City of Katy, TX Control of Political Subdivisions in Extraterritorial Jurisdiction

The city council hereby finds, determines and declares that it is to the best interest of the city and of the territory within its extraterritorial jurisdiction that the proponents of any political subdivision having as one of its purposes the supplying of fresh water for domestic or commercial uses, or the furnishing of sanitary sewer service, when such district is sought to be created within the area of the extraterritorial jurisdiction of the city, shall, as a prerequisite to the written consent of the city, agree and covenant in writing to adhere to the following rules, regulations and standards:

(1)

Bonds restricted to providing utilities; other conditions.

Bonds may be issued by the district only for the purpose of purchasing and constructing, or purchasing or construction or constructing [sic] or otherwise acquiring waterworks systems and sanitary sewer systems, and with the prior written consent of the city for drainage facilities, and to make any and all necessary purchases, constructions, improvements, extensions, additions and repairs thereto, and to purchase or acquire all necessary land, rights-of-way, easements, sites, equipment, buildings, plants, structures, and facilities therefor, and to operate and maintain the same, and to sell water and other services within the boundaries of the district. Such bonds may not be exchanged for property acquired by purchase, or in payment of the contract price of work done or services rendered for the use and benefit of said district. Such bonds and all refunding bonds issued by the district shall only be sold after the taking of public bids therefor, and all bonds and refunding bonds shall be sold for cash for not less than par, provided the net effective interest rate on bonds so sold, taking into account any discount or premium as well as the interest rate borne by such bonds, shall not exceed two percent (2%) above the average interest rate reported by the Daily Bond Buyer in its weekly “Twenty Bond Index” in its most recent issue published immediately prior to the date of the sale of such bonds. Provided, however, the net effective interest rate of any such bonds shall never under any circumstances exceed two percent (2%) of the preceding sale of tax bonds by the city. Such bonds shall contain an option for prior redemption on any payment date occurring fifteen (15) years after issue date. Such bonds shall further be issued under terms and conditions approved in writing by the city.

(2)

Plans and specifications of water and sewer facilities to be approved by city.

The district shall submit the plans and specifications for all construction of water and sanitary sewer facilities to the city for approval and such district must obtain the approval thereof by the city before commencing construction thereof. The construction of the district's water and sanitary sewer facilities shall be in accordance with the approved plans and specifications and with applicable standards and specifications of the city, and during the progress of the construction and installation of such facilities the city engineer or an employee of the city shall make periodic on-the-ground inspections, and no such construction shall be started or undertaken by the district unless it has in its possession the following.

(3)

Certifications required.

A certificate of the district's engineer, who shall be a registered professional engineer under the laws of the state, that, in his opinion, such construction conforms to the city's established standards and specifications; and a letter or certificate of the city engineer that, in his opinion, such construction conforms to the city's established standards and specifications; moreover, the owner or the developer of the land shall covenant and agree that he or they will, prior to the sale of any lot or parcel of land, obtain the approval of the planning commission of the city of a plat and properly record it, and otherwise comply with the rules and regulations of the planning commission of the city, as contained in the city subdivision ordinance.

(4)

Inspection requirements.

Full-time resident inspection shall be provided during the construction period, by inspectors approved by the city engineer, which inspectors shall be removed upon request by the city engineer if found not to be competent. In addition, an additional inspector or inspectors shall be furnished, if deemed necessary by the city engineer. Daily inspection reports shall be furnished, with a copy to the city. All construction contracts shall be let on a competitive bidding basis with the contract to be awarded on the basis of the lowest and best bid by a responsible, competent contractor, which bid shall include evidence of the financial condition of bidders. Bid bonds, payment bonds, performance bonds, and affidavits of payment shall in all cases be required. Upon completion of construction, submission of a complete set of “as-built” plans to the city by the engineer for the district shall be required.

(5)

City council to select board member.

At least one (1) of the members of the initial board of directors shall be a person selected by the city council.

(6)

District taxation requirements.

The district shall not be permitted to escrow any funds in excess of two (2) years’ interest on the bonds which the district issues and shall levy a tax simultaneously with the first installment of such bonds and to [shall] continue a tax levy until such bonds are paid in full. The district will use a tax valuation ratio and a tax rate not less than that used by the city for its tax roll, so that the district tax will not be less than the city tax on comparable property.

(7)

City consent for bonds to be given to attorney general.

The instruments creating such district shall include terms and conditions which will require the city's consent be given to the attorney general of the state prior to his final approval of any installment of bonds.

(8)

District water and sewer service rates.

The district rates for water and sewer service shall be no less than the rates charged by the city to its customers.

(9)

City to furnish financial advisory service.

The city will furnish complete financial advisory service to the district, which service will include recommendations to the board of the district as to the amount of bonds that should be authorized, the installment sale of such authorization, the maturity schedule of each installment, the optional provisions to be contained in such bonds, and to recommend and supervise the final sale and delivery of the district bonds.

(10)

Treatment of district's sewage.

The district shall contract with the city for treatment of the district's sewage for the city's cost plus ten percent (10%).

(11)

Applicable state statutes.

Except to the extent of any conflict with any of the aforesaid provisions, the provisions of V.T.C.A., Water Code, section 51.149, as amended, shall apply in their entirety to said political subdivision.

(1999 Code, sec. 11.501)

Upon application, the proponents shall deposit the sum of twenty thousand dollars ($20,000.00) with the city to reimburse the city for all fiscal, legal and engineering fees and expenses prior to the date of consent to the creation of the district in reviewing the feasibility of creating [the district], the necessity for creating the district, and the terms and conditions upon which the consent to the creation of the district should be given. Such sum shall be used by the city for the purpose of paying said costs incurred prior to the date the city consented to the creating of the district. Any part of the deposit not needed for the purpose of paying such fees and expenses shall be returned forthwith to the proponents. It is understood that the fees and expenses paid will be those actually incurred by the city and the city will make an accounting to the proponents. In the event the city should necessarily incur additional expenses in reviewing this financing for the district, other than those incurred in levying and assessing the taxes, those incurred for the expansion of the city's sewage treatment plant, those incurred in operating the water and sewer system and providing other services to the district by and upon request of the district, and not required by the resolution consenting to the creating of the district, then the proponents agree to reimburse the city for such cost upon demand.

(1999 Code, sec. 11.503)