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R99-075 10-29-99RESOLUTION NO. R99-75 A RESOLUTION OF THE CITY COUNCIL OF PEARLAND, TEXAS, APPROVING THE SERVICE AND ASSESSMENT PLAN FOR CITY OF PEARLAND PUBLIC IMPROVEMENT DISTRICT NO. ONE (SHADOW CREEK RANCH). Section 1. correct. Section 2. WHEREAS, the City of Pearland (the "City") is authorized pursuant to TEX. LOCAL GOV'T CODE, ch. 372, as amended ("Chapter 372") to create public improvement districts for the purposes described therein; and WHEREAS, the City has received a petition (the "Petition") requesting the creation of the City of Pearland Public Improvement District No. One (the "PID"), held a public hearing, and created the PID in accordance with the applicable provisions of Chapter 372; and WHEREAS, the city council wishes to adopt a Service and Assessment Plan with respect to the PID; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: The facts recited in the preamble hereto are found to be true and The Service and Assessment Plan attached to this resolution is hereby approved and adopted on behalf of the PID, and the mayor, city secretary and any other appropriate officials of the City are hereby authorized to take all necessary actions on behalf of the City to implement the terms thereof in accordance therewith. Section 3. It is hereby found, determined and declared that a sufficient written notice of the date, hour, place and subject of this meeting of the City Council was posted at a place convenient to the public at the City Hall of the City for the time required by law RESOLUTION NO. R99-75 preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government Code, and that this meeting has been open to the public as required by law at all times during which this Resolution and the subject matter thereof has been discussed, considered and formally acted upon. City Council further ratifies, approves and confirms such written notice and the contents and posting thereof. Section 4. Effective Date. This Resolution shall become effective immediately upon the later of (i) its passage or (ii) the effective date of City of Pearland Resolution No. R99-74, authorizing the PID. PASSED, APPROVED, and ADOPTED this the 25thday of October ,1999. TOM REID ATTEST: APPROVED AS TO FORM' DARRIN M. COKER CITY ATTORNEY MAYOR 2 City of Pearland Public Improvement District Number One Shadow Creek Ranch Service and Assessment Plan EXHIBIT A 1. Introduction This Service and Assessment Plan (this "Plan") is prepared and adopted in conformance with the Public Improvement District Assessment Act, Texas Local Government Code, Ch. 372, as amended (the "Act"), and in accordance with City of Pearland, Texas, Resolution No. R99-74, creating the City of Pearland Public Improvement District No. One (the "PID"), pursuant to which the PID was created by the City of Pearland, Texas (the "City"). The creation of the PID was initiated by a petition. (the "Creation Petition") submitted to the City by Pearland Investments, Inc., in compliance with the requirements of Section 372.005 of the Act. 2. Boundaries The boundaries of the PID are described in the legal description, attached as Exhibit A. 3. Administration of the PID The management of the PID will be the ultimate responsibility of the City Council of the City of Pearland; provided that, to the extent allowed by law, the City may initially appoint a separate board, which may be a non-profit corporation (the "Board") to carry out the City's delegable responsibilities hereunder, as well as the day-to-day management and administration of this Plan. 4. Generally The area within the PID is anticipated to be developed as a part of the master-planned community to be known as Shadow Creek Ranch. It is estimated that Shadow Creek Ranch will be developed over 15 years. Generally speaking, this Plan (i) designates the improvements required for the growth and development of the land within the PID, (ii) provides for the financing and construction of such improvements by various entities owning or developing land within the PID, and (iii) describes the terms under which such entities will be reimbursed for the improvements from PID assessments, or from the proceeds of bonds payable from PID assessments. At the time of adoption of this Plan, it is not possible to determine with certainty the placement and sequencing of the PID Improvements (defined below). The goal of this Plan is to provide sufficient certainty for the owners of land within the PID to proceed with the financing of the necessary improvements, while allowing for sufficient flexibility to meet the varying needs of the PID over the life of the development of Shadow Creek Ranch. The costs and assessments relating to the various PID Improvements will be allocated as the Improvements are planned and constructed. 5. Authorized Improvements; benefits conferred The improvements authorized under this Plan (the "Improvements"), and the estimated costs thereof, are described below: Improvements Cost Water distribution lines Sanitary Sewer lines Storm water Drainage facilities, including detention Water and sewer impact fees Financing costs (including reserve funds, developer interest and costs of issuance) Creation and administration costs $ 9,046,744 13,570,115 19,224,330 11,109,311 22,864,500 400,000 TOTAL $ 76,215,000 Costs are expressed in 1999 dollars, and shall be adjusted in accordance with the Engineering News Record regional construction index applicable to the City. It is hereby found and declared that the above Improvements will confer a special benefit upon the land within the PID, in that continued growth and development within the PID will require such Improvements to be made. 6. Service plan; advance financing by landowners Service will be provided to the PID through the construction of Improvements in accordance with this Section. Although the Improvements are required for the growth and development of the PID, it is not necessary for them to be built simultaneously or in advance of the need therefor. This is particularly true in view of the fact that the size of Shadow Creek Ranch makes it likely that it will be constructed in phases as development warrants. In addition, it is intended that portions of the PID not directly benefitting from a particular phase of the Improvements not be assessed for such Improvements. As a result, this Plan contemplates that the Improvements will be financed and constructed by the owners and developers of land within the PID, to be reimbursed in accordance with the terms of this Plan. To be authorized to construct Improvements under this Plan and to be eligible for reimbursement from PID funds, an owner or developer must follow the procedures described below: a. Define a "neighborhood." The owner of property within the PID (a "Developer") shall describe all or a portion of such property within which certain of the Improvements required for its development will be constructed. b. Submit application to the City. Prior to the submission of any final plat, the Developer shall submit an application to the City requesting that the described Improvements be authorized. The application shall include: (i) a legal description and map of the neighborhood, (ii) the specified Improvements requested, (iii) a preliminary estimate of the costs of the Improvements, (iv) the anticipated construction schedule, (v) the anticipated required assessment per square foot to be levied within the neighborhood, computed on a lot-by-lot basis, (vi) a reimbursement agreement following a form approved for such purpose by the City Attorney, and (vi) a certificate from the Shadow Creek Ranch Maintenance Association ("SCRMA") making a preliminary finding to the effect that the application complies with the requirements of this Plan as well as the Shadow Creek Ranch community design guidelines, and all applicable deed restrictions and other restrictive covenants relating to the village. c. City approval of application and reimbursement agreement. The City Council will review the application, and upon a finding that the application is in compliance with the requirements of this Plan, the City Manager will be authorized to execute the reimbursement agreement on behalf of the City, and the Developer will be authorized to proceed with construction in accordance with the contents of the application and this Plan. The reimbursement agreement will state whether the parties expect the Developer to be reimbursed for all or a portion of the Improvements to be constructed. The Improvements project budget and assessment with respect to the applicable Improvements, if approved by the City in accordance with this Subsection, will be thereby adopted as an amendment to, and become a part of, this Plan. d. Construction of the Improvements. The Developer shall proceed with the construction of the Improvements in accordance with the schedule described in the application. Design and construction of all Improvements shall be performed to City specifications, and all construction shall be bid competitively to the same extent and in the same manner as would be required for similar work carried out by the City. The conduct of the work shall be the responsibility of the Developer, but the City and the SCRMA shall have unlimited rights to inspect the construction of the Improvements. e. Conveyance of Improvements to the City. Upon completion of the Improvements, and final inspection and acceptance of the Improvements by the City, the Village Developer will convey all rights to the Improvements to the City, subject to the Village Developer's rights of reimbursement described in the reimbursement agreement. 7. Assessment plan; reimbursement to Developers A Developer who has financed the construction of Improvements in accordance with the preceding Section shall be reimbursed in accordance with this Section. a. Eligible costs. The only costs of a Developer reimbursable with respect to Improvements constructed hereunder are: engineering and design fees, permit, inspection and filing fees, construction costs, and five years of developer interest payable at the net effective interest rate of the PID bonds from which the reimbursement is paid. 3 b. Prerequisites for reimbursement. In addition to any other requirements set forth in this Plan, to be eligible for reimbursement, a Village Developer must: (i) present a certification from the SCRMA stating that the Improvements have been completed in accordance with the approved plans, as well as all applicable design guidelines, deed restrictions and covenants, (ii) have followed the procedures described in the preceding Section and in the applicable reimbursement agreement, (iii) present a consent to the levy of an assessment within the neighborhood in the amount required to accommodate the reimbursement in a form acceptable to the City and the City Attorney, and executed by the Developer and any other party owning an interest in the neighborhood according to the then-current official tax rolls, and (iv) until the City has levied the applicable neighborhood assessment as provided in Subsection (c), below, (1) refrain from the subdivision of land in the neighborhood, (2) not have received final approval of any plat or building permit for any permanent structure to be located within the neighborhood. c. Levy of assessments. The plan of assessment contemplates that the assessments will be levied in phases, as Improvements are constructed within each neighborhood, and as each Developer becomes eligible for reimbursement. The applicable reimbursement agreement will specify whether the Developer will be reimbursed from the proceeds of PID bonds payable from the applicable neighborhood assessment, or directly from applicable village assessments. Each neighborhood assessment will be levied in the amount per square foot of land within the neighborhood specified in the applicable reimbursement agreement and the Developer consent (described in 7(b)(iii)). The total assessment may not exceed $1.15 computed on a square-foot basis, on all land in the neighborhood prorated over the actual number of lots, and adjusted in accordance with the Engineering News Record regional construction index applicable to the City. Interest on the assessment between the effective date of the ordinance levying the assessment and the date the first installment is payable shall be added to the first installment. If the Developer opts to be reimbursed from PID bond proceeds, such proceeds, net of costs of issuance and administration costs, shall be used to reimburse a Developer as soon as practicable once the City has issued PID bonds for such purpose as described below. The issuance of PID bonds by the City to reimburse any Developer is conditioned upon (i) the compliance of the Developer with the terms of this Plan and the applicable reimbursement agreement, and (ii) a determination of the City' s financial advisor that the (1) PID bonds required for such reimbursement are reasonably marketable, and (2) issuance thereof will not have a materially detrimental effect on the viability of the outstanding PID bonds. The City may combine reimbursements for the purpose of issuance of PID bonds as may be reasonably necessary to minimize transactional costs. 4 Any PID bonds issued to reimburse a Developer pursuant to the above shall be payable solely by the neighborhood assessment, which shall be sufficient to pay principle and interest on the applicable PID bonds, and such bonds shall not be general obligations of the City. Notwithstanding any other provisions of this Plan, the ability of the City to levy an assessment, and thereby to reimburse a Village Developer shall be subject to the consent limitations placed thereon described in the Creation Petition and the resolution of City Council authorizing the PID. d. Assessments, generally. The village assessments will be initially determined assuming a collection percentage rate determined by the PID's financial advisor for the payment of assessments; provided that the City may from time to time adopt a differing assumption to reflect the actual collection of assessments in the PID. Notice and hearing of the levy of each assessment is to be given as provided in the Act. The assessment levy statement will be sent to each property owner liable therefor and the assessment installments will be due and payable at the time property taxes are due and payable to the City. Each lot assessment will be financed and paid over a 15-year period commencing as of the initial due date of the assessment, amortized at a rate equal to one-half of one percent (½%) above the actual interest rate paid by the City on the bonds issued pursuant to this Plan to finance the Improvements for which the assessment is levied. Annual installments will become past due on February 1. Notwithstanding the above, no assessment installment shall be considered delinquent until 30 days after it is mailed or otherwise provided to the property owner. The lot owner may satisfy and obtain a release of the assessment in full at any time by paying all outstanding principle and interest as of the date of the payment. After February 1, delinquent assessments or installments shall incur the costs of collection. If practicable, the assessments may be included on the City property tax statement. A lien is established against the property assessed effective as of the date of the ordinance levying the assessment, privileged above all other liens, including prior mortgage liens, to the extent allowed by law. The owner of assessed property may pay at any time the entire assessment then due on such property, with interest as accrued on the assessment. 8. Apportionment of costs The Improvements will be paid by assessments that constitute 100 percent of the total cost of the Improvements. As a result, in accordance with Section 372.014(a) of the Act, at no time shall the cost of the Improvements to be paid for with assessments against property in the PID constitute less than ten percent of the total costs of Improvements. Payment of assessments against property owned by exempt jurisdictions other than the City shall be established by contract. 9. Operation and maintenance of certain facilities by the SCRMA It is anticipated that SCRMA will be vested with the powers typical of a property owner's association established through deed restrictions or other restrictive covenants, including the power to collect maintenance assessments within Shadow Creek Ranch, as well as assessments specific to each neighborhood. To the extent that it has been established and remains in operation, the SCRMA may enter into long-term contractual relationships with the City to operate and maintain certain of the PID drainage Improvements, including lakes, channels, and other detention facilities. 10. Amendment or dissolution This Plan shall be reviewed annually by the PID to recommend any update to this Plan and to determine the annual budget for the Improvements. City Council shall consider such recommendations and enact amendments to this Plan based thereon. Should any of the functions of the PID be assumed by a municipal utility district or other special district with respect to one or more neighborhoods, the City will revise the PID budget and amend this Plan accordingly to avoid duplication. The PID may be dissolved (i) by petition as described in Section 372.011 of the Act; or (ii) in the event one or more municipal utility district or other special district is created and confirmed over the entire area of the PID. Notwithstanding the above, the PID may not be dissolved, nor the Plan amended if it would have the effect of impairing the obligations to bondholders, the Association or Developers then outstanding. VEHOU09:93141.1 EXHIBIT A CITY OF PEARLAND PUBLIC IMPROVEMENT DISTRICT NUMBER ONE SHADOW CREEK RANCH CITY OF PEARLAND, BRAZORIA AND FORT BEND COUNTIES, TEXAS LEGAL DESCRIPTION Being 3305 acres of land, more or less, located in the Dupuy and Roberts Survey, Abstract 726, Brazoria County; William Morris Survey, Abstract 344, Brazoria County; T. C. R. R. Co. Survey, Section 3, Abstract 678, Brazoria County; T. C. R .R. Co. Survey, Section 4 (John W. Maxcy), Abstract 675, Brazoria County; Obediah Pitts Survey, Abstract 717, Brazoria County; H.T. & B. R. R. Co. Survey, Section 80 (J.S. Talmage), Abstract 564, Brazoria County; H. T. & B. R. R. Co. Survey, Section 81, Abstract 300, Brazoria County; H. T. & B. R. R. Co. Survey, Section 82 (J. S. Talmage), Abstract 565, Brazoria County; H. T. & B. R. R. Co. Survey, Section 83, Abstract 305 in Brazoria County and Abstract 761 in Fort Bend County; S.G. Haynie Survey, Abstract 212 in Brazoria County and Abstract 620 in Fort Bend County; Franklin Hooper Survey, Abstract 198, Fort Bend County; George W. McDonald Survey, Abstract 577, Fort Bend County; I. C. Stafford Survey, Abstract 668, Fort Bend County and the H. Levering Survey, Abstract 279, Fort Bend County, Texas; said 3305 acres, more or less, being more particularly described as follows: BEGINNING at the common north comer of Lots 3 and 4, Block 10 of the ALLISON - RICHEY GULF COAST HOME CO'S PART OF SUBURBAN GARDENS, SEC.'S 3 & 4, T.C.R.R. SURVEY AND SEC. 82, H. T. & B. R. R. CO. SURVEY & OBEDIAH PITTS SURVEY, a subdivision of record in Volume 2, Page 99 of the Plat Records of Brazoria County, Texas (B.C.P.R.) also being on the common line of the aforementioned T.C.R.R. Co. Survey, Section 4 and the Dupuy and Roberts Survey; THENCE, SOUTHERLY, 782 feet, more or less, along the common line of said Lots 3 and 4, to a point for comer on the southerly fight-of-way line of Farm to Market Road 2234, 160 feet wide; THENCE, EASTERLY, 998 feet, more or less, along said southerly right-of-way line and its easterly extension, to a point for comer on the west line of the J. Crawley Survey, Abstract 174, Brazoria County, Texas; THENCE, SOUTHERLY, 3482 feet, more or less, along the west line of said J. Crawley Survey to a point for comer on the centerline of Hughes Ranch Road, also being the southwest comer of said J. Crawley Survey; THENCE, EASTERLY, 421 feet, more or less, along the southerly line of said J. Crawley Survey and along said centerline of Hughes Ranch Road, to a point for comer on the centerline of State Highway 288; THENCE, SOUTHERLY, 2426 feet, more or less, along said centerline of State Highway 288 to a point for comer on the easterly extension of the south line of that certain called 202.51 acre tract described in Clerk's File No. 98-022936, Official Records, Brazoria County, Texas (B. C. O. R.); THENCE, WESTERLY, 2588 feet, more or less, along said easterly extension and the south line of said 202.51 acres, to a point for comer on the common line of aforementioned William Morris Survey and the T.C.R.R. Co. Survey, Section 4, also being on the east line of Block 17 of the aforementioned ALLISON-RICHEY GULF COAST HOME CO'S PART OF SUBURBAN GARDENS; THENCE, SOUTHERLY, 370 feet, more or less, along said common survey line and the east line of said Block 17, to a point for comer, same being the southwest comer of said William Morris Survey and an interior comer of said T.C.R.R. Co. Survey, Section 4; THENCE, SOUTHERLY, 2520 feet, more or less, along the east line of Blocks 17, 18 and 19 and the west line of Blocks 20 and 21 of said ALLISON-RICHEY GULF COAST HOME CO'S PART OF SUBURBAN GARDENS, to a point for comer on the southerly line of County Road 92, 40 foot wide, a dedicated road as shown on aforementioned ALLISON-RICHEY GULF COAST HOME CO'S PART OF SUBURBAN GARDENS; THENCE, WESTERLY, 7090 feet, more or less, along the southerly line of said County Road 92, to a point for comer on the west line of aforementioned H. T. & B. R. R. Co. Survey, Section 80 and the east line of the H. T. & B. R. R. Co. Survey, Section 84 (R. B. Lyle), Abstract 538 in Brazoria County and Abstract 767 in Fort Bend County; THENCE, NORTHERLY, 20 feet, more or less, along the common line of said H. T. & B. R. R. Co. Survey, Section 80 and Section 84, to a point for comer, same being the common comer of said H. T. & B. R. R. Co. Survey, Section 80 and Section 84 and aforementioned H. T. & B. R. R. Co. Survey, Section 82 and Section 83; THENCE, WESTERLY, 5280 feet, more or less, along the common line of said H. T. & B. R. R. Co. Survey, Section 83 and Section 84, to a point for comer on the east line of aforementioned Franklin Hooper Survey, same being the common west comer of said H. T. & B. R. R. Co. Survey, Section 83 and Section 84; THENCE, SOUTHERLY, 158 feet, more or less, along the common line of said H. T. & B. R. R. Co. Survey, Section 84 and the Franklin Hooper Survey, to a point for comer, same being the southeast comer of said Franklin Hooper Survey and the northeast comer of the A.B. Langerman Survey, Abstract 555, Fort Bend County, Texas; THENCE, EASTERLY, 2636 feet, more or less, along the common line of said Franklin Hooper Survey and said A.B. Langerman Survey, to a point for comer on the easterly right-of-way line of Farm to Market Road 521; THENCE, NORTHEASTERLY, 9667 feet, more or less, along said easterly right-of-way line, to a point for comer on the centerline of Clear Creek; THENCE, NORTHEASTERLY, 1327 feet, more or less, along the centerline of Clear Creek to a point for comer on the aforementioned southerly right-of-way line of Farm to Market Road 2234; 2 THENCE, SOUTHEASTERLY, 1519 feet, more or less, along said southerly right-of-way line to a point for comer on the of Fort Bend and Brazoria County line; THENCE, NORTHEASTERLY, 577 feet, more or less, along said county line, to a point for comer at the common comer of Brazoria, Fort Bend and Harris Counties; THENCE, NORTHEASTERLY, 2426 feet, more or less, along the of Brazoria and Harris County line, to a point for comer in the aforemention centerline of Clear Creek; THENCE, EASTERLY, 8250 feet, more or less, along the centerline meanders of Clear Creek to a point for comer on the northerly line of aforementioned Lot 3, Block 10 of said ALLISON-RICHEY GULF COAST HOME CO'S PART OF SUBURBAN GARDENS, same being on the aforementioned common survey line of the T. C. R. R. Co. Survey, Section 4 and the Dupuy and Roberts Survey; THENCE, EASTERLY, 453 feet, more or less, along said north line of Lot 3, Block 10 and said common survey line to the POINT OF BEGINNING and containing 3305 acres, more or less. 3