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R2002-0101 06-24-02RESOLUTION NO. R2002-101 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO ENTER INTO A STRATEGIC PARTNERSHIP AGREEMENT WITH BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 21. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. That certain Strategic Partnership Agreement by and between the City of Pearland and Brazoria County Municipal Utility District No. 21, a copy of which is attached hereto as Exhibit "A" and made a part hereof for all purposes, is hereby authorized and approved. Section 2. That the City Manager or his designee is hereby authorized to execute and the City Secretary to attest a Strategic Partnership Agreement with Brazoria County Municipal Utility District No. 21. PASSED, APPROVED and ADOPTED this the 24 day of June A.D., 2002. TOM REID MAYOR ATTEST: UNG Y SEr'ETARY APPROVED AS TO FORM: • DARRIN M. COKER CITY ATTORNEY Exhibit "A" R2002-101 STRATEGIC PARTNERSHIP AGREEMENT THE STATE OF TEXAS § COUNTY OF BRAZORIA § This STRATEGIC PARTNERSHIP AGREEMENT (this "Agreement") is made and entered into, effective as of July 1 , 2002, by and between the CITY OF PEARLAND, TEXAS, a municipal corporation and home -rule city of the State of Texas (the "City"), and BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 21, a conservation and reclamation district created pursuant to Article XIV, Section 59, Texas Constitution and operating pursuant to Chapters 49 and 54, Texas Water Code (the "District"). RECITALS 1. The District was created with the consent of the City for the purpose of providing water, sewer and drainage facilities to the land within its boundaries. The District is located within the extraterritorial jurisdiction ("ETJ") of the City, but is not within its corporate limits. The District is part of a master planned community of approximately 922 acres (the "Development"). 2. The City has historically annexed land into its corporate limits before development of such land has proceeded. However, the City determined that, because the District is located a substantial distance from current development within the City, its development can best proceed pursuant to a development agreement with the developer of land within the Development (the "Developer") and a strategic partnership agreement with the municipal utility districts within the Development. 3. To provide certainty and order with regard to the conduct of the Development and the roles of the City, the District and the Developer, the City and the Developer entered into that certain Development Agreement, dated October 23, 2000 (the "Development Agreement") to provide for certain terms in connection with the Development. In addition, the provisions of Tex. Local Gov't Code, §43.0751 (Vernon Supp. 2000) (the "Act") state that the City and the District may enter into a strategic partnership agreement that provides for the terms and conditions under which services will be provided and funded by the City and the District and under which the District will continue to exist for an extended period after annexation of the land within the District by the City. 4. The City and the District, after the provision of required notices, held public hearings in compliance with the Act. Based upon public input received at such hearings, the City and the District wish to enter into a strategic partnership agreement to provide the terms and conditions under which services will be provided by the City and the District and under which the District will continue to exist for an extended period of time after the District is annexed for general purposes. NOW, 'THEREFORE, for and in consideration of the mutual agreements, covenants, and conditions contained herein, and other good and valuable consideration, the City and the District agree as follows: 850297_1.DOC Article 1 DEFINITIONS 1.01. Definitions. The terms "Act," "City," "Developer," "Development," "Development Agreement," "District," and "ETT shall have the meanings provided for them in the Recitals, above. Except as may be otherwise defined, or the context clearly requires otherwise, capitalized terms and phrases used in this Agreement shall have the meanings as follows: City Consent means the ordinance of the City consenting to the creation of the District, and the terms and conditions to such consent described therein. City Regulations means the City's Building Code and related regulations, the City Subdivision Code, the City's infrastructure design criteria, the City's Land Use and Urban Design Code, and the City's Flood Plain Ordinance. below. below. Districts means the District and the Participating District. Effective Date and similar references means the date first written above. Fee means the monthly fee assessed against residential property defined in Section 5.02, Interim STP means the interim rental package wastewater plant described in Section 6.02, Maximum Capacity means 750,000 gallons per day, average daily flow. Participating District means the second municipal utility district established within the Development. Party or Parties means a party or the parties to this Agreement, being the City and the District. Permanent STP is defined in Section 6.02, below. Person means any individual, partnership, association, firm, trust, estate, public or private corporation, or any other entity whatsoever. TNRCC means the Texas Natural Resource Conservation Commission and its successors. 1.02. Findings and conclusions. The City and the District hereby find and declare: a. The Act authorizes the City and the District to enter into this Agreement to define the terms and conditions under which services to the District will be provided and funded by the Parties and to define the terms and conditions under which the District will be annexed by the City at a future date as agreed hereunder as an alternative to annexation without the consent of the District. 850297_1.DOC 2 b. In compliance with Subsection (p) of the Act, this Agreement (i) does not require the District to provide revenue to the City solely for the purpose of an agreement with the City to forgo annexation of the District, and (ii) provides benefits to each party, including revenue, services, and regulatory benefits which are reasonable and equitable with regard to the benefits provided to the other Party. c. All the terms and conditions contained in this Agreement are lawful and appropriate to provide for the provision of municipal services and annexation. d. The District is not obligated to make payments to the City for services except as otherwise provided herein. e. This Agreement has been duly adopted by the City and the District after conducting two public hearings at which members of the public who wanted to present testimony or evidence regarding the Agreement were given the opportunity to do so. Notice of each hearing was published in the format required by Tex. Local Gov't Code, §43.123(b) and was published at least once on or after the 20th day before each public hearing. Article 3 ANNEXATION OF '1HL+' DISTRICT 3.01. Conditions to annexation. The Parties agree that the District and its residents should be allowed to develop and function with certainty regarding the conditions under which annexation will be authorized for the City. As a result, the City and the District agree that, without regard to the City's right and power under existing or subsequently enacted law, the City will not annex the District until the following conditions have been met, and shall thereafter be authorized, but not required, to annex the District for any purpose: a. All of the District's water, wastewater treatment, and drainage facilities have been constructed; and b. The Developer, or the Developer's successors or assigns, has been reimbursed by the District to the maximum extent permitted by the rules of the TNRCC or the City assumes any obligation for such reimbursement of the District under such rules. 3.02. Annexation procedures. Because the District is, pursuant to this Agreement, an area that is the subject of a strategic partnership agreement, the City is not required to include the District in its Annexation Plan pursuant to Tex. Local Gov't Code, §43.052, et seq. (Vernon Supp. 2000). Except as provided in this Agreement, the City hereby waives any right to annex the District for full or limited purposes under any and all existing or future laws including under Section 17 of Senate Bill 89, published as Act of May 30, 1999, 76th Leg., R.S., ch. 1169, § 17, 1999 Tex. Gen. Laws 4074, 4090. Upon the annexation of territory within the District by the City pursuant to the provisions of this Agreement, such territory shall no longer be subject to the terms and provisions of this Agreement but shall instead be governed by the rules, regulations, codes, and ordinances then and thereafter effective within the City. Annexation shall otherwise be in accordance with existing law. 850297_1.DOC 3.03. Operations prior to annexation. Prior to annexation, except as may be specifically provided in this Agreement or in the City Consent, the District is authorized to exercise all powers and functions of a municipal utility district provided by law, including, without limiting the foregoing, the power to incur additional debts, liabilities, or obligations, to construct additional utility facilities, or to contract with others for the provision and operation thereof, or sell or otherwise transfer property without prior approval of the City, and the exercise of such powers is hereby approved by the City; provided that the authority granted hereby shall be limited to actions in compliance with the City Consent. 3.04. Continuation of the District following annexation. Upon annexation of the District under the provisions of Section 3.01, above, the District will continue to exist for an extended period to allow for the completion of District operations and the integration of the District's system into the City's system, following which period the City shall act to abolish the District in accordance with applicable law; provided that, if the City has not abolished the District within 90 days after annexation, the District shall be automatically abolished on the 91 st day. At such time, the City will assume all rights, assets, liabilities and obligations of the District (including all obligations to reimburse the developers within the District) and the District will not be continued or converted for limited purposes. Upon annexation, fees and charges imposed on residents of the former District for services provided by the City shall be equal to those fees and charges imposed on all other residents of the City. 3.05. Attempted incorporation. Notwithstanding any provision herein to the contrary, in the event that an election is called pursuant to applicable law in connection with a bona fide petition for incorporation of a municipality that includes a substantial portion of the District, the City shall be entitled to annex that portion the District attempting to incorporate. Article 4 ALLOCATION OF MUNICIPAL SERVICES WITHIN THE DISTRICT 4.01. City Fire/EMS services. The District will formulate, with the assistance and advice of the City, and in conjunction with the Participating District, a "fire plan," as such term is used in Tex. Water Code, §49.3 51, consistent with the terms of this Section. The City may, but is not required to, provide all required fire and emergency medical services within the District. Such services will be provided as warranted by the then -current status of development within the District, on the same basis and using the same criteria as are used for the determination of the provision of such services within the City. The District will use its reasonable efforts to receive the required authorization and to thereafter contract with the City (in a form mutually agreeable and consistent with other such contracts entered into by the City relating to fire/EMS services outside the City) for the City to provide fire/EMS protection services to the District. Payment to the City with regard to services provided under this Section shall be described in the fire plan, and shall be based upon the actual costs to the City, including reasonable overhead, in providing such services. The Developer has agreed in the Development Agreement to provide a site for a fire station within the Development, and the City agrees to make use of such site in conjunction with the provision of fire/EMS service described herein. 4.02. Police protection. The District may provide for the provision of enhanced police protection services within the District by either contracting with the City or with a third party 850297_1.DOC 4 provider of such services. If provided by the City, such services will be provided as warranted by the then -current status of development within the District, on the same basis and using the same criteria as are used for the determination of the provision of such services within the City. Payment to the City with regard to any police protection provided under this Section shall be based upon the actual costs of the City, including reasonable overhead, in providing such services. 4.03. Solid waste services. The District will provide solid waste collection services to the residential users within the District, using the same contractor used by the City. The District may, at its option, either (i) enter into a separate contract with such contractor to provide solid waste collection services to its residents, or (ii) request the City to extend its existing collection contract to cover the District. If the District elects the first option, it shall pay the contractor directly; if the District elects the second option, it shall pay the City for the costs attributable to the contract extension. 4.04. City inspection and regulation services. As a part of the municipal services to be provided within the District by the City, the City shall be authorized to enforce the City Regulations within the District, including the requirements included in such regulations relating to inspection of residential and commercial property and construction. The City reserves the right to charge a differential inspection fee for inspections conducted outside the City limits, but such fee shall not be more than 110 percent of the in -City inspection fee. To assist the District in enforcing the City Regulations, the District shall include in its Rate Order or other applicable water and sewer regulations a provision requiring that applicants for new District sewer taps affirm their compliance with the City Regulations, and that continued water and sewer services from the District shall be contingent upon the continued compliance of the affected property by the City Regulations; provided that, the District shall not be responsible for detecting or enforcing violations of the City Regulations except as provided in this Section. The District shall not transfer any new water or sewer service from a builder to the initial occupant of any structure requiring a certificate of occupancy without first obtaining from the applicant a certificate of occupancy issued by the City with respect to the structure. 4.05. Infrastructure inspection fees. The District shall be responsible for the payment ofthe City's infrastructure construction inspection fees that are applicable to District facilities. The City intends to rely upon the District's inspection reports with periodic inspection by City inspectors, but the City reserves the right to provide for full-time inspection by City personnel or by contract inspection services. 4.06. Expenses to be reasonably incurred. The City shall not incur capital or operating expenses in connection with this Article for which it intends to be reimbursed that cannot be repaid by a Fee that can be reasonably paid by a residential property owner, taking into consideration all other District fees, including property taxes and utility fees. Article 5 COSTS AND ASSESSMENTS 5.01. Determination of costs of municipal services. The City shall determine its actual costs of providing municipal services described in Article 4 using generally accepted municipal auditing procedures, and shall provide such cost to the District annually, at least 60 days prior to the 850297_1.DOC 5 beginning of the District's fiscal year. The costs of each City service shall be separately accounted for and, to the extent the City receives fees or other revenues in connection therewith (e.g., inspection or permit fees), such revenues shall be described and used to offset the City's costs. The District agrees to pay the reasonable expenses incurred by the City in computing the cost of municipal services, including reasonable consultants' fees. 5.02. Fee derived from residential property. In accordance with the Act, the District shall impose a fee on residential property within the District to be used to pay the City a fee in lieu of full - purpose annexation. The fee shall be equal to the costs of providing municipal services within the District as computed in accordance with Section 5.01, above, divided by the number of residential properties within the District. Fees with respect to multi -family properties, if any, shall be allocated based upon the number of dwelling units within each property. Costs associated with the District's fire/EMS plan described in Section 4.01, above, and solid waste collection described in Section 4.03, above, reflect services that the District would otherwise provide for itself, without respect to this Agreement, and are therefore not considered to be fees in lieu of full -purpose annexation as such term is used in the Act. The District will convert the fee derived under this Section into a monthly fee, payable by the owners of residential property within the District (the "Fee"), and enforceable in the same manner as other District fees and expenses. The District will be responsible for payment to the City, regardless of the District's ability to collect the full assessment. 5.03. Fee in lieu of full -purpose annexation. Each calendar quarter, the District shall pay the Fee collected pursuant to Section 5.02, above, to the City in lieu of full -purpose annexation. Article 6 WATER, WASTEWATER AND DRAINAGE SERVICES 6.01. Generally. The District, in conjunction with the Participating District, will initially provide all water, sewer and drainage services for the Development in the same manner as such services are provided by other ETJ districts; provided that the Districts will participate in regional facilities as provided in this Article. 6.02 Wastewater facilities. The Districts will provide wastewater treatment for the Development by owning or leasing interim package wastewater treatment plants or capacity ("Interim STP"). The Interim STP shall not exceed the Maximum Capacity. At the time the Interim STP average daily flow reaches 75 percent of the Maximum Capacity, the District and the Participating District will begin design of a permanent wastewater treatment plant (the "Permanent STP") to serve the Development, and will commence construction when the flow reaches 90 percent of the Maximum Capacity. The Parties agree that the City may financially participate in such Permanent STP to the extent that it desires capacity therein for its purposes outside the Districts. Should the average daily flow in the Interim STP not exceed 90 percent of the Maximum Capacity within two years of completion of residential construction within the Development, the Districts agree to commence construction on the Permanent STP prior to lowering the tax rate below $1.00 per $100.00 of taxable valuation. The District will consult with the City regarding the conceptual and final design of wastewater treatment facilities, and the City may provide comments thereto, which comments the District will use its best efforts to incorporate consistent with good engineering practices and applicable regulations. The City reserves the right for the City, or its designee, to construct the initial or subsequent phases of the Permanent STP at any time to serve properties 850297_1.DOC 6 outside the Districts. The District will not be required to participate in any such City -required expansion without its agreement, but will remain financially responsible for its pro-rata share of the Permanent STP prior to such expansion. 6.03 Water facilities. The Districts will provide for such interim water capacity as they determine is necessary, in accordance with applicable TNRCC regulations, and consistent with the timing of the needs of the Development, including without limitation the design and construction of the water distribution system to facilitate the interconnection to the City's permanent water supply and to Fort Bend Fresh Water Supply District No. 1. The distribution water mains within the Development are anticipated to be a 16-inch water main along County Road 58 and a 12-inch water main north to future County Road 101. At such time as the City determines that it is necessary to connect the Districts to the City water distribution system, the Districts will participate in funding the construction of a City water main (currently anticipated to be a 16-inch water main east along County Road 58, then continuing as a 12-inch water main north along County Road 48 to County Road 59). The District's financial participation in the water main shall be based upon its pro rata share of the water main's capacity required to serve it, taking into account any then -existing permanent water supply constructed by or on behalf of the District. The water plant site will be configured to include a minimum 500,000 gallon elevated tank; however, the District will not be responsible for funding or constructing the elevated tank. 6.04. Other considerations. Except as provided herein, the District shall be subject to the regulation and approval of the City in the same manner as provided for a district located in the City's ETJ generally. Article 7 SALES TAX PROVISIONS 7.01. Imposition of sales tax. The City is hereby authorized to impose its sales and use taxes within the boundaries of the District, without annexation by the City, subject to the provisions and procedures described in this Article. 7.02. Eligibility. This Article shall become effective upon the receipt of notice by the District from the City that, as a result of any Federal Census, the City is an eligible municipality under Subsection (n) of the Act. The City shall have one year from the date of the official publication of the Federal Census to provide such notice. Because the most recent estimated Federal Census figures for Brazoria and Harris Counties greatly exceed the following population figures, it is anticipated that, after completion of the 2000 Federal Census, Brazoria County will be shown to have a population exceeding 200,000, and that Harris County will be shown to have a population exceeding 2.8 million, and that the City will be eligible to invoke this Article at such time. 7.03. Hearings. Upon receipt of the notice described in Section 7.02, above, the District will cooperate with the City to schedule two public hearings regarding the imposition of the City's sales and use taxes in the District, following the same notification process as provided in Subsection (d) of the Act. 7.04. Sales tax agreement. Following the hearings, the City may direct the District to approve and execute the Sales and Use Tax Agreement attached hereto as Exhibit A. The District 850297_1.DOC 7 agrees that, upon receipt of such direction, it will execute the Sales and Use Tax Agreement within 60 days thereafter. 7.05. Cooperation. The Parties will cooperate to provide such documentation as the City may reasonably require to satisfy the requirements of the State Comptroller in connection with the collection of sales and use taxes within the District. Article 8 DEFAULT, NOTICE AND REMEDIES 8.01. Default, notice. A breach of any material provision of this Agreement after notice and an opportunity to cure, shall constitute a default. The non -breaching defaulting Party shall notify the breaching Party of an alleged breach, which notice shall specify the alleged breach with reasonable particularity. If the breaching Party fails to cure the breach within a reasonable time not sooner than 30 days after receipt of such notice (or such longer period of time as the non -breaching Party may specify in such notice), the non -breaching Party may declare a default hereunder and exercise the remedies provided in this Agreement in the event of default. 8.02. Remedies. In the event of a default hereunder, the remedies of the non -defaulting Party shall be limited to either or both of the following: a. Monetary damages for actual losses incurred by the non -defaulting Party if such recovery of monetary damages would otherwise be available under existing law and the defaulting Party is not otherwise immune from paying such damages; and b. Injunctive relief specifying the actions to be taken by the defaulting Party to cure the default or otherwise comply with its obligations hereunder. Injunctive relief shall be directed solely to the default and shall not address or include any activity or actions not directly related to the default. Article 9 MISCELLANEOUS 9.01. Beneficiaries. This Agreement shall bind and inure to the benefit of the Parties, their successors and assigns. This Agreement shall be recorded with the County Clerk in Official Records of each county in which the District is located, and shall bind and benefit each owner and each future owner of land included within the District's boundaries in accordance with Tex. Local Gov't Code, §43.0751(c). In the event of a dissolution of the District by the City, the Developer shall be considered a third -party beneficiary of this Agreement. 9.02 Term. This Agreement shall commence and bind the Parties on the Effective Date and continue for 50 years thereafter, unless terminated on an earlier date pursuant to other provisions or by express written agreement executed by the City and the District. Upon the expiration of 50 years from its Effective Date, this Agreement may be extended, at the District's request, with City approval, for successive one-year periods until all land within the District has been annexed by the City. 850297_1.DOC 8 9.03. Notice. Any notices or other communications (a "Notice") required to be given by one Party to another by this Agreement shall be given in writing addressed to the Party to be notified at the address set forth below for such Party, (i) by delivering the same in person (ii) by depositing the same in the United States Mail, certified or registered, return receipt requested, postage prepaid, addressed to the Party to be notified, or (iii) by depositing the same with Federal Express or another nationally recognized courier service guaranteeing "next day delivery," addressed to the Party to be notified, or (iv) by sending the same by.telefax with confirming copy sent by mail. Notice deposited in the United States mail in the manner hereinabove described shall be deemed effective from and after the date of such deposit. Notice given in any other manner shall be effective only if and when received by the Party to be notified. For the purposes of notice, the addresses of the Parties, until changed as provided below, shall be as follows: District: City of Pearland 3519 Liberty Drive Pearland, Texas 77581 Attn: City Manager Brazoria County Municipal Utility District No. 21 c/o Vinson & Elkins L.L.P. 2300 First City Tower 1001 Fannin Houston, Texas 77002 Attn: James A. Boone The Parties shall have the right from time to time to change their respective addresses, and each shall have the right to specify as its address any other address within the United States of America by giving at least five days written notice to the other Parties. If any date or any period provided in this Agreement ends on a Saturday, Sunday, or legal holiday, the applicable period for calculating the notice shall be extended to the first business day following such Saturday, Sunday or legal holiday. 9.04. Time. Time is of the essence in all things pertaining to the performance of this Agreement. 9.05. Severability. If any provision of this Agreement is held to be illegal, invalid, or unenforceable then, and in that event, it is the intention of the Parties hereto that the remainder of this Agreement shall not be affected. 9.06. Waiver. Any failure by a Party hereto to insist upon strict performance by the other Party of any material provision of this Agreement shall not be deemed a waiver thereof or of any other provision hereof, and such Party shall have the right at any time thereafter to insist upon strict performance of any and all of the provisions of this Agreement. 9.07. Applicable law and venue. The construction and validity of this Agreement shall be governed by the laws of the State of Texas without regard to conflicts of law principles. Venue shall be in Brazoria County, Texas. 850297 1.DOC 9 9.08. Reservation of rights. To the extent not inconsistent with this Agreement, each Party reserves all rights, privileges, and immunities under applicable laws. 9.09. Further documents. The Parties agree that at any time after execution of this Agreement, they will, upon request of another Party, execute and deliver such further documents and do such further acts and things as the other Party may reasonably request in order to carry out the terms of this Agreement. 9.10. Incorporation of exhibits and other documents by reference. All Exhibits and other documents attached to or referred to in this Agreement are incorporated herein by reference for the purposes set forth in this Agreement. 9.11. Effect of State and Federal laws. Notwithstanding any other provision of this Agreement, the District shall comply with all applicable statutes or regulations of the United States and the State of Texas, as well as any City ordinances or rules implementing such statutes or regulations, and such City ordinances or rules shall not be deemed a breach or default under this Agreement. 9.12. Authority for execution. The City hereby certifies, represents, and warrants that the execution of this Agreement is duly authorized and adopted in conformity with the City Charter and City ordinances. The District hereby certifies, represents, and warrants that the execution of this Agreement is duly authorized and adopted by the Board of Directors of the District. SIGNATURE PAGES FOLLOW 850297_1.DOC 10 A IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement effective as of the date first written above. CITY OF PEARLAND, TEXA By: Mayor ATTEST: THE STATE OF TEXAS § COUNTY OF BRAZORIA § This instrument was acknowledged before me on , 2002, by �0 rY\ 1i ck , as Mayor of Pearland, Texas, a home -rule municipaffty, on behalf of said municipality. I iA . WELSH z - - 4e of Texas My Commission Expires: 0g/20/2006 .g � c(so (/C Notary, State of Texas 850297_1.DOC 11 ATTEST: By: �verrrnruecrgegryy C • Secretary m ®f e : " `�. ; i- •• / THE STATE OF TEXAS COUNTY OF BRAZORIA BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 21 /di , 2002, by yb` Municipal Utility District No. 21, a politica subdi 'sion of the State of Texas, on behalf of said political subdivision. This instrument w acknowledged before me on �U'f�•,•y Q. , as of Brazoria (NOTARY SE LINDA SOTIRAKE Notary Public, State of Texas My Commission Expires AUGUST 31, 2J04 + Pt State of Texas 850297_1.DOC 12 Exhibit A to Strategic Partnership Agreement SALES AND USE TAX AGREEMENT THE STATE OF TEXAS § COUNTY OF BRAZORIA § This SALES AND USE TAX AGREEMENT (this "Agreement") is made and entered into effective as of , 2002, by and between the CITY OF PEARLAND, TEXAS, a municipal corporation and home -rule city of the State of Texas (the "City"), and BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 21, a conservation and reclamation district created pursuant to Article XIV, Section 59, Texas Constitution and operating pursuant to Chapters 49 and 54, Texas Water Code (the "District"). RECITALS 1. The City and the District have preciously entered into that certain Strategic Partnership Agreement, dated as of , 2002 (the "Strategic Partnership Agreement"), providing for, inter alia, the imposition of the City's sales and use taxes within the District, contingent upon the City being an eligible municipality in accordance with the terms of Subsection (n) of the Act. 2. The 2000 Federal Census has determined that Brazoria County has a population in excess of 200,000, and that Harris County has a population in excess of 2.8 million. As a result, the City has found that it is a municipality in a county with a population of more than 200,000, bordering on the Gulf of Mexico, and adjacent to a county with a population of more than 2.8 million, and is therefore an eligible municipality under Subsection (n) of the Act. 3. The City provided notice to the District, and together they held two public hearings in accordance with Article 7 of the Strategic Partnership Agreement. NOW, THEREFORE, the City and the District hereby agree as follows: Section 1. Capitalized terms used herein shall have the same meanings as provided in the Strategic Partnership Agreement, unless otherwise defined herein. Section 2. Effective upon the date first written above, the City is hereby authorized to impose, levy and collect its Sales and Use Taxes within the District. Section 3. The parties agree to take all reasonably necessary steps to give effect to the terms of this Agreement. IN WITNESS WHEREOF, the undersigned Parties have executed this Agreement effective as of the date first written above. 850297_1.DOC A-1 ATTEST: City Secretary ATTEST: By: Secretary CITY OF PEARLAND, TEXAS By: Mayor BRAZORIA COUNTY MUNICIPAL UTILITY DISTRICT NO. 21 By: President, Board of Directors 850297_1.DOC A-2