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HomeMy WebLinkAbout02-23-17-04 - Resolution - 02/23/2017 RESOLUTION NO. 02-23-17-04 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS, APPROVING THE CREATION OF THE SPRING CREEK LOCAL GOVERNMENT CORPORATION; APPROVING THE CERTIFICATE OF FORMATION AND THE BYLAWS THEREOF;CONFIRMING THE APPOINTMENT OF THE INITIAL DIRECTORS. WHEREAS, Subchapter D of Chapter 431, Texas Transportation Code ("Act") authorizes the creation and organization of a public non-profit local government corporation to act as a duly constituted authority of a city to aid and assist the city in the performance of one or more governmental functions; and WHEREAS, the Act requires a local government corporation to be created pursuant to the provisions of Chapter 394,Texas Local Government Code ("Chapter 394"),and requires the local government corporation's articles of incorporation (now call "Certificate of Formation") and bylaws to be in the form, and to be executed approved and filed in the manner prescribed by Chapter 394; and WHEREAS,the City Council of the City of College Station,Texas, desires to authorize the Spring Creek Local Government Corporation's Certificate of Formation, approve its Bylaws, appoint its board of directors, and take other action required thereof; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF COLLEGE STATION, TEXAS: PART 1: That the City Council hereby approves the creation of the Spring Creek Local Government Corporation under the provisions of the Act and Chapter 394, for the purpose of aiding, assisting, and acting on behalf of the City of College Station in the performance of its governmental functions to promote the common good and general welfare of the City, including, without limitation, the development of the area in the City included at or in the vicinity of the Spring Creek Corporate Campus, in furtherance of the promotion, development, encouragement and maintenance of employment, commerce, economic development and public facility development in the City of College Station. PART 2: That the City Council hereby approves the Certificate of Formation of the Spring Creek Local Government Corporation in substantially the form attached hereto as Exhibit "A" and authorizes the incorporators of the Spring Creek Local Government Corporation to file such Certificate of Formation with the Secretary of State of the State of Texas in the manner proscribed by law. PART 3: That the City Council hereby approves the Bylaws of the Spring Creek Local Government Corporation in substantially the form attached hereto as Exhibit"B." PART 4: That the City Council hereby confirms the appointment of the initial Directors listed in the Certificate of Formation attached hereto. PART 5: That this Resolution shall take effect immediately from and after its passage. Resolution No. 02-23-47-04 Page 2 of 27 ADOPTED this 23'd day of February, 2017. ATTEST: APPROVE P. City Secret.,0 %A,fI R APPROVED: Cada 74 O'i)401,-X) City Attorney Resolution No. 02-23-17-04 Page 3 of 27 Exhibit "A" Certificate of Formation Resolution No. 02-23-17-04 Page 4 of 27 CERTIFICATE OF FORMATION OF SPRING CREEK LOCAL GOVERNMENT CORPORATION We, the undersigned natural persons, each of whom is at least eighteen (18) years of age or more, and a resident and a qualified voter of the City of College Station, Texas (the"City"), and a citizen of the State of Texas, acting as incorporators of a corporation under the provisions of Subchapter D of Chapter 431, Texas Transportation Code (the "Act"), and Chapter 394, Texas Local Government Code, do hereby adopt the following Certificate of Formation for such corporation: ARTICLE I Corporation Name The name of the corporation is the SPRING CREEK LOCAL GOVERNMENT CORPORATION (the "Corporation"). ARTICLE II Nature of Corporation The Corporation is a public non-profit corporation. ARTICLE III Duration of Corporation The period of duration of the Corporation shall be perpetual. ARTICLE IV Corporate Purpose and Authority 4.01 The Corporation is organized for the purpose of aiding, assisting, and acting on behalf of the City in the performance of its governmental functions to promote the common good and general welfare of the City, including, without limitation, the development of the geographic area of the City included at or in the vicinity of the "Spring Creek Corporate Campus"as depicted on Exhibit "A", in furtherance of the promotion, development, encouragement and maintenance of employment, commerce, economic development and public facility development in the City of College Station. 4.02 The Corporation shall have the power to purchase, exchange, contract for, lease, rent, and in any and all other ways acquire, own, improve, and hold, and to sell, convey,mortgage, lease, rent to others, or otherwise dispose of real estate, improvements in real estate, interests in Resolution No. 02-23-17-04 Page 5 of 27 real estate, and personal property of every kind,character,and description to carry out the purposes of the Corporation; subject to the approval of the City Council. 4.03 The Corporation shall have and exercise all of the rights, powers, privileges, and functions given by the general laws of Texas to non-profit corporations incorporated under the Act, including, without limitation, the Texas Nonprofit Corporation Law (Tex. Bus. Org. Code, Chapters 20 and 21 and the provisions of Title I thereof to the extent applicable to non-profit corporations, as amended) or their successor. 4.04 The Corporation shall have all other powers of a like or different nature not prohibited by law which are available to non-profit corporations in Texas and which are necessary or useful to enable the Corporation to perform the purposes for which it was created, including the power to issue bonds, notes or other obligations, and otherwise exercise its borrowing power to accomplish the purposes for which it was created; provided, however, prior to the consummation of the sale and delivery of any bonds, notes or other forms of debt instruments, the Corporation shall obtain the approval thereof from the City Council. 4.05 In the exercise of the powers of the Corporation, the Corporation may enter into a loan, lease, trust, or other agreements as authorized by the Act that are necessary and appropriate to the fulfillment of the public purpose of the Corporation,all of which agreements,and the specific uses, and the method of withdrawals and expenditure of the proceeds of the bonds or notes, and other instruments must be included as part of the approval process of the City as required above. In connection with the issuance of its bonds,notes, or other debt instruments,the Corporation shall select bond counsel and financial advisors acceptable to the City Manager and City Attorney. 4.06 The Corporation is created as a local government corporation pursuant to the Act and shall be a governmental unit within the meaning of Subdivision (3), Section 101.001, Texas Civil Practice and Remedies Code. The operations of the Corporation are governmental and not proprietary functions for all purposes, including for purposes of the Texas Tort Claims Act,Section 101.001, et seq., Texas Civil Practice and Remedies Code. ARTICLE V No Members or Shareholders The Corporation shall have no members and shall have no stock. ARTICLE VI Board of Directors 6.01 All powers of the Corporation shall be vested in the Board of Directors (the "Board"). To be eligible to serve as a Director, a person must be a resident and qualified elector of the City. The Board shall consist of five (5) persons who shall be appointed by the City Council of the City (each a "Director"). The initial five (5) Directors of the Board shall be those persons named in Article VIII, below. With respect to the initial Board, the terms of the initial Directors Resolution No. 02-23-17-04 Page 6 of 27 shall commence on the date the Secretary of State issues the certificate of incorporation for the Corporation and each shall serve for the term expiring on the date set forth thereon. The Mayor of the City shall serve as a Director and shall serve as President of the Board. The remaining Directors may be members of the City Council of the City, City officers or employees, or residents of the City whom the City Council determines have a special knowledge or expertise that would be beneficial to the Corporation, such as a banker or realtor. If a Director ceases to be an elected official, officer or employee of the City, or a resident of the City, he or she shall be disqualified from serving as a Director. 6.02 Except as provided herein, each Director shall serve a term of office of two (2) years,or until his or her successor is appointed by the City Council of the City,unless such Director has been appointed to fill an unexpired term, in which case the term of such Director shall expire on the expiration date of the term of the Director who he or she was appointed to replace. Initial and subsequent Directors shall be eligible for reappointment; provided, however, that no Director may serve longer than six (6) years consecutively, unless such service is required to complete an unexpired term or in order to serve until a successor is appointed. A majority of the Board must at all times be residents of the City. Any Director may be removed from office at any time, with or without cause, by the City Council of the City. 6.03 Vacancies on the Board that occur before the end of a Director's term shall be filled in the same manner as appointments made under this section. 6.04 All other matters pertaining to the internal affairs of the Corporation shall be governed by the Bylaws of the Corporation, so long as such Bylaws are not inconsistent with this Certificate of Formation or the laws of the State of Texas. ARTICLE VII Registered Office and Agent The street address of the initial registered office of the Corporation is 1101 Texas Avenue, College Station, Texas 77842, and the name of the initial registered agent at such address is Kelly Templin. ARTICLE VIII Initial Directors The names and addresses of the initial Directors are: NAME ADDRESS INITIAL TERM EXPIRES Karl Mooney 1101 Texas Avenue September 30, 2018 College Station, Texas 77842 Resolution No. 02-23-17-04 Page 7 of 27 James Benham 1101 Texas Avenue September 30, 2018 College Station, Texas 77842 Julie Schultz 1101 Texas Avenue September 30, 2019 College Station, Texas 77842 1101 Texas Avenue September 30, 2019 College Station, Texas 77842 1101 Texas Avenue September 30, 2019 College Station, Texas 77842 ARTICLE IX Incorporators The names and street addresses of the incorporators, each of whom resides within the City, are: Karl Mooney 1101 Texas Avenue College Station, Texas 77842 James Benham 1101 Texas Avenue College Station, Texas 77842 Julie Schultz 1101 Texas Avenue College Station, Texas 77842 ARTICLE X Approval of Certificate of Formation Resolution Number approving the form and substance of this Certificate of Formation was adopted by the City Council of the City of College Station, Texas on ARTICLE XI Director Liability No Director shall be liable to the Corporation for monetary damages for an act or omission in the Director's capacity as a Director, except for liability (i) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law,(ii)for any transaction for which the Director received an improper benefit, whether or not the benefit resulted from an act taken within the scope of the Director's office, or (iii) for acts or omissions for which the liability of the Director is expressly provided by statute. Any repeal or amendment of this Article Resolution No. 02-23-17-04 Page 8 of 27 by the Directors shall be prospective only, and shall not adversely affect any limitation on the personal liability of a Director existing at the time of such repeal or amendment. In addition to the circumstances in which a Director is not personally liable as set forth in the preceding sentences, a Director shall not be liable to the fullest extent permitted by any amendment to the Texas statutes hereafter enacted that further limits the liability of a Director. ARTICLE XII Limits on Use of Corporate Assets; Income of Corporation 12.01 In accordance with the provisions of Section 501(c)(3) of the Internal Revenue Code (the "CODE") and regardless of any provisions of this Certificate of Formation or the laws of the State of Texas, the Corporation shall not: A. Permit any part of the net earnings of the Corporation to inure to the benefit of any private individual (except that reasonable compensation may be paid for personal services rendered to or for the Corporation in effecting one or more of its purposes); B. Direct any of its activities to attempting to influence legislation by propaganda or otherwise; C. Participate in, or intervene in (including the publication or distribution of statements), any political campaign on behalf of any candidate for public office; or D. Attempt to influence the outcome of any election for public office or to carry on, directly or indirectly, any voter registration drives. 12.02 Any income earned by the Corporation after payment of reasonable expenses, debt and such reserves as may be necessary as set forth in the authorizing documents related to the issuance of debt by the Corporation shall accrue to the City. 12.03 The City shall, at all times, have an unrestricted right to receive any income earned by the Corporation, exclusive of amounts needed to cover reasonable expenditures and reasonable reserves for future activities. Any income of the Corporation received by the City shall be deposited into such account or fund as determined by the City Council of the City. No part of the Corporation's income shall inure to the benefit of any private interests. ARTICLE XIII Corporation as Private Foundation If the Corporation is a private foundation within the meaning of Section 509(a)of the Code, the Corporation: (a) shall distribute its income for each taxable year at such time and in such manner as not to become subject to the tax on undistributed income imposed by Section 4942 of the Code; (b) shall not engage in any act of self-dealing as defined in Section 4941(d) of the Code; (c) shall not retain any excess business holdings as defined in Section 4943(c) of the Code; (d) Resolution No. 02-23-17-04 Page 9 of 27 shall not make any investments in such manner as to subject it to tax under Section 4944 of the Code; and (e) shall not make any taxable expenditures as defined in Section 4945(d) of the Code. ARTICLE XIV Dissolution 14.01 If the Board of Directors determines by resolution that the purposes for which the Corporation was formed have been substantially met and all bonds issued by and all obligations incurred by the Corporation have been fully paid or provision made for such payment, the Board shall execute a certificate of dissolution which states those facts and declares the Corporation dissolved in accordance with the requirements of the Act or with applicable law then in existence. In the event of dissolution or liquidation of the Corporation, all assets will be turned over to the City for deposit into such account or fund as the City Council of the City should direct. 14.02 Subject to any restrictions contained in applicable state law, if the City considers and approves a resolution or ordinance directing the Board to proceed with the dissolution of the Corporation,the Board shall promptly proceed with the dissolution of the Corporation. The failure of the Board to promptly proceed with the dissolution of the Corporation in accordance with this Section 14.02 shall be deemed a cause for the removal from office of any or all of the Directors as permitted by Article VI of this Certificate of Formation. ARTICLE XV Indemnification of Directors and Officers 15.01 Right to Indemnification. Subject to the limitations and conditions as provided in this Article XV and the Bylaws of the Corporation, each person who was or is made a party or is threatened to be made a party to or is involved in any threatened,pending or completed action, suit or proceeding, whether civil, administrative, arbitrative or investigative (hereinafter a "proceeding"), or any appeal in such a proceeding or any inquiry or investigation that could lead to such a proceeding, by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a Director or officer of the Corporation shall be indemnified by the Corporation to the fullest extent permitted by the Texas Nonprofit Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide prior to such amendment) against judgments, penalties, fines, settlements, and reasonable expenses (including, without limitation, attorney's fees) actually incurred by such person to indemnity hereunder. The rights granted pursuant to this Article XV shall be deemed contract rights, and no amendment, modification, or repeal of this Article XV shall have the effect of limiting or denying any such rights with respect to action taken or proceedings arising prior to any such amendment, modification, or repeal. It is expressly acknowledged that the indemnification provided in this Article XV could involve indemnification for negligence or under theories of strict liability. This indemnification does not apply to deliberate or criminal acts of such person or persons subject to indemnification hereunder. Resolution No. 02-23-17-04 Page 10 of 27 15.02 Indemnification of Employees and Agents. The Corporation, by adoption of resolution of the Board, may indemnify and advance expenses to an employee or agent of the Corporation to the same extent and subject to the same conditions under which it may indemnify and advance expenses to Directors and officers under this Article XV. 15.03 Appearance as a Witness. Notwithstanding any other provision of this Article XV, the Corporation may pay or reimburse expenses incurred by a Director, officer, employee or agent in connection with his or her appearance as a witness or other participation in a proceeding involving the Corporation or its business at a time when he or she is not a named defendant or respondent in the proceedings. 15.04 Non-exclusivity of Rights. The right to indemnification and the advancement and payment of expenses conferred in this Article XV shall not be exclusive of any other right which a Director, officer, employee or agent indemnified pursuant to Section 15.02 above, may have or hereafter acquire under any law (common or statutory), provision of this Certificate of Formation or the Bylaws of the Corporation, agreement, or vote of disinterested Directors or otherwise. 15.05 Insurance. The Corporation shall purchase and maintain insurance, at its sole cost and expense to protect itself and any person who is or was serving as a Director, officer, employee or agent of the Corporation or who is or was serving at the request of the Corporation as a Director, officer, partner, venture, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership,joint venture, proprietorship, employee benefit plan, trust or other enterprise against any expense, liability or loss, whether the Corporation would have the power to indemnify such person against such expense, liability or loss under this Article XV. 15.06 Notification. Any indemnification of a Director or officer in accordance with this Article XV shall be reported in writing to the members of the Board with or before the notice of the next regular meeting of the Board and, in any case, within the 12-month period immediately following the date of the indemnification or advance. 15.07 Savings Clause. If this Article XV or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and hold harmless each Director, officer or any other person indemnified pursuant to this Article XV as to costs, charges and expenses (including attorneys' fees),judgments, fines, and in amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative,to the full extent permitted by any applicable portion of this Article XV that shall not have been invalidated and to the fullest extent permitted by applicable law. ARTICLE XVI Amendments This Certificate of Formation may not be changed or amended unless approved in writing by the City. Resolution No. 02-23-17-04 Page 11 of 27 IN WITNESS WHEREOF, we have hereunto set our hands this day of , 20 Karl Mooney Incorporator James Benham Incorporator Julie Schultz Incorporator STATE OF TEXAS } } COUNTY OF BRAZOS } Before me, on this day personally appeared Karl Mooney, known to me to be the person whose name is subscribed to the foregoing document and, being by me first duly sworn, declared that the statements therein contained are true and correct. Notary Public, State of Texas Resolution No. 02-23-17-04 Page 12 of 27 STATE OF TEXAS } } COUNTY OF BRAZOS } Before me, on this day personally appeared James Benham, known to me to be the person whose name is subscribed to the foregoing document and, being by me first duly sworn, declared that the statements therein contained are true and correct. Notary Public, State of Texas STATE OF TEXAS } } COUNTY OF BRAZOS } Before me, on this day personally appeared Julie Schultz, known to me to be the person whose name is subscribed to the foregoing document and, being by me first duly sworn, declared that the statements therein contained are true and correct. Notary Public, State of Texas Resolution No. 02-23-17-04 Page 13 of 27 EXHIBIT A m Cn 0 ! c cm 00m3 n l.. r+ 'ZV C a D 2 C 1`e} D z P v � m m m II : 1 O 1_ '..- z md� e f' N• \ . .. / \ ,..,l'i,:t i L m '1, ^r y i z %� °+ p wr. a _/ a .O a 5�¢ r { ]p] ` ? tie / r.-'', I O 3 1::, 1 -. 411° \\ .:,. 3P. 0 O W� o m r 3 O Y" m 0 'O N m i 111F p'. A •• vr. C CO 3 z p �.` vi < O3 4 Nr • � � 3 • cl o , a �� 1 Y M C Z 4,1 y N p3 r m +' S'^._ N r Lji Yti 3 d o = X 1 A O11, c• �� �/^ a - r-,: . mm `SI� mM+ ,:r x",' Z �� _ �' air 1- m p p, D G 0 r- 4 % m \</ M I ; VI VIq m am- j$�• m 0 • =D Z AX Z m 7c i lj !III g' I T 11 gse sgSS @e,�s'3, MI 1 a 1,iii 3 ��asGy$ �z S€° �3 F£ D II II N I ° l_, 98 1.11,11Ec £ �?z 'fir y 1 Spring Creek 1 ilaw. ,si; 1 E�� F�ti z 0 0 1 i,, Corporate Campus le,nr,!E, R , ,1a ,' o< m "� �.,�i 11 � N Dom. �v - v� No 1 College Station,Texas, le Resolution No. 02-23-17-04 Page 15 of 27 Exhibit "B" Resolution No. 02-23-17-04 Page 16 of 27 BYLAWS OF THE SPRING CREEK LOCAL GOVERNMENT CORPORATION A Texas Non-Profit Local Government Corporation created by and on behalf of the City of College Station, Texas ARTICLE I Corporate Purpose and Authority 1.01 Purpose. The Spring Creek Local Government Corporation(the "Corporation") is organized for the purpose of aiding, assisting, and acting on behalf of the City in the performance of its governmental functions to promote the common good and general welfare of the City, including, without limitation, the development of the geographic area of the City included at or in the vicinity of the "Spring Creek Corporate Campus" as depicted on Exhibit "A", in furtherance of the promotion, development, encouragement and maintenance of employment, commerce, economic development and public facility development in the City of College Station. The Corporation shall have the power to purchase, exchange, contract for, lease, rent, and in any and all other ways acquire, own, improve, and hold, and to sell, convey, mortgage, lease, rent to others, or otherwise dispose of real estate, improvements in real estate, interests in real estate, and personal property of every kind, character, and description to carry out the purposes of the Corporation; subject to the approval of the City Council. In the exercise of the powers of the Corporation, the Corporation may enter into a loan, lease, trust, or other agreements as authorized by the Act that are necessary and appropriate to the fulfillment of the public purpose of the Corporation,all of which agreements,and the specific uses, and the method of withdrawals and expenditure of the proceeds of the bonds or notes, and other instruments must be included as part of the approval process of the City as required above. In connection with the issuance of its bonds, notes, or other debt instruments, the Corporation shall select bond counsel and financial advisors acceptable to the City Manager and City Attorney. 1.02 Non-Profit Corporation. The Corporation shall have and exercise all of the rights, powers, privileges, and functions given by the general laws of Texas to non-profit corporations incorporated under the Act, including, without limitation, the Texas Nonprofit Corporation Law (Tex. Bus. Org. Code, Chapters 20 and 21 and the provisions of Title I thereof to the extent applicable to non-profit corporations, as amended) or their successor. 1.03 Powers of Non-Profit Corporation. The Corporation shall have all other powers of a like or different nature not prohibited by law which are available to non-profit corporations in Texas and which are necessary or useful to enable the Corporation to perform the purposes for which it was created, including the power to issue bonds,notes or other obligations, and otherwise exercise its borrowing power to accomplish the purposes for which it was created including the power to issue bonds, notes or other obligations, and otherwise exercise its borrowing power to accomplish the purposes for which it was created; provided, however, prior to the consummation of the sale and delivery of any bonds, notes or other forms of debt instruments, the Corporation shall obtain the approval thereof from the City Council. Resolution No. 02-23-17-04 Page 17 of 27 1.04 Local Government Corporation. The Corporation is created as a local government corporation pursuant to the Act and shall be a governmental unit within the meaning of Subdivision (3), Section 101.001, Texas Civil Practice and Remedies Code. The operations of the Corporation are governmental and not proprietary functions for all purposes, including for purposes of the Texas Tort Claims Act, Section 101.001, et seq., Texas Civil Practice and Remedies Code. ARTICLE II Board of Directors 2.01 Powers Vested in Board. All powers of the Corporation shall be vested in the Board of Directors consisting of five (5) members (the "Board"). The qualification, selection, terms, removal, and replacement of the members of the Board of Directors of the Corporation("Director" or"Directors") shall be governed by Article VI of the Certificate of Formation ("Certificate"). 2.02 Initial Board and Transition. The initial Directors shall be those persons named in Article VIII of the Certificate. 2.03 Governing Documents. All matters pertaining to the internal affairs of the Corporation shall be governed by these Bylaws, so long as these bylaws are not inconsistent with the Certificate, and such other documents as required by the City and as the same may be amended from time to time, or the laws of the State of Texas. 2.04 Voting Rights. All Directors shall have full and equal voting rights. All references herein to an act, resolution or vote of the Directors shall refer to a vote of the Directors entitled to vote on the matter as provided herein. 2.05 Meeting Location. The Directors may hold their meetings and may have an office and keep the books of the Corporation at such place or places within College Station, Texas, as the Board may from time to time determine; provided, however, in the absence of any such determination, such place shall be in the registered office of the Corporation. 2.06 Open Meetings. The Board shall meet in accordance with and file notice of each meeting of the Board for the same length of time and in the same manner and location as is required of the City under Chapter 551 of the Texas Government Code (the "Open Meetings Act"). In addition, all Board meetings shall be posted at City Hall and on the City's website. Board meetings shall be recorded and,with the exception of recordings of closed sessions under the Open Meetings Act, such recordings shall be made available on the Corporation's website, or, in the absence of a website, on the City's website. 2.07 Public Information. The Corporation, the Board, and any committee of the Board exercising the powers of the Board are subject to Chapter 552 of the Texas Government Code(the "Public Information Act"). 2.08 Annual Meetings. The Board shall hold an annual meeting at a time and at a location in the City as designated by the Board for the purposes of electing officers and transacting any other business related to the Corporation. Resolution No. 02-23-17-04 Page 18 of 27 2.09 Special and Emergency Meetings. Special and emergency meetings of the Board shall be held whenever called by the President of the Board or the Secretary of the Board or by any two (2) of the Directors who are serving duly appointed terms of office at the time the meeting is called. A majority of the Board must be present for any special called or emergency meeting. The Secretary shall give notice of each special meeting to each Director in person, by telephone, by electronic transmission (e.g. facsimile or electronic mail) or mail via the United States Postal Service at least seventy-two (72)hours prior to the meeting in accordance with the Open Meetings Act. An emergency meeting may only be held as permitted under the Open Meetings Act. 2.10 Quorum. A majority of the entire Board (three (3) Directors) shall constitute a quorum for the consideration of matters pertaining to the purposes of the Corporation. If at any meeting of the Board there is less than a quorum present, those present may adjourn the meeting. The vote of a majority of the entire membership of the Board in favor of a motion, resolution, or other act shall be required to constitute the act of the Board, unless the vote of a greater number of Directors is required by law, by the Certificate, or by these Bylaws. 2.11 Assent Presumed Without Express Abstention or Dissent. A Director who is present at a meeting of the Board at which any corporate action is taken shall be presumed to have assented to such action unless such person's dissent or abstention shall be entered in the minutes of the meeting or unless such person shall file a written dissent or abstention to such action with the person acting as the secretary of the meeting before the adjournment thereof Such right to dissent or abstain shall not apply to a Director who voted in favor of the action. 2.12 Conduct of Business. At the meetings of the Board, matters pertaining to the purpose of the Corporation shall be considered in such order as the Board may from time to time determine. At all meetings of the Board, the President shall preside, and in the absence of the President, the Vice President shall preside. The Secretary of the Corporation shall act as secretary of all meetings of the Board, but in the absence of the Secretary, the presiding officer may appoint any person to act as secretary of the meeting. 2.13 Executive Committee, Other Committees. The Board may, by resolution passed by a majority of the entire Board, designate two (2) or more Directors to constitute an executive committee or other type of committee. In addition, the Board may appoint members of the Corporation staff and citizens and/or employees of the City to be members of a committee, except for an Audit, Compensation or Governance Committee, which committees may only be composed of Directors. 2.14 Power of Committees. Except to the extent provided in the authorizing resolution for the committee, a committee may not exercise the authority of the Board. Each committee so designated shall keep regular minutes of the transactions of its meetings, shall cause such minutes to be recorded in books kept for that purpose in the office of the Corporation, and shall report the same to the Board from time to time. Committees authorized to exercise the powers of the Board shall give notice of any meeting in the manner required for a meeting of the Board. Resolution No. 02-23-17-04 Page 19 of 27 2.15 Compensation of Directors. Directors, as such, shall receive no salary or compensation for their services as Directors; provided, however, Directors may be reimbursed for reasonable and necessary expenses incurred in carrying out the Corporation's purposes. 2.16 Director's Reliance on Consultant Information. A Director shall not be liable if, while acting in good faith and with ordinary care, such person relies on information, opinions, reports or statements, including financial statements and other financial data, concerning the Corporation or another person that were prepared or presented by: (a) one or more officers or employees of the Corporation; (b) an employee of the City; (c) legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence; or (d) a committee of the Board of which the Director is not a member. ARTICLE III Officers 3.01 Titles and Terms of Office. The officers of the Corporation shall be a President, a Vice President, a Secretary, a Treasurer, and such other officers as the Board may from time to time elect or appoint. Each officer shall be a current Director. One person may hold more than one office,except the President shall not hold the office of Secretary. The term of office for each officer shall be one (1) year and shall serve from October 1 through the following September 30, except that such office shall terminate on the earlier of: (a) the date that the officer is replaced by the Board; or(b) the date that the officer is no longer a member of the Board. All officers shall be appointed and subject to removal at any time, with or without cause, by a vote of a majority of the entire Board. A vacancy in any office elected pursuant to this Article III shall be filled by a majority of the entire Board. 3.02 Powers and Duties of the President. The President shall be a member of the Board and shall preside at all meetings of the Board. The President shall be the principal executive officer of the Corporation and shall be in general charge of the properties and affairs of the Corporation. In furtherance of the purposes of the Corporation and subject to the limitations contained in the Certificate, the President or Vice President may sign and execute all bonds, notes, deeds, conveyances, assignments, mortgages, contracts and other obligations in the name of the Corporation. The President shall have such other duties as may be assigned to him or her by the Board. The President may call meetings of the Board as provided in Article II of these Bylaws. Resolution No. 02-23-17-04 Page 20 of 27 3.03 Powers and Duties of the Vice President. A Vice President shall be a member of the Board and shall have such powers and duties as may be assigned to such person by the Board or the President, including the performance of such duties of the President upon the death,absence, disability, or resignation of the President, or upon the President's inability to perform the duties of the office. Any action taken by the Vice President in the performance of the duties of the President shall be conclusive evidence of the absence or inability to act of the President at the time such action was taken. 3.04 Treasurer. The Treasure shall have custody of all the funds and securities of the Corporation which come into possession of the Corporation. When necessary or proper, the Treasurer: (a) may endorse, on behalf of the Corporation, for collection, checks, notes and other obligations and shall deposit the same to the credit of the Corporation in such bank or banks or depositories as shall be designated in the manner prescribed by the Board; (b)may sign all receipts and vouchers for payments made to the Corporation, either alone or jointly with such other officer as is designated by the Board; (c) shall enter or cause to be entered regularly in the books of the Corporation to be kept by such person for that purpose full and accurate accounts of all moneys received and paid out on account of the Corporation; (d) shall perform all acts incident to the position of treasurer subject to the control of the Board; and€ shall, if required by the Board, give such bond for the faithful discharge of his or her duties in such form as the Board may require. The Corporation may contract with the City to provide financial services for the Corporation in deciding the performance of the duties of the Treasurer set forth in this section 3.04. 3.05 Secretary. The Secretary: (a) shall keep the minutes of all meetings of the Board in the books provided for that purpose; (b) shall attend to the giving and serving of all notices; (c) in furtherance of the purposes of the Corporation and subject to the limitations contained in the Certificate, may sign with the President in the name of the Corporation and/or attest to signatures thereof, all contracts, conveyances, bonds, deeds, assignments, mortgages, and other instruments of the Corporation; (d) shall have charge of the Corporation's books, records, documents and instruments, except the books of account and financial records and securities of which the Treasurer shall have custody and charge, and such other books and papers as the Board may direct, all of which shall at all reasonable times be open to the inspection of any Director upon application at the office of the Corporation during business hours; and shall in general perform all duties incident to the office of Secretary subject to the control of the Board. Nothing in this section 3.05 shall be construed as prohibiting the Board or the City from providing to the Secretary such support as may be reasonable and necessary to assist the Secretary in carrying out the duties set forth herein. 3.06 Compensation. Officers shall serve without compensation for their duties, but are entitled to receive reimbursement for their reasonable expenses only in performing their functions in accordance with any policies that may be adopted by the Board. 3.07 Officer's Reliance on Consultant Information. In the discharge of a duty imposed or power conferred on an officer of the Corporation,the officer may in good faith and with ordinary care, rely on information, opinions, reports or statements, including financial statements and other financial data, concerning the Corporation or another person that were prepared or presented by: Resolution No. 02-23-17-04 Page 21 of 27 (a) one or more officers or employees of the Corporation, including members of the Board; (b) an employee of the City; or (c) legal counsel, public accountants, or other persons as to matters the officer reasonably believes are within the person's professional or expert competence. ARTICLE IV Financial Responsibilities 4.01 Audit. Not later than one hundred twenty (120) days after the close of each fiscal year,the Board shall have an annual audit prepared by an independent auditor who is duly licensed or certified as a public accountant in the State of Texas of the financial books and records of the Corporation. The Corporation shall provide a copy of the completed audit to the City not later than fifteen (15) days after its receipt by the Corporation. 4.02 Capital Spending Authority. The Board may expend funds for capital improvements in accordance with a capital improvement plan approved by the Board for the current fiscal year budget as follows: (a) Funds from the City shall be used for the purposes of the Corporation as authorized and directed by the City. (b) Funds from other sources, such as donations, may be used at the discretion of the Board for capital purposes as long as the uses are consistent with the direction of the City and are not reasonably expected by the Board to increase the operation and maintenance costs of the Corporation above the limits established in Section 4.04 below, or have a capital cost greater than $100,000.00. (c) Proceeds of bonds, notes or other obligations shall be expended in accordance with the terms of the resolution authorizing the issuance of such bonds, notes or other obligations. 4.03 Issuance of Debt. (a) The Corporation, with the approval of the City, is authorized to issue short-term debt in the form of bonds, notes, and other obligations which by their terms mature and are payable not later than one (1) year from their initial date of issuance. Where possible, the amount and purpose of the short-term debt shall be projected by the Corporation in its annual budget to the City. The City shall be given first opportunity to provide these funds before the Board incurs debt. (b) The Corporation, with the approval of the City, is authorized to issue long-term debt in the form of bonds, notes or other obligations which by their terms mature and are payable beyond one (1) year from their initial date of issuance. Long term Resolution No. 02-23-17-04 Page 22 of 27 debt may be issued to finance capital improvements and costs related thereto, and to refund or refinance any outstanding bonds, notes, or obligations issued or incurred by the Corporation, or for such other reasons as may be approved by the City. (c) Short-term debt as defined in Subsection (a) and long-term debt as defined in Subsection (b) of this Section 4.03 may be issued only if: (i) The issuance of said debt is approved by a majority of the entire Board; and (ii) The issuance of said debt is approved by resolution or ordinance of the City. (d) Any debt issuance approved by the City shall be paid from any source or sources permitted by law including the income and revenue of the Corporation. 4.04 Increase in O&M Costs. Except for items mandated by changes in state and federal law or regulation that could not reasonably have been anticipated prior to submission of the Corporation's budget to the Cities for review and comment, in the event any one or more items are added during a fiscal year that would increase or cause the annual operation and maintenance costs to exceed ten percent(10%) above the budgeted amount for that year,the Board must receive prior approval from the City prior to making the addition. 4.05 Fiscal Year. The fiscal year of the Corporation shall begin October 1 of each year. 4.06 Annual Budget. (a) No later than ninety (90) days prior to the beginning of each fiscal year, the Board shall prepare, or cause to be prepared, and approve a budget(the "Budget") for the fiscal year. The Budget must be approved by a majority vote of the entire Board. After approval by the Board,the Budget shall be submitted to the City for approval. Failure of the City to reject, to ask for additional information regarding, or to request a modification of, the Budget approved by the Board on or before the thirtieth (30th) day after submission of the Budget to the City shall be deemed an approval of the Budget by the City (and a request for additional information or for modification may be provided by an employee of the City). (b) The Budget shall, at a minimum, include capital, operational, debt service and project-specific expenditures and corresponding revenues. The Budget shall clearly indicate the sources and purposes of revenues contributed by the City. (c) If the Board fails to approve the Budget, then the Budget for the prior fiscal year shall be deemed approved. Resolution No. 02-23-17-04 Page 23 of 27 4.07 Sale or Transfer of Assets. The Corporation may not sell, transfer or assign real property in whole or in part, without the approval of the Board. After approval by the Board, the proposed sale, transfer or assignment of the assets (the"Asset Transfer") must be submitted to the City for approval. Notwithstanding the foregoing, the Board shall not be required to obtain the City's consent to sell, convey, or transfer to a third party personal property of the Corporation determined by the Board to be surplus and which has a depreciated value of less than $1000.00. ARTICLE V Indemnification of Directors and Officers 5.01 Right to Indemnification. Subject to the limitations and conditions as provided in this Article V and the Certificate, each person who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, administrative, arbitrative or investigative (hereinafter a "proceeding"), or any appeal in such a proceeding or any inquiry or investigation that could lead to such a proceeding, by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a Director or officer of the Corporation shall be indemnified by the Corporation to the fullest extent permitted by the Texas Nonprofit Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide prior to such amendment) against judgments, penalties, fines, settlements, and reasonable expenses (including, without limitation, attorney's fees) actually incurred by such person to indemnity hereunder. The rights granted pursuant to this Article XV shall be deemed contract rights, and no amendment, modification, or repeal of this Article XV shall have the effect of limiting or denying any such rights with respect to action taken or proceedings arising prior to any such amendment, modification, or repeal. It is expressly acknowledged that the indemnification provided in this Article XV could involve indemnification for negligence or under theories of strict liability. This indemnification does not apply to deliberate or criminal acts of such person or persons subject to indemnification hereunder. 5.02 Indemnification of Employees and Agents. The Corporation, by adoption of resolution of the Board, may indemnify and advance expenses to an employee or agent of the Corporation to the same extent and subject to the same conditions under which it may indemnify and advance expenses to Directors and officers under this Article V. 5.03 Appearance as a Witness. Notwithstanding any other provision of this Article V, the Corporation may pay or reimburse expenses incurred by a Director, officer, employee or agent in connection with his or her appearance as a witness or other participation in a proceeding involving the Corporation or its business at a time when he or she is not a named defendant or respondent in the proceedings. 5.04 Non-exclusivity of Rights. The right to indemnification and the advancement and payment of expenses conferred in this Article V shall not be exclusive of any other right which a Director, officer, employee or agent indemnified pursuant to Section 5.02 above, may have or hereafter acquire under any law (common or statutory), provision of this Certificate of Formation or the Bylaws of the Corporation, agreement, or vote of disinterested Directors or otherwise. Resolution No. 02-23-17-04 Page 24 of 27 5.05 Insurance. The Corporation shall purchase and maintain insurance, at its sole cost and expense to protect itself and any person who is or was serving as a Director, officer, employee or agent of the Corporation or who is or was serving at the request of the Corporation as a Director, officer, partner, venture, proprietor, trustee, employee, agent or similar functionary of another foreign or domestic corporation, partnership,joint venture, proprietorship, employee benefit plan, trust or other enterprise against any expense, liability or loss, whether the Corporation would have the power to indemnify such person against such expense, liability or loss under this Article V. 5.06 Notification. Any indemnification of a Director or officer in accordance with this Article XV shall be reported in writing to the members of the Board with or before the notice of the next regular meeting of the Board and, in any case, within the 12-month period immediately following the date of the indemnification or advance. 5.07 Savings Clause. If this Article V or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and hold harmless each Director, officer or any other person indemnified pursuant to this Article V as to costs, charges and expenses (including attorneys' fees),judgments, fines, and in amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative,to the full extent permitted by any applicable portion of this Article V that shall not have been invalidated and to the fullest extent permitted by applicable law. ARTICLE VI Code of Ethics 6.01 Policy. It is the policy of the Corporation that Directors and officers conduct themselves in a manner consistent with sound business and ethical practices;that the public interest always be considered in conducting corporate business; that the appearance of impropriety be avoided to ensure and maintain public confidence in the Corporation; and that the Board establish policies to control and manage the affairs of the Corporation fairly, impartially, and without discrimination. 6.02 Purposes. This Code of Ethics has been adopted as part of the Corporation's Bylaws for the following purposes: (a) to encourage high ethical standards in official conduct by Directors and corporate officers; and (b) to establish guidelines for such ethical standards of conduct. 6.03 Conflicts of Interest. (a) Abide by State and Criminal Laws for Public Officers. All Directors, officers and employees shall abide by state civil and criminal laws regarding conflicts of interest, official misconduct and other regulations and restrictions involving their official duties. Resolution No. 02-23-17-04 Page 25 of 27 (b) Disclosure and Abstention. It is the intent of these Bylaws that the Directors and officers take all steps to avoid the appearance of impropriety in the conduct of their affairs on behalf of the Corporation. This includes not engaging in any conduct or business that may be deemed to compromise their independent judgment in executing their duties as Corporation officials. In the event that a Director or officer has a financial or equitable interest, direct or indirect, in a transaction that comes before the Board, or a committee, the affected Director must: (i) Disclose that interest in writing and file it with the Board Secretary; and (ii) Refrain from discussing or voting on the same. (c) Definition of Financial Interest/Relative. The "financial or equitable interest" contemplated under (b) of this Section requires that the affected person who is the Director or officer or their relative receive an actual financial benefit from the transaction with the Corporation. A relative is a person related within the first degree of consanguinity or affinity to the Director or officer. A financial or equitable interest does not include the following: (i) An ownership in the entity transacting business with the Corporation where the ownership interest is less than one percent (1%). (ii) Compensation as an employee, officer or director of the entity transacting business with the Corporation where such compensation is not affected by the entity's transaction with the Corporation. (iii) An investment or ownership in a publicly held company in an amount less than Ten Thousand Dollars ($10,000.00). (iv) The status of the person being an employee of a public entity serving as Director of the Board. 6.04 Acceptance of Gifts. No Director of officer shall accept any benefit as consideration for any decision, opinion, recommendation, vote or other exercise of discretion in carrying out official acts for the Corporation. No Director or officer shall solicit, accept, or agree to accept any benefit from a person known to be interested in or likely to become interested in any contract, purchase, payment, claim or transaction involving the exercise of the Director's or officer's discretion. As used here "benefit" does not include: (a) A fee prescribed by law to be received by a Director or officer or any other benefit to which the Director or officer is lawfully entitled or for which he gives legitimate consideration in a capacity other than as a Director or officer; (b) A gift or other benefit conferred on an account of kinship or a personal, professional, or business relationship independent of the official status of the Director or officer; Resolution No. 02-23-17-04 Page 26 of 27 (c) An honorarium in consideration for legitimate services rendered above and beyond official duties and responsibilities if: (i) Not more than one honorarium is received from the same person in a calendar year; (ii) Not more than one honorarium is received from the same service; and (iii) The value of the honorarium does not exceed $250.00 exclusive of reimbursement for travel, food, and lodging expenses incurred by the Director or officer in performance of the services. (d) A benefit consisting of food, lodging, transportation, or entertainment accepted as a guest is reported as may be required by law. 6.05 Nepotism. No Director or officer shall appoint, or vote for, or confirm the appointment to any office, position, clerkship, employment or duty, of any person related within the second degree of affinity or within the third degree of consanguinity to the Director or officer so appointing, voting, or confirming, or to any other Director or officer. ARTICLE VII Miscellaneous Provisions 7.01 Seal. The seal of the Corporation shall be such as may be from time to time approved by the Board. The seal of the Corporation shall not be required to be placed on a document in order for the document to be considered a valid act or agreement of the Corporation. 7.02 Notice and Waiver of Notice. Whenever any notice, other than public notice of a meeting given to comply with the Open Meetings Act, is required to be given under the provisions of these Bylaws, such notice shall be deemed to be sufficient if given by depositing the same in a post office box in a sealed postpaid wrapper addressed to the person entitles thereto at his or her post office address, as it appears on the books of the Corporation, and such notice shall be deemed to have been given on the day of such mailing. If transmitted by facsimile or email, such notice shall be deemed to be delivered upon successful transmission of the facsimile or email. A Director may waive notice of any meeting. The attendance of a Director at any meeting shall constitute a waiver of notice of such meeting unless such attendance is for the purpose of objecting to the failure of notice. A waiver of notice, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. 7.03 Gender. References herein to the masculine gender shall also refer to the feminine in all appropriate cases and vice versa. 8.04 City Access to Records of Corporation. Notwithstanding the provisions of the Public Information Act or any exceptions contained therein to disclosure and the rights or Resolution No. 02-23-17-04 Page 27 of 27 limitations thereof regarding the review of record of Texas non-profit corporations, the City shall have a special right to review and obtain copies of the records of the Corporation, regardless of format, upon reasonable notice and during regular business hours of the Corporation. Such special right of access includes the right of the City's Internal Auditor to access necessary records and to conduct financial audits at the direction of the City's governing body. 8.05 Amendments. A proposal to alter, amend or repeal these Bylaws shall be made by the affirmative vote of a majority of the entire Board at any annual or special meeting if notice of the proposed amendment be contained in the notice of the special meeting. However, any proposed change or amendment to the Bylaws must be approved by resolution of the City to be effective.