's facilities at the Existing Landfill or IESI Land. IESI will pay the City for such disposal $21.00 per month plus $1.00 per thousand gallons in excess of one thousand gallons discharged in any one month, or the City's then existing rates for commercial wastewater disposal. The City's standards for acceptance of such wastewater are set forth on Exhibit " P attached hereto and the City shall not be obligated to accept wastewater that fails to meet such minimum standards. 8. Exhibits. All exhibits referred to herein and attached hereto are fully incorporated herein by reference. 9. Representations and Warranties: (a) IESI represents and warrants to the City that this Agreement has been duly authorized by all requisite corporate action and constitutes a binding obligation of IESI. (b) The City represents and warrants to IESI that: (i) This Agreement has been duly authorized by all requisite municipality action and constitutes a binding obligation of the City. (ii) City has all permits, licenses, certificates, approvals, registrations, and applications (hereinafter, "Environmental Permits"), necessary to comply with all applicable Environmental Laws (as defined herein). A complete list of all Environmental Permits is attached hereto as Exhibit G. (iii) The Existing Landfill and, in connection with the Existing Landfill, City, are not in violation of and are in compliance with all applicable Environmental Laws; (iv) There is no basis for a claim, proceeding, investigation, or other action by any federal, state, or any local governmental agency or any third party against the Existing Landfill or, in connection with the Existing Landfill, City, under applicable Environmental Laws, including, without limitation, claims for cleanup, remediation or investigation costs or claims that City is a potentially responsible party under CERCLA, its state equivalent, or any other Environmental Law; (v) No claim, proceeding, investigation, or other action is pending, threatened, or contemplated by any federal, state, or any local governmental agency or any third parry and City has received no notice of violation, letters, or other indications regarding any such claim, whether written or oral; (vi) There has not been a Release (as defined herein) of Hazardous Materials (as herein defined) from the Existing Landfill, whether on -site or off -site, affecting any soil or groundwater requiring any investigation, remediation, cleanup or other corrective action or that is in violation of any Environmental Law; (vii) The Existing Landfill has contained and contains no underground or aboveground storage tanks, no PCBs or PCB -contaminated waste, and no asbestos -containing materials; 213804.5 l (viii) No conditions currently exist or are reasonably foreseeable that could subject IESI to any investigation, litigation, administrative, enforcement, or any other damages, penalties, injunctive relief, cleanup costs or other corrective action under any applicable Environmental Law and; (ix) City will disclose to IESI all reports, investigations, or other data commissioned or possessed by City, or within City's control, relating to any environmental condition at or near the Existing Landfill and compliance with applicable Environmental Laws relating to the Existing Landfill. (c) The representations and warranties set out above shall apply regardless of any due diligence or other inquiries made by IESI. (d) Definitions. "Hazardous Materials" means anything defined as a "contaminant" or "hazardous substance" under the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA") or its state equivalent. "Environmental Law" means applicable federal, state and local laws relating to protection of the public health, welfare, and the environment, including without limitation, laws relating to the storage, handling and use of chemicals and other Hazardous Materials, those relating to the generation, processing, treatment, storage, transport, disposal, or other management of waste materials of any kind, and those relating to the protection of environmentally sensitive areas. "Release" means depositing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping and disposing. "Existing Conditions" shall mean all facts, events, circumstances, and conditions existing or applicable at or prior to the date of the execution of the Lease (as herein defined) with respect to the Existing Landfill or City's use or operation thereof. 10. Existing Conditions. City agrees that it will remain responsible for any Existing Conditions. If any federal, state or local agency requires any investigation, monitoring, inspection, remediation, or other corrective action relating to or arising from any Existing Conditions, City agrees to undertake any such actions and complete the same in compliance with all applicable Environmental Laws and to the satisfaction of the TNRCC as evidenced in writing by a no further action letter or other document indicating the same. Further, City agrees to waive, discharge, and release, and covenants not to sue, IESI for any claims or causes of action, whatsoever in nature, known or unknown, whether past, present, or future, based on, arising from, or related to Existing Conditions. 11. Notices. Any notice or documents required or permitted to be given hereunder by one party to the other shall be in writing and same shall be given and shall be deemed to have been served and given if (i) delivered in person to the address set forth herein below for the party to whom the notice is given, (ii) placed in the United States mail, certified - return 213804.5 6 c ' receipt requested, addressed to such party at the address hereinafter specified or (iii) deposited into the custody of Federal Express Corporation to be sent by Federal Express Overnight Delivery addressed to such party at the address hereinafter specified. Any notice mailed as above shall be effective upon its deposit into the custody of the U.S. Postal Service or Federal Express Corporation, as applicable; all other notices shall be effective upon receipt. From time to time either party may designate another address by giving the other party written notice of such change of address in accordance with the provisions hereof. 12. Time of the Essence. Time is of the essence of this Agreement. 13. Assi s. This Agreement shall inure to the benefit of and be binding on the parties hereto and their respective legal representatives, successors, and assigns. IESI may assign all or any part of its rights hereunder at any time, but no such assignment shall relieve IESI of its obligations hereunder unless the assignee expressly assumes all of IESI's obligations hereunder that remain unfulfilled at the time of such assignment. 14. Effective Date. The date on which this Agreement is executed by the last to sign of the City and IESI shall be the "Effective Date" of this Agreement. 15. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 16. Construction. The parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting parry shall not be employed in the interpretation of this Agreement or any amendments or exhibits hereto. 17. Attorneys Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party or parties shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which such party or parties may be entitled. 18. Business Days. If the day for performance of any act required under this Agreement falls on a Saturday, Sunday or legal holiday, then the day for such performance shall be the next following regular business day. 19. Counterparts. This Agreement may be executed in multiple counterparts, each of which shall, for all purposes, be deemed an original, but which together shall constitute one and same instrument. Attest: City Secretary Approved: City Attorney INDEPENDENT ENVIRONMENTAL SERVICES, INC. By: Charles F. Flood President Date executed: Address: 3300 North Beach Street Haltom City, Texas 76117 CITY OF BANGER, TEXAS By: Mayor Date executed: Address: Sanger, Texas 76265 213804.5 LIST OF EXHIBITS "A" - Legal Description of Existing Landfill "B" - Legal Description of IESI Land "C" - Form of Lease Covering Existing Landfill Form of Deed Covering Golf Course Land 'Ell- Form of Municipal Service Agreement "F" - Minimum Wastewater Standards "G" - Environmental Permits EXHIBIT DRAFT LEASE THIS LEASE ("Lease") is made, entered into and effective as of the day of , 1998 ("Effective Date"), by and between THE CITY OF SANGER, TEXAS, a municipal corporation of Denton County, Texas ("City"), and INDEPENDENT ENVIRONMENTAL SERVICES, INC., a Texas corporation ("IESI"). RECITALS A. City is the owner and operator of a Type II municipal solid waste landfill located on approximately 25 acres of land, more particularly described on the attached Exhibit "A" ("Existing Landfill"). B. City has agreed to lease to IESI the Existing Landfill, and grant IESI certain rights in connection with the reopening, operation, and expansion of the Existing Landfill. C. This Lease is made pursuant to that certain Landfill and Waste Disposal Agreement between City and IESI dated , 1998 ("Waste Disposal Agreement"). In consideration of the mutual covenants and agreements contained herein and other good and valuable consideration, receipt of which is hereby acknowledged, and intending to be legally bound, the City and IESI hereby agree as follows. ARTICLE I DEFINITIONS As used in this Lease, the following terms shall have the meanings specified in this Article as follows: "Default" means the occurrence and continuation of any of the Events of Default set forth in Article XI hereof beyond any applicable notice or time periods. "Environmental Laws" means applicable federal, state and local laws relating to protection of the public health, welfare, and the environment, including without limitation, laws relating to the storage, handling and use of chemicals and other Hazardous Materials, those relating to the generation, processing, treatment, storage, transport, disposal, or other management of waste materials of any kind, and those relating to the protection of environmentally sensitive areas. "Environmental Proceedings" means any pending civil (including actions by private parties), criminal or administrative proceedings or investigations affecting the Existing Landfill relating to environmental, health or safety matters. "Event of Default" means an event which, with applicable notice or lapse of time or both, would become a Default. "ExistinzConditions" means all facts, events, circumstances, and conditions existing or applicable at or prior to the date of the execution of this Lease with respect to the Existing Landfill or City's use, operation, or closure thereof. "Force Majeure Event" means any act of God, war, civil disturbance, court order, laws, acts or regulations of governmental bodies, labor disputes, failure or loss of supply or market, or any equipment failure or malfunction or other occurrence beyond the reasonable control of the party affected. "Government Agency" means any federal, state, county, municipal or local government or any agency, department, instrumentality or political subdivision thereof. "Hazardous Materials" means anything defined as a "contaminant" or "hazardous substance" under the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA") or its state equivalent. "Landfill Facility" means all assets and/or facilities of IESI now or hereafter constructed or put in operation on the Existing Landfill, together with all assets, operations and additional facilities on contiguous lands hereafter owned, leased, operated or controlled by IESI or its Affiliates. "Laws" means all applicable laws, rules, regulations, statutes, treaties, codes, ordinances, permits, certificates, orders and licenses of any Government Agency, and applicable judgments, decrees, injunctions, writs, orders or like action of any court, arbitrator or other administrative, judicial or quasi judicial tribunal or agency of competent jurisdiction pertaining to any matters arising under this Lease and/or the Waste Disposal Agreement (including, but not limited to, those pertaining to health or safety; to the construction, use or occupancy of the Existing Landfill and the reopening and/or expansion of the Existing Landfill; and to the Environmental Laws), or the franchises and privileges connected therewith. "Release" means any depositing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing. "TNRCC" means the Texas Natural Resources Conservation Commission and any successor government agency. __ "Transaction Documents" means this Lease and the Waste Disposal Agreement. 214321.E 2 ARTICLE II Existing Landfill 2.1 Lease. The City hereby demises, leases and rents to the IESI, and IESI hereby leases, hires and rents from the City, upon and subject to the terms, covenants, conditions and limitations hereinafter set forth, for the Term (as defined below), of this Lease the Existing Landfill, together with the City's interest in any rights -of -way or use, easements, licenses, permits or other rights pertaining to the Existing Landfill. 2.2 City's Representations. City hereby represents and warrants to IESI as follows: (a) City possesses full power and authority to enter into the Transaction Documents and to perform its obligations thereunder. The execution and delivery of the Transaction Documents and the performance and observance of the provisions thereof have been duly authorized by all necessary corporate actions. The Transaction Documents are valid and binding obligations of City and enforceable against City in accordance with their terms. (b) No third party consent or approval is required in connection with the execution, and performance by City of any its obligations as set forth in the Transaction Documents. The execution, delivery and performance by City of its obligations pursuant to the Transaction Documents by City will not: (i) require any approval by any Government Agency, (ii) contravene the City's charter, bylaws, or any applicable Laws, or (iii) contravene or result in any breach of or constitute a default under any indenture, mortgage, loan agreement, lease, contract or other agreement or instrument to which City is a parry or by which the Existing Landfill is bound, which contravention, breach or default would have a material adverse effect on the IESI's ability to perform its obligations under the Transaction Documents or interfere with IESI's contemplated Landfill Facility. (c) There are no Environmental Proceedings or other actions or proceedings pending or threatened against City involving the Existing Landfill before any court, tribunal, administrative agency, board or arbitrator. (d) There has been no Release and there is no threat of Release of any Hazardous Materials on, under, onto or from the Existing Landfill. (e) City is in compliance with all Environmental Laws with regard to the Existing Landfill. . 2.3 IESI's Revresentations. IESI hereby represents and warrants to City as follows: (a) IESI is a corporation duly and validly organized and existing and in good standing under the laws of the State of Texas and possesses full power and authority to enter into the Transaction Documents and to perform its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents by IESI and the performance and observance of the provisions thereof have been 214321.E 3 duly authorized by all necessary corporate actions. The Transaction Documents are valid and binding obligations of IESI enforceable against IESI in accordance with their terms. (b) No third party consent or approval is required in connection with the execution, delivery and performance by IESI of any of the Transaction Documents. The execution, delivery and performance of the Transaction Documents by IESI will not: contravene or result in any breach of or constitute a default under any indenture, mortgage, loan agreement, lease, contract or other agreement or instrument to which IESI is a party or by which it is bound, which contravention, breach or default would have a material adverse effect on the IESI's ability to perform its obligations under the Transaction Documents. (c) There are no actions or proceedings pending or; to the best of IESI's knowledge, threatened against IESI before any court, tribunal, administrative agency, board or arbitrator that, if adversely determined, would adversely affect IESI's ability to perform its obligations under the Transaction Documents. ARTICLE III LEASE TERM 3.1 Initial Term. The initial term of this Lease (the "Initial Term") shall commence on the Effective Date and shall expire on the twenty-fifth (25th) anniversary of the Effective Date. In the event it becomes apparent to IESI, in its sole discretion, that the Permits referred to in Section 6.1 (i) will not be obtained within a reasonable time, or (ii) are not obtainable within a reasonable time to the extent necessary to permit IESI to expand the Existing Landfill and/or construct the anticipated Landfill Facilities, IESI may elect to terminate this Lease, in which event all the Transaction Documents will terminate in their entirety. Thereafter, neither parry will have any further liability to the other parry except for any outstanding indebtedness and other claims arising prior to termination. 3.2 Renewal Terms. The Term of the Lease will be automatically renewed and extended • for two (2) additional successive periods of five (5) years each, commencing upon expiration of the term then in effect and expiring on the fifth (5th) anniversary thereafter ("Renewal Terms") unless IESI elects to terminate the Lease by giving written notice of such election to the City prior to the expiration of the term then in effect. If IESI gives such notice to City prior to the expiration of the term then in effect, this Lease and any continuing obligations under the Waste Disposal Agreement shall terminate in their entirety (except for those obligations which explicitly state that they are to survive any termination or expiration). 3.3 Term of the Lease. The Initial Term and the successive renewal term(s), if applicable, are herein collectively referred to as the "Term. " If the Initial Term is extended or renewed in accordance with this Article III, no further writing shall be required to evidence such extension; provided, however, that either party, upon request of the other party, shall execute and acknowledge, in form suitable for recording, an instrument confirming any such extension or renewal. 214321.E 4 3.4 Hardship, Gross Inequity; Renegotiation. In the event at any time on or after the Commercial Operation Date, IESI suffers economic hardship as a result of the transactions contemplated by the Transaction Documents, and such economic hardship (i) did not exist and was not foreseeable at the time the Transaction Documents were entered into, and (ii) is summarized in reasonable detail in a written notice to City, the parties will in good faith negotiate changes to the Transaction Documents so as to alleviate the economic hardship. 3.5 Sale of Existing Landfill. The City will, if so requested by IESI at any time within six (6) months after the expiration of the Term of this Lease, offer the Existing Landfill for sale to the highest bidder, without reserve, in accordance with laws and ordinances pertaining to the sale of land owned by the City. Such sale will be conducted as promptly as reasonably possible following IESI's request, consistent with applicable law. ARTICLE N LEASE PAYMENTS 4.1 Consideration. As consideration for this Lease and subject to the terms and conditions contained in the Waste Disposal Agreement, IESI agrees during the term of this Lease to: (a) Provide, without charge, residential trash collection and disposal service for non- hazardous municipal solid waste ("Waste") to up to two thousand (2,000) residences located within the City; (b) Provide, without charge to bona fide residents of the City, adrop-off recycling center [and a citizen collection station further description to be provided by IESI] and free disposal of non -hazardous household solid waste that can be lawfully accepted at the Landfill Facility, and (c) Pay to the City the royalty provided for in the Waste Disposal Agreement. Further, as additional consideration for the agreements and covenants of the City hereunder, IESI agrees to donate to the City approximately 125 acres of land for use as a golf course, upon • the terms described in the Waste Disposal Agreement. 4.2 Additional Rent. All amounts which IESI is required to pay pursuant to this Lease, including but not limited to reimbursements for permitting and construction costs incurred (subject to IESI's approval) by City on behalf of IESI, shall constitute additional rent ("Additional Rent"). IESI shall perform all its obligations under this Lease at its sole cost and expense, and shall pay all Consideration and Additional Rent when due. ARTICLE V USE; INSPECTION: TITLE TO IMPROVEMENTS 5.1 Use. The IESI may use the Existing Landfill for the re -opening, operation, maintenance, and expansion of the Existing Landfill as a Type I landfill, and for all ancillary purposes related thereto. The City covenants that, for so long as IESI is not in breach or in default of any of its obligations under the Transaction Documents, neither City nor anyone claiming by, through or 214321.E 4� under City shall interfere with use or possession of the Existing Landfill during the Term of this Lease. On the Occupancy Date, City shall deliver possession of the Existing Landfill to IESI free of any rights or claims of any other parties. 5.2 Inpection. Notwithstanding the provisions of Section 5.1, City, and its respective agents may enter upon and inspect the Existing Landfill at any reasonable time during normal business hours, upon the giving of reasonable notice (in no event less than forty-eight hours advance notice), the execution by such party or parties of a liability waiver and release agreement acceptable to IESI, and provided precautions are taken not to unreasonably inconvenience IESI or any persons occupying the Existing Landfill in accordance with this Lease or unreasonably interfere with IESI's business operations, and such persons are accompanied by an employee or other representative of IESI at all times during such entry and inspection. 5.3 Title to Improvements. It is expressly agreed that any and all buildings, improvements, fixtures, machinery and equipment of whatsoever nature at any time constructed, made, installed, placed or maintained by IESI upon the Existing Landfill (collectively, the "Improvements") (a) are not the subject of this Lease; (b) shall be and remain the property of IESI; and (c) may be removed from the Existing Landfill by IESI at the expiration of the Term or earlier termination of this Lease. ARTICLE VI PERMITTING; COOPERATION 6.1. Permits, Upon IESI's request, City shall file for and use reasonable efforts to obtain the issuance of any and all Government Agency permits, licenses, certificates and approvals that are required in connection with the uses permitted in this Lease (hereinafter collectively referred to as the "Permits"). City shall provide the services of its employees in this respect at City's sole cost and expense. IESI shall, on the other hand, be solely responsible for all reasonable and necessary out-of-pocket costs (not otherwise incurred by City), filing fees, issuance fees, charges and other fees and expenses levied, assessed or required by such Government Agencies, and other fees and charges, including but not limited to, fees and charges for consultants and other contract services incurred by City in connection with the Permits. IESI shall reimburse City, upon request, for any such reasonable fees, charges, expenses, costs, payments and/or advances therefor made and/or incurred by City. IESI shall, at its own cost and expense, cooperate with and assist City to the fullest extent in the obtaining of all necessary Permits. 6.2 Cooperation of the Parties. City and IESI shall cooperate with each other in connection with the Permits and any proposed expansion of the Existing Landfill to include adjoining lands acquired or controlled by IESI. ARTICLE VII RIGHTS AND OBLIGATIONS 7.1 Pro�erty Taxes. Subject to Section 7.2, City shall pay, on a timely basis, all taxes, assessments, levies, fees and similar charges, general and special, ordinary or extraordinary levied or assessed by any Government Agency, including any interest and penalties thereon, 214321.E 0 r (collectively "Taxes") against the Existing Landfill. Subject to Section 7.2, IESI shall pay, on a timely basis, all Taxes, and any interest and penalties thereon, which are levied or assessed against IESI's personal property located on the Existing Landfill, which become due and payable during the Term of this Lease. IESI shall be responsible for filing with all applicable Government Agencies for property tax purposes the required renditions of IESI's personal property. IESI will provide City with copies of all such renditions contemporaneously with the filing of same with the applicable Government Agencies. In the event that any of the tax bills issued by the applicable Government Agency shall cover Taxes to be paid by both parties, the parties shall cooperate with each other so that the Taxes to be paid by each party are paid simultaneously. If any Tax to be paid by IESI hereunder may be paid early or prepaid for purposes of receiving a discount, IESI shall have the option to pay early or prepay such Tax and shall be entitled to the benefit of such discount allocable to that portion of the Tax required to be paid by IESI hereunder. Anything in the preceding sentences or in this Lease to the contrary notwithstanding, nothing in this Lease shall require payment the IESI of any income (including capital gain), franchise, transfer or similar taxes of the City. Any amounts to be paid by IESI hereunder shall be apportioned between the City and the IESI as of the date on which this Lease terminates or expires. 7.2 Permitted Contests. (a) IESI shall not be required, nor shall City have the right, to pay any Taxes which are required to be paid by IESI hereunder, as long as IESI shall contest the existence, amount or validity thereof by appropriate proceedings which shall prevent the collection of or other realization upon the Taxes so contested. At the request of the IESI, City shall cooperate with IESI, at IESI's expense, in connection with the prosecution of any contests hereunder. (b) City shall not be required, nor shall IESI have the right, to pay, discharge or remove any Taxes, liens or encumbrances which are required to be paid, discharged or removed by City hereunder, as long as City shall contest the existence, amount or validity thereof by appropriate proceedings which shall prevent the collection of or other realization upon the Taxes, liens or • encumbrances so contested, and which also shall prevent the sale, forfeiture or loss of the Existing Landfill to satisfy the same or any Laws, and which shall not affect the payment of any sum required to be paid by City hereunder; provided further that such contest shall not subject IESI to the risk of any criminal liability or any material civil liability. City shall provide adequate assurance to IESI that such Taxes, liens or encumbrances shall be paid at the conclusion of such contest if deemed to be owed, and that such Laws shall be complied with at the conclusion of such contest if deemed to be valid and applicable to the ownership of the Existing Landfill or the use thereof or the operations and business conducted thereon. At the request of the City, IESI shall cooperate with City, at CO ty's expense, in connection with the prosecution of any contests hereunder. 7.3 Operations. During the term of this Lease and until such permit is obtained in IESI's name or assigned to IESI, IESI may continue to operate the Existing Landfill under the City's 214321.6 G. existing permit from the TN CC, provided IESI will be responsible for all operational expenses with the exception of those expenses subject to the provisions of Article IX below. 7.4 Additions and Alterations. IESI may make additions to and alterations of the Improvements at any time located or constructed on the Existing Landfill, construct additional improvements on the Existing Landfill, and IESI may remove and make substitutions and replacements for the same. ARTICLE VIII USE OF TANGIBLE ASSETS; OPERATION OF THE EXISTING LANDFILL 8.1 Tangible Assets. During the Term of this Lease, IESI shall have the right to receive the benefits of those of City's tangible assets, facilities and infrastructure located at the Existing Landfill. Tangible Assets shall include, without limitation, City's equipment (such as any systems for disposing of natural gas, any vent system(s), equipment providing access to utilities, emergency response equipment, and security systems) all of the foregoing of which are in existence at the Landfill as of the effective date of this Lease; provided, however, that, IESI shall reimburse City for the depreciated cost of any Tangible Asset damaged by IESI's use pursuant to this Section 8.1. ARTICLE IX EXISTING CONDITIONS . 9.1 Existing Conditions. City agrees that it will remain responsible for any Existing Conditions. If any federal, state or local agency requires any investigation, monitoring, inspection, remediation, or other corrective action relating to or arising from any Existing Conditions, City agrees to undertake any such actions and complete the same in compliance with all applicable Environmental Laws and to the satisfaction of the TNRCC as evidenced in writing by a no further action letter or other document indicating the same. Further, City agrees to waive, discharge, and release, and covenants not to sue, IESI for any claims or causes of action, whatsoever in nature, known or unknown, whether past, present, or future, based on, arising from, or related to Existing Conditions. 9.2 Survival. The responsibility described in Section 9.1 shall survive the expiration or termination of this Lease and the other Transaction Documents. ARTICLE X INSURANCE 10.1 Insurance. During the Term of this Lease, each party, at its own cost and expense, will at all times carry and maintain, or cause to be carried and maintained, such liability, environmental, workers compensation and other insurance as is appropriate to the conduct of such parry's operations and financial condition and consistent with the amount and scope of insurance typically carried by other entities with similar liabilities and financial conditions. 214321.E ARTICLE XI DEFAULTS 11.1 Defaults. IESI shall be in Default under this Lease upon the occurrence and continuation A any of the following Events of Default beyond any applicable notice or time periods: (a) Nonpayment of any amount due hereunder which continues for thirty (30) days after receipt of notice of nonpayment. (b) Material nonperformance of or noncompliance with any material obligation or covenant contained herein or in any other Transaction Document, which nonperformance or noncompliance continues for sixty (60) days after receipt of written notice thereof, except IESI shall not be in Default under this Lease provided IESI commences to cure such nonperformance or noncompliance during such sixty (60) day period and uses reasonable efforts to cure the nonperformance or noncompliance as soon as is reasonably practicable. (c) If any warranty or representation contained herein proves to have been false in any material respect when made or furnished. 11.2 City Default. City shall be in Default under this Lease upon the occurrence and continuation of any of the following Events of Default beyond any applicable notice of time periods: (a) Immediately, upon disturbance of IESI in its possession of the Existing Landfill or a violation of the covenants described in Section 5.1 of this Lease. (b) Failure to promptly and diligently take responsibility for any Existing Condition pursuant to Section 9.1. (c) Iyonperformance of or noncompliance with any material obligation or covenant contained herein or in any other Transaction Document, which nonperformance or noncompliance continues for sixty (60) days after receipt of written notice thereof. (d) If any warranty or representation contained herein proves to have been false in any material respect when made or furnished. 11.3 Default Remedies. Upon an Event of Default, City may, as its sole and exclusive remedy, terminate this Lease by providing written notice thereof to IESI. In such case, IESI shall have sixty (60) days to vacate the Existing Landfill and remove any equipment that it desires to remove. Upon Default by City, IESI may suspend all further performance of its obligations under the Lease and/or the Waste Disposal Agreement without liability to City until such time as City cures the Event of Default, may terminate the Transaction Documents or may seek any other remedy available in law or equity. ARTICLE XII ASSIGNMENT; SUBLETTING; TRANSFER 12.1 Assignment; Subletting; Transfer by IESI. IESI shall have the right to assign, sublet, or transfer, this Lease or any of the rights and obligations of IESI hereunder, directly or indirectly, to any other person or entity without the prior written consent of City, including, without limitation, pledging the Lease as security or collateral for any lending transaction. Upon assignment or transfer, IESI shall be relieved of any further obligations under this Lease provided the Assignee agrees to assume IESI's obligations hereunder. 12.2 Assignment; Transfer bOLCity. City shall not have the right to sell, transfer or assign the Existing Landfill or this Lease or any of the rights and obligations of City hereunder without the prior written consent of IESI (which may be granted, conditioned or withheld in IESI's sole discretion). 12.3 Effect of Prohibited Assignment. Any attempted assignment, sublease or transfer, er disposal of the Existing Landfill, the Lease and/or any rights and obligations thereunder, otherwise than as permitted by Section 12.1 or 12.2, as applicable, shall be void and of no force and effect. ARTICLE XIII MISCELLANEOUS 13.1 Counterparts. This Lease may be executed in any number of counterparts, each of which shall be an original, and such counterparts shall together constitute one and the same instrument. 13.2 Estoppels. Each party hereto agrees that at any time and from time to time during the Term of this Lease, it will promptly, but in no event later than thirty (30) days after request by the other parry hereto, execute, acknowledge and deliver to such other parry or to any prospective purchaser, assignee or mortgagee or third party designated by such other party, a certificate stating (a) that this Lease is unmodified and in force and effect (or if there have been modifications, that this Lease is in force and effect as modified, and identifying the modification agreements), (b) the date to which Rent has been paid; (c) whether or not to the best knowledge of the certifying party, the other party is then in default in the performance of any covenant, agreement or condition contained in this Lease, and, if there is any such default, specifying the nature and extent thereof; and (d) a statement of the address to which notices to the certifying party should be sent. 13.3 Surrender by IESI. Upon the expiration or termination of this Lease, IESI shall peaceably leave and surrender the Existing Landfill to City within sixty (60) days thereof; provided, however that IESI and its successors and assigns shall have an easement or irrevocable license to enter and cross the Existing Landfill, by vehicle or on foot, for the purpose of accessing any adjacent property or landfill facilities owned by it for commercial operations, maintenance and closure. Upon IESI's request, City will execute an instrument in form and substance acceptable to IESI memorializing such easement or license. Notwithstanding anything to the contrary contained in this Lease, any property not removed from the Existing Landfill within such sixty (60) day period shall become the property of City. Any costs and expenses 214321.E 10 of removing any detachable equipment, machinery or personal property of IESI shall, at all times, be borne by IESI. The provisions of this Section 13.3 shall survive the termination or expiration of this Lease. 13.4 Amendments; Modifications; Non -Waiver. No term or provision of this Lease may be amended, modified, supplemented, waived, discharged or terminated except by an instrument in writing, dated, acknowledged as an amendment to this Lease and signed by both parties hereto. No waiver of any covenant of this Lease or a breach of such covenant shall constitute a waiver of any other covenant or any other breach of said covenant. 13.5 Severabili�; Reformation; Interpretation. If any provision of this Lease is determined to be invalid or unenforceable, the remainder of this Lease, shall not be affected thereby, and the invalid or unenforceable provision shall be reformed to the minimum extent necessary to make the provision valid and enforceable. To the extent of any inconsistency between the two, the provisions of the Waste Disposal Agreement shall control over the provisions of this Lease. . 13.E Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been given (a) if mailed by first class registered or certified mail, postage prepaid, upon actual receipt or refusal to accept, or (b) if deposited for overnight delivery with a nationally recognized courier service, upon actual receipt or refusal to accept, or (c) if delivered by hand or in the form of a facsimile transmission (subject to confirmation of receipt), when received, in each case addressed or directed as follows: City: Attention. Telephone. Facsimile: IESI: 3300 North Beach Street Haltom City, TX 76117 Attention: Charles F. Flood Telephone: (817) 222-2221 Facsimile: (817) 222- Upon giving not less than fifteen (15) days written notice to the other parry, the City and the IESI shall each have the right to change its notice address in the manner specified above. 13.7 Governing Law. This Lease shall be construed, governed by and administered in accordance with the laws of the State of Texas. 13.8 Relationship of the Parties. The execution and delivery of this Lease shall not be deemed to create a partnership, agency or other business relationship between City and IESI, other than the tenancy created hereunder. 13.9 Recording. Promptly upon the request of either party, the parties agree to execute and acknowledge a Memorandum of this Lease in form sufficient for recording in the Deed Records of Denton County, Texas. N WITNESS WIIEREOF, the parties hereto have caused this Lease to be executed and delivered by their duly authorized representatives as of the day and year first above written. CITY By: City Attorney Name: City Secretary • Title: IESI Charles F. Flood, President EXHIBIT "D" SPECIAL WARRANTY DEED THE STATE OF TEXAS § COUNTY OF DENTON § KNOW ALL PERSONS BY THESE PRESENTS: INDEPENDENT ENVIRONMENTAL SERVICES, INC., a Texas corporation ("Grantor"), for and in consideration of the sum of TEN AND N0/100 DOLLARS ($10.00) cash and other good and valuable consideration to it paid by THE CITY OF SANGER, TEXAS, a municipal corporation of Denton County, Texas ("Grantee"), whose mailing address is P.O. Box 578, Sanger, Texas 76266, Attention: City Secretary, the receipt and sufficiency of which are hereby acknowledged and confessed, has GRANTED, BARGAINED, SOLD, and CONVEYED, and by these presents does GRANT, BARGAIN, SELL, and CONVEY unto the Grantee that certain tract of land ("Land") described in Exhibit "A" hereto, together with all improvements, if any, thereon and all rights and appurtenances appertaining thereto (herein collectively called the "Property"). This conveyance is given and accepted subject to any matters of record affecting title to the Property (herein called the "Permitted Encumbrances") and to the right of re-entry in favor of Grantor set out below. TO HAVE AND TO HOLD the Property, unto Grantee, its legal representatives, successors, and assigns forever, so long as Grantee (1) commences construction of a golf course on the Land within six (6) months of the Effective Date, (2) completes the construction of a golf course on the Land within two (2) years after the commencement of the golf course construction, (3) uses the Land for no purpose other than the operation of a golf course operated on an "open to the public" basis, and (4) continuously operates the golf course on an "open to the public" basis (the "Conditions Subsequent"). If Grantee fails to comply with any of Conditions Subsequent, Grantor has a right to re-enter and re -take the Property, and, the Grantee agrees, upon request of Grantor to execute such documents as reasonably requested by Grantor to evidence a return of title to the Property to Grantor. It is understood that (a) for the purposes of condition (4) above, Grantor shall only have the right to re-enter and retake the Property if the Grantee does not operate the golf course on an "open to the public" basis for either (i) more than four (4) consecutive months, or (ii) for more than one hundred twenty (120) days in any three hundred sixty-five (365) day period, and (b) condition(4) above shall only exist for a period of twenty (20) years after the Effective Date. It is the intent of Grantor and Grantee to create a fee simple estate subject to conditions subsequent, so that, if Grantee fails to comply with the Conditions Subsequent, Grantor, its successors or assigns may re-enter the Property and terminate Grantee's fee simple estate therein. Grantor does hereby bind itself, and its legal representatives, successors, and assigns to WARRANT AND FOREVER DEFEND all and singular the Property, subject to the Permitted Encumbrances and the Conditions Subsequent, unto Grantee, its legal representatives, successors, and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof, by, through or under Grantor, but not otherwise. 215969.2 EXECUTED to be effective as of the "Effective Date"). Attest: City Secretary Approved as to Form. City Attorney day of , 1998 (the GRANTOR: INDEPENDENT ENVIRONMENTAL SERVICES, INC. By: Charles F. Flood, President GRANTEE: THE CITY OF SANGER, TEXAS THE STATE OF TEXAS § COUNTY OF TARRANT § This instrument was acknowledged before me on the day of , 1998, by Charles F. Flood, President of INDEPENDENT ENVIRONMENTAL SERVICES, INC., on behalf of said corporation. Notary Public, State of Texas THE STATE OF TEXAS § COUNTY OF DENTON § This instrument was acknowledged before me on the day of 1998, by , CITY OF SANGER, TEXAS., on behalf of said municipality. Notary Public, State of Texas After recording, return to: Christian Brose, Esq. Kelly, Hart &Hallman, P.C. 201 Main Street, Suite 2500 Fort Worth, Texas 76102 215969.2 of THE r EXHIBIT "A" PROPERTY DESCRIPTION 215969.2 �v j MAIN NUMBER 940-565-8556 METRO 940430-1751 Chief Bennie Erwin Sanger Police Department P.O. Box 578 Sanger, Texas 76266 Fax: 940-458-4180 BRLJCE ISAACKS CRIMINAL DISTRICT ATTORNEY P.O. BOX 2344 DENTON, TEXAS 76202 February 24, 1998 Re: Officer Stephen Lehotsky and Officer B.J. Thorne ; Case: State of Texas vs. Rogelio Martinez; Offense: Injury to a Child - Recklessly Causing Bodily Injury - State Jail Felony . Dear Chief Bennie Erwin HOT CHECKS 940-565-8557 FAX 940-565-8588 I recently prosecuted the above named defendant on a charge of Injury to a Child. Two of the officers came from your department. I would like to formally commend Officer Lehotsky and Officer Thorne on a job well done. Both Officers did an impressive job at the scene and on the witness stand. In addition, both officers were very interested in what they could do to improve their performance on upcoming cases. They were also very cooperative during the trial and were willing to go out of the way to make sure that we had everything we needed to successfully prosecute the case. The jury found the defendant guilty in less than thirty minutes on a case that I had questions about when I first looked at the file. I respectfully request that this letter be placed in each of their files for permanent record. Please commend your officers on their profassicnalism «nd hard r�ork and pass on my persona! gratitude to both of them. Si Patrick D. Ber _ Assistant riminal District Family Violence Unit