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CP 2006-06-27 NOTICE OF CITY COUNCIL MEETING AND AGENDA JUNE 27, 2006 DOUG STOVER, BILLY FAUGHT, Place 5 Mayor Mayor Pro Tem TIM BRANCHEAU, Place 1 MARSHA TUNNELL, Place 4 JAYNE PETERS, Place 2 MARVIN FRANKLIN, Place 6 BRIANNA HINOJOSA-FLORES Place 3 BILL YORK, Place 7 JIM WITT, City Manager MEETING TIME AND PLACE: Call to Order 5:30 p.m. Council Chambers (Open to the Public) Executive Session Immediately Following 1st Fl. Conf. Room (Closed to the Public) Work Session Immediately Following 1st Fl. Conf. Room (Open to the Public) Regular Session 7:00 p.m. Council Chambers (Open to the Public) Notice is hereby given that the City Council of the City of Coppell, Texas will meet in Regular Called Session on Tuesday, June 27, 2006, at 5:30 p.m. for Executive Session, Work Session will follow immediately thereafter, and Regular Session will begin at 7:00 p.m., to be held at Town Center, 255 Parkway Boulevard, Coppell, Texas. As authorized by Section 551.071(2) of the Texas Government Code, this meeting may be convened into closed Executive Session for the purpose of seeking confidential legal advice from the City Attorney on any agenda item listed herein. The City of Coppell reserves the right to reconvene, recess or realign the Work Session or called Executive Session or order of business at any time prior to adjournment. The purpose of the meeting is to consider the following items: ITEM # ITEM DESCRIPTION REGULAR SESSION (Open to the Public) 1. Call to order. ag062706 Page 1 of 6 ITEM # ITEM DESCRIPTION EXECUTIVE SESSION (Closed to the Public) 2. Convene Executive Session A. Section 551.071, Texas Government Code - Consultation with City Attorney. 1. The City of Coppell and Coppell Independent School District opposition to a change of zoning request of the Billingsley Corporation in the City of Dallas, Zoning Case Number Z045- 107; and City of Coppell vs. CB Parkway Business Center VI, et al in the County Court at Law No. 3,; and CB Parkway Business Center, et al vs. City of Coppell, et al.; and City of Dallas vs. Douglas Stover, et al in the 191st District Court; and City of Coppell, et al vs. City of Dallas, et al in the 101st District Court. B. Section 551.087, Texas Government Code – Economic Development Negotiations. 1. Economic Development Prospects on the west side of Coppell. WORK SESSION (Open to the Public) 3. Convene Work Session A. Discussion regarding Fence Ordinance. B. Presentation by Coppell PD on underage drinking strategy. C. Review FY’07 Council Goals and associated staff work plan. D. Discussion of Agenda Items. Adjourn Work Session. PUBLIC ANNOUNCEMENTS Public Service Announcements concerning local civic events and no Council action is required or permitted. REGULAR SESSION (Open to the Public) 4. Convene Regular Session. 5. Invocation. 6. Pledge of Allegiance. ag062706 Page 2 of 6 ITEM # ITEM DESCRIPTION 7. Annual update by Judge Marian Moseley regarding the Coppell Municipal Court. 8. Citizen's Appearances. CONSENT AGENDA 9. Consider approval of the following consent agenda items: A. Consider approval of minutes: June 13, 2006. B. Consider approval of a Resolution supporting the North Central Texas Council of Governments’ regional policy position regarding the proposed Trans-Texas Corridor, and authorizing the Mayor to sign. C. Consider approval of a Resolution denying the request by Atmos Energy Corporation to increase gas utility rates within the City of Coppell, providing for notice hereof to said company, and authorizing the Mayor to sign. D. Consider approval of an Ordinance denying the request by Atmos Energy Corporation to implement an annual gas reliability infrastructure program rate increase for the third consecutive year, providing for notice hereof to said company, and authorizing the Mayor to sign. E. Consider approval of entering into a supplemental agreement with TXU Electric Delivery Company for street lighting services on East Sandy Lake Road, from Kimbel Kourt to the east city limit line, in an amount of $59,972.96 as provided for in CIP funds; and authorizing the City Manager to sign. F. Consider approval of a resolution authorizing the filing of a project funds application with the North Central Texas Council of Governments for a regional solid waste management local project, and authorizing the Mayor to sign. END OF CONSENT ag062706 Page 3 of 6 ITEM # ITEM DESCRIPTION 10. Consider and authorize City Manager to negotiate and execute a purchase and sale agreement, and any other necessary agreements and instruments related thereto, and the Mayor is authorized to execute the appropriate conveyance for the transfer of Lot 1, Black A of the Crescent Addition, approximately 2.1898 acres of land, to the Coppell Economic Development Foundation, acting as an independent foundation, for the resale of such property to Coppell Hard Eight, Ltd. for the construction of a restaurant. 11. PUBLIC HEARING: Consider approval of the designation of a reinvestment zone pursuant to Section 312.201 of the Property Redevelopment and Tax Abatement Act. The property to be considered for Reinvestment Zone designation is the property described as Lot 1, Block A of Crescent Addition (2.1898 acres), located at the southeast corner of Freeport Pkwy and Bethel Rd, Coppell, Texas. 12. Consider approval of an Ordinance designating Coppell Hard Eight, Ltd., Reinvestment Zone No. 49, and authorizing the Mayor to sign. 13. Consider approval of a Resolution approving a Tax Abatement Agreement between the City of Coppell and Coppell Hard Eight, Ltd., and authorizing the Mayor to sign. 14. Discuss and consider approval of an Economic Development Agreement by and between the City of Coppell and C oppell Hard Eight, Ltd., and authorizing the Mayor to sign. 15. Necessary action resulting from Work Session. 16. City Manager's Report. A. Water Usage Update. 17. Mayor and Council Reports. A. Report by Mayor Stover regarding 4th of July activities. 18. Council Committee Reports. A. Carrollton/Farmers Branch ISD/Lewisville ISD - Councilmember Tunnell. B. Coppell ISD - Mayor Pro Tem Faught and Councilmember York. C. Coppell Seniors – Mayor Pro Tem Faught and Councilmember Brancheau. D. Dallas Regional Mobility Coalition - Councilmember Peters. ag062706 Page 4 of 6 ITEM # ITEM DESCRIPTION E. Economic Development Committee - Councilmembers Peters and Franklin. F. Metrocrest Hospital Authority - Councilmember Tunnell. G. Metrocrest Medical Foundation - Councilmember Hinojosa-Flores. H. Metrocrest Medical Services - Councilmember Hinojosa-Flores. I. Metrocrest Social Service Center – Councilmember York. J. North Texas Council of Governments - Councilmember Peters. K. NTCOG/Regional Emergency Management – Councilmember Franklin. L. North Texas Commission - Councilmember Brancheau. M. Senior Adult Services - Mayor Pro Tem Faught. 19. Necessary Action Resulting from Executive Session. Adjournment. ________________________________ Douglas N. Stover, Mayor CERTIFICATE I certify that the above Notice of Meeting was posted on the bulletin board at the City Hall of the City of Coppell, Texas on this _________ day of _________________, 2006, at __________________. ________________________________ Libby Ball, City Secretary ag062706 Page 5 of 6 DETAILED INFORMATION REGARDING THIS AGENDA IS AVAILABLE ON THE CITY'S WEBSITE (www.ci.coppell.tx.us) UNDER PUBLIC DOCUMENTS, COUNCIL PACKETS. PUBLIC NOTICES STATEMENT FOR ADA COMPLIANCE The City of Coppell acknowledges its responsibility to comply with the Americans With Disabilities Act of 1990. Thus, in order to assist individuals with disabilities who require special services (i.e. sign interpretative services, alternative audio/visual devices, and amanuenses) for participation in or access to the City of Coppell sponsored public programs, services and/or meetings, the City requests that individuals make requests for these services forty-eight (48) hours ahead of the scheduled program, service and/or meeting. To make arrangements, contact Vivyon V. Bowman, ADA Coordinator or other designated official at (972) 462-0022, or (TDD 1-800-RELAY, TX 1-800-735-2989). IN COMPLIANCE WITH CITY OF COPPELL ORDINANCE NO. 95724 Carrying of a concealed handgun on these premises or at any official political meeting in the City of Coppell is illegal. Es ilegal llevar consigo un arma de fuego oculta, adentro de este edificio, o en cualquier junta oficial de politica en la ciudad de Coppell. ag062706 Page 6 of 6 KEY TO COUNCIL GOALS ICONS 2006 Economic Development • Aggressively pursue development partnership on Lesley tract • Analyze large tract development opportunities • Continue “hot spot” focus • Develop strategy for use/sale of city-owned property • Study revenue enhancements • Continue focus on vacant retail revitalization Quality Public Facilities & Infrastructure • Examine funding opportunities for IMF • Study continued use of ½-cent sales tax for parks • Continue focus on local and regional transportation efforts • Provide quality park and recreation facilities for all Excellent City Services & High Citizen Satisfaction • Continue strategic planning for future costs of service delivery • Timely response with quality service delivery • Initiate review and revisions of Code of Ordinances • Develop methods to enhance communication efforts • Promote citizen involvement • Examine our effectiveness at participating in state/federal legislative process Sense of Community • Develop and support community special events • Develop and support activities for teens • Embark on a “Coppell 2025” vision effort • Continue to evaluate cemetery issue • Evaluate services and programs for our senior adult community • Continue to partner with taxing entities serving our community, particularly our ISD’s Fiscal Stability • Continue and refine financial planning and forecasting • Continue systematic management and reduction of debt and expenditures • Balance expenditures with ability to maintain over time • Perform cost analysis on all approved projects and programs prior to implementation • Protect the sales tax base from Streamlined Sales Tax initiative • Remain aware of external factors and developments that potentially impact the financial condition of the city Neighborhood Integrity & Code Enforcement • Maintain communication with neighborhoods and the community • Update the Master Plan and Zoning as required • Continue proactive neighborhood integrity programs • Access HOA common area maintenance expectations and obligations Safe Community • Maintain and improve existing excellent level of service • Continue focus on Homeland Security • Provide quality public education programs • Continue traffic/speed control efforts DEPT: City Manager DATE: June 27, 2006 ITEM #: ES-2 AGENDA REQUEST FORM EXECUTIVE SESSION A. Section 551.071, Texas Government Code – Consultation with City Attorney. 1. The City of Coppell and Coppell Independent School District opposition to a change of zoning request of the Billingsley Corporation in the City of Dallas, Zoning Case Number Z045-107 and City of Coppell vs. CB Parkway Business Center VI, et al in the County Court at Law No. 3, and CB Parkway Business Center et al vs. City of Coppell, et al. 2. Discussion with City Attorney regarding local regulation of alcoholic beverages pursuant to Section 109.031, et seq. of the Texas Alcoholic Beverage Code. B. Section 551.087, Texas Government Code – Economic Development Negotiations. 1. Economic Development Prospects on the west side of Coppell. Agenda Request Form - Revised 02/04 Document Name: %executivesession DEPT: City Secretary DATE: June 27, 2006 ITEM #:WS-3 AGENDA REQUEST FORM WORK SESSION A. Discussion regarding Fence Ordinance. B. Presentation by Coppell PD on underage drinking strategy. C. Review FY’07 Council Goals and associated staff work plan. D. Discussion of Agenda Items. Agenda Request Form - Revised 02/04 Document Name: %worksession MEMORANDUM TO:Mr. Clay Phillips, Deputy City Manager FROM:Kevin Richardson, Fire Chief DATE:May 18, 2006 SUBJECT:Fence Ordinance While reviewing Article 9-2 of the City of Coppell Code of Ordinances, staff discovered several areas that City Council should provide feedback. Staff reviewed the fence ordinances from Allen, Farmers Branch, Flower Mound, Frisco, Grapevine and Irving to look for new trends. First area of discussion is regarding the public view of the fence. Irving and several other cities’ HOA’s have determined the finished side of the fence should be the side visible to the public rights of ways. Currently, our ordinance does not specify which side of the fence is exposed to the public view. Without being specific, we get inconsistent installation. Next area of discussion is the support material. Currently our ordinance specifies the use of wood or metal posts. The city of Irving specifies the use of metal posts exclusively. Staff believes the metal posts are sturdier and will provide a longer lasting product. Game fences are another potential discussion point. Ordinance currently restricts fences to a maximum height of 8-feet, other communities (Flower Mound, Grapevine and Irving) allow 12-foot game fences as long as they are placed in specific areas. The disapproval of electrified fences was inadvertently omitted from the latest fence ordinance and will need to be replaced. We have a brief powerpoint presentation available and are available if you have any additional questions or comments. Attachment SUMMARY OF FENCE ORDINANCE Cities Surveyed Allen, Farmers Branch, Flower Mound, Frisco, Grapevine and Irving #1 Does your city regulate which side of the fence faces the public rights-of-way? #2 Does your city regulate the type of support material used for typical residential fence? #3 Does your city allow game fences (ie, tennis or basketball court)? #4 Does your city allow electrified fences? Farmers Flower Allen Branch Mound Frisco Grapevine Irving #1 NO* NO NO* NO* NO YES #2 NO* NO NO NO NO YES** #3 NO NO YES*** NO YES YES**** #4 NO NO NO NO NO NO * Some of the Home Owner Associations have written specifications in the covenants. ** Metal support posts only, treated wood posts no longer permitted. *** Ten (10) feet maximum height. **** Twelve (12) feet maximum height. DEPT: City Manager DATE: June 27, 2006 ITEM #: 7 AGENDA REQUEST FORM ITEM CAPTION: Annual update by Judge Marian Moseley regarding the Coppell Municipal Court. GOAL(S): EXECUTIVE SUMMARY: FINANCIAL COMMENTS: Agenda Request Form - Revised 09/04 Document Name: !Judge DEPT: City Manager DATE: June 27, 2006 ITEM #: 8 AGENDA REQUEST FORM CITIZENS' APPEARANCES ORDINANCE NO. 2001-964 AN ORDINANCE OF THE CITY OF COPPELL, TEXAS, ESTABLISHING RULES, TIMES AND PROCEDURES FOR CONDUCTING CITY COUNCIL MEETINGS. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS, THE FOLLOWING ARE HEREBY ADOPTED AS THE RULES, TIMES AND PROCEDURES FOR CONDUCTING COUNCIL MEETINGS OF THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS: The City of Coppell Code of Ordinances, Article 1-10 "Rules, Times and Procedures for Conducting City Council Meetings," be, and the same is hereby, amended to read as follows: "ARTICLE 1-10 RULES, TIMES AND PROCEDURES FOR CONDUCTING CITY COUNCIL MEETINGS ". . . 1-10-6.2.1 CITIZENS APPEARANCE Persons wishing to speak on any matter other than an item scheduled for a public hearing on the agenda, must sign a register and list their residence address, provided by the City Secretary on a table outside the Council Chambers, and such persons may be heard only at the "Citizens Appearance" portion of a regular meeting or special meeting. Each speaker must state his or her name and address of residence. Presentations by individuals during the "Citizens Appearance" shall be limited to two (2) minutes each. An individual speaker's time may be extended for an additional two (2) minutes with the approval of a majority of the Council members present. There shall be a cumulative limit of twenty (20) minutes allotted of any regular or special Council meeting. Those persons who signed up to speak at the "Citizens Appearance" shall be called upon in the order that they have signed the provided register. No personal attacks by any speaker shall be made against any member of the Council, Mayor, individual, group or corporation (Charter Article 3, Section 3.12). Agenda Request Form - Revised 09/02 Document Name: %citapp.doc DEPT: City Secretary DATE: June 27, 2006 ITEM #: 9/A AGENDA REQUEST FORM ITEM CAPTION: Consider approval of minutes: June 13, 2006. GOAL(S): EXECUTIVE SUMMARY: FINANCIAL COMMENTS: Agenda Request Form - Revised 02/04 Document Name: %minutes MINUTES OF JUNE 13, 2006 The City Council of the City of Coppell met in Regular Called Session on Tuesday, June 13, 2006, at 5:30 p.m. in the City Council Chambers of Town Center, 255 Parkway Boulevard, Coppell, Texas. The following members were present: Doug Stover, Mayor Billy Faught, Mayor Pro Tem Tim Brancheau, Councilmember Jayne Peters, Councilmember (late arrival) Brianna Hinojosa-Flores, Councilmember Marsha Tunnell, Councilmember Marvin Franklin, Councilmember Bill York, Councilmember Also present were City Manager Jim Witt, City Secretary Libby Ball and City Attorney Robert Hager. 1. Call to order. Mayor Stover called the meeting to order, determined that a quorum was present and convened into Executive Session. EXECUTIVE SESSION (Closed to the Public) 2. Convene Executive Session A. Section 551.071, Texas Government Code - Consultation with City Attorney. 1. The City of Coppell and Coppell Independent School District opposition to a change of zoning request of the Billingsley Corporation in the City of Dallas, Zoning Case Number Z045-107; and City of Coppell vs. CB Parkway Business Center VI, et al in the County Court at Law No. 3,; and CB Parkway Business Center, et al vs. City of Coppell, et al.; and City of Dallas vs. Douglas Stover, et al in the 191st District Court; and City of Coppell, et al vs. City of Dallas, et al in the 101st District Court. B. Section 551.072, Texas Government Code – Deliberation regarding Real Property. 1. Land sale West of Coppell Road and South of Bethel. cm061306 Page 1 of 8 Mayor Stover convened into Executive Session at 5:47 p.m. as allowed under the above-stated article. Mayor Stover adjourned the Executive Session at 6:16 p.m. and opened the Work Session. WORK SESSION (Open to the Public) 3. Convene Work Session A. Discussion regarding proposed Sex Offender Ordinance. B. Discussion regarding appointment to the Economic Development Foundation. C. Discussion regarding Council Committee appointments. D. Discussion of Agenda Items. Councilmember Peters arrived during Work Session. REGULAR SESSION (Open to the Public) 4. Convene Regular Session. 5. Invocation. Pastor Rod Collver, Living Hope Church, led those present in the Invocation. 6. Pledge of Allegiance. Mayor Stover led those present in the Pledge of Allegiance. 7. Citizens' Appearances. There was no one signed up to speak under this item. CONSENT AGENDA 8. Consider approval of the following consent agenda items: cm061306 Page 2 of 8 A. Consider approval of minutes: May 18, 2006 May 23, 2006 May 30, 2006. B. Consider approval of an Ordinance for Case No. PD-212- LI, Freeport North, northern portion of Lot 1, Block 1, (CitiFinancial), zoning change request from LI (Light Industrial) to PD-212-LI (Planned Development-212-Light Industrial), to amend the approved Site Plan to allow an expansion to the off-street parking areas; to allow deficits in parking and landscaping, and to allow additional site modifications on 12.28 acres of property located at 1111 Northpoint Drive (southwest corner of Northpoint Drive and Royal Lane), and authorizing the Mayor to sign. C. Consider approval of an Ordinance for text amendments to the Coppell Zoning Ordinance to add definitions and regulations for hotels, motels and residence hotels, specifically: amending Sec. 12-42-1, Special Definitions; Sec. 12-30 Special Use Permits to allow a hotel, motel and residence hotel by Special Use Permit in “HC” and. “H” districts; delete these uses by Special Use Permit from the “O”, “R” and “C” districts; amend Sec. 28A-1 to delete these uses as permitted in the “H” district, and further to add Sec. 12-30-18 Hotel, Motel and Residence Hotel to provide development standards for these uses, and authorizing the Mayor to sign. Action: Councilmember Peters moved to approve Consent Agenda Items A, B carrying Ordinance No. 91500-A-433 and C carrying Ordinance No. 91500-A-434. Councilmember York seconded the motion; the motion carried 7-0 with Mayor Pro Tem Faught and Councilmembers Brancheau, Peters, Hinojosa-Flores, Tunnell, Franklin and York voting in favor of the motion. 9. Consider approval of Northlake 635 Business Park, Lot 2, Block B, (PSINet, Lot 1, Block A), Site Plan Amendment, to allow a two-story, 27,200-square-foot addition (13,600-square feet per cm061306 Page 3 of 8 floor) to the existing Crestside Facilities building on 6.527 acres of property located at 1333 Crestside Drive. Presentation: Gary Sieb, Director of Planning, made a presentation to the Council. Action: Councilmember Tunnell moved to approve Northlake 635 Business Park, Lot 2, Block B, (PSINet, Lot 1, Block A), Site Plan Amendment, to allow a two-story, 27,200-square-foot addition (13,600-square feet per floor) to the existing Crestside Facilities building on 6.527 acres of property located at 1333 Crestside Drive, subject to the following conditions: 1) The new addition shall be designed using brick with steel framework adjacent to fire lane, so that any potential wall failure during fire conditions will minimize chance of failure into collapse zone. 2) A tree removal permit will be required prior to start of construction. 3) Contact Jeff Curry at 972-888-1330 to discuss electric load requirements. 4) Verify all provided tree calculations for each landscaping category (Perimeter, Non-vehicular and Interior). Mayor Pro Tem Faught seconded the motion; the motion carried 7-0 with Mayor Pro Tem Faught and Councilmembers Brancheau, Peters, Hinojosa-Flores, Tunnell, Franklin and York voting in favor of the motion. 10. PUBLIC HEARING: Consider approval of Northlake 635 Business Park, Lot 2, Block B, (PSINet, Lot 1, Block A), Replat, to relocate the fire lane to accommodate the two-story, 27,200-square-foot addition (13,600-square feet per floor) to the existing Crestside Facilities building on 6.527 acres of property located at 1333 Crestside Drive. Presentation: Gary Sieb, Director of Planning, made a presentation to the Council. cm061306 Page 4 of 8 Public Hearing: Mayor Stover opened the Public Hearing and advised that no one had signed up to speak on this proposal. Action: Councilmember Tunnell moved to close the Public Hearing and approve Northlake 635 Business Park, Lot 2, Block B, (PSINet, Lot 1, Block A), Replat, to relocate the fire lane to accommodate the two-story, 27,200- square-foot addition (13,600-square feet per floor) to the existing Crestside Facilities building on 6.527 acres of property located at 1333 Crestside Drive, subject to the following conditions: 1) Water lines 10” in diameter and smaller shall be Class 200, DR-14. Please modify the utility notes accordingly. 2) Construction plans should be submitted for review and construction permit should be applied for through the Engineering Department. Councilmember York seconded the motion; the motion carried 7-0 with Mayor Pro Tem Faught and Councilmembers Brancheau, Peters, Hinojosa-Flores, Tunnell, Franklin and York voting in favor of the motion. 11. PUBLIC HEARING: Consider approval of Freeport North, Lot 1R1 and 1R2, Block 1, Replat to subdivide Lot 1 into two lots and to retain the existing developments on 27.85 acres of property located along the west side of Royal Lane between Northpoint Drive and Gateview Boulevard. Presentation: Gary Sieb, Director of Planning, made a presentation to the Council. Public Hearing: Mayor Stover opened the Public Hearing and advised that no one had signed up to speak on this proposal. cm061306 Page 5 of 8 Action: Mayor Pro Tem Faught moved to close the Public Hearing and approve Freeport North, Lot 1R1 and 1R2, Block 1, Replat to subdivide Lot 1 into two lots and to retain the existing developments on 27.85 acres of property located along the west side of Royal Lane between Northpoint Drive and Gateview Boulevard, subject to the following condition: 1) Provide a Property Association Agreement between Lots 1R1 and 1R2, Block 1 for the maintenance of the shared utilities located within the private utility easements. Councilmember Franklin seconded the motion; the motion carried 7-0 with Mayor Pro Tem Faught and Councilmembers Brancheau, Peters, Hinojosa-Flores, Tunnell, Franklin and York voting in favor of the motion. 12. Consider approval of an Ordinance of the city of Coppell making it unlawful for certain sex offenders to reside within 1,000 feet of premises where children gather, and authorizing the Mayor to sign. Presentation: City Manager Jim Witt made a presentation to the Council. Action: Councilmember Tunnell moved to approve Ordinance No. 2006-1126 of the city of Coppell making it unlawful for certain sex offenders to reside within 1,000 feet of premises where children gather, and authorizing the Mayor to sign. Councilmember Hinojosa-Flores seconded the motion; the motion carried 7-0 with Mayor Pro Tem Faught and Councilmembers Brancheau, Peters, Hinojosa-Flores, Tunnell, Franklin and York voting in favor of the motion. 13. Consider appointments to Council Committees. Presentation: Mayor Stover read the proposed appointments for the record. cm061306 Page 6 of 8 Action: Councilmember York moved to approve the following Council Committee appointments: A. Carrollton/Farmers Branch ISD/Lewisville ISD – Tunnell B. Coppell ISD – Faught and York C. Coppell Seniors – Brancheau and Faught D. Dallas Regional Mobility Coalition – Peters E. Economic Development Committee – Peters and Franklin F. Metrocrest Hospital Authority – Tunnell G. Metrocrest Medical Foundation – Hinojosa-Flores H. Metrocrest Medical Services – Hinojosa-Flores I. Metrocrest Social Service Center – York J. North Texas Council of Governments – Peters K. NTCOG/Regional Emergency Management – Franklin L. North Texas Commission – Brancheau M. Senior Adult Services – Faught Councilmember Brancheau seconded the motion; the motion carried 7-0 with Mayor Pro Tem Faught and Councilmembers Brancheau, Peters, Hinojosa-Flores, Tunnell, Franklin and York voting in favor of the motion. 14. A. Consider approval of resignation of Marvin Franklin from the Coppell Economic Development Foundation; and B. Consider approval of appointment of a member to fill the vacant unexpired Regular term on the Coppell Economic Development Foundation, term to expire July 2006. Action: Councilmember Tunnell moved to accept the resignation of Marvin Franklin from the Coppell Economic Development Foundation and appoint Bill Lowery to fill the vacancy. Councilmember Peters seconded the motion; the motion carried 7-0 with Mayor Pro Tem Faught and Councilmembers Brancheau, Peters, Hinojosa-Flores, Tunnell, Franklin and York voting in favor of the motion. 15. Necessary action resulting from Work Session. cm061306 Page 7 of 8 There was no action necessary under this item. 16. City Manager's Report. A. Water Usage Update. A. City Manager, Jim Witt gave a report on City water usage and stated that the City of Coppell is doing well with conserving water. 17. Mayor and Council Reports. A. Report by Mayor Stover regarding Metroplex Mayors’ Meeting. B. Report by Mayor Stover regarding Council Retreat. C. Report by Mayor Stover regarding Update on Beer and Wine Petition. A. The Mayor gave a report regarding the Metroplex Mayor’s Meeting and it’s guest speaker, the Publicity Director of the Collegiate Baseball League and how the level of attendance and support is very low; and the 10th Anniversary of the Dart Light Rail. B. The Mayor gave a report on the Council Retreat and what was accomplished. C. The Mayor gave a report on the Beer and Wine Petition and it’s progress and potential inclusion in the November General Election. 18. Necessary action resulting from Executive Session. There was no action necessary under this item. There being no further business to come before the City Council, the meeting was adjourned. ____________________________________ Douglas N. Stover, Mayor ATTEST: ____________________________________ Libby Ball, City Secretary cm061306 Page 8 of 8 DEPT: City Manager DATE: June 27, 2006 ITEM #: 9/B AGENDA REQUEST FORM ITEM CAPTION: Consider approval of a Resolution supporting the North Central Texas Council of Governments’ Regional policy position regarding the proposed Trans-Texas Corridor, and authorizing the Mayor to sign. GOAL(S): EXECUTIVE SUMMARY: FINANCIAL COMMENTS: Agenda Request Form - Revised 09/04 Document Name: !RTC RESOLUTION NO. ________________________ A RESOLUTION BY THE CITY OF COPPELL SUPPORTING THE NORTH CENTRAL TEXAS COUNCIL OF GOVERNMENTS’ REGIONAL POLICY POSITION REGARDING THE PROPOSED TRANS-TEXAS CORRIDOR. WHEREAS,the public policy initiatives currently included in the Dallas NAFTA Trade Corridor project are an inland/agile port system, a linear/foreign trade zone, an inland port of pre-clearance, and a cargo airport, and these initiatives will expand as the project further develops; and WHEREAS,the Dallas NAFTA Trade Corridor project relies on the current and future movement of international trade and commerce along existing infrastructure, including highway and rail, through southern Dallas County; and WHEREAS,Union Pacific Railroad invested $100 million in the southern sector of Dallas County for the Dallas Intermodal Terminal in 2005, a state-of-the-art intermodal facility that can accommodate 365,000 lifts per year; and WHEREAS,the NAFTA highway from Laredo, Texas to Detroit, Michigan and the freight movement corridor, including rail and highway, from the ports of Los Angeles and Long Beach in the west coast of the U.S. are significant contributors to economic development in Dallas County; and WHEREAS,the alignment of the Trans-Texas Corridor 35 (TTC-35) proposed by the Texas Department of Transportation and the Texas Transportation Commission in the Draft Environmental Impact Statement unveiled in April 2006 would reroute the movement of commerce and the related jobs associated therewith away from the southern sector of Dallas County; and WHEREAS,the Regional Transportation Council (RTC) and the North Central Texas Council of Governments have passed a resolution establishing a regional policy position regarding the alignment of TTC-35; and WHEREAS,the city of Coppell agrees with the policy position established by the RTC regarding TTC-35 (see attached map). NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS, THAT: The city of Coppell fully supports the Regional Transportation Council’s Regional Policy Position regarding TTC-35 and strongly encourages all other cities and counties in North Texas to do likewise. The city of Coppell supports the vision of the proposed Trans-Texas Corridor; however, opposes the proposed alignment of TTC-35 in the Draft Environmental Impact Statement unveiled by the Texas Department of Transportation (TxDOT) in April 2006, including the proposed alignments by TxDOT and Cintra/Zachary of an auto/truck corridor to the east of Dallas County and a rail corridor to the west of Tarrant County. The city of Coppell recognizes the benefits of trade and commerce, and also recognizes the need to balance the benefits of trade and commerce with the congestion and air quality issues that are also affiliated with trade and commerce. The city of Coppell, Texas circulate this Resolution widely to interested parties including the Governor of Texas, the Lieutenant Governor, the Speaker of the House, the Senate Transportation and Homeland Security Committee, the House Transportation Committee, members of the Texas Legislature, the Texas Transportation Commission, the Executive Director of the Texas Department of Transportation, the media and others, and is so accordingly ordered. DULY PASSED and approved by the City Council of the city of Coppell, Texas, on this the _______ day of June 2006. APPROVED: ___________________________________ DOUGLAS N. STOVER, MAYOR ATTEST: ____________________________________ LIBBY BALL, CITY SECRETARY APPROVED AS TO FORM: __________________________________ ROBERT E. HAGER, CITY ATTORNEY DEPT: Finance DATE: June 27, 2006 ITEM #: 9/C AGENDA REQUEST FORM ITEM CAPTION: Consider approval of a Resolution denying the request by Atmos Energy Corporation to increase gas utility rates within the City of Coppell, providing for notice hereof to said company, and authorizing the Mayor to sign. GOAL(S): EXECUTIVE SUMMARY: Based on our legal counsel's recommendation and our consultants' initial review of the rate increase filings, staff believes Atmos' rate increase request is unjustified and unreasonable. Therefore, staff is recommending the Resolution denying Atmos' system-wide rate increase request be approved. FINANCIAL COMMENTS: Agenda Request Form - Revised 09/04 Document Name: $AtmosEnergyRes-1AR 816 Congress Avenue, Suite 1900 Austin, Texas 78701 Telephone: (512) 322-5800 Facsimile: (512) 472-0532 www.lglawfirm.com Mr. Gay’s Direct Line: (512) 322-5875 Email: ggay@lglawfirm.com CONFIDENTIAL ATTORNEY/CLIENT COMMUNICATION M E M O R A N D U M TO: Atmos Cities That Did Not Pass Show Cause Resolutions FROM: Geoffrey M. Gay, Georgia Crump, Kristen Doyle DATE: June 1, 2006 RE: Denial Of Atmos Rate Increase Request Attached please find a denial resolution to be used in denying the system-wide rate increase request filed by Atmos Gas on May 31, 2006. Action must be taken before the proposed July 5, 2006 effective date or higher rates may be imposed by Atmos. According to information provided by the Company, this filing will increase the Company’s revenues by $61 million annually, or 3.6%. The average residential bill will increase 5.36%, or by approximately $4.02 per month. Commercial customers will see their average bill increase by 5.25%, or by approximately $17.16 per month. Under ordinary circumstances, our advice would be for cities to suspend the effective date to allow cities to take 90 days to study a rate filing and exercise their original jurisdiction. However, this filing by Atmos is in direct response to the actions of 88 coalition cities who exercised their original jurisdiction late last year by passing show cause resolutions requiring Atmos to justify its current rates. By agreement between the Atmos Cities Steering Committee and the Company, all 88 of the show cause cities are deemed to have reduced Atmos’ rates and eliminated GRIP surcharges effective May 31, 2006. Logically, if we were to advise you now to suspend the Company’s application, we would only be back several months from now advising you to adopt a rate ordinance consistent with the rate reduction ordinance previously adopted by show cause cities. Stated another way, Atmos’ rate filing is unusual in that it is primarily a defensive effort to support their appeal of the rate reduction ordinances passed by the show cause cities and a necessary step to guarantee that system-wide rates are implemented following a final Railroad Commission order on the appeal of city ordinances. The attached denial resolution endorses the efforts of the show cause cities to reduce Atmos’ rates, and should be used instead of the document suggested by Atmos. Since the denial of Atmos’ rate increase is not a change of Atmos’ rates, a resolution rather than an ordinance may suffice under your charter (if applicable). Additionally, ordinances may require multiple readings, but the resolution requires just one reading. You should be sure to check with your city attorney if you have any questions regarding the number of readings you will require. If you have any questions or concerns, please give one of us a call. 1668\13\Updates to Cities\mmo060601gnc RESOLUTION NO. _________________ A RESOLUTION OF THE CITY OF COPPELL ENDORSING THE EFFORTS OF THE ATMOS CITIES STEERING COMMITTEE TO REDUCE RATES OF ATMOS ENERGY CORP., MID-TEX DIVISION; DENYING ATMOS ENERGY CORP., MID-TEX DIVISION’S STATEMENT OF INTENT TO INCREASE THE GAS UTILITY RATES WITHIN THE CITY; AUTHORIZING INTERVENTION IN ANY NECESSARY PROCEEDINGS AFFECTING CITY’S INTERESTS BEFORE ADMINISTRATIVE OR JUDICIAL BODIES AND PARTICIPATION WITH THE ATMOS CITIES STEERING COMMITTEE; REQUIRING REIMBURSEMENT OF REASONABLE LEGAL AND CONSULTANT EXPENSES; FINDING THAT THE MEETING AT WHICH THIS RESOLUTION IS ADOPTED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW; AND REQUIRING DELIVERY OF THIS RESOLUTION TO THE COMPANY AND LEGAL COUNSEL. WHEREAS, the City of Coppell (“City”) is a regulatory authority under the Gas Utility Regulatory Act (“GURA”) and has original jurisdiction over the gas utility rates of Atmos Energy Corp., Mid-Tex Division (the “Company”); and WHEREAS, at least 88 Texas municipalities served by the Company required the Company to file rate filing packages with those cities to show cause regarding the reasonableness of the Company’s current rates in those cities (the “Show Cause Cities”); and WHEREAS, at least 53 Show Cause Cities have adopted ordinances reducing the Company’s rates to be charged to all customers within those cities; and WHEREAS, the Company has appealed those rate ordinances of the Show Cause Cities to the Railroad Commission of Texas under the provisions of the Gas Utilities Regulatory Act; and WHEREAS, the Company filed with the City on or about May 31, 2006, its Statement of Intent to increase gas utility rates within the City effective July 5, 2006; and 1668\14\res060601 Denial Res Non SC Cities 1 WHEREAS, the City has original jurisdiction to evaluate the Company’s request as it pertains to customers of the Company served from the distribution facilities located within the City, pursuant to GURA §§ 102.001(b) and 103.001; WHEREAS, the appeal of the Company’s Statement of Intent to increase rates will be consolidated with the appeals of the Show Cause Cities; and WHEREAS, GURA § 103.022 provides that costs incurred by the City in ratemaking activities are to be reimbursed by the regulated utility; WHEREAS, the City wishes to participate with the Atmos Cities Steering Committee (“ACSC”) and be represented by attorneys and consultants representing ACSC; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS: SECTION 1. That the City endorses the efforts of ACSC to reduce the rates charged by the Company within the boundaries of member cities. SECTION 2. That the Company’s Statement of Intent to increase gas utility rates within the City, as part of the Company’s statewide gas utility system, be denied in all respects. SECTION 3. That it is in the best interests of the customers of the Company within the City for the City to participate through the ACSC in the appeals filed by the Company to the Railroad Commission of Texas, and the City’s intervention in Railroad Commission proceedings and any litigation associated with the Company’s rates charged in the City is hereby authorized. SECTION 4. That the Company shall promptly reimburse the City’s reasonable costs associated with the City’s participation in ratemaking proceedings and associated litigation. 1668\14\res060601 Denial Res Non SC Cities 2 1668\14\res060601 Denial Res Non SC Cities 3 SECTION 5. That it is hereby officially found and determined that the meeting at which this Resolution is adopted is open to the public as required by law and the public notice of the time, place, and purpose of said meeting was given as required. SECTION 6. A copy of this Resolution shall be sent to Atmos Mid-Tex, care of Richard T. Reis, at Atmos Energy Corporation, 5420 LBJ Freeway, Suite 1800, Dallas, Texas 75240, and to Geoffrey Gay, legal counsel to ACSC, at Lloyd Gosselink Blevins Rochelle & Townsend, P.C., P.O. Box 1725, Austin, Texas 78767-1725. DULY PASSED and approved by the City Council of the City of Coppell, Texas, on this the ______ day of __________, 2006. APPROVED: ____________________________________ Douglas N. Stover, Mayor ATTEST: ____________________________________ Libby Ball, City Secretary APPROVED AS TO FORM: _____________________________ City Attorney DEPT: Finance DATE: June 27, 2006 ITEM #: 9/D AGENDA REQUEST FORM ITEM CAPTION: Consider approval of an Ordinance denying the request by Atmos Energy Corporation to implement an annual gas reliability infrastructure program rate increase for the third consecutive year, providing for notice hereof to said company, and authorizing the Mayor to sign. GOAL(S): EXECUTIVE SUMMARY: On March 31, 2006, Atmos Energy Corporation filed with the City of Coppell a request for the third consecutive year for an annual gas reliability infrastructure program (GRIP) rate increase for our customers. Based on our gas rate attorney's recommendation, the City of Coppell is being advised to deny this request. This will delay the effective date of the new surcharge and allow the City and our consultants more time to review and negotiate a possible settlement related to this filing. This GRIP rate increase request was originally suspended at the City of Coppell Council Meeting on May 23, 2006. Based on our legal counsel's recommendation and our consultants' review of the rate increase filings, staff believes Atmos' rate increase request is unjustified, unreasonable and is not in complete compliance with the GRIP statute. Therefore, staff is recommending the Ordinance denying Atmos' GRIP rate increase request be approved. FINANCIAL COMMENTS: Agenda Request Form - Revised 09/04 Document Name: $AtmosEnergy-1AR MODEL STAFF REPORT ON ATMOS MID-TEX GRIP DENIAL ORDINANCE Purpose of the Ordinance: Atmos Mid-Tex filed its third surcharge request under the Gas Reliability Infrastructure Program (“GRIP”) statute, seeking to add additional surcharges on top of the 2003 and 2004 GRIP surcharges already approved by the Railroad Commission. The 2005 surcharges are $0.51 on all residential customers, $1.75 for commercial customers, and $78.47 for industrial customers. If this third surcharge were to be approved, the total amount of surcharges resulting from the GRIP statute would be $1.09/month for residential customers, $3.68/month for commercial customers, and $151.96/month for industrial customers. The ordinance denies the 2005 surcharge request on the grounds that it does not comply with the law and is not reasonable, and also because it is duplicative of the Company’s Statement of Intent filing for the same period of time. What is GRIP: GRIP is piecemeal ratemaking and would be illegal under traditional ratemaking in the public interest. Atmos persuaded the legislature in 2003 to make an exception to the prohibition against piecemeal ratemaking to encourage increased investment in distribution pipe by allowing prompt recovery despite the possibility that increased revenues and declining costs would more than offset increased investment. Observations on the Filing: The following problems have been identified in this filing: (i) the capital structure and component costs used by Atmos do not represent Atmos Energy’s costs, but are proxies based on TXU Gas’ circumstances; (ii) the rate base amounts used show enormous and unexplained increases over the amounts in both 2003 and 2004 that are not shown to be reasonable; and (iii) the Statement of Intent filed today with the Commission and the Cities also includes Atmos’ 2005 investment, making the 2005 GRIP filing unnecessary and creating the potential for double-counting and double-recovery for this investment. Once the GRIP surcharge is in place, it is updated annually until the next general rate case; however, that next case can be delayed by the Company for more than five years. On May 31, 2006, the Company filed a Statement of Intent to increase its rates with the Railroad Commission and the Cities. The test year used for that filing is the calendar year ending December 31, 2005, which is the same period of time covered by this latest GRIP filing. Thus, the capital investment made by Atmos during 2005 is the subject of two proceedings – this GRIP filing and the Statement of Intent. Because the 2005 capital investment will be reviewed in the Statement of Intent filing, the GRIP filing for 2005 is superfluous, duplicative, and unnecessary. 1668\15\oth060531 Model Staff Report 2 Explanation of “Be It Resolved” Paragraphs: 1. This paragraph sets out the finding that the Company’s request is unreasonable, duplicative, and unnecessary. 2. This paragraph authorizes participation in a Steering Committee and coordinated control over legal counsel and consultants. 3. This paragraph notifies the Company that the City expects reimbursement of its expenses associated with its review of the filing. 4. This paragraph authorizes the City to intervene in the Company’s appeal of the ordinance to the Railroad Commission and in any related litigation. 5. This paragraph provides for an immediate effective date. 6. This paragraph cites conformance with the Open Meetings Act. 7. This paragraph directs that a copy of the signed ordinance be sent to a representative of the Company and a representative of the coalition of cities. 816 Congress Avenue, Suite 1900 Austin, Texas 78701 Telephone: (512) 322-5800 Facsimile: (512) 472-0532 www.lglawfirm.com Ms. .Crump’s Direct Line: (512) 322-5832 Email: gcrump@lglawfirm.com M E M O R A N D U M TO: All Atmos Mid-Tex Gas Cities FROM: Geoffrey Gay Georgia Crump Kristen Doyle DATE: May 31, 2006 RE: Status Update –Atmos GRIP 3 Filing CONFIDENTIAL/ATTORNEY-CLIENT COMMUNICATION Atmos GRIP 3 (2005) Filing ■ Attached is a denial ordinance that must be adopted by the City on or before July 13, 2006. By law, all cities that suspended the effective date of the GRIP 3 surcharge must take final action on or before July 13, 2006. After review of the Company’s GRIP filing for the 2005 rate year, we recommend that the City adopt the attached ordinance denying the requested surcharge. As explained further in the attached memorandum from the Cities’ consultant, and as summarized in the attached Model Staff Report: (i) the capital structure and component costs used by Atmos do not represent Atmos Energy’s costs, but are proxies based on TXU Gas’ circumstances; (ii) the rate base amounts used show enormous and unexplained increases over the amounts in both 2003 and 2004 that are not shown to be reasonable; and (iii) the Statement of Intent filed today with the Commission and the Cities also includes Atmos’ 2005 investment, making the 2005 GRIP filing unnecessary and creating the potential for double-counting and double-recovery for this investment. Notify Us As always, if you have any questions regarding anything we send to you or need additional information, please contact us or our paralegal, Barbara Kimmell, at (512) 322-5871 or bkimmell@lglawfirm.com. 1668\15\updates to cities\mmo060531 R.J. Covington Consulting, LLC (512) 331-4949 11044 Research Boulevard, Suite A-325 Fax: (512) 331-5743 Austin, Texas 78759 www.RJCovington.com May 30, 2006 MEMO TO : Geoffrey Gay, Georgia Crump FROM : Karl Nalepa SUBJECT : Atmos Energy Mid Tex 2005 GRIP Recommendation On March 31, 2006 Atmos Energy Mid Tex (Atmos) filed with Cities its latest Gas Reliability Infrastructure Program (GRIP) request to implement a surcharge to recover its incremental utility investment made during 2005, in accordance with Texas Utilities Code §104.301. This filing follows similar requests to implement a surcharge on investments made in 2003 and 2004. A summary of the request is shown in Figure 1. Figure 1 Rate Class 2003 GRIP 2004 GRIP 2005 GRIP (requested) Residential $ 0.29 $ 0.29 $ 0.51 Commercial $ 0.96 $ 0.97 $ 1.75 Industrial / Transport $31.85 $41.64 $78.47 In the two prior filings, the Cities found that the surcharges were excessive and unwarranted and denied implementation. The Company subsequently appealed the Cities’ decisions to the Texas Railroad Commission (RRC), which ultimately granted the surcharges. RJ Covington Consulting has reviewed the latest filing and based on the following reasoning, recommends that the Company’s request to implement the current GRIP surcharge be denied. Rate of Return As argued in prior filings, the parameters applied by Atmos to calculate its proposed surcharge are based on a different company - TXU Gas – from which the utility assets were acquired effective October 2004. In particular, the capital structure and component costs do not represent Atmos Energy’s costs. As a result, the filing overstates the allowed return for Atmos. An example of the impact is shown in Figure 2, where the GUD 9400 approved composite rate of return is compared to Atmos’ rate of return based on components reported in its December 31, 2005 Form 10Q. June 9, 2006 2 Figure 2 TXU Gas - GUD 9400 Atmos Energy - Form 10Q Ratio Cost Total Ratio Cost Total Debt 48.3% 6.57% 3.173% 57.12% 5.40% 3.086% Preferred Stock 1.9% 5.51% 0.105% - - - Common Equity 49.8% 10.00% 4.980% 42.88% 10.00% 4.288% Return 8.258% 7.374% Rate Base Atmos claims $117 million in incremental investment in 2005. This compares to $88 million in 2004 and $74 million in 2003. Of the 2005 total, $10.9 million is the result of plant additions assigned to Mid Tex from Atmos’ shared services. This same issue arose in the analysis of Atmos’ show cause filing, and represents plant assets of Atmos Energy that have been allocated to Mid Tex since its acquisition from TXU. Atmos has not shown that it is reasonable to recover these affiliated assets from Mid Tex ratepayers. A related rate base issue is reflected in the Company’s associated Earning Monitoring Report. The report more than tripled the booked amount of materials & supplies in rate base (from $633 thousand to $2.4 million) as a result of the assignment of Atmos’ shared services amounts. Similarly, Atmos increased prepayments in rate base by $6.9 million (from $140 thousand to $7.0 million) as a result of assigned shared services amounts. Again, these affiliated assets have not been shown to be reasonable. Pending Atmos Mid Texas Rate Filing The overriding problem with implementing the 2005 GRIP surcharge is that the GRIP investment year coincides with the test year of the imminent rate filing. Atmos’ rate filing will also include its 2005 investment, so at the very least the GRIP surcharge is unnecessary and creates the opportunity to double count return on these plant investments. If the surcharge is approved, even on an interim basis subject to refund, the Company will be allowed to collect twice on its investment until its next filed rate case some 5 or more years from now. This is clearly not in the public interest. Further, if the GRIP surcharge is approved, it would create a complicated restating of plant assets in the next rate case to undo the over-collection. This is not efficient, nor is it likely to result in refunds to the same customers that originally paid the surcharge. ORDINANCE NO. _________ AN ORDINANCE OF THE CITY OF COPPELL, TEXAS, DENYING THE REQUEST OF ATMOS ENERGY CORP., MID-TEX DIVISION, FOR AN ANNUAL GAS RELIABILITY INFRASTRUCTURE PROGRAM (GRIP) RATE INCREASE IN THIS MUNICIPALITY, AS A PART OF THE COMPANY’S STATEWIDE GAS UTILITY DISTRIBUTION SYSTEM; APPROVING COOPERATION WITH OTHER CITIES WITHIN THE ATMOS ENERGY CORP., MID-TEX DIVISION DISTRIBUTION SYSTEM AS PART OF THE ATMOS CITIES STEERING COMMITTEE (ACSC); AUTHORIZING ACSC TO HIRE LEGAL AND CONSULTING SERVICES AND TO NEGOTIATE WITH THE COMPANY AND DIRECT ANY NECESSARY LITIGATION; AUTHORIZING INTERVENTION AS PART OF ACSC IN ANY APPEAL OF THE CITY’S ACTION TO THE RAILROAD COMMISSION; PROVIDING A REQUIREMENT FOR A PROMPT REIMBURSEMENT OF COSTS INCURRED BY THE CITY; FINDING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW; AND PROVIDING FOR NOTICE OF THIS ORDINANCE TO ATMOS ENERGY CORP., MID-TEX DIVISION. WHEREAS, on or about March 30, 2006, Atmos Energy Corp., Mid-Tex Division, (the “Company”) filed with the City a request for an annual gas reliability infrastructure program (“GRIP”) rate increase for customers on the Company’s statewide gas utility system to be effective May 30, 2006; and WHEREAS, the City has exclusive original jurisdiction to evaluate the Company’s request as it pertains to the distribution facilities located within the City, pursuant to Texas Utilities Code §§ 102.001(b) and 103.001; and WHEREAS, it is reasonable for the City to cooperate with other cities in a coalition of cities in opposition to the Company’s filing at the Railroad Commission (“Commission”), said coalition being known as Atmos Cities Steering Committee (“ACSC”), in any appeal of the cities’ actions to the Commission; and WHEREAS, the Gas Utility Regulatory Act (“GURA”) grants local regulatory authorities the right to intervene in rate proceedings filed at the Railroad Commission; and WHEREAS, the Texas Utilities Code § 103.022 provides that costs incurred by the City in ratemaking activities are to be reimbursed by the regulated utility; and WHEREAS, counsel for ACSC, upon review of the Company’s filing and upon consultation with various consultants, recommends finding that the Company’s proposal is unjustified and unreasonable; and 1668\15\ord060531 Model Ordinance Denying 1 WHEREAS, the Company has publicly stated that it will receive substantial profit in 2005 and that its expenses are substantially below those on which the GUD No. 9400 rates it is charging were based; and WHEREAS, the Company’s GRIP request fails to account for growth in numbers of customers, thereby undercounting the revenues it will receive from its proposed GRIP rate increase; and WHEREAS, the Company’s GRIP request fails to recognize that GUD No. 9400 rates included profit based on TXU Corporation’s capital structure rather than Atmos Energy Corp.’s current capital structure, which justifies a lower rate of return; and WHEREAS, under the provisions of § 104.301 of GURA, the interim rate adjustment is subject to true-up in a general rate case filed within five years of the effective date of the interim rate surcharge; and WHEREAS, the Company has, on May 31, 2006, filed a Statement of Intent to increase its distribution rates on a system-wide basis, using calendar year ending December 31, 2005, as its test year; and WHEREAS, the capital investment made by Atmos during 2005 will be reviewed in the Statement of Intent filing, making the 2005 GRIP filing superfluous, duplicative, and unnecessary; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS: SECTION 1. That the Company’s GRIP rate increase request is found to be unreasonable, superfluous, duplicative, and unnecessary, and is therefore denied in all respects. SECTION 2. That the City is authorized to cooperate with other Cities within the Company’s Distribution System that have formed ACSC to hire and direct legal counsel and consultants, negotiate with the Company, make recommendations to the City regarding reasonable rates, and to direct any necessary litigation associated with an appeal of a rate ordinance and the rate case filed at the Commission. SECTION 3. That the costs incurred by the City in reviewing the Company’s GRIP request shall be promptly reimbursed by the Company. SECTION 4. That the City is authorized to intervene in any appeal of the City’s action filed at the Commission and any related litigation, and to participate in any such appeal or litigation as a member of ACSC. SECTION 5. This Ordinance shall become effective immediately from and after its passage, as the law and charter in such cases provide. 1668\15\ord060531 Model Ordinance Denying 2 1668\15\ord060531 Model Ordinance Denying 3 SECTION 6. That it is hereby officially found and determined that the meeting at which this Ordinance is passed is open to the public as required by law and that public notice of the time, place and purpose of said meeting was given as required. SECTION 7. A copy of this ordinance, constituting final action on the Company’s application, be forwarded to the following: Richard T. Reis Atmos Energy Corporation 5420 LBJ Freeway, Suite 1800 Dallas, Texas 75240 Lloyd Gosselink Blevins Rochelle & Townsend c/o Geoffrey Gay P.O. Box 1725 Austin, Texas 78767-1725. DULY PASSED and approved by the City Council of the City of Coppell, Texas, on this the ______ day of __________, 2006. APPROVED: ____________________________________ Douglas N. Stover, Mayor ATTEST: ____________________________________ Libby Ball, City Secretary APPROVED AS TO FORM: _____________________________ City Attorney DEPT: Engineering DATE: June 27, 2006 ITEM #: 9/E   AGENDA REQUEST FORM ITEM CAPTION: Consider approval of entering into a supplemental agreement with TXU Electric Delivery Company for street lighting services on East Sandy Lake Road, from Kimbel Kourt to the east city limit line, in an amount of $59,972.96 as provided for in CIP funds; and authorizing the City Manager to sign. GOAL(S): EXECUTIVE SUMMARY: Approval of this supplemental agreement with TXU will provide for the installation of 25 streetlights along East Sandy Lake Road. All foundations and conduit were included as part of the original project scope and are being installed by the street contractor, Tiseo Paving Company. Staff recommends approval of the agreement with TXU Electric Delivery Company for street light installation on East Sandy Lake Road and will be available for any questions at the Council meeting. FINANCIAL COMMENTS: Funds are available in the Street CIP accounts for this contract. Agenda Request Form - Revised 09/04 Document Name: #E Sandy Lk Street Lights 1 INCH = FT. 0 500 500 250 Proposed Street Lights Sandy Lake Road City of Coppell Project ST93-01 Created in LDDTS:\CAD\In_Design\MISC EXHIBITS\dwg\EXHIBITS.dwg\ST9301 LIGHTS Created on: 01 June 2006 by Scott Latta PROPOSED PAVING IMPROVEMENTS PROPOSED STREET LIGHT RIVERCHASEBLVD o b o f v @ d SIO S h S r pSS @ SIO d S rPpSSr ZiI A @ d S S pS S upS S r II t g i o A v V o A V P v Q K v tAtllTPY be s O L Sj AD o JoO fh OSC kdc S rp lfO S j ONJS d IO h S pS h S S r rPS d flO S cClJSJ pS J t s pS c p J f @ O td r J h S t SSCrP S@d SsrPpS c r t lO tlO lO ii d@ S h S tPr PS lO t Ir Cs if CllO C lO tt Iril O fl d SIO pS JiSSp S ELECTRIC CONSTRUCTION PRINT TXU Electric Delivery WR NO SHEET OF DATE SCALE SERVICE CENTER FBR OFFICE lql MAPSCO DESIGNER FIELDING LOUIS R PHONE q l PROJECT MANAGER FIELDING LOUIS R PHONE q l TXU Electrlc Oehverg ps dr llland electronlC da ta products ore created for the lOternal purposes of TXU ElectllCOehvery flth no mphcatIon of sultabdlty or fItness for the Intended use of the l eClplent TXU Electric Oehvery vl make good faIth efforts to prOVlde products thatarefree from error but does not v ront the occurocyor quohty of such productsThe locatIons shown ere opproxunatln Md orenot mtended to show exact locatlons ProOOcts prOVIded to other partIes by TXU ElectrIc Oehvery are for the Jn l use of the recIpIent Md the reCIpIent es not to dlphcate ordlstrloote the products Or filJ portJon of the products to thIrd tles wrthoot the prIor vntten permiSSIon of TXU ElectrJc Oehvery The recIpIent further ee to hold harmless and Indemtufy TXU ElectrIc Oehvery og ost aU chnms costs expenses end d ge resultng from orpr dl ted upon strIct hainhtv for persooolmJuJ lSs death orproperty on oecoont of cny defects the property provHled hereunder WR NAME CUSTOMER ADDRESS LOCA nON COPPELL INST MEDIAN STREET LIGHTS EAST SANDYT LAKE RD COPPELL INST MEDIAN STREET LIGHTS SANDY LAKE ROAD q O fa Ii o d SL S pS@SLpSSL @d slOpSSLSlpSSL i i i i I I I ov d S OS @L pS J SL oo d SlOpSSSlpS SL d S O S @SSL pS I SL o d @ tPis I Sl o d Sl S pS@SlpS SL ELECTRIC CONSTRUCTION TXU Electric Delivery PRINT@SO S Sl PS S d@SlOpSISLrpS S droSOSSlSlpSSLf P d S O pS ISL SL dPS Sl f p I I I I I I I DESIGNER FIELDING LOUIS R PHONE q PROJECT MANAGER FIELDING LOUIS R PHONE q WR NO SHEET OF DATE SCALE SERVICE CENTER FBR OFFICE lql MAPSCO L S@Bq i B A AoO jf NoCo I go t WR NAME CUSTOMER ADDRESS LOCATION o TXU ElectrIc fJehvel s crowlOS ond electroruc data products orecreated for the mternal purposes of TXU Electrlc Oelwery with no lfnph tIon of surtablhty orfltness for the Intended use of the recIpient TXU ElectrIc Oehvery Vlll make good forth efforts to prOVlJe products tht e free from error but does not warrYt the acCUracy orquahty of such products The locotlOOS shown are cpproxunauons and ue not tntended to show exact locattonsProducts provided to other plKtles by TXU ElectrIC Oehvery orefor the lOterMl use of the recIpient ond the reCIpIent ogrees not to dJphcate ordIstnbute the products orany portIon of the products to thIrd tIes WIthout the prIOr WItten permiSSIon of TXU ElectrIC OehvetyTherecIpIentfurtherogreestoholdMnnlessandtooemrnfyTXUElectrICOehverytnStoIlcloImscostsexpensesand comages resulung from orpredIcoted upon strIct l abthty for perSomlllnJ n s death orproperty e on oceount of anydefectshepropettyprOVIdedhereunder COPPELL INST MEDIAN STREET LIGHTS EAST SANDYT LAKE RD COPPELL INST MEDIAN STREET LIGHTS SANDY LAKE ROAD DEPT: Parks and Recreation Department DATE: June 27, 2006 ITEM #: 9/F   AGENDA REQUEST FORM ITEM CAPTION: Consider approval of a resolution authorizing the filing of a project funds application with the North Central Texas Council of Governments for a regional solid waste management local project, and authorizing the Mayor to sign. GOAL(S): EXECUTIVE SUMMARY: Background: North Central Texas Council of Governments is seeking applications for local solid waste management project funding projects. The goal of the reimbursement program is to return to local government entities dedicated solid waste fees for the achievement of state, regional and local solid waste management objectives. This is the same type of funds that were awarded for the Run, Refresh, Recycle project for recycling at Wagon Wheel and MacArthur Parks. The proposed project application will be submitted for full reimbursement funding of $13,735 for “Recycling Promotion in Motion”, a self contained educational booth for volunteers to easily set up and reach out to meet citizens in already established community event/activity arenas to increase public awareness and participation in recycling. FINANCIAL COMMENTS: No City matching funds are required for this grant. Agenda Request Form - Revised 09/04 Document Name: ^COG Funds-1AR Page 1 A RESOLUTION OF THE CITY OF COPPELL, TEXAS RESOLUTION NO. ________ RESOLUTION OF CITY OF COPPELL AUTHORIZING THE FILING OF A PROJECT APPLICATION WITH THE NORTH CENTRAL TEXAS COUNCIL OF GOVERNMENT (NCTCOG) FOR A REGIONAL SOLID WASTE PROGRAM LOCAL PROJECT; AUTHORIZING CITY MANAGER OR HIS DESIGNEE TO ACT ON BEHALF OF THE CITY OF COPPELL IN ALL MATTERS RELATED TO THE APPLICATION; AND PLEDGING THAT IF A PROJECT IS RECEIVED THE CITY OF COPPELL WILL COMPLY WITH THE PROJECT REQUIREMENTS OF THE NCTCOG, THE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY AND THE STATE OF TEXAS; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the North Central Texas Council of Governments is directed by the Texas Commission on Environmental Quality to administer solid waste project funds for implementation the COG’s adopted regional solid waste management plan; and WHEREAS, the city of Coppell in the State of Texas is qualified to apply for project funds under the Request for Projects. NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF COPPELL, OF THE CITY OF COPPELL, TEXAS: SECTION 1.That the City Manager or his designee is authorized to request project funding under the North Central Texas Council of Governments’ Request for Projects of the Regional Solid Waste Local Project Funding Program and act on behalf of the city of Coppell in all matters related to the project application and any subsequent project contract and project requirements that may result. SECTION 2.In the event the project is funded and such funds are received, the city of Coppell will comply with the project requirements of the North Central Texas Council of Governments, Texas Commission on Environmental Quality and the State of Texas. Page 2 45271 (Revised) SECTION 3.Any and all funds, equipment and/or facilities acquired with such funds shall be used only for the purposes for which they are intended under the project. SECTION 4.That all activities will comply with and support the adopted regional and local solid waste management plans adopted for the geographical area in which the activities are performed. SECTION 5.That should any word, phrase, paragraph, or section of this Resolution be held to be unconstitutional, illegal or invalid, the same shall not affect the validity of this Resolution as a whole, or any part or provision thereof other than the part so decided to be unconstitutional, illegal or invalid, and shall not affect the validity of the Resolution as a whole. SECTION 6.That this Resolution shall take effect immediately from and after its passage as the law and charter in such cases provide. DULY PASSED by the City Council of the City of Coppell, Texas, this the _______ day of ___________________, 2006. APPROVED: _________________________________________ DOUGLAS N. STOVER ATTEST: _________________________________________ LIBBY BALL, CITY SECRETARY APPROVED AS TO FORM: _________________________________ ROBERT E. HAGER, CITY ATTORNEY (REH/cdb 6/14/06) DEPT: City Manager's Office DATE: June 27, 2006 ITEM #: 10   AGENDA REQUEST FORM ITEM CAPTION: Consider and authorize City Manager to negotiate and execute a purchase and sale agreement, and any necessary agreements and instruments related thereto, for the transfer of Lot 1, Block A of the Crescent Addition, approximately 2.1898 acres of land, to the Coppell Economic Development Foundation, acting as an independent foundation, for the resale of such property to Coppell Hard Eight, Ltd. for the construction of a restaurant. GOAL(S): EXECUTIVE SUMMARY: FINANCIAL COMMENTS: Agenda Request Form - Revised 09/04 Document Name: !Hard Way Land Sale - 1 AR DRAFT January 26, 2006 Coppell/CEDF/Hard Way /Purchase and Sale Agreement – Page 1 63305 PURCHASE AND SALE AGREEMENT Seller: City of Coppell Attn: City Manager 255 Parkway Blvd. Coppell, Texas 75019 972/304-3673 Phone Purchaser: Coppell Economic Development Foundation, Inc. 255 Parkway Blvd. Coppell, Texas 75019 Attn: Clay Phillips 972/304-3677 Phone Property: The real property as more particularly described in Exhibit “A” hereto, but excluding any mineral rights, such mineral rights being reserved by the Seller, in accordance with a survey to be obtained by Purchaser. Title Company: Chicago Title Insurance Attn: Jay Turner 8600 MacArthur Blvd., Suite 102 Irving, TX 75063-6900 Closing Date: Concurrent with the Purchaser’s closing of the sale of the Property to The Hard Way, Inc., which shall be no later than the expiration date as set forth in the Ground Lease. Purchase Price: Two Hundred Twenty Five Thousand Two Hundred Fifty Dollars ($225,250.00). Grant The difference between the fair market value of the Property as determined by an appraisal obtained by the Seller, and the Purchase Price. Ground Lease That certain Ground Lease by and between the Seller and The Hard Way, Inc. dated of approximate even date herewith attached as Exhibit “B” attached hereto. WHEREAS, the Seller is authorized by Section 380.001 TEX. LOC. GOV’T CODE to provide economic development incentives to support the expansion of local business activity, employment and development; and WHEREAS, the Purchaser desires to purchase the Property from the Seller for the resale to The Hard Way, Inc. for the development of the Property for the operation of a restaurant and/or retail uses; and DRAFT January 26, 2006 Coppell/CEDF/Hard Way /Purchase and Sale Agreement – Page 2 63305 WHEREAS, Section 272.001 of the TEX. LOC. GOV’T CODE allows the Seller to convey land it wants developed by contracting with an independent foundation without auction or soliciting competitive bids; and WHEREAS, the Purchaser is a Texas non-profit corporation and qualifies as an independent foundation under Section 272.001 TEX. LOC. GOV’T CODE; and WHEREAS, the Seller desires the Purchaser to develop the Property by the subsequent transfer of the Property to The Hard Way, Inc. NOW, THEREFORE, in consideration of the sum of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 1.Sale and Purchase. Seller agrees to sell, and Purchaser agrees to purchase the Property as provided in this Agreement. 2.Title, Survey, and Environmental Reports. (a) Within sixty (60) calendar days prior to the Closing Date, Seller, at Purchaser’s expense, shall deliver to Purchaser: (i) a current commitment for title insurance for the Property, from the Title Company setting forth the state of title to the Property together with any easements or restrictions (existing or created pursuant hereto) benefiting the Property, together with all exceptions or conditions to such title; (ii) legible copies of all documents referenced in the title commitments; (iii) a current Survey certified to Purchaser. and Title Company; and (iv) tax statements for current and prior years. (b) If there are objections by Purchaser, the Seller shall in good faith attempt to satisfy them prior to closing, but Seller shall not be required to incur any cost to do so. . 3.Closing. (a) The closing of the sale of Property shall occur at 1:00 p.m. on the Closing Date therefore at the Title Company. (b) At the closing: (a) Seller shall deliver to the Title Company: (1) a special warranty deed, in form and substance reasonably acceptable to Seller and the Purchaser, conveying good and indefeasible title to the Property to the Purchaser free and clear of any and all encumbrances, except the Permitted Exceptions; and (2) a Texas owner’s DRAFT January 26, 2006 Coppell/CEDF/Hard Way /Purchase and Sale Agreement – Page 3 63305 policy of title insurance (or equivalent) in the amount of the Purchase Price, insuring such title to Purchaser; (c) At the closing Purchaser shall deliver to the Seller through Title Company, the Purchase Price in cash or immediately available funds. Ad valorem taxes, assessments, and any other charges against the Property acquired shall be prorated as of the Closing Date and become the responsibility of the Purchaser as of the Closing Date. The Seller hereby agrees to pay and be responsible for the following closing cost: (i) the cost of all tax certificates relating to all taxes and other assessments incurred or arising in relation to the property; (ii) all costs and expenses incurred by or on behalf of the Seller, including Seller’s attorney’s fees; and (iii) such other incidental costs and fees customarily paid by sellers of property in Dallas County, Texas for transactions of a similar nature to the transaction contemplated herein. The Purchaser hereby agrees to pay and be responsible for the following closing cost: (i) the Title Company’s escrow fees; (ii) all fees and premiums for the survey and Phase I environmental; (iii) all fees and premiums for the Basic Owner’s Title Policy; (iv) any endorsements to the Basic Owner’s Title Policy; (v) all costs and expenses incurred by or on behalf of the Purchaser, including the Purchaser’s attorneys’ fees; and (vi) such other incidental costs and fees customarily paid by purchasers of property in Dallas County, Texas, for transactions of a similar nature to the transaction contemplated herein. Closing is conditioned upon The Hard Way, Inc. closing the purchase of the Property from the Coppell Economic Development Foundation and no uncured event of default by The Hard Way, Inc. under the Ground Lease. 4.Permitted Exceptions. Purchaser acknowledges and agrees that the Property will be conveyed by Seller at closing subject to the Ground Lease set forth in Exhibit “B” and the restriction set forth in Section 5 below, and that the Special Warranty Deed shall contain such provisions. The zoning, the lien for current taxes, the environmental condition, the Ground Lease and the restriction set forth in Section 5 below shall be deemed to be Permitted Exceptions. 5.Property Restriction. Seller and Purchaser agree and understand that the Property is being conveyed by Seller pursuant to TEX. LOC. GOV'T CODE §272.001 that allows the Seller to convey land it wants developed by contracting with an independent foundation without solicitation of competitive bids. Purchaser agrees to serve as an independent foundation to have the Property developed in accordance with the terms set forth herein. Purchaser agrees that the Property is being conveyed by Seller, solely for resale to The Hard Way, Inc. for the operation of a restaurant and office/retail uses on the Property as set forth in the Ground Lease. 6.Representations and Covenants. Seller represents and covenants that: (a) it has authority to enter into this Agreement; and (b) no other person has any interests in or claims against the Property (other than as reflected by the title commitment), and it will not hereafter encumber the Property. Purchaser represents that it has authority to enter into this Agreement. DRAFT January 26, 2006 Coppell/CEDF/Hard Way /Purchase and Sale Agreement – Page 4 63305 The only representations made by any party concerning the Property and this Agreement are as set out in this Section 6. 7.Property Sold As Is. Purchaser represents that as of the Closing Date, Purchaser will have fully inspected the Property, will have made all investigations as it deems necessary or appropriate and will be relying solely upon its inspection and investigation of the Property for all purposes whatsoever, including, but not limited to, the determination of the condition of the structures, improvements, soils, subsurface, drainage, surface and groundwater quality, and all other physical characteristics; availability and adequacy of utilities; compliance with governmental laws and regulations; access; encroachments; acreage and other survey matters and the character and suitability of the Property. In addition, Purchaser acknowledges and agrees that the Property is being purchased and will be conveyed “AS IS” with all faults and defects, whether patent or latent, as of the Closing. There have been no representations, warranties, guarantees, statements or information, express or implied, pertaining to the Property, its condition, or any other matters whatsoever, made to or furnished to Purchaser by Seller or any employee or agent of Seller, except as specifically set forth in this Agreement. 8.Remedies. If Purchaser defaults, Seller’s sole remedy shall be to terminate this Agreement. If Seller defaults, Purchaser’s sole remedy shall be to terminate this Agreement. 9.Notices. Notices must be in writing to and given at the addresses stated above. Notice given by delivery service or fax shall be effective upon receipt at the address of the addressee; notice given by mail shall be effective upon receipt. With a copy to: Peter G. Smith Nichols, Jacksono, Dillard, Hager & Smith, L.L.P. 1800 Lincoln Plaza 500 North Akard Dallas, Texas 75201 10.Miscellaneous. (a) Entireties. This Agreement contains the entire agreement of the parties pertaining to the Property. (b) Modifications. This Agreement may only be modified by a written document signed by both parties. (c) Assignment. Purchaser may not assign its rights under this Agreement to any entity without the express written consent of Seller. DRAFT January 26, 2006 Coppell/CEDF/Hard Way /Purchase and Sale Agreement – Page 5 63305 (d) Time is of the Essence. Time is of the essence with respect to the performance by the parties of their respective obligations hereunder. (e) Effective Date. The date of this Agreement shall be the date a fully executed copy hereof, with any changes approved by the parties, is deposited with the Title Company. (f) Non-Business Day. If the final date of any period provided herein for the performance of an obligation or for the taking of any action falls on a Saturday, Sunday, or holiday, then the end of such period shall be extended to the next business day. (g) Zoning. Seller assumes no obligation to change the current zoning on the Property. (h) Brokers. Seller and Purchaser represent and warrant that they have not worked with any broker relative to this transaction and that no brokerage commission is due and payable upon the Closing. Each party shall indemnify each other from any claim for brokers’ commissions relative to the sale of the property and alleged to be due. (i) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original for all purposes and constitute one and the same instrument; but in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. (j) Law Governing. This Agreement shall be construed under and in accordance with the laws of the State of Texas; and venue for any action arising from this Agreement shall be in the State District Court of Dallas County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. Signature Page to Follow DRAFT January 26, 2006 Coppell/CEDF/Hard Way /Purchase and Sale Agreement – Page 6 63305 EXECUTED on the _____ day of ________________, 2006. Seller: City of Coppell, Texas By: Jim Witt, City Manager EXECUTED on the _____ day of _________________, 2006. Purchaser: Coppell Economic Development Foundation, Inc. By: Name: Clay Phillips Title: Director DRAFT January 26, 2006 Coppell/CEDF/Hard Way /Purchase and Sale Agreement – Page 7 63305 Seller’s Acknowledgment STATE OF TEXAS § § COUNTY OF DALLAS § This instrument was acknowledged before me on the _____ day of __________, 2006 by Jim Witt, City Manager of the City of Coppell, Texas, a Texas municipality, on behalf of said municipality. Notary Public, State of Texas My Commission expires: Purchaser’s Acknowledgment STATE OF TEXAS § § COUNTY OF DALLAS § This instrument was acknowledged before me this _________ day of ___________, 2006, by Clay Phillips, a Director of the Coppell Economic Development Foundation, Inc. a Texas non-profit corporation on behalf of said corporation. Notary Public, State of Texas My Commission expires:_______________ DRAFT January 26, 2006 Exhibit "A" Legal Description of Property CRESCENT ADDITION LOT 1, BLOCK A WHEREAS City of Coppell is the owner of a 2.1898 acre tract of land situated in the James A. Simmons Survey, Abstract No. 1296, Dallas County, Texas; said tract being part of a tract of land described in deed to City of Coppell recorded in Volume 2003094, Page 0797 of the Deed Records of Dallas County, Texas; said tract also being part of Block 5, Coppell Commerce Center Phase I, an addition to the City of Coppell, recorded in Vol. 81051, pg. 3041, deed records, Dallas County, Texas; said 2.1898 acre tract bring more particularly described as follows: BEGINNING, as a ½ inch iron rod found for corner, said point being in the south right-of-way line of Bethel Road (a 50 foot right-of-way); said point also being the northwest corner of that certain 1.09 acre tract of land described in deed to Camille Juraszek recorded in Volume 99100, Page 674 of the Deed Records of Dallas County, Texas; THENCE, South 01 degrees 18 minutes 00 seconds West, departing said south right-of-way line of Bethel Road, a distance of 183.30 feet to a ½ inch iron rod found for corner; said point being in the north line of a 18.918 acre tract of land described in deed to KCO TXII Coppell Inv. Ltd recorded in Volume 2000246, Page 3694 of the Deed Records of Dallas County, Texas; THENCE, North 89 degrees 01 minutes 04 seconds West, a distance of 520.41 feet to a “+” cut found on the top of curb in the east right-of-way line of Freeport Parkway (a 70 foot right-of-way at this point); THENCE, North 01 degrees 18 minutes 00 seconds East, along said east right-of-way line of Freeport Parkway, a distance of 183.30 feet to a ½ inch iron rod w/”PACHECO KOCH” cap set for corner; said point being at the intersection of the east right-of-way line of Freeport Parkway and the south right-of-way line of Bethel Road; THENCE, South 89 degrees 01 minutes 04 seconds East, departing said east right-of-way line of Freeport Parkway and along said south right-of-way line of Bethel Road, a distance of 520.41 feet to the POINT OF BEGINNING; CONTAINING, 95,390 square feet or 2.1898 acres of land, more or less. DRAFT January 26, 2006 Exhibit “B” Ground Lease DEPT: City Manager's Office DATE: June 27, 2006 ITEM #: 11   AGENDA REQUEST FORM ITEM CAPTION: PUBLIC HEARING: Consider approval of the designation of a reinvestment zone pursuant to Section 312.201 of the Property Redevelopment and Tax Abatement Act. The property to be considered for Reinvestment Zone designation is the property described as Lot 1, Block A of Crescent Addition (2.1898 acres), located at the southeast corner of Freeport Pkwy and Bethel Rd, Coppell, Texas GOAL(S): EXECUTIVE SUMMARY: The Public Hearing Announcement was published in the Dallas Morning News, West Addition, on June 17, 2006. FINANCIAL COMMENTS: Agenda Request Form - Revised 09/04 Document Name: !Coppell Hard Eight PH - 1 AR NOTICE OF PUBLIC HEARING OF DESIGNATION OF REINVESTMENT ZONE A PUBLIC HEARING will be conducted by the City Council of the City of Coppell, Texas, in the Council Chambers, Town Center, 255 Parkway Boulevard, Coppell, Texas on the 27th day of June, 2006, at 7:00 P.M., to consider designation of the property described as Lot 1, Block A of Crescent Addition (2.1898 acres), located at the southeast corner of Freeport Pkwy and Bethel Rd, Coppell, Texas, as a Reinvestment Zone under Chapter 312 of the Texas Property Tax Code. The Council will seek to determine whether the improvements sought to be made in the zone are feasible and practical and will be a benefit to the land included in the zone and to the City after the expiration of a tax abatement agreement to be entered into pursuant to Section 312.204 of the Texas Property Tax Code. At the hearing, interested persons are entitled to speak and present evidence for or against the designation. Dallas Morning News, West Addition, June 17, 2006 PUBLIC NOTICE STATEMENT FOR ADA COMPLIANCE The City of Coppell acknowledges its responsibility to comply with the Americans With Disabilities Act of 1990. Thus, in order to assist individuals with disabilities who require special services (i.e., sign interpretative services, alternative audio/visual devices, and amanuenses) for participation in or access to the City of Coppell sponsored public programs, services and/or meetings, the City requests that individuals make requests for these services forty-eight (48) hours ahead of the scheduled program, service and/or meeting. To make arrangements, contact Vivyon V. Bowman, ADA Coordinator or other designated official at (972) 462-0022, or (TDD 1-800-RELAY, TX, 1-800-735-2989). DEPT: City Manager's Office DATE: June 27, 2006 ITEM #: 12 AGENDA REQUEST FORM ITEM CAPTION: Consider approval of an Ordinance designating Coppell Hard Eight, Ltd., Reinvestment Zone No. 49, and authorizing the Mayor to sign. GOAL(S): EXECUTIVE SUMMARY: City Council is scheduled to conduct a Public Hearing regarding designation of the reinvestment zone on June 27, 2006. FINANCIAL COMMENTS: Agenda Request Form - Revised 09/04 Document Name: !Coppell Hard Eight Ordinance - 1 AR 63859 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COPPELL, DALLAS COUNTY, TEXAS, DESIGNATING REINVESTMENT ZONE NO. 49 (COPPELL HARD EIGHT, LTD.); PROVIDING ELIGIBILITY OF THE ZONE FOR COMMERCIAL- INDUSTRIAL TAX ABATEMENT; CONTAINING FINDINGS THAT THE AREA QUALIFIES TO BE DESIGNATED AS A REINVESTMENT ZONE AND THE IMPROVEMENTS SOUGHT ARE FEASIBLE AND PRACTICABLE AND OF BENEFIT TO THE LAND AND THE CITY; PROVIDING FOR A SEVERABILITY CLAUSE; PROVIDING FOR A REPEALING CLAUSE; AND PROVIDING FOR THE EFFECTIVE DATE OF SAID ORDINANCE. WHEREAS, the City Council of the City of Coppell, Texas, has caused notice to be published in a newspaper having general circulation in the City and has delivered such notice to the presiding officer of the governing body of each taxing unit that includes in its boundaries real property described herein; and WHEREAS, the City Council of the City of Coppell, Texas, has conducted a public hearing on the designation of the area described herein as a reinvestment zone; and WHEREAS, the proposed Tax Abatement Agreement by and among the City of Coppell, Texas, and Coppell Hard Eight, Ltd., attached hereto as Exhibit “A” has been presented to the City Council; and the City Council is of the opinion and finds that the terms and conditions thereof should be approved and that the Mayor should be authorized to execute the Agreement on behalf of the City of Coppell. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COPPELL, DALLAS COUNTY, TEXAS, THAT: SECTION 1. The City Council of the City of Coppell, Texas, finds that the area described herein will, if designated as a reinvestment zone, be reasonably likely to contribute to the rendition or expansion of primary employment, or to attract major investment in the zone that will be of benefit to the property and contribute to the economic development of the City. The City Council further finds that the improvements sought are feasible and practicable and would be of benefit to the land to be included in the zone and to the City after the expiration of a tax abatement agreement. 63859 SECTION 2. Pursuant to the provisions of Section 312.201 of the Texas Tax Code, the real property described in the Tax Abatement Agreement attached hereto as Exhibit “A” and made a part hereof for all purposes is hereby designated as a reinvestment zone and for identification is assigned the name “Reinvestment Zone No. 49.” SECTION 3. The property within Reinvestment Zone No. 49 is eligible for commercial- industrial tax abatement effective January 1, 2006. SECTION 4. The Agreement attached hereto as Exhibit “A” having been reviewed by the City Council and found to be acceptable and in the best interests of the City and its citizens, is hereby approved, and the Mayor is hereby authorized to execute the Agreement on behalf of the City of Coppell, Texas. SECTION 6. That should any sentence, paragraph, subdivision, clause, phrase or section of this ordinance be adjudged or held to be unconstitutional, illegal or invalid, the same shall not affect the validity of this ordinance as a whole, or any part or provision thereof other than the part so decided to be unconstitutional, illegal or invalid, and shall not affect the validity of the Comprehensive Zoning Ordinance as a whole. SECTION 5. That all provisions of the Ordinances of the City of Coppell, Texas, in conflict with the provisions of this ordinance be, and the same are hereby, repealed, and all other provisions not in conflict with the provisions of this ordinance shall remain in full force and effect. SECTION 7. This ordinance shall take effect immediately from and after its passage in accordance with the provisions of the Charter of the City of Coppell, and it is accordingly so ordained. 63859 DULY PASSED by the City Council of the City of Coppell, Texas, this the _______ day of ___________________, 2006. APPROVED: _____________________________________ DOUGLAS N. STOVER, MAYOR ATTEST: _____________________________________ LIBBY BALL, CITY SECRETARY APPROVED AS TO FORM: _________________________________ CITY ATTORNEY 63859 Exhibit “A” Legal Description DEPT: City Manager's Office DATE: June 27, 2006 ITEM #: 13 AGENDA REQUEST FORM ITEM CAPTION: Consider approval of a Resolution approving a Tax Abatement Agreement between the City of Coppell and Coppell Hard Eight, Ltd., and authorizing the Mayor to sign. GOAL(S): EXECUTIVE SUMMARY: City Council is scheduled to conduct a Public Hearing regarding designation of the reinvestment zone on June 27, 2006. FINANCIAL COMMENTS: Agenda Request Form - Revised 09/04 Document Name: !Coppell Hard Eight Resolution - 1 AR 1 63855 RESOLUTION NO. ________________ A RESOLUTION OF THE CITY OF COPPELL, TEXAS, APPROVING THE TERMS AND CONDITIONS OF A TAX ABATEMENT AGREEMENT BY AND BETWEEN THE CITY OF COPPELL, TEXAS AND COPPELL HARD EIGHT, LTD..; AUTHORIZING ITS EXECUTION BY THE MAYOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council has been presented a proposed Tax Abatement Agreement by and between the City of Coppell, Texas and Coppell Hard Eight, Ltd., a copy of which is attached hereto and incorporated herein by reference; and WHEREAS, upon full review and consideration of the Agreement, and all matters related thereto, the City Council is of the opinion and finds that the terms and conditions thereof should be approved, and that the Mayor should be authorized to execute the Agreement on behalf of the City of Coppell, Texas; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COPPELL, TEXAS, THAT: SECTION 1.The Agreement attached hereto having been reviewed by the City Council of the City of Coppell, Texas, and found to be acceptable and in the best interest of the City and its citizens, be, and the same is hereby, in all things approved, and the Mayor is hereby authorized to execute the Agreement on behalf of the City of Coppell, Texas. SECTION 2.The City Council finds that the improvements proposed to be built upon the Premises described in the Agreement will enhance the economic vitality of the community through a combination of new capital investment, increased sales tax revenues, and the creation of additional job opportunities. SECTION 3.The tax abatement to be granted by the Agreement will not include inventory, and supplies. SECTION 4.The improvements proposed for the Premises will accomplish the tax abatement guidelines of the City of Coppell, Texas. 2 63855 SECTION 5.The City Manager delivered to the presiding officer of the governing body of each taxing unit in which the property subject to the Agreement is located, a written notice that the City of Coppell, Texas, intends to enter into the Agreement. The notice given by the City Manager included a copy of the Agreement approved by this Resolution. SECTION 6.This Resolution and the Tax Abatement Agreement are hereby approved by the affirmative vote of the majority of the members of the City Council of the City of Coppell, Texas, at a regularly scheduled meeting of the City Council. SECTION 7.This Resolution shall become effective immediately from and after its passage. DULY RESOLVED AND ADOPTED by the City Council of the City of Coppell, Texas, on this the ______ day of ________________, 2006. CITY OF COPPELL, TEXAS ___________________________________________ DOUGLAS N. STOVER, MAYOR ATTEST: ___________________________________________ LIBBY BALL, CITY SECRETARY APPROVED AS TO FORM: ____________________________________ CITY ATTORNEY (PGS/si 06/19/06) Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 1 17720 STATE OF TEXAS § § TAX ABATEMENT AGREEMENT COUNTY OF DALLAS § This Tax Abatement Agreement (the “Agreement”) is entered into by and between the City of Coppell, Texas (the “City”), and Coppell Hard Eight, Ltd (“Owner”), acting by and through their authorized representatives. W I T N E S S E T H: WHEREAS, the City Council of the City of Coppell, Texas, (the “City”), passed an Ordinance (the “Ordinance”) establishing Tax Abatement Reinvestment Zone No. 49 (the “Zone”), for commercial/industrial tax abatement, as authorized by the Property Redevelopment and Tax Abatement Act, Chapter 312 of the Texas Tax Code, as amended (the “Tax Code”); and WHEREAS, the City has adopted guidelines for tax abatement (the “Tax Abatement Guidelines”); and WHEREAS, the Tax Abatement Guidelines contain appropriate guidelines and criteria governing tax abatement agreements to be entered into by the City as contemplated by the Tax Code; and WHEREAS, the City has adopted a resolution stating that it elects to be eligible to participate in tax abatement; and WHEREAS, in order to maintain and enhance the commercial and industrial economic and employment base of the Coppell area, it is in the best interests of the taxpayers for the City to enter into this Agreement in accordance with said Ordinance, the Tax Abatement Guidelines and the Tax Code; and WHEREAS, Owner owns or is under contract to purchase the real property described in Exhibit “A” attached hereto (“Land”) and intends to construct certain Improvements (hereinafter defined) on the Land; and WHEREAS, Owner’s development efforts described herein will create permanent new jobs in the City; and WHEREAS, the City Council finds that the contemplated use of the Premises (hereinafter defined), the contemplated Improvements thereto in the amount set forth in this Agreement, and the other terms hereof are consistent with encouraging development of the Zone in accordance with the purposes for its creation and/or in compliance with the Tax Abatement Guidelines, the Ordinance adopted by the City, the Tax Code and all other applicable laws; and WHEREAS, the City Council finds that the Improvements sought are feasible and practicable and would be of benefit to the Premises to be included in the Zone and to the City after expiration of this Agreement; and Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 2 17720 WHEREAS, a copy of this Agreement has been furnished, in the manner prescribed by the Tax Code, to the presiding officers of the governing bodies of each of the taxing units in which the Premises is located; and WHEREAS, the City desires to enter into an agreement with Owner for the abatement of taxes pursuant to Chapter 312 of the Tax Code as amended. NOW, THEREFORE, in consideration of the mutual benefits and promises contained herein and for good and other valuable consideration, the adequacy and receipt of which is hereby acknowledged, including the expansion of primary employment, the attraction of major investment in the Zone, which contributes to the economic development of Coppell and the enhancement of the tax base in the City, the parties agree as follows: Article I Definitions Wherever used in this Agreement, the following terms shall have the meanings ascribed to them: “Base Year Taxable Value” shall mean the Taxable Value for the Land for the year in which the Tax Abatement Agreement is executed (2006). “CEDF” shall mean Coppell Economic Development Foundation. “CEDF Purchase and Sale Agreement” shall mean that certain purchase and sale agreement for the Land between the City and the CEDF of approximate even date herewith for the subsequent transfer of the Land to the Owner. “Commencement of Construction” shall mean that: (i) the plans have been prepared and all approvals thereof required by applicable governmental authorities have been obtained for construction of the Improvements; (ii) all necessary permits for the construction of the Improvements, on the Land pursuant to the respective plans therefore having been issued by all applicable governmental authorities; and (iii) grading of the Land or the construction of the vertical elements of the Improvements has commenced. “Completion of Construction” shall mean that: (i) the construction of the Improvements, on the Land has been substantially completed; (ii) the first final, permanent certificate(s) of occupancy for the occupancy of the Improvements has been issued by the City. “Coppell Hard Eight Purchase and Sale Agreement” shall mean that certain purchase and sale agreement for the Land between the Owner and the CEDF of approximate even date herewith. Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 3 17720 “Economic Development Agreement” shall mean that certain economic development agreement by and between Owner and the City dated of approximate even date herewith. “Event of Bankruptcy or Insolvency” shall mean the dissolution or termination of a party’s existence as a going business, insolvency, appointment of receiver for any part of a party’s property and such appointment is not terminated within ninety (90) days after such appointment is initially made, any general assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against such party, and such proceeding is not dismissed within ninety (90) days after the filing thereof. “First Year of Abatement” shall mean January 1 of the calendar year immediately following the date of issuance of the first final certificate of occupancy for the Owner’s occupancy of the Improvements, unless otherwise agreed by the parties. “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, adverse weather, government or de facto governmental action (unless caused by acts or omissions of such party), fires, explosions or floods, strikes, slowdowns or work stoppages. “Improvements” shall mean the contemplated improvements to be constructed on the Land, and as further described herein, and any additions or expansions constructed on the Land during the term of this Agreement. “Land” means the real property described in Exhibit A. “Note” shall mean that certain promissory note in the principal amount of $1,300,000.00 payable to the lender First Financial Bank, N.A. in Stephenville P.O. Box 998 Stephenville, Texas 76401 by the Company as borrower with a maturity date of sixty-eight (68) months for the construction for the Restaurant as set forth in the Guaranty. “Premises” shall collectively mean the Land and the Improvements following construction thereof, but excluding Tangible Personal Property. “Related Agreements” shall collectively mean the Coppell Hard Eight Purchase and Sale Agreement, the Note and the Economic Development Agreement. “Tangible Personal Property” shall mean tangible personal property, equipment and fixtures owned by or leased by Owner, other than inventory or supplies, located on the Premises subsequent to the execution of this Agreement. “Taxable Value” means the appraised value as certified by the Appraisal District as of January 1 of a given year. Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 4 17720 Article II General Provisions 2.1 Owner is under contract, to purchase the Land, which Land is located within the city limits of the City and within the Zone. Owner intends to construct the Improvements on the Land and to locate Tangible Personal Property (hereinafter defined) on the Premises. 2.2 The Premises are not in an improvement project financed by tax increment bonds. 2.3 This Agreement is entered into subject to the rights of the holders of outstanding bonds of the City. 2.4 The Premises are not owned or leased by any member of the Coppell City Council or any member of the Coppell Planning and Zoning Commission, or any member of the governing body of any taxing units joining in or adopting this Agreement. Article III Tax Abatement Authorized 3.1 This Agreement is authorized by the Tax Code and in accordance with the City Tax Abatement Guidelines, and approved by resolution of the City Council. 3.2 Subject to the terms and conditions of this Agreement, the City hereby grants Owner an abatement of seventy-five percent (75%) of the Taxable Value of the Improvements, and an abatement of seventy-five percent (75%) of the Taxable Value of the Tangible Personal Property for a period of five (5) consecutive years. The actual percentage of Taxable Value of the Improvements subject to abatement for each year this Agreement is in effect will apply only to the portion of the Taxable Value of the Improvements that exceeds the Base Year Taxable Value. The actual percentage of Taxable Value of the Tangible Personal Property subject to abatement will only apply to the Tangible Personal Property located on the Premises after this Agreement is executed. 3.3 The period of tax abatement herein authorized shall be for a period of five (5) consecutive years. 3.4 During the period of tax abatement herein authorized, Owner shall be subject to all taxation not abated, including but not limited to, sales tax and ad valorem taxation on land, inventory and supplies. 3.5 The term of this Agreement shall begin on the Effective Date and shall continue until February 1 of the calendar year following the sixth (6th) anniversary date of the First Year of Abatement. Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 5 17720 Article IV Improvements Owner intends to construct or caused to be constructed on the Land a restaurant containing approximately 11,000 square feet of space (and other ancillary facilities such as reasonably required parking and landscaping more fully described in the submittals filed by Owner with the City from time to time in order to obtain a building permit) (“Improvements”). Owner intends to locate Tangible Personal Property on the Premises. Nothing in this Agreement shall obligate Owner to construct the Improvements, including an unscreened outdoor open-pit barbecue similar to the unscreened open-pit barbecue located at the Owner’s restaurant in Stephenville, Texas, on the Land or to locate Tangible Personal Property on the Premises but said actions are a condition precedent to Owner’s tax abatement pursuant to this Agreement. Article V Construction of Improvements 5.1 As a condition precedent to the initiation of Owner’s tax abatement pursuant to this Agreement, Owner will diligently and faithfully, in good and workmanlike manner, subject to events of Force Majeure to cause Commencement of Construction to occur on or before August 15, 2006, or other date mutually agreed to by the parties and to cause Completion of Construction of the Improvements to occur within two hundred forty (240) calendar days thereafter, as good and valuable consideration for this Agreement, and all construction of the Improvements will be in accordance with all applicable state and local laws, codes, and regulations, (or valid waiver thereof); provided, that Owner shall have such additional time to complete and maintain the Improvements as may be required in the event of “Force Majeure,” if Owner is diligently and faithfully pursuing completion of the Improvements. 5.2 Owner agrees to maintain the Improvements during the term of this Agreement in accordance with all applicable state and local laws, codes, and regulations. Owner agrees that the Improvements shall be used only as a restaurant building for a period of five (5) years commencing on the date the first final certificate of occupancy is issued for the Owner’s occupancy of the Improvements. 5.3 The City, its agents and employees shall have the right of access to the Premises during construction to inspect the Improvements at reasonable times and with reasonable notice to Owner, and in accordance with Owner’s visitor access and security policies, in order to insure that the construction of the Improvements are in accordance with this Agreement and all applicable state and local laws and regulations (or valid waiver thereof). Article VI General Requirements 6.1 Construction plans for the Improvements to be constructed on the Land will be filed with the City, which shall be deemed to be incorporated by reference herein and made a part hereof for all purposes. Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 6 17720 6.2 After completion of the Improvements, Owner shall certify in writing to the City the construction cost of the Improvements. Owner shall before May 1 of each calendar year that the Agreement is in effect, certify in writing to the City that it is in compliance with each term of the Agreement. 6.3 The Land and the Improvements constructed thereon at all times shall be used in the manner (i) that is consistent with the City’s Comprehensive Zoning Ordinance, as amended, and (ii) that, during the period taxes are abated hereunder, is consistent with the general purposes of encouraging development or redevelopment within the Zone. 6.4 Owner agrees, subject to events of Force Majeure, to continuously own and occupy the Improvements for a period of at least five (5) consecutive years beginning the First Year of Abatement. Article VII Default: Recapture of Tax Revenue 7.1 In the event Owner: (i) fails to complete the Improvements in accordance with this Agreement or in accordance with applicable State or local laws, codes or regulations; (ii) has delinquent ad valorem or sales taxes owed to the City (provided Owner retains its right to timely and properly protest such taxes or assessment); (iii) has an “Event of Bankruptcy or Insolvency”; or (iv) breaches any of the terms and conditions of this Agreement or any one or more of the Related Agreements, then Owner after the expiration of the notice and cure periods described below, shall be in default of this Agreement. As liquidated damages in the event of such default, the Owner shall, within thirty (30) days after demand, pay to the City all taxes which otherwise would have been paid by the Owner to the City without benefit of a tax abatement for the Owner’s property the subject of this Agreement, with interest at the statutory rate for delinquent taxes as determined by Section 33.01 of the Tax Code as amended but without penalty. The parties acknowledge that actual damages in the event of default termination would be speculative and difficult to determine. The parties further agree that any abated tax, including interest as a result of this Agreement, shall be recoverable against the Owner, its successors and assigns and shall constitute a tax lien against the Improvements and the Tangible Personal Property, the subject of this Agreement, and shall become due, owing and shall be paid to the City within thirty (30) days after termination. 7.2 Upon breach by Owner of any obligations under this Agreement, or any one or more the Related Agreements, the City shall notify the Owner in writing, who shall have sixty (60) days from receipt of the notice in which to cure any such default. If the default cannot reasonably be cured within a sixty (60) day period, and the Owner has diligently pursued such remedies as shall be reasonably necessary to cure such default, then the City may extend the period in which the default must be cured. 7.3 If the Owner fails to cure the default within the time provided as specified above or, as such time period may be extended, then the City at its sole option shall have the right to terminate this Agreement, by written notice to the Owner. Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 7 17720 7.4 Upon termination of this Agreement by City, all tax abated as a result of this Agreement, shall become a debt to the City as liquidated damages, and shall become due and payable not later than thirty (30) days after a notice of termination is made. The City shall have all remedies for the collection of the abated tax provided generally in the Tax Code for the collection of delinquent property tax. The City at its sole discretion has the option to provide a repayment schedule. The computation of the abated tax for the purposes of the Agreement shall be based upon the full Taxable Value of the Improvements and the Tangible Personal Property, without tax abatement for the years in which tax abatement hereunder was received by the Owner, as determined by the Appraisal District, multiplied by the tax rate of the years in question, as calculated by the City Tax Assessor-Collector. The liquidated damages shall incur penalties as provided for delinquent taxes and shall commence to accrue after expiration of the thirty (30) day payment period. Article VIII Miscellaneous 8.1 Annual Application for Tax Exemption. It shall be the responsibility of the Owner pursuant to the Tax Code, to file an annual exemption application form with the Chief Appraiser for each Appraisal District in which the eligible taxable property has situs. A copy of the exemption application shall be submitted to the City upon request. 8.2 Notice. All notices required by this Agreement shall be addressed to the following, or other such other party or address as either party designates in writing, by certified mail, postage prepaid, or by hand or overnight delivery: If intended for Owner, to: Coppell Hard Eight, Ltd. Attn: Phillip Nivens 1091 Glen Rose Highway Stephenville, Texas 76401 With a copy to: Steven J. Reid 105 W. Pearl St. Granbury, Texas 76048 (817) 573-3718 (817) 573-9732 FAX If intended for City, to: Attn: City Manager City of Coppell, Texas P. O. Box 9478 Coppell, Texas 75019 Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 8 17720 With copy to: Peter G. Smith Nichols, Jackson, Dillard, Hager & Smith, L.L.P. 1800 Lincoln Plaza 500 N. Akard Dallas, Texas 75201 8.3 City Council Authorization. This Agreement was authorized by resolution of the City Council approved by its Council meeting authorizing the Mayor to execute this Agreement on behalf of the City. 8.4 Severability. In the event any section, subsection, paragraph, sentence, phrase or word herein is held invalid, illegal or unconstitutional, the balance of this Agreement shall stand, shall be enforceable and shall be read as if the parties intended at all times to delete said invalid section, subsection, paragraph, sentence, phrase or word. 8.5 Applicable Law. This Agreement shall be construed under the laws of the State of Texas. Venue for any action under this Agreement shall be the State District Court of Dallas County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. 8.6 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and constitute one and the same instrument. 8.7 Entire Agreement. This Agreement embodies the complete agreement of the parties hereto, superseding all oral or written previous and contemporary agreements between the parties and relating to the matters in this Agreement, and except as otherwise provided herein cannot be modified without written agreement of the parties to be attached to and made a part of this Agreement. 8.8 Recordation of Agreement. A certified copy of this Agreement shall be recorded in the Deed Records of Dallas County, Texas. 8.9 Incorporation of Recitals. The determinations recited and declared in the preambles to this Agreement are hereby incorporated herein as part of this Agreement. 8.10 Exhibits. All exhibits to this Agreement are incorporated herein by reference for all purposes wherever reference is made to the same. 8.11 Conditions Precedent. This Agreement and the Parties respective obligations, is subject to and contingent upon: (i) the City and Owner entering into the Economic Development Agreement; (ii) the Owner and the CEDF entering in to Coppell Hard Eight Purchase and Sale Agreement; (iii) the City and the CEDF entering into CEDF Purchase and Sale Agreement; and (iv) the Owner closing the purchase of the Land from the CEDF on or before July 15, 2006. Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 9 17720 Signature Page to Follow Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 10 17720 EXECUTED in duplicate originals the ____ day of ________________, 2006. City of Coppell, Texas By: ______________________________________ Douglas N. Stover, Mayor Attest: By: _______________________________________ Libby Ball, City Secretary Agreed As To Form: By: City Attorney (Pgs/06 19 06)(74080) EXECUTED in duplicate originals the ____ day of __________________, 2006. Coppell Hard Eight, Ltd. By: Big Boy, Inc. Its General Partner By: __________________________________ Phillip Nivens President Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 11 17720 City’s Acknowledgment STATE OF TEXAS § § COUNTY OF DALLAS § This instrument was acknowledged before me on the _____ day of _______________, 2006, by Douglas N. Stover, Mayor of the City of Coppell, Texas, a Texas municipality, on behalf of said municipality. ___________________________________ Notary Public, State of Texas My Commission Expires: _________________________ Owner’s Acknowledgment STATE OF TEXAS § § COUNTY OF _____________ § This instrument was acknowledged before me on the _______ day of ___________, 2006, by Phillip Nivens, being the President of Big Boy, Inc. the general partner of Coppell Hard Eight, Ltd., a Texas limited partnership on behalf of said partnership. Notary Public, State of Texas My Commission Expires: Final Draft 06 19 06 Coppell Hard Eight/Tax Abatement Agreement –PAGE 12 17720 Exhibit “A” Legal Description of the Land Crescent Addition Lot 1, Block A WHEREAS City of Coppell is the owner of a 2.1898 acre tract of land situated in the James A. Simmons Survey, Abstract No. 1296, Dallas County, Texas; said tract being part of a tract of land described in deed to City of Coppell recorded in Volume 2003094, Page 0797 of the Deed Records of Dallas County, Texas; said tract also being part of Block 5, Coppell Commerce Center Phase I, an addition to the City of Coppell, recorded in Vol. 81051, pg 3041, deed records, Dallas County, Texas; said 2.1898 acre tract being more particularly described as follows: BEGINNING, at a ½ inch iron rod found for corner, said point being in the south right-of-way line of Bethel Road (a 50 foot right-if-way); said point also being the northwest corner of that certain 1.09 acre tract of land described in deed to Camille Juraszek recorded in Volume 99100, Page 674 of the Deed Records of Dallas County, Texas; THENCE, South 01 degrees 18 minutes 00 seconds West, departing said south right-of-way line of Bethel Road, a distance of 183.30 feet to a ½ inch iron rod found for corner; said point being in the north line of a 18.918 acre tract of land described in deed to KCO TXII Coppell Inv. Ltd. recorded in Volume 2000246, Page 3694 of the Deed Records of Dallas County, Texas; THENCE, North 89 degrees 01 minutes 04 seconds West, a distance of 520.41 feet to a “+” cut found on the top of curb in the east right-of-way line of Freeport Parkway (a 70 foot right-of-way at this point); THENCE, North 01 degrees 18 minutes 00 seconds East, along said east right-of-way line of Freeport Parkway, a distance of 183.30 feet to a ½ inch iron rod w/”PACHECO KOCH” cap set for corner; said point being at the intersection of the east right-of-way line of Freeport Parkway and the south right-of-way line of Bethel Road; THENCE, South 89 degrees 01 minutes 04 seconds East, departing said east right-of-way line of Freeport Parkway and along said south right-of-way line of Bethel Road, a distance of 520.41 feet to the POINT OF BEGINNING; CONTAINING, 95,390 square feet or 2.1898 acres of land, more or less. DEPT: City Manager's Office DATE: June 27, 2006 ITEM #: 14   AGENDA REQUEST FORM ITEM CAPTION: Discuss and consider approval of an Economic Development Agreement by and between the City of Coppell and Coppell Hard Eight, Ltd., and authorizing the Mayor to sign. GOAL(S): EXECUTIVE SUMMARY: FINANCIAL COMMENTS: Agenda Request Form - Revised 09/04 Document Name: !Coppell Hard Eight Eco Dev Agr - 1 AR Final Draft June 19, 2006 - 1 - 63321 STATE OF TEXAS § § ECONOMIC DEVELOPMENT AGREEMENT § COUNTY OF DALLAS § This Economic Development Agreement (“Agreement”) is made by and between the City of Coppell, Texas (the “City”), and Coppell Hard Eight, Ltd., (“Company”), acting by and through their respective authorized officers. WITNESSETH: WHEREAS, Company has or intends to initial lease and then purchase the land (hereinafter defined) and to construct the Improvements (hereinafter defined) therein; and WHEREAS, the City has adopted programs for promoting economic development; and WHEREAS, the City is authorized by TEX. LOC. GOV’T CODE §380.001 to provide economic development grants to promote local economic development and to stimulate business and commercial activity in the City; and WHEREAS, the City has determined that making an economic development grant to the Company in accordance with this Agreement will further the objectives of the City, will benefit the City and the City’s inhabitants and will promote local economic development and stimulate business and commercial activity in the City. NOW THEREFORE, in consideration of the foregoing, and on the terms and conditions hereinafter set forth, the parties agree as follows: Article I Term This Agreement shall be effective on the date of execution hereof by the City and the Company (“Effective Date”) and shall continue until the Expiration Date (hereinafter defined), unless sooner terminated as provided herein. Article II Definitions Wherever used in this Agreement, the following terms shall have the meanings ascribed to them: “Building Permit Fee Waiver” shall mean the waiver of the collection of building permit fees associated with the shell construction of the Restaurant that occurs after the Effective Date and prior to the Completion of Construction to be provided as set forth herein. “CEDF” shall mean the Coppell Economic Development Foundation. Final Draft June 19, 2006 - 2 - 63321 “CEDF Purchase and Sale Agreement” shall mean that certain purchase and sale agreement for the Land by and between the CEDF and the City dated of approximate even date herewith. “City” shall mean the City of Coppell, Texas. “Company” shall mean Coppell Hard Eight, Ltd. “Commencement Date” shall mean the date the first final certificate of occupancy is issued by the City for Company’s occupancy for the Restaurant. “Commencement of Construction” shall mean that (i) the construction plans for the Restaurant have been prepared and all approvals thereof required by applicable governmental authorities have been obtained; and (ii) all necessary permits for construction of the Restaurant pursuant to the respective plans therefore having been issued by all applicable governmental authorities. “Completion of Construction” shall mean: (i) substantial completion of the Restaurant; and (ii) the first final certificate of occupancy has been issued for the Restaurant. “Consummated in the City” shall have the same meaning assigned by Tax Code, Section 321.203. “Event of Bankruptcy or Insolvency” shall mean the dissolution or termination of a party’s existence as a going business, insolvency, appointment of receiver for any part of such party’s property and such appointment is not terminated within ninety (90) days after such appointment is initially made, any general assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against such party and such proceeding is not dismissed within ninety (90) days after the filing thereof. “Expiration Date” shall mean the 10th anniversary date of the Effective Date. “Financing Incentive” shall mean an economic development grant in an amount not to exceed $171,500.00 which is intended to be equal to the amount of interest due and payable pursuant to the Note calculated on the difference between 2.5% annual percentage rate and the interest rate set forth in the Note to be paid as set forth herein. “Force Majuere” 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. “Grants” shall collectively mean the Roadway Impact Fee Waiver, Building Permit Fee Waiver, the Site Improvements Grant, the Financing Incentive and the Sales Tax Grant(s) as set forth herein. Final Draft June 19, 2006 - 3 - 63321 “Grant Period” shall mean a six calendar month period (ending June 30 and December 31 of each calendar year) beginning with the first six calendar months immediately following the Commencement Date, except that the first Grant Period shall be from the Commencement Date until the next semi-annual date June 30 or December 31 as applicable. “Guaranty” shall mean that certain guaranty agreement by and between the City and First Financial Bank, N.A. in Stephenville P.O. Box 998, Stephenville, Texas, 76401 for $550,000.00 of the Note. “Hard Eight Purchase and Sale Agreement” shall mean that certain purchase and sale agreement for the Land by and between the Owner and the CEDF dated of approximate even date herewith. “Improvements” shall mean the Restaurant. “Impositions” shall mean all taxes, including real estate and ad valorem taxes, assessments, use and occupancy taxes, charges, excises, license and permit fees, and other charges by public or governmental authority, general and special, ordinary and extraordinary, foreseen and unforeseen, which are or may be assessed, charged, levied, or imposed by any public or governmental authority on the Company or any property or any business owned by Company within the City. “Land” means the real property described in Exhibit A. “Note” shall mean that certain promissory note in the principal amount of $1,300,000.00 payable to the lender First Financial Bank, N.A. in Stephenville P.O. Box 998 Stephenville, Texas 76401 by the Company as borrower with a maturity date of sixty-eight (68) months for the construction for the Restaurant as set forth in the Guaranty. “Payment Request” shall mean written request from Company to the City for payment of the Site Improvement Grant accompanied by copies of all invoices, bills, receipts and such other information as may be reasonably requested by City to document Company expenditures for the Site Improvements. “Premises” shall collectively mean the Land and the Restaurant following construction thereof. “Related Agreements” shall collectively mean the Tax Abatement Agreement, the Note and the Hard Eight Purchase and Sale Agreement. "Restaurant" shall mean a restaurant consisting of at least 11,000 square feet of space, other structures, drives, parking areas, facilities, paving, landscaping and other improvements included to be constructed on the Land more fully described in submittals filed with the City in order to obtain building permit(s). Final Draft June 19, 2006 - 4 - 63321 “Required Use” shall mean the continuous lease and/or ownership of the Land and the Company’s continuous operation of the Restaurant on the Land. “Roadway Impact Fee Waiver” shall mean the waiver of the collection of the roadway impact fees to be assessed, if any, by the City against the Land to be provided as set forth herein. “Sales and Use Tax” shall mean the one percent (1%) sales and use tax imposed by the City pursuant to Chapter 321 of the Texas Tax Code (it being expressly understood that the City’s sales and use tax receipts are being used only as a measurement for its participation through the use of general funds), attributed to the collection of the City’s one percent (1%) sales and use tax as a result of the sale by Company of Taxable Items at the Restaurant that are Consummated in the City during the Grant Period. Sales Tax Receipts do not include any sales and use tax imposed by City for the benefit of the Coppell Recreation Development Corporation, pursuant to Section 4B of the Development Corporation Act of 1979, article 5190.6, Vernon’s Revised Civil Statutes, or sales and use tax imposed by the City for the benefit of Coppell Education Development Corporation pursuant to Chapter 379 A of the TEX. LOC. GOV’T CODE. “Sales Tax Certificate” shall mean a certificate or other statement in a form reasonably acceptable to the City setting forth the City’s Sales and Use Tax Receipts for the applicable Grant Period, together with such supporting documentation required herein, and as the City may reasonably request. “Sales Tax Grant” shall mean semi-annual economic development grants in an amount equal to a percentage of the Sales Tax Receipts to be paid as set forth herein. “Sales Tax Receipts” shall mean the City’s receipts from the State of Texas from the collection of the Sales and Use Tax for the applicable Grant Period. “Site Improvements” shall mean certain improvements consisting of parking lot improvements, drainage improvements, and landscaping for the Restaurant to be constructed on the Land by the Company. “Site Improvements Grant” shall mean an economic development grant in the amount of the lesser of the actual costs incurred and paid by the Company for the Site Improvements not to exceed $250,000.00. “State of Texas” shall mean the office of the Texas Comptroller, or its successor. “Tax Abatement Agreement” shall mean that certain tax abatement agreement by and between the City and Company dated of approximate even date herewith. “Taxable Items” shall have the same meaning assigned by Chapter 151, TEX. TAX CODE, as amended. Final Draft June 19, 2006 - 5 - 63321 Article III Economic Development Grants 3.1 Sales Tax Grants. (a)Subject to the Company’s obligation to repay the Grants in paragraph 5.2 hereof, and the Company’s continued satisfaction of all the terms and conditions of this Agreement, the City agrees to provide Company with semi-annual Sales Tax Grants for ten (10) calendar years from lawfully available funds. The semi-annual Sales Tax Grants shall be in an amount equal to the percentage of the Sales Tax Receipts for the applicable Grant Period for the applicable calendar year set forth below not to exceed $20,000.00 per calendar year: Calendar Year 1-5 Calendar Year 6-10 100% 50% (b)Sales Tax Grant Payment. The Sales Tax Grants shall be paid semi-annually within ninety (90) days after June 30 and within ninety (90) days after December 31 of each calendar year, and the City’s receipt of the Sales Tax Certificate from the Company for the applicable Grant Period for a period of ten (10) consecutive calendar years, beginning with the first Grant Period following the Commencement Date. For example, assume the Commencement Date is July 15, 2007 then the first Grant Period would be from July 15, 2007 through and including December 31, 2007, and the first Sales Tax Grant would be paid within sixty (60) days after December 31, 2007 and City receipt of the Sales Tax Certificate for such Grant Period. (c)Sales Tax Grant Limitation. The City shall not be required to pay any Sales Tax Grant until such time as the City has received Sales Tax Receipts from the State of Texas relating to the applicable Grant Period for which such quarterly Sales Tax Grant payment is due. Under no circumstances shall any Sales Tax Grant include any receipts from the City’s imposition and collection of sales and use tax for the sale of Taxable Items by the Company at any location, business, establishment, or entity in the City other than from the sale of Taxable Items by Company consummated at the Restaurant. The payment of the Sales Tax Grants hereunder is limited to the extent that the City has received Sales Tax Receipts for the respective Grant Period. The City shall not be required to provide any Sales Tax Grants during the term of this Agreement for any Grant Period(s) for which the City has not received the Sale Tax Receipts for such Grant Period. (d)Sales Tax Refunds. The Company shall promptly, but in no case later than ten (10) days, notify the City in writing of any adjustments found, determined or made by Company, the State of Texas or by an outside audit that results or will result in either a refund or the payment of additional Sales and Use Tax. Such notification shall also include the amount of any such adjustment in Sales and Use Tax Receipts. In the event the State of Texas determines that the City erroneously received Sales Tax Receipts, or that the amount of Sales and Use Tax paid to the City exceeds the correct amount of Sales and Use Tax for a previous Grant Period, for which the Company has received a Sales Tax Grant, the Company shall, within thirty (30) days after receipt of notification thereof from the City specifying the amount by which such Sales Tax Grant exceeded the amount to which the Company was entitled pursuant to such State of Texas determination, pay Final Draft June 19, 2006 - 6 - 63321 such amount to the City. The City may at its option adjust the Sales Tax Grant payment(s) for the Grant Period(s) immediately following such State of Texas determination for such incorrect amount. As a condition precedent to payment of such refund, the City shall provide Company with a copy of such determination by the State of Texas. (e)Amended Sales Tax Returns. In the event the Company files an amended sales and use tax return, or report, or if additional Sales and use Tax is due and owing by Company to the State of Texas, as determined by or as approved by the State of Texas affecting Sales Tax Receipts for a previous Grant Period, then the Grant payment for the Grant Period immediately following the City’s receipt of Sales Tax Receipts from the State of Texas shall be adjusted accordingly. As a condition precedent to payment of such adjustment, Company shall provide City with a copy of any such amended Sales and Use Tax report or return, and the approval thereof by the State of Texas. (f)Confidentiality. The City agrees, to the extent allowed by law, to keep all information and documentation received from the State of Texas pursuant to this Agreement hereof (“Confidential Tax Information”) confidential. The City will only provide access to the Confidential Tax Information to its employees, independent contractors or agents on a “need-to- know” basis. The City will use the Confidential Tax Information solely for the purposes of determining the Company’s entitlement to a Sales Tax Grant, a refund or to determine if any additional Sales and Use Tax is due. The City will not, without the Company’s prior written authorization, directly or indirectly, intentionally or inadvertently: (a) disclose to any other person except as may be required by law (other than as expressly permitted above) the Confidential Tax Information; (b) copy, photograph, photocopy, reduce to writing or otherwise reproduce or duplicate the Confidential Tax Information in any form or medium, electronic or otherwise except in connected with the purposes provided herein. The Company’s Waiver of Sales Tax Confidentiality is solely for the limited purpose of allowing the City to confirm the Company’s entitlement to Sales Tax Grants, City’s entitlement to refunds, or the Company’s obligation to pay additional Sales and Use Tax during the term of this Agreement. In the event the City is requested or becomes legally compelled (by deposition, interrogatory, request for documents, subpoena, civil investigative demand or similar process) to disclose any Confidential Tax Information, the City shall provide the Company with prompt written notice of such request or requirement so that the Company may seek a protective order or other appropriate remedy and/or waive compliance with the terms of this Section. (g)Waiver of Sales Tax Confidentiality. The Company shall provide the City, and maintain during the term of this Agreement a Waiver of Sales Tax Confidentiality which authorizes the State of Texas to release to the City the Sales and Use Tax information pertaining to the Company for the sale of Taxable Items at the Improvements during the term of this Agreement substantially in the form attached hereto as Exhibit “C”. The Company will continue to maintain an effective Waiver of Sales Tax Confidentiality during the term of this Agreement. The Waiver of Sales Tax Confidentiality shall include but not be limited to the following documentation and may include the following: a. A schedule detailing the amount of Sales and Use Tax collected by the Company, and paid to the State of Texas as a result of the sale of Taxable Items by the Company consummated at the Improvements during the term of this Agreement; Final Draft June 19, 2006 - 7 - 63321 b. A copy of all Sales and Use Tax returns and reports, direct payment and self- assessment returns, Sales and Use Tax prepayment returns, direct payment permits and reports, sales and use tax audit assessments, including amended sales and use tax returns or reports, filed by the Company during the term, showing Sales and Use Tax collected (including sales and use tax paid directly to the State of Texas pursuant to a direct payment certificate) by the Company for the sale of Taxable Items consummated at the Improvements during the term of this Agreement; and c. Information concerning any refund or credit received by the Company of Sales or Use Tax paid or collected by the Company (including any Sales and Use Tax paid directly to the State pursuant to a direct payment permit) which has previously been reported by the Company as Sales and Use Tax paid or collected. 3.2 Building Permit Fee Waiver; Roadway Impact Fee Waiver. Subject to the Company’s obligation to repay the Grants in paragraph 5.2 hereof, and the Company’s continued satisfaction of all the terms and conditions of this Agreement, the City shall provide the Building Permit Fee Waiver and the Roadway Impact fee Waiver to the Company not to exceed $20,000.00 in the aggregate. The parties acknowledge and agree that in the event impact fees are not assessed against the Land, that the City shall not be required to pay any remaining or unused portion of the Impact Fee Waiver in cash or cash equivalent to Company or any other party, or to apply any remaining or unused portion of the Impact Fee Waiver against any other fees or charges assessed or to be assessed by the City against the Company or any property owned by Company to the Company. 3.3 Site Improvements Grant. Subject to the Company’s obligation to repay the Grants in paragraph 5.2 hereof, and the Company’s continued satisfaction of all the terms and conditions of this Agreement, the City agrees to provide the Company with the Site Improvements Grant to be paid as completion of the work progresses from time to time within thirty (30) days after City receipt of a Payment Request. 3.4 Financing Incentive. Subject to the Company’s obligation to repay the Grants in paragraph 5.2 hereof, and the Company’s continued satisfaction of all the terms and conditions of this Agreement, the City agrees to provide the First Financial Bank, N.A. in Stephenville P.O. Box 998 Stephenville, Texas 76401 with the Financing Incentive to be paid within thirty (30) days after City receipt of a written request for demand for payment of such sum by the financial institution which is the payee under the Note following the closing of the purchase of the Land by the Company from the CEDF and the execution of the Note. As a condition precedent to City payment of the Financing Incentive, the Company and First Financial Bank, N.A. in Stephenville P.O. Box 998 Stephenville, Texas 76401 shall have: (i) executed the Note; (ii) submitted a fully executed copy of the Note including all financing, and other documents related thereto, to the City at least thirty (30) days prior to the Closing of the purchase of the Land by the Company; and (iii) the City shall have reviewed and approved the Note. The Company shall cause First Financial Bank, N.A. in Stephenville P.O. Box 998 Stephenville, Texas 76401 to cooperate with the City and to grant access to the documents related to the Note. Final Draft June 19, 2006 - 8 - 63321 3.5 Guaranty. Subject to the satisfaction of the conditions set forth in Section 3.4 above, the City agrees to execute and provide the Guaranty at closing of the purchase of the Land by the Company pursuant to the Hard Eight Purchase and Sale Agreement. 3.6 Current Revenue. (a) The Grants made hereunder shall be paid solely from lawful available funds, which have been appropriated by the City. Under no circumstances shall City’s obligations hereunder be deemed to create any debt within the meaning of any constitutional or statutory provision. Consequently, not withstanding any other provision of this Agreement, City shall have no obligation or liability to pay any Grants unless and until the City appropriates funds to make such payment during the budget year in which such Grant is payable. All payments of the Grants are subject to appropriation of funds for such payments in the budget year for which they are made. The Grants shall be paid solely from annual appropriations from the general funds of the City or from such other funds of the City as may be legally set aside for such purpose consistent with Article III, Section 52(a) of the Texas Constitution, as amended. In the event the City does not appropriate funds in any fiscal year for which payment of the Grant is due under this Agreement, the City shall not be liable to Company for such payments and Company shall have the right but not the obligation to terminate the Agreement. (b) The City shall not be obligated to pay any commercial bank, lender or similar institution for any loan or credit agreement made by Company. None of the City’s obligations under this Agreement shall be pledged or otherwise encumbered in favor of any commercial lender and/or similar financial institution. Not withstanding the foregoing the Company may pledge the payment of the Sales Tax Grants and the Site Improvement Grant to First Financial Bank, N.A. - Stephenville. Article IV Conditions to the Economic Development Grants The City’s obligation to pay the Grants shall be conditioned upon the Company’s compliance with and satisfaction of each of the conditions set forth below: 4.1 Sales Tax Certificate. As a condition precedent to the payment of any Sales Tax Grant hereunder, City shall have received the Sales Tax Certificate for the respective Grant Period. The Company shall within thirty (30) days following the end of each calendar quarter beginning with the first calendar quarter following the Commencement Date provide the City with a Sales Tax Certificate. The City shall have no duty to calculate the Sales Tax Receipts or determine the amount of any Sales Tax Grant or Company’s entitlement to any Sales Tax Grant, or pay any Sales Tax Grant during the term of this Agreement until such time as Company has provided the City the Sales Tax Certificate for the applicable Grand Period. The Company shall use a form substantially as set forth in Exhibit “B” for the Sales Tax Certificate required herein. At the request of the City, the Company shall provide such additional documentation as may be reasonably requested by City to evidence, support and establish the Sales Tax Receipts. The Sales Tax Certificate shall at a minimum contain, include or be accompanied by the following: Final Draft June 19, 2006 - 9 - 63321 i. A schedule detailing the amount of the Sales and Use Tax collected and paid to the State of Texas as a result of the sale of Taxable Items by Company Consummated at the Restaurant for the applicable Grant Period; and ii. A copy of all sales and use tax returns and reports, direct payment and self assessment returns, sales and use tax prepayment returns, direct payment permits and reports, including amended sales and use tax returns or reports, filed by the Company, for the previous ending calendar quarter for Sales and Use Tax collected by the Company for the sale of Taxable Items consummated at the Restaurant for the applicable Grant Period. City agrees to the extent allowed by law to maintain the confidentiality of the Sales Tax Certificate. 4.2 The Company shall as a condition precedent to the payment of any quarterly Sales Tax Grant the City shall have received a Sales tax Certificate for the applicable Grant Period for which payment of a Sales Tax Grant is requested. 4.3 Restaurant Construction. Company shall subject to events of Force Majeure to cause Commencement of Construction of the Restaurant to occur on or before August 15, 2006 or other date mutually agreed to by the parties, and subject to events of Force Majeure to cause Completion of Construction to occur thereof within nine calendar months thereafter. 4.4 Continuous Operation. During the term of this Agreement following the Commencement Date for and continuing thereafter until termination of this Agreement the Company shall continuously lease the Land (or own the Land), and occupy the Restaurant; and that it shall not use the Restaurant and/or the Land for any purpose other than the Required Use and that the Company shall not allow the operation and occupancy of the Premises in conformance with the Required Use to cease for more than thirty (30) days except in connection with, and to the extent of an Event of Force Majeure. 4.5 The Company agrees that as a condition precedent to payment of any of the Grants hereunder that it shall not have an uncured breach or default of this Agreement and/or any one or more of the Related Agreements. Article V Termination 5.1 This Agreement shall terminate upon any one of the following: (a) by written agreement of the parties; (b) on the Expiration Date; (c) by either party in the event the other party breaches any of the terms or conditions of this Agreement and such breach is not cured within thirty (30) days after written notice thereof; Final Draft June 19, 2006 - 10 - 63321 (d) by City, if Company suffers an Event of Bankruptcy or Insolvency; (e) by City, if any Impositions owed to the City or the State of Texas by Company shall become delinquent (provided, however the Company retains the right to timely and properly protest and contest any such Impositions); and (f) by City, if any subsequent Federal or State legislation or any decision of a court of competent jurisdiction declares or renders this Agreement invalid, illegal or unenforceable. 5.2 In the event the Agreement is terminated by the City, pursuant to Section 5.1 (c), (d) or (e) the Company shall immediately repay to the City an amount equal to all Grants paid by the City to the Company prior to the date of such termination plus the rate of interest periodically announced by the Wall Street Journal as the prime or base commercial lending rate, or if the Wall Street Journal shall ever cease to exist or cease to announce a prime or base lending rate, then at the annual rate of interest from time to time announced by Citibank, N.A. (or by any other New York money center bank selected by the City) as its prime or base commercial lending rate, from the Effective Date until paid. Such repayment is to be paid in twelve (12) equal monthly installments on or before the first day of each calendar month beginning the first day the calendar month sixty (60) days following termination until paid. The repayment obligation of Company set forth in this section 5.2 shall survive termination. Article VI Miscellaneous 6.1 Binding Agreement. The terms and conditions of this Agreement are binding upon the successors and permitted assigns of the parties hereto. This Agreement may not be assigned without the express written consent of the City Manager. 6.2 Limitation on Liability. It is understood and agreed between the parties that the Company, in satisfying the conditions of this Agreement, has acted independently, and the City assumes no responsibilities or liabilities to third parties in connection with these actions. The Company agrees to indemnify and hold harmless the City from all such claims, suits, and causes of actions, liabilities and expenses, including reasonable attorney’s fees, of any nature whatsoever by a third party arising out of the Company’s performance of the conditions under this Agreement, excluding actions of third parties with whom Company has not contracted with or whom are not injured on the Land or within the Improvements. 6.3 No Joint Venture. It is acknowledged and agreed by the parties that the terms hereof are not intended to and shall not be deemed to create a partnership or joint venture among the parties. 6.4 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. Final Draft June 19, 2006 - 11 - 63321 6.5 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 on the day actually received if sent by courier or otherwise hand delivered. If intended for City, to: Attn: City Manager City of Coppell 255 Parkway Boulevard P.O. Box 9478 Coppell, Texas 75019 With a copy to: Peter G. Smith Nichols, Jackson, Dillard, Hager & Smith, L.L.P. 1800 Lincoln Plaza 500 North Akard Dallas, Texas 75201 If intended for the Company: If intended for Company: Coppell Hard Eight, Ltd.. Attn: Phillip Nivens 1091 Glen Rose Highway Stephenville, Texas 76401 With a copy to: Steven J. Reid 105 W. Pearl Granbury, Texas 76048 (817) 573-3718 (817) 573-9732 FAX 6.6 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, except as provided in any Exhibits attached hereto. 6.7 Governing Law. The Agreement shall be governed by the laws of the State of Texas; and venue for any action concerning this Agreement shall be in the State District Court of Final Draft June 19, 2006 - 12 - 63321 Dallas County, Texas. Venue for any action shall be in the State District Court of Dallas County Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. 6.8 Amendment. This Agreement may only be amended by the mutual written agreement of the parties. 6.9 Legal Construction. 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, a provision shall be added to this Agreement which is legal, valid and enforceable and is as similar in terms as possible to the provision found to be illegal, invalid or unenforceable. 6.10 Recitals. The recitals to this Agreement are incorporated herein. 6.11 Counterparts. This Agreement may be executed in counterparts. Each of the counterparts shall be deemed an original instrument, but all of the counterparts shall constitute one and the same instrument. 5.12 Exhibits. All exhibits to this Agreement are incorporated herein by reference for all purp6ses wherever reference is made to the same. 6.13 Survival of Covenants. Any of the representations, warranties, covenants, and obligations of the parties, as well as any rights and benefits of the parties, pertaining to a period of time following the termination of this Agreement shall survive termination. 6.14 Conditions Precedent. This Agreement and the Parties respective obligations, are subject to and contingent upon: (i) the City and Company entering into the Tax Abatement Agreement; (ii) the Company and the CEDF entering into the Hard Eight Purchase and Sale Agreement; (iii) the Company and First Financial Bank, N.A. in Stephenville P.O. Box 998 Stephenville, Texas 76401 having executed the Note; (iv) the City having reviewed and approved the Note. Signature Page to Follow Final Draft June 19, 2006 - 13 - 63321 EXECUTED on this _______ day of _____________________, 2006. City of Coppell, Texas By: Douglas N. Stover, Mayor Attest: By: Libby Ball, City Secretary Approved as To Form: By: Peter G. Smith (06/21/06) EXECUTED this the _________ day of ______________________, 2006. Coppell Hard Eight, Ltd. By: Big Boy, Inc. Its General Partner By: _______________________________________ Phillip Nivens President Final Draft June 19, 2006 - 14 - 63321 City’s Acknowledgment STATE OF TEXAS § § COUNTY OF DALLAS § This instrument was acknowledged before me on the _____ day of _______________, 2006, by Douglas N. Stover, Mayor of the City of Coppell, Texas, a Texas municipality, on behalf of said municipality. ___________________________________ Notary Public, State of Texas My Commission Expires: _________________________ Company’s Acknowledgment STATE OF TEXAS § § COUNTY OF _____________ § This instrument was acknowledged before me on the _______ day of ___________, 2006, by Phillip Nivens, being the President of Big Boy, Inc., the general partner of Coppell Hard Eight, Ltd., a Texas limited partnership on behalf of said partnership. Notary Public, State of Texas My Commission expires: ___________________________ Exhibit “A” Legal description of Land CRESCENT ADDITION LOT 1, BLOCK A WHEREAS City of Coppell is the owner of a 2.1898 acre tract of land situated in the James A. Simmons Survey, Abstract No. 1296, Dallas County, Texas; said tract being part of a tract of land described in deed to City of Coppell recorded in Volume 2003094, Page 0797 of the Deed Records of Dallas County, Texas; said tract also being part of Block 5, Coppell Commerce Center Phase I, an addition to the City of Coppell, recorded in Vol. 81051, pg. 3041, deed records, Dallas County, Texas; said 2.1898 acre tract bring more particularly described as follows: BEGINNING, as a ½ inch iron rod found for corner, said point being in the south right-of-way line of Bethel Road (a 50 foot right-of-way); said point also being the northwest corner of that certain 1.09 acre tract of land described in deed to Camille Juraszek recorded in Volume 99100, Page 674 of the Deed Records of Dallas County, Texas; THENCE, South 01 degrees 18 minutes 00 seconds West, departing said south right-of-way line of Bethel Road, a distance of 183.30 feet to a ½ inch iron rod found for corner; said point being in the north line of a 18.918 acre tract of land described in deed to KCO TXII Coppell Inv. Ltd recorded in Volume 2000246, Page 3694 of the Deed Records of Dallas County, Texas; THENCE, North 89 degrees 01 minutes 04 seconds West, a distance of 520.41 feet to a “+” cut found on the top of curb in the east right-of-way line of Freeport Parkway (a 70 foot right-of-way at this point); THENCE, North 01 degrees 18 minutes 00 seconds East, along said east right-of-way line of Freeport Parkway, a distance of 183.30 feet to a ½ inch iron rod w/”PACHECO KOCH” cap set for corner; said point being at the intersection of the east right-of-way line of Freeport Parkway and the south right-of-way line of Bethel Road; THENCE, South 89 degrees 01 minutes 04 seconds East, departing said east right-of-way line of Freeport Parkway and along said south right-of-way line of Bethel Road, a distance of 520.41 feet to the POINT OF BEGINNING; CONTAINING, 95,390 square feet or 2.1898 acres of land, more or less. Exhibit “B” Sales Tax Certificate Form Taxpayer Number: ________________________ Calendar Period Beginning and Ending: _____________ 1. TOTAL SALES (Whole dollars only)_______ 2. TAXABLE SALES (Whole dollars only)_______ 3. TAXABLE PURCHASES (Whole dollars only) ______ 7. AMOUNT OF TAX DUE (Dollars and Cents) (Multiply “Amount subject to tax “ by “Tax Rate” for state and City tax due) 4. Amount subject to state tax (Item 2 plus Item 3) _______ X = 7a.State Tax (include Item 8a) 5. Amount subject to City tax _X = 7b.City Tax (include Item 8b) 26180 STATE TAX - Column a LOCAL TAX - Column b 8. Total tax due 9. Prepayment credit 10. Adjusted tax due (Item 8 minus Item 9) 11. TIMELY FILING DISCOUNT 12. Prior payments 13. Net tax due (Item 10 minus Items 11 & 12) 14. Penalty and interest (See instructions) 15a. Total state amount due 15b. Total City amount due 15. TOTAL STATE AND LOCAL AMOUNT DUE (Item 13 plus Item 14) 16. TOTAL CITY AMOUNT PAID (Item 15b) I declare that the Information in this document and any attachments is true and correct to the best of my knowledge. Sign Taxpayer or duly authorized agent Here Date Daytime phone (Area code & number) Exhibit C Waiver of Sales Tax Confidentiality Date: ____________________ I authorize the Comptroller of Public Accounts to release sales tax information pertaining to the taxpayer indicated below to the City of Coppell, Texas. This waiver applies only to our place of business located in Coppell, Texas. Name of Taxpayer as Shown on Texas Sales Tax Permit Taxpayer Mailing Address Physical Location of Business Permitted for Sales Tax in Coppell, Texas Texas Taxpayer ID Number Tax Outlet Number ______________________________________ Authorized Signature ______________________________________ Printed Name ______________________________________ Position Title Telephone Number The authorized signature must be an owner, officer, director, partner, or agent authorized to sign a Texas Sales Tax Return. If you have any questions concerning this waiver of confidentiality, please contact the Texas Comptroller of Public Accounts at 800.531.5441. DEPT: City Secretary DATE: June 27, 2006 ITEM #: 15 AGENDA REQUEST FORM NECESSARY ACTION RESULTING FROM WORK SESSION Agenda Request Form - Revised 02/04 Document Name: %necessaryactionwork DEPT: City Manager DATE: June 27, 2006 ITEM #: 16 AGENDA REQUEST FORM CITY MANAGER'S REPORT A. Water usage update. Agenda Request Form - Revised 09/02 Document Name: %necessaryactionwork DEPT: City Manager DATE: June 27, 2006 ITEM #: 17 AGENDA REQUEST FORM MAYOR AND COUNCIL REPORTS A. Report by Mayor Stover regarding 4th of July activities. Agenda Request Form - Revised 09/02 Document Name: %mayorreport DEPT: City Secretary DATE: June 27, 2006 ITEM #: 18 AGENDA REQUEST FORM COUNCIL COMMITTEE REPORTS A. Carrollton/Farmers Branch ISD/Lewisville ISD – Councilmember Tunnell. B. Coppell ISD - Mayor Pro Tem Faught and Councilmember York. C. Coppell Seniors – Mayor Pro Tem Faught and Councilmember Brancheau. D. Dallas Regional Mobility Coalition - Councilmember Peters. E. Economic Development Committee - Councilmembers Peters and Franklin. F. Metrocrest Hospital Authority - Councilmember Tunnell. G. Metrocrest Medical Foundation - Councilmember Hinojosa-Flores. H. Metrocrest Medical Services - Councilmember Hinojosa-Flores. I. Metrocrest Social Service Center – Councilmember York. J. North Texas Council of Governments - Councilmember Peters. K. NTCOG/Regional Emergency Management – Councilmember Franklin. L. North Texas Commission - Councilmember Brancheau. M. Senior Adult Services - Mayor Pro Tem Faught. Agenda Request Form - Revised 06/03 Document Name: %ccommreport DEPT: City Secretary DATE: June 27, 2006 ITEM #: 19 AGENDA REQUEST FORM NECESSARY ACTION RESULTING FROM EXECUTIVE SESSION Agenda Request Form - Revised 09/02 Document Name: %necessaryactionexec CERTIFICATE OF AGENDA ITEM SUBMISSION Council Meeting Date: June 27, 2006 Department Submissions: Item No. 9/E was placed on the Agenda for the above-referenced City Council meeting by the Engineering Department. I have reviewed the Agenda Request (and any backup if applicable) and hereby submit this item to the City Council for consideration. ____________________ Engineering Department Item No. 9/F was placed on the Agenda for the above-referenced City Council meeting by the Park Department. I have reviewed the Agenda Request (and any backup if applicable) and hereby submit this item to the City Council for consideration. ____________________ Park Department Financial Review: I certify that I have reviewed all the items submitted for consideration on the Agenda for the above-referenced City Council Meeting and have inserted any financial comments where appropriate. ____________________ Finance Department City Manager Review: I certify that I have reviewed the complete Agenda and Packet for the above-referenced City Council Meeting and hereby submit the same to the City Council for consideration. ____________________ City Manager