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Home My WebLink AboutAgenda Packet City Council - 06/24/2025 Cityof Corpus Christi 1201 Leopard Street Corpus Christi,TX 78401 cctexas.com Meeting Agenda Final-revised City Council Tuesday,June 24,2025 11:30 AM Council Chambers Addendums may be added on Friday. Public Notice: Persons with disabilities who plan to attend this meeting and who may need auxiliary aids or services are requested to contact the City Secretary's office (at 361-826-3105) at least 48 hours in advance so that appropriate arrangements can be made. Si Usted desea dirigirse al Concilio y cree que su ingles es limitado, habra un interprete ingles-espanol en todas las juntas del Concilio para ayudarle. This meeting may be held via videoconference call pursuant to Texas Government Code § 551.127. If this meeting is held via videoconference call or other remote method of meeting, then a member of this governmental body presiding over this meeting will be physically present at the location of this meeting unless this meeting is held pursuant to Texas Government Code § 551.125 due to an emergency or other public necessity pursuant to Texas Government Code § 551.045. A. Mayor Paulette Guajardo to call the meeting to order. B. Invocation to be given by Reverend Dr. Chip Blackshear with First Presbyterian of Corpus Christi. C. Pledge of Allegiance to the Flag of the United States and to the Texas Flag to be led by Joshua William Martinez, 6th grader from Tuloso Midway Elementary School. D. City Secretary Rebecca L. Huerta to call the roll of the required Charter Officers. E. CITY MANAGER'S COMMENTS / UPDATE ON CITY OPERATIONS: (ITEM 1) 1. 25-0950 Update on Alternative Water Supply Projects City of Corpus Christi Page 1 Printed on 6/24/2025 City Council Meeting Agenda-Final-revised June 24,2025 F. PUBLIC COMMENT-APPROXIMATELY 12:00 P.M. To speak during this public comment period on a city-related matter or agenda item, you must sign up before the meeting begins. Each speaker is limited to a total of no more than 3 minutes per speaker. You will not be allowed to speak again on an item when the Council is considering the item. Time limits may be restricted further by the Mayor at any meeting. If you have a petition or other information pertaining to your subject, please present it to the City Secretary. Written comments may be submitted at cctexas.com/departments/city-secretary. Electronic media that you would like to use may only be introduced into the City system IF approved by the City's Communications Department at least 24 hours prior to the Meeting. Please contact Communications at 826-3211 to coordinate. This is a public hearing for all items on this agenda. G. BOARD &COMMITTEE APPOINTMENTS: (NONE) H. EXPLANATION OF COUNCIL ACTION: For administrative convenience, certain of the agenda items are listed as motions, resolutions, or ordinances. If deemed appropriate, the City Council will use a different method of adoption from the one listed;may finally pass an ordinance by adopting it as an emergency measure rather than a two reading ordinance;or may modify the action specified. I. CONSENT AGENDA: (ITEMS 2 -16) NOTICE TO THE PUBLIC: The following items are consent motions, resolutions, and ordinances of a routine or administrative nature. The Council has been furnished with background and support material on each item, and/or it has been discussed at a previous meeting. All items will be acted upon by one vote without being discussed separately unless requested by a Council Member or a citizen, in which event the item or items will immediately be withdrawn for individual consideration in its normal sequence after the items not requiring separate discussion have been acted upon. The remaining items will be adopted by one vote. Consent- Second Reading Ordinances 2. 25-0591 Ordinance amending the Roadway Master Plan Map and the Urban Transportation Plan Map of Mobility CC, transportation elements of the Comprehensive Plan of the City of Corpus Christi, by modifying County Road 22 between SH286 and County Road 43 from an A2 Arterial to a C1 Collector, modifying County Road 22 between County Road 43 and a proposed P1 Parkway from a C3 Collector to a C1 Collector, and modifying a planned road between County Road 22 and County Road 20A from a C3 Collector to a C1 Collector; amending related elements of the Comprehensive Plan of the City; and providing for publication. sponsors: Public Works/Street Department 3. 25-0521 Ordinance accepting Public Health Infrastructure Grant for$250,000.00 from the Department of State Health Services to enhance and expand City of Corpus Christi Page 2 Printed on 6/24/2025 City Council Meeting Agenda-Final-revised June 24,2025 Laboratory Information Management System infrastructure through November 30, 2027; and appropriating $250,000.00 in the Health Grant Fund. Sponsors: Health Department 4. 25-0601 Ordinance authorizing an Interlocal Agreement with an estimated payment amount of$700,000.00 to the City of Corpus Christi from the Texas General Land Office to provide beach water sampling in Nueces, Aransas, and San Patricio counties under the Texas Beach Watch Program for a five-year period beginning in FY25 and ending August 31, 2030. Sponsors: Health Department 5. 25-0845 Ordinance adding annexed areas to City Council District 1 and District 3. Sponsors: City Secretary's Office 6. 25-0899 Ordinance appointing Gabriel Rodriguez as Division 1 Judge, Jason Supplee as Division 2 Judge, David Walsh as Division 3 Judge, William Gregory "Bill" Bonilla as Division 4 Judge, and George Picha as Division 5 Judge of the Municipal Court; appointing Christopher E. Matt as part-time judge #1, Douglas K. DeFratus as part-time judge #2, William Holt Feemster as part-time judge #3, Mara Schechter as part-time judge #4, Mario A. Olivarez as part-time judge #5, Arnold McAdams as part-time judge #6, and Robert Reyna as part-time judge #7 of the Municipal Court; determining salary; providing a two year term of office; and declaring an effective date. Sponsors: Municipal Court Committee and City Secretary's Office Consent- Contracts and Procurement 7. 25-0877 Motion authorizing the purchase of 450 new flame-resistant Tecasafe Plus wildland fire protective equipment (pants) from Casco Industries, of Houston, Texas, through the BuyBoard Cooperative, for the Corpus Christi Fire Department for a total amount of$112,625.00, with FY 2025 funding in the amount of$112,625.00 from the General Fund. Sponsors: Fire Department and Finance & Procurement 8. 25-0761 Motion authorizing the purchase of one replacement 2024 Ford F-150 Police Responder from Silsbee Ford, of Silsbee, Texas, through the TIPS Cooperative, for a total amount of$51,397.53 to be used by the Corpus Christi Police Department for the Operation Stonegarden Program (drug and human trafficking), with FY 2025 funding in the amount of$50,000.00 available through the Police Grants Fund and $1,397.53 from the General Fund. Sponsors: Asset Management Department, Police Department and Finance & Procurement City of Corpus Christi Page 3 Printed on 6/24/2025 City Council Meeting Agenda-Final-revised June 24,2025 9. 25-0821 Resolution authorizing the purchase of a new 2025 Low Profile Deck Trailer from Mobile Lift Concepts, of Corona, California, for on-site vehicle inspections and catalytic converter investigations for the Corpus Christi Police Department's Auto Theft Task Force, for a total amount of $59,000.00, with FY 2025 funding from the Police Grants Fund. Sponsors: Police Department,Asset Management Department and Finance & Procurement 10. 25-0464 Resolution ratifying the purchase of one replacement Western Star 12-yard dump truck and the lease-purchase of three additional and four replacement Western Star 12-yard dump trucks due to the originally ordered Freightliner model 12-yard dump trucks not being available in inventory, from Doggett Freightliner, of Austin, Texas, through the Buyboard Cooperative, for Corpus Christi Water for the same total price previously authorized by Resolution 033175. Sponsors: Asset Management Department and Finance & Procurement 11. 25-0838 Motion authorizing execution of a three-year professional services agreement, with two one-year options, with CAS-Claims Administrative Services, Inc., dba Claims Administrative Services, of Tyler, Texas, in an amount up to $675,000.00, with a potential up to $1,125,000.00 if options are exercised, for workers' compensation claims third party administrator services, with FY 2026 funding of$225,000.00 from the Risk Fund, subject to approval of the annual budget. Sponsors: Legal Department and Finance & Procurement Consent- Capital Projects 12. 25-0903 Motion authorizing the approval of Change Order No. 1 with Clark Pipeline Services, LLC., of Corpus Christi, Texas, for the Ship Channel Waterline and Gas Line Crossing Project, in the amount of$1,288,049.28 with at least 50% of the water line funding from the Port of Corpus Christi for a total amount not to exceed $13,214,182.72 with FY 2025 funding available from the Water Capital Fund. Sponsors: Corpus Christi Water and Engineering Services General Consent Items 13. 25-0815 Resolution to authorize Texas Commission on Environmental Quality Agreed Order in Docket No. 2021-0986-MWD-E which allows for improvements at Oso Wastewater Treatment Plant in lieu of$236,955.00 administrative penalty. Sponsors: Corpus Christi Water 14. 25-0972 Resolution authorizing a grant application for the FY 2026 Beach Cleaning and Maintenance Assistance Program from the Texas General Land Office for $1,815,778.14 to provide beach cleaning and maintenance on North City of Corpus Christi Page 4 Printed on 6/24/2025 City Council Meeting Agenda-Final-revised June 24,2025 Padre Island and Mustang Island. Sponsors: Parks and Recreation Department Consent-First Reading Ordinances 15. 25-0822 Ordinance authorizing acceptance of a grant from the Executive Office of the President, Office of National Drug Control Policy, for overtime for two sworn officers and lease payments on two vehicles for identification and disruption of narcotics trafficking as part of the FY 2025 Texas Coastal Corridor High Intensity Drug Trafficking Area Initiative in an amount of $41,800.00; and appropriating $41,800.00 in the Police Grants Fund. Sponsors: Police Department 16. 25-0923 Ordinance ratifying the acceptance of an amendment in the amount of $6,329 increasing the HOME Investment Partnerships Program - American Rescue Plan (HOME-ARP) grant M-21-MP-48-0502 from the U.S. Department of Housing and Urban Development; and amending the Fiscal Year 2025 budget by appropriating $6,329 into Grant Fund 9045. Sponsors: Planning and Community Development Department J. RECESS FOR LUNCH The City Council will take a lunch break at approximately 1:30 p.m. K. PUBLIC HEARINGS: NONE The following items are public hearings and public hearings with first reading ordinances. Each item will be considered individually. L. INDIVIDUAL CONSIDERATION ITEMS: (ITEMS 17 - 20) The following items are motions, resolutions or ordinances that may be considered and voted on individually. 17. 25-0985 Resolution finding the authorization and purchase of the properties by the Corpus Christi Housing Authority related to the apartment complexes of Armon Bay, Azure, Churchill Square, Ocean Palms Apartments, Sandcastle, Sawgrass, South Lake Ranch, Stoneleigh Apartment, The Icon, The Summit, The Veranda, Tuscany Bay South, Villas of Ocean Drive, Arts at Ocean Drive, Caspian Apartments, Gulf Breeze, Shadow Bend, Bay Vista, Bay Vista Point, Baypoint, and Solana Vista void by operation of law; and finding the related memorandum of understandings, ground leases, and operating agreements illegal; requesting the Corpus Christi Housing Authority to acknowledge the findings herein and to immediately terminate the void/illegal land acquisitions, related contracts, and actions. Sponsors: Legal Department 18. 25-0989 Discussion and possible action regarding Oak View Group 360's performance and financial reporting as operator of the Convention Center City of Corpus Christi Page 5 Printed on 6/24/2025 City Council Meeting Agenda-Final-revised June 24,2025 Complex, including possible termination of contract, returning naming rights authority to the City Council, and directing staff to initiate a new bidding process for arena management services, as requested by Council Members Eric Cantu, Carolyn Vaughn, and Gil Hernandez. sponsors: City Secretary's Office 19. 25-0987 Resolution to rescind Corpus Christi Council Resolution 033396 authorizing the City Manager or designee to execute contracts and amendments for design services or construction materials for the Inner Harbor Seawater Desalination Treatment Plant Project and acquisition of property, as requested by Council Members Carolyn Vaughn, Eric Cantu, and Gil Hernandez. sponsors: City Secretary's Office 20. 25-0988 Discussion and possible action regarding an MOU between the City of Corpus Christi and South Texas Water Authority, as requested by Council Members Carolyn Vaughn, Eric Cantu, and Gil Hernandez. sponsors: City Secretary's Office M. BRIEFINGS: (ITEMS 21 - 22) Briefing information will be provided to the City Council during the Council meeting. Briefings are for Council information only. No action will be taken and no public comment will be solicited. The City Manager or City Council Liaison for any city board, commission, committee or corporation(including Type A or B Corporation) may report on the action(s) or discussion(s) of any such body's public meeting that occurred within one month prior to this City Council meeting. 21. 25-0919 Briefing on City Proposed Tax Increment Reinvestment Zone #7 London Area sponsors: Economic Development 22. 25-0953 Briefing on the Inner Harbor Water Treatment Campus Update sponsors: Inner Harbor Desalination Program Management Office N. EXECUTIVE SESSION: (ITEMS 23 -25) PUBLIC NOTICE is given that the City Council may elect to go into executive session at any time during the meeting in order to discuss any matters listed on the agenda, when authorized by the provisions of the Open Meeting Act, Chapter 551 of the Texas Government Code, and that the City Council specifically expects to go into executive session on the following matters. If the Council elects to go into executive session regarding an agenda item, the section or sections of the Open Meetings Act authorizing the executive session will be publicly announced by the presiding officer. The City Council may deliberate and take action in open session on any issue that may be discussed in executive session. The description of an item in "Executive Sessions" constitutes the written interpretation by the City Attorney of Chapter 551 of the Texas Government Code and his determination that said item may be legally discussed in Closed Meeting in compliance with Chapter 551 the Texas Government Code. 23. 25-0951 Executive session pursuant to Texas Government Code § 551.071 City of Corpus Christi Page 6 Printed on 6/24/2025 City Council Meeting Agenda-Final-revised June 24,2025 and Texas Disciplinary Rules of Professional Conduct Rule 1.05 to consult with attorneys concerning legal issues related to the potential long-term agreement with 1 PointFive USA, LLC (1 P5) to purchase reclaimed water from the City's Greenwood Wastewater Treatment Plant and potential easements or other property rights to be purchased by 1 P5 from the City in areas adjacent to or near the Greenwood Plant and Texas Government Code § 551.072 to discuss and deliberate the potential purchase or value of the aforementioned property rights because deliberation in an open meeting would have a detrimental effect on the position of the governmental body in negotiations with a third person. 24. 25-0952 Executive session pursuant to Texas Government Code § 551.071 and Texas Disciplinary Rules of Professional Conduct Rule 1.05 to consult with attorneys concerning legal issues related to the potential value and/or acquisition of properties at, adjacent, and/or near Leopard Street and Corn Products Road, and/or near Airline Drive and St. Pius Drive; and Texas Government Code § 551.072 to discuss and deliberate the purchase or value of the aforementioned areas of real property because deliberation in an open meeting would have a detrimental effect on the position of the governmental body in negotiations with a third person, including, but not limited to, potential consideration of authorization to enter agreement(s) for the purchase of the property or property(ies) at and/or adjacent to the aforementioned locations. 25. 25-0977 Executive session pursuant to Texas Government Code § 551.071 and Texas Disciplinary Rules of Professional Conduct Rule 1.05 to consult with attorneys concerning legal issues related to the potential agreement with Ticona (aka Celanese) to purchase water from the City and Texas Government Code § 551.072 to discuss and deliberate the potential purchase or value of property rights related thereto because deliberation in an open meeting would have a detrimental effect on the position of the governmental body in negotiations with a third person. O. ADJOURNMENT City of Corpus Christi Page 7 Printed on 6/24/2025 t Update aer u Drew Molly, P.E. Chief Operating Officer Corpus June 24, 2025 CcW-SlervinghnstiWatlBe the Coastal Bend Reservoir Water Levels San Miguel Creek FM 3445 North of Tilden with 85cfs flow As of June 20, the combined capacity of Lake Corpus Christi and Choke Canyon increased from 14.7%to 15.9%. • The increased water levels are due to the June 10 to June 15 rain events. low Lake Texana's Water level increased from 81.4%to 99.4%. • Lavaca-Navidad River Authority made 4,500 acre-ft of interruptible water available to the City. Updates to the Water Supply Dashboard; the most recent update Was done on June 23, 2025. 15%Remaining 10% Level Water Western Supplies are Empty in Western Remaining in Emergency*(180 days Supplies Western before the Western Choke Lake Corpus Supplies Supplies Reach 0%) Canyon Christi Previous December J, Model June 2025 October 2025 October 2026 2026 Apri12027 i Updated Atascosa River @ GocJ� July 2025 December 2025 December 2026 February 2027 May 2027 Model + ,,2 South Texas Water Authority Groundwater Project VMlhd WeNCuNg ��0� �� o • STWA entered into a Water Supply Agreement with Seven ' r suRPAcc Seas Water (STWA) USA, LLC (Seven Seas) for Seven Seas to °LP°�� RIanN Gong design, permit, construct, finance, and operate a brackish water desalination treatment facility and will sell up to 3 �AnnWaror CLAY Sanitary Seal million gallons of water per day to STWA. &SILT • STWA has expressed that they can expand the brackish !/► water desalination plant and sell up to 28 million gallons of �� treated water to the City. CLAY • The City and STWA are in the process of negotiating a Water • Su L Agreement. On June 18, the City received a draft - p p Y g Y F,�a, Pack memorandum of understanding (MOU) from STWA, which City staff are currently reviewing. l ii a Region N Water Planning Group Meeting Regional Water Planning Area N-Coastal Bend • On June 19, CCW presented at the Region N Water Planning Meeting. The presentation consisted of adding three projects to the draft Region N Plan. The three - projects added to the draft plan were: the EV Ranch Brackish Groundwater project, the Nueces River Groundwater project, and the City's Reuse project. •.... • The Coastal Bend Regional Water Planning Area includes 11 counties, portions of the Nueces River Basin, "K,ehs and its adjoining coastal basins. m • The purpose of the Region N Plan is to identify all • "'°`"""°` potential water supply projects in the near and long term. ° C� Effluent Reuse Project . The City has continued to explore alternative sources of new Water supply and is identifying and evaluating alternative potable reuse applications. City Council approved Garver, LLC ("Garver"), to provide professional services for this evaluation on April 8, 2025. The executed contract was received by Garver on June 20, 2025. The main tasks associated with this project are: 1. Review and study the City's historical water quality data and develop a 12-Month Source Water Characterization Report, Pilot Plant Planning and Design. 2. Develop a Reuse Alternatives Summary. Advan<etl Water Purification Facility at Oao Reclamation Plan[ 3. Begin Conceptual Design of a full-scale temporary Advanced Water Purification Facility. Potential Reuse Option: ° • The Oso WWTP has the largest potential for treating the effluent to potable standards. � • Yield up to 11,2o1 ac-ft/yr or 10 MGD 5 Additional Water Supply Project Updates Nueces River Groundwater Wells Project I • CCW submitted a Bed and Banks Permit application to the TCEO on May 12, 2025. • The application was declared administratively complete on June 11, 2025. • On June 18, CCW received the draft bed and banks notice and permit for review. Well installation continues with two contractors. Evangeline Groundwater Project • On June lit", City staff met with the Evangeline Team • City Staff anticipates the Valuation proposal to take four to five weeks CON 6 Thank you ! Corpus Christi Water- Serving the Coastal Bend Se GO H, v AGENDA MEMORANDUM N�ORPOPPE 1 st Reading Ordinance for the City Council Meeting June 17, 2025 1852 2nd Reading Ordinance for the City Council Meeting June 24, 2025 DATE: June 17, 2025 TO: Peter Zanoni, City Manager FROM: Ernesto De La Garza, Director of Public Works Ernesto D2(a-)-cctexas.com (361) 826-1677 Corpus Christi Transportation Master Plan "Mobility CC" Amendments Modifications Related to Future Mirabella and King's Lake West Developments CAPTION: Ordinance amending the Roadway Master Plan Map and the Urban Transportation Plan Map of Mobility CC, transportation elements of the Comprehensive Plan of the City of Corpus Christi, by modifying County Road 22 between SH286 and County Road 43 from an A2 Arterial to a C1 Collector, modifying County Road 22 between County Road 43 and a proposed P1 Parkway from a C3 Collector to a C1 Collector, and modifying a planned road between County Road 22 and County Road 20A from a C3 Collector to a C1 Collector; amending related elements of the Comprehensive Plan of the City; and providing for publication. SUMMARY: KCI Engineers, an agent for the developer of Mirabella, and Pape-Dawson Consulting Engineers, LLC (Pape-Dawson Engineers), an agent for the developer of King's Lake West, submitted applications requesting to modify (reduce) the proposed classifications of roadways on the City's transportation master plan. These planned roadways are within and along the frontage of these future developments. KCI Engineers requested to reduce the classification of a planned (C3) Collector, between County Road 22 and County Road 20A, to a (Cl) Collector. Pape-Dawson Engineers requested to reduce the classification of County Road 22 (planned (C3) Collector) and County Road 43 (planned (A2) Arterial) to a (Cl) Collector. City staff supported and recommended the requests to reduce the classifications of County Road 22 and the planned (C3) Collector. City staff also recommended reducing the classification of County Road 22, from SH286 to County Road 43 to maintain consistency on the proposed right-of- way widths. The Planning Commission supported all of staff's recommendations. Final approval of these modifications to the plan requires Council action. BACKGROUND AND FINDINGS: The Public Works Department oversees the City's Transportation Master Plan "Mobility CC" which addresses the master planned transportation network in the City of Corpus Christi limits and the City's Extraterritorial Jurisdiction (ETJ). The plan designates the ultimate rights-of-way for collector, arterial, and freeway segments and their alignments to create an efficient multi-modal system. Modifications to the plan require Council action. Mirabella Development is an undeveloped tract located on the east side of SH 286 between Weber Road and Staples Street. It will consist of 1154 dwelling units scheduled for buildout over seven phases by 2032. King's Lake West is an undeveloped, 110-acre tract located southeast of FM 43 at the County Road 43 intersection that will consist of 502 single family detached houses scheduled for completion in 2028. Both developments are in the City's Extraterritorial Jurisdiction (ETJ). KCI Engineers (Mirabelli) and Pape-Dawson Consulting Engineers, LLC (King's Lake West), each prepared a Traffic Impact Analysis (TIA)for City review. The TIA for each development analyzed existing and projected site-generated traffic on area roadways and studied intersections within a 1.0-mile radius as required by the City's Unified Development Code (UDC). KCI (Mirabelli) submitted an application to request Transportation Master Plan amendments for the planned (C3) Primary Collector to a (Cl) Collector (See Exhibit A). The TIA projected 4,000 vehicles per day along the planned segment. This projected design capacity falls within the threshold of a (Cl) Collector. City staff supported this recommendation, but also recommended reducing County Road 22, a planned (A2) Arterial, to a (Cl) Collector. The Planning Commission supported staff's recommendations and voted as follows: Abstain (1), Yea (6), and Against (2). Pape-Dawson Consulting Engineers, LLC (King's Lake West) submitted an application to request Transportation Master Plan amendments for County Road 22, a planned (C3) Primary Collector and County Road 43, a planned (A2) Secondary Arterial to a (Cl) Collector (See Exhibit A). Staff did not support the request to modify County Road 43, a proposed (A2) arterial to a proposed (Cl) Collector. The reason being County Road 22 is an east-west roadway that would dead end into a future Oso Parkway Collector. County Road 43 is a north-south segment between FM43 (Weber) and FM2444 (South Staples) with the potential for growth further south. Planning Commission supported staff's recommendations and voted as follows: Yea (8), and Against (1). A summary of the requests and recommendations are summarized in the table below. ProposedID Road Classification Limits Modification Recommendation 1 Planned C3 Collector C3 Primary County Road 22 C1 Collector Mirabella Yes Collector to County Road 20A 2 County Road 22 A2 Secondary SH286 to C1 Collector City Yes Arterial County Road 43 3 County Road 22 C3 Primary County Road 43 C1 Collector King's Lake Yes Collector to P1 Parkway 4 County Road 43 A2 Secondary Adjacent to C1 Collector King's Lake No Arterial King's Lake Per the Transportation plan, Typical sections of a (Cl) Collector, (C3) Collector, (P1) Parkway, and (A2) Secondary Arterial are provided in the table below: Road •• Daily (FT) Trips C1 Collector 60 2 No 5 4,000—8,000 Primary 75 4 No 5 10,000—14,000 Collector(0) Parkway 80 2 No 5 4,000-8,000 Collector(P1) Secondary 100 4 Median 5 20,000—32,000 Arterial (A2) ALTERNATIVES: Denial of Planning Commission and City Staff recommendations. FISCAL IMPACT: None. RECOMMENDATION: City Staff recommends the following modifications to the Corpus Christi Transportation Master Plan"Mobility CC: 1. Modify planned (C3) Primary Collector to a(Cl) Collector(impacts the Mirabella Development Only). 2. Modify County Road 22 from a proposed (A2) Secondary Arterial and (C3) Primary Collector to a proposed (Cl) Collector from SH286 to Oso Parkway (impacts both developments). LIST OF SUPPORTING DOCUMENTS: Presentation Exhibit A Ordinance amending the Roadway Master Plan Map and the Urban Transportation Plan Map of Mobility CC, transportation elements of the Comprehensive Plan of the City of Corpus Christi, by modifying County Road 22 between SH286 and County Road 43 from an A2 Arterial to a C1 Collector, modifying County Road 22 between County Road 43 and a proposed P1 Parkway from a C3 Collector to a C1 Collector, and modifying a planned road between between County Road 22 and County Road 20A from a C3 Collector to a C1 Collector; amending related elements of the Comprehensive Plan of the City; and providing for publication. WHEREAS, the Planning Commission has forwarded to the City Council its recommendation concerning the amendments to the Corpus Christi Roadway Master Plan and the Urban Transportation Plan, elements of the Comprehensive Plan of the City of Corpus Christi, Texas; WHEREAS, Planning Commission held a public hearing regarding amendments to the Corpus Christi Roadway Master Plan and the Urban Transportation Plan maps, during which all interested persons were allowed to be heard; WHEREAS, City Council held a public hearing, regarding amendments to the Corpus Christi Roadway Master Plan and Urban Transportation Plan maps, during which all interested persons were allowed to be heard; and WHEREAS, the City Council has determined that these amendments would best serve public health, necessity, and convenience, and the general welfare of the City of Corpus Christi, and its citizens; BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. The Corpus Christi Roadway Master Plan Map and the Urban Transportation Plan Map of Mobility CC, elements of the Comprehensive Plan of the City of Corpus Christi, Texas (the "Comprehensive Plan"), are amended by modifying County Road 22 between SH286 and County Road 43 from an A2 Arterial to a C1 Collector, modifying County Road 22 between County Road 43 and a proposed P1 Parkway from a C3 Collector to a C1 Collector, and modifying a planned road between between County Road 22 and County Road 20A from a C3 Collector to a C1 Collector, as shown on Exhibit "A," which is attached to this ordinance and incorporated into this ordinance by reference as if fully set out in its entirety. SECTION 2. To the extent the amendments made by this ordinance represent a deviation from the Comprehensive Plan, the Comprehensive Plan is amended to conform to the amendments made by this ordinance. SECTION 3. The Comprehensive Plan, as amended from time to time and except as changed by this ordinance, remains in full force and effect. SECTION 4. Any ordinance or part of any ordinance in conflict with this ordinance is expressly repealed by this ordinance. SECTION 5. The City Council intends that every section, paragraph, subdivision, clause, phrase, word, or provision of this ordinance be given full force and effect for its purpose. Therefore, if any section, paragraph, clause, phrase, word, or provision of this ordinance is held invalid or unconstitutional by final judgment of a court of competent jurisdiction, that judgment shall not affect any other section, paragraph, subdivision, clause, phrase, word, or provision of this ordinance. SECTION 6. Publication shall be made in the City's official publication as required by the City's Charter. Introduced and voted on the day of , 2025. PASSED and APPROVED on the day of , 2025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary EXHIBIT A EXISTING MASTER TRANSPORTATION PLAN PROPOSED AMENDMENT WEBER RD IFM 931 A3(ARTERIAL) o $ ' C3(C.—.R) ».z C3(COLLECTOR) A m 2 4 3 2 0 4 3 O \S COUNTY ROAp 11 A2(ARTERIAL) *(COLLECTOR)- \F COUNTY ftOA0 Y1 C1(COLLECTOR) C1(COLLEcrOR)la FO LEOENO KING'5 LAKE WEST _ KING'S LAKE WEST COUNTYROAD20A CJICOLLECTOR) �I MARIBELLA - COUNN ROAD 2QA CS(COLLECTOR) MAfiIEEL I I SOUTH STARLEBST(FM2GC6)1 1 KASRIAN 1 I SOUTH STARLESST(FMaaml l I KASRwN� Proposed Amendments Summary Table RecommendationID Road Classification Limits Proposed Requestor Planning # Modification Commission/Staff 1 Planned C3 Collector C3 Primary County Road 22 C1 Collector Mirabella Yes Collector to County Road 20A 2 County Road 22 A2 Secondary SH286to C1 Collector City Yes Arterial County Road 43 3 County Road 22 C3 Primary County Road 43 C1 Collector King's Lake Yes Collector to PI Parkway 4 County Road 43 A2 Secondary Adjacent to C1 Collector King's Lake No Arterial King's Lake Classification Table Summary DailyRoad ROW Width(FT) Travel Lane Median Turn Lane Sidewalk Average (FT) Trips C1 Collector 60 2 No 5 4,000-8,000 Primary 75 4 No 5 10,000-14,000 Collector(0) Parkway 80 2 No 5 4,000-8,000 Collector(P1) Secondary 100 4 Median 5 20,000—32,000 Arterial(A2) V SION ZERO o�oOHRIST Corpus Christi Transportation0 Master Plan (MobilityCC) Amendments Modifications Related to Future Mirabella & King's Lake West Developments =y City Council Presentation June 17, 2025 f)� Background Oio • Transportation Plan Requested Amendments ID Road Classification Limits Proposed Requestor Planning # Modification Commission/Staff Recommendation 1 Planned C3 Collector C3 Primary County Road 22 C1 Collector Mirabella Yes Collector to County Road 20A 2 County Road 22 A2 Secondary SH286 to C1 Collector City Yes Arterial County Road 43 3 County Road 22 C3 Primary County Road 43 C1 Collector King's Lake Yes Collector to P1 Parkway 4 County Road 43 A2 Secondary Adjacent to Cl Collector King's Lake No Arterial King's Lake • Requested Amendments Presented to Planning Commission • TIA Provided for Each Development (Within in 1-Mile) Amendment Requests �► EXISTING MASTER TRANSPORTATION PLAN WEBER RD(FM 43) A3(ARTERIAL) K] K 1I O a of w F U cQ U C3(COLLECTOR) 4 0 2 z 3 Z � AaO'O4r COUNTY ROAD 22 A2(ARTERIAL) C3(COLLECTOR) FD N r = c~i w (ps cN 0 y V LEGEND O U KING'S LAKE WEST COUNTY ROAD 20A C3(COLLECTOR) MARIBELLA 4 4 SOUTH STAPLES ST(FM2444)1 1 KASPIAN 3 Recommendations PROPOSED AMENDMENT WEBER RD(FM 43) A3(ARTERIAL) ' \�O w w r U � / C3(COLLECTOR) / i Q /a 4 O / � 5 p,4Op0 SFO LL COUNTY ROAD 22 Cl(COLLECTOR) C1(COLLECTOR) Q O ¢ � i O U � LEGEND U KING'S LAKE WEST COUNTY ROAD 20A C3(COLLECTOR)W MARGELLA 1 i I SOUTH STAPLES ST(FM2444)i I= KASPIAN Recommendations Amend & Update Transportation Plan as Indicated Below 1 Planned C3 Collector C3 Primary County Road 22 C1 Collector Mirabella Yes Collector to County Road 20A 2 County Road 22 A2 Secondary SH286 to C1 Collector City Yes Arterial County Road 43 3 County Road 22 C3 Primary County Road 43 C1 Collector King's Lake Yes Collector to PI Parkway 4 County Road 43 A2 Secondary Adjacent to C1 Collector King's Lake No Arterial King's Lake 1. Reduce Planned C3 Primary Collector to C1 Collector. 2. Reduce County Road 22, from SH286 to County Road 43 to a C1 Collector. 3. Reduce County Road 22, from County Road 43 to a Proposed P1 Parkway, to a C1 Collector se GO � w O AGENDA MEMORANDUM "ORPOR First Reading for the City Council Meeting of June 17, 2025 1852 Second Reading for the City Council Meeting of June 24, 2025 DATE: June 10, 2025 TO: Peter Zanoni, City Manager FROM: Dr. Dante Gonzalez, Interim Director of Public Health DanteG()cctexas.com 361-826-7203 Acceptance of the City of Corpus Christi Laboratory Response Network Public Health Infrastructure Grant in the amount of$250,000.00 and appropriation of the funds from upon contract execution through November 30, 2027 CAPTION: Ordinance accepting Public Health Infrastructure Grant for $250,000.00 from the Department of State Health Services to enhance and expand Laboratory Information Management System infrastructure through November 30, 2027; and appropriating $250,000.00 into the Health Grant Fund. SUMMARY: The Public Health Infrastructure Grant aims to strategically enhance and expand Laboratory Information Management System infrastructure, improve jurisdictional visibility of laboratory data, and enable faster, more comprehensive data exchange and reporting to and from the Department of State Health Services via the National Electronic Disease Surveillance System and the Centers for Disease Control and Prevention. The system will enhance data flow efficiency between the public health laboratory and its partners, improving accuracy and reliability by automating the process of reporting. This will facilitate informed decision-making, quicken result reporting, ensure regulatory compliance, and foster an innovative research environment. Enhancing LIMS capabilities will increase the flexibility and scalability of lab services, enabling the development of a more comprehensive and adaptable test menu to meet the evolving needs of the community. The City Manager, or designee, may reject or terminate this grant. Furthermore, the City Manager, or designee, is authorized to execute contract amendments pertaining to these grant funds in the following instances: a)for the carry-over of funds, when ascertained and approved by the funding agency through a revised notice of award; b) a no-cost extension; c) when an amendment will provide supplemental grant funds in an amount not to exceed 20% of the original grant amount; d)for reimbursement increases of administration funds for each participant served; e) to comply with applicable State or federal laws and regulations; and f) for matters which do not change the essential purpose of the grant. BACKGROUND AND FINDINGS: The purpose of this contract is to make strategic investments to enhance and expand Laboratory Information Management System infrastructure, improve jurisdictional visibility of laboratory data, and enable faster, more comprehensive data exchange and reporting to and from the Department of State Health Services via the National Electronic Disease Surveillance System and the Centers for Disease Control and Prevention. This grant will start upon contract execution and go through November 30, 2027. All funding will be provided by DSHS with a total budget amount of 250.000.00, with the following allocations: • $35,300.00 for Supplies (Computer hardware & office supplies) • $214,700.00 for Contractual (Annual LIMS support, HL7 interface builds, configurations) These funds will be utilized to establish interfaces across departments within the Public Health District supporting the reporting of notifiable conditions as required by several Texas state laws (Health & Safety Code, Chapters 81, 84, and 87) which require specific information regarding notifiable conditions be provided to the Texas Department of State Health Services (DSHS). Health care providers, and laboratories are required to report notifiable conditions. (Chapter 97, Title 25, Texas Administrative Code) 3-Year Budget Breakdown: DSHS DSHS DSHS Funding Funding Fundiii-7 Budget (ateoories Year 1 Year 2 y e-.ir 3 Sumtnary (Execution thru (12/l/2025 (12r1�2026 11i30 202 ) thru thru 11f30?2026) 11:30.2027y Personnel $0.00 $0.00 $0.00 $0.00 Fringe Benefits $0.00 $0.00 $0.00 $0.00 Tr,ivel $0.00 $0.00 $0.00 $0.00 Equipment $0.00 $0.00 $0.00 $0.00 Supplies $193333,00 $3.533.00 $11434.00 `b35.300.00 Contractual $41 MO.00 $84.200.00 $89.500.00 5-'14.?00,00 Other $0.00 $0.00 $0.00 50,00 Toul Direct C osts $603333,00 $87.733.00 5101.934.00 5-'-50.000,00 Indirect Costs $0.00 $0,00 $0.00 $0.00 Tot.il Suin of Direct mid Indirect $60,3.33.00 $87,733.00 5101,934.00 5250,000.00 Costs Listed below are the preliminary contractual provisions of funding pending Council approval: • Laboratory Information Management System (LIMS) Annual Support • LIMS Interfaces to Analyzers and Disease Surveillance Databases • LIMS Configuration of database reports for epidemiological and statistical analysis This grant will support efficient and accurate data exchange, allowing the Corpus Christ-Nueces County Public Health District to effectively perform infectious disease surveillance and control. ALTERNATIVES: Refuse the execution of the grant contract and lose additional funding to be utilized for strengthening the public health laboratory data surveillance and exchange infrastructure. FISCAL IMPACT: There is no fiscal impact. The grant requires no match. FUNDING DETAIL: Fund: 1066 Health Grants Organization/Activity: 89 Grants & Capital Projects/TBD Department: 15 Heath Dept Account: various Total Amount: $250,000.00 RECOMMENDATION: Staff recommends approval of the Ordinance. LIST OF SUPPORTING DOCUMENTS: Contract No. HHS001593800001 Ordinance Presentation Certificate of Funds Ordinance accepting Public Health Infrastructure Grant for $250,000.00 from the Department of State Health Services to enhance and expand Laboratory Information Management System infrastructure through November 30, 2027; and appropriating $250,000.00 in the Health Grant Fund. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, THAT: SECTION 1. The City Manager or designee is authorized to execute all documents necessary to execute Contract No. HHS001593800001 (the "Contract") between the Department of State Health Services ("DSHS") and Corpus Christi-Nueces County Public Health District for a grant in the amount of $250,000.00, effective from execution of Contract, through November 30, 2027, to provide Laboratory Information Management System infrastructure through November 30, 2027. SECTION 2. Funds in the amount of $250,000.00 are appropriated in the Health Grants Fund No. 1066 to enhance and expand Laboratory Information Management System infrastructure through November 30, 2027. SECTION 3. The City Manager or designee is authorized to execute any future amendments to the Contract that extend the contract period or increase or decrease the amount of the grant. SECTION 4. A copy of the executed health grant contract and amendments shall be filed in the office of the City Secretary. SECTION 5. In the event of the loss or misuse of these DSHS funds, the City assures the funds will be returned to the funding agency in accordance with the applicable requirements. Introduced and voted on the day of , 2025. PASSED and APPROVED on the day of , 2025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary Department of State Health Services Public Health Infrastructure Grant Ordinance Authorizing Acceptance of Grant Award Health Department Interim Director Dr.Dante Gonzalez June 10, 2025 Ordinance Ordinance accepting Public Health Infrastructure Grant for $250,000.00 from the Department of State Health Services to enhance and expand Laboratory Information Management System infrastructure through November 30, 2027; and appropriating $250,000.00 in the Health Grant Fund. a� Summary Information Public Health Infrastructure Grant Overview: The purpose of this grant is to make strategic investments that enhance data exchange efficiency and accuracy and strengthening infectious disease surveillance and control efforts. The objective of this grant is to: • Enhances Laboratory Information Management System (LIMS) infrastructure • Improve jurisdictional visibility of laboratory data • Enable faster and more comprehensive data exchange and reporting to: o Department of State Health Services o National Electronic Disease Surveillance System o Centers for Disease Control and Prevention (CDC) Background Information Public Health Infrastructure Grant Continued: Grant enhancement initiatives include: • Automate reporting processes for improved accuracy, reliability, and efficiency • Strengthen data flow between public health laboratories and partners • Enhance lab service flexibility and scalability • Expand test menu options to meet evolving community needs • Supports informed decision-making and regulatory compliance with Texas state laws requiring notification of conditions to DSHS jW Background Information 3-Year Budget Breakdown: 3-Year Total: $250,000.00 Budget Summary: DSHS DSHS DSHS Funding Funding Funding • Year 1 60 333.00 Budget Categories Year Year 2 Year 3 Summary $ (Execution thra (12.1!2025 (12A,1026 11130I2025) thru thru 11/30/202 W30l2027 Personnel $0.00 $0,00 $0.00 Son Fringe Benefits $0.00 $0.00 $0.00 $0.00 • Year 2: $87,733.00 Travel $0.00 $0.00 $0.00 $0.00 Equipment $0.00 $OM $0.00 50.00 Supplies $19.333.00 $3.533.00 $12.434.00 $35.300.00 Contractual $41.000.00 $84.200.00 $89.500.00 $214.700.00 • Year 3: $101,943.00 Other $0.00 $0.00 $0.00 $0.00 Total Direct Costs $60.333.00 $87.733.00 $101.934.00 $250.000.00 Indirect Costs $0.00 $0.00 $0.00 $0.00 Total Sum oFDirert and Indirect $60,333.00 587,733.00 5101,934.00 5250.000.00 Costs 5 Fiscal Impact & Recommendation Fiscal Impact: Public Health Infrastructure Grant contract is effective upon contract execution through November 30, 2027. • Total 3-year grant amount is 250,000.00 o $214,700.00 for contractual services (annual LIMS support, HL7 interface builds, configurations o $35,300.00 for supplies (computer hardware & office supplies) • No FTEs are supported by this grant. Recommendation: Staff recommends approval of the Ordinance. Department of State Health Services Public Health �, Infrastructure Grant uestions ?Q se w O H v AGENDA MEMORANDUM NCOOppgpl EO First Reading for the City Council Meeting of June 17, 2025 1852 Second Reading for the City Council Meeting of June 24, 2025 DATE: June 10, 2025 TO: Peter Zanoni, City Manager FROM: Dr. Dante Gonzalez, Interim Director of Public Health DanteG@cctexas.com 361-826-7203 Acceptance of the Texas Beach Watch 5-Year Contract to Collect & Analyze Recreational Beach Water for the Corpus Christi — Nueces County Public Health District CAPTION: Ordinance authorizing an Interlocal Agreement with an estimated payment amount of $700,000.00 to the City of Corpus Christi from the Texas General Land Office to provide beach water sampling in Nueces, Aransas, and San Patricio counties under the Texas Beach Watch Program for a five-year period beginning in FY25 and ending August 31, 2030. SUMMARY: The Corpus Christi-Nueces County Public Health District (CCNCPHD) received Contract No. 26-004-004 from the General Land Office (GLO) to collect and analyze recreational beach water samples from designated sampling stations and report results to the GLO. During the contract term, the GLO will issue annual Work Orders. This agreement funds one Public Health Technician position. Under this contract, CCNCPHD will follow the Texas Beach Watch work plan to collect and analyze water samples in Nueces, Aransas, and San Patricio Counties. The Texas Beach Watch program helps protect public health by monitoring coastal water quality and issuing advisories when bacteria levels exceed safe limits, ensuring the community can make informed decisions about swimming and water activities. All funding is based on annual work orders from the General Land Office (GLO), with an estimated $700,000.00 allocated over the next five years. The City Manager, or designee, may reject or terminate this grant. Furthermore, the City Manager, or designee, is authorized to execute contract amendments pertaining to these grant funds in the following instances: a) for the carry-over of funds, when ascertained and approved by the funding agency through a revised notice of award; b) a no-cost extension; c) when an amendment will provide supplemental grant funds in an amount not to exceed 20% of the original grant amount; d) for reimbursement increases of administration funds for each participant served; e) to comply with applicable State or federal laws and regulations; and f) for matters which do not change the essential purpose of the grant. BACKGROUND AND FINDINGS: The GLO has awarded a contract to CCNCPHD to collect and analyze recreational beach water samples, notify the public of beach water quality and recommend and/or issue, water quality advisories when warranted. This contract is effective September 1, 2025, through August 31, 2030. Every year, the GLO awards the Texas Beach Watch Program financial support, which provides for salary, benefits, and expenses. Annual work orders are awarded to the CCNCPHD during the 5-year contract term. The TBW program collects & analyzes specimens throughout designated sampling stations in Nueces, Aransas, and San Patricio Counties and monitors waterways. The program monitors these recreational beaches and when Enterococci bacteria levels in the water exceed the acceptable standards established by the U.S. Environmental Protection Agency (EPA), the GLO works with local governments to issue advisories warning the public. This award has been appropriated to the CCNCPHD since 2015. Water samples are collected and tested throughout the year. During the peak beach season, which runs from May through October, water samples are collected weekly. During the rest of the year, samples are collected every two weeks. The one exception occurs in March when weekly sampling is conducted to coincide with spring break. In FY24, the Corpus Christi-Nueces County Public Health District collected approximately 2,000 initial water samples and 500 recollected samples from 50 sampling stations as part of monitoring efforts. Budget Breakdown: Total estimated amount of Texas Beach Watch Contract is $700.000.00 i Salaries &Wages $44,000.00 $44,000.00 $44,000.00 $44,000.00 $44,000.00 Overtime $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 Other Pa $716.04 $716.04 $716.04 $716.04 $716.04 Retirement $11,012.40 $11,012.40 $11,012.40 $11,012.40 $11,012.40 Group Insurance Benefits $8,500.00 $8,500.00 $8,500.00 $8,500.00 $8,500.00 Other Employee Benefits $78.00 $78.00 $78.00 $78.00 $78.00 Clinical Supplies $25,000.00 $25,000.00 $25,000.00 $25,000.00 $25,000.00 Chem/hsld supplies $500.00 $500.00 $500.00 $500.00 $500.00 Janitorial supplies $400.00 $400.00 $400.00 $400.00 $400.00 Minor tools & equipment $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 Minor computer equipment $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 Office supplies $12,000.00 $12,000.00 $12,000.00 $12,000.00 $12,000.00 Fuel & Lubricants $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 Food & Food Supplies $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 Professional services $4,193.56 $4,193.56 $4,193.56 $4,193.56 $4,193.56 Vehicle repairs $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 Tel e hone/tele ra h/cable $600.00 $600.00 $600.00 $600.00 $600.00 Uniforms & Safety Clothing $10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00 Travel $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 The Texas Beach Watch program, funded by the EPA and managed by the GLO, provides daily water quality updates based on sample results which are entered in the GLO database. Local governments post advisory signs at beach access points when bacterial levels exceed acceptable limits. Water samples are collected and analyzed at multiple locations throughout the Coastal Bend, with repeat sampling continuing until bacteria levels return to a safe range. Reimbursement for each sample is determined by the annual work order provided by the GLO. The total estimated revenue for the next five years is $700,000.00. ALTERNATIVES: Denial of the Texas Beach Watch contract would eliminate essential real-time reporting on recreational beach water bacterial levels for the community who utilizes these resources. FISCAL IMPACT: All collection, testing, and reporting services are fully covered through annual work orders from the General Land Office(GLO). The total estimated revenue for the next five years is$700,000.00. FUNDING DETAIL: Fund: 1066 Health Grant Fund Organization/Activity: 89 Grants & CIP/TBD Mission Element: 15 Health Account: Various Amount: 700,000.00 RECOMMENDATION: Staff recommends approval of the Ordinance to apply, approve, and appropriate GLO contract and annual work orders. LIST OF SUPPORTING DOCUMENTS: Ordinance GLO Contract No. 26-004-004 Presentation Certificate of Funds Ordinance authorizing an Interlocal Agreement for an estimated $700,000.00 with the Texas General Land Office to provide beach water sampling in Nueces, Aransas, and San Patricio counties under the Texas Beach Watch Program for a five-year period ending August 31, 2030. Whereas, under the Texas Beach Watch Program, the Texas General Land Office will issue work orders for beach water sampling based on need and funding availability; and Whereas, the Texas General Land Office will issue work orders for a total estimated $700,000.00 in services over the five-year contract period. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, THAT: SECTION 1. The City Manager or designee is authorized to execute an Interlocal Agreement with the Texas General Land Office to provide beach water sampling in Nueces, Aransas, and San Patricio counties under the Texas Beach Watch Program for a five-year term ending August 31, 2030. SECTION 2. The City Manager or designee is authorized to execute work orders under the Interlocal Agreement with the Texas General Land Office to provide beach water sampling in Nueces, Aransas, and San Patricio counties under the Texas Beach Watch Program for a five-year term ending August 31, 2030. SECTION 3. All funds received under the Texas Beach Watch Program are appropriated in the Health Grants Fund No. 1066 to provide reimbursement for beach water sampling in Nueces, Aransas, and San Patricio counties under the Texas Beach Watch Program. SECTION 4. The City Manager, or designee, may reject or terminate this grant. Furthermore, the City Manager, or designee, is authorized to execute contract amendments pertaining to these funds in the following instances: a) for the carry-over of funds, when ascertained and approved by the funding agency through a revised notice of award; b) a no-cost extension; c) when an amendment will provide supplemental funds in an amount not to exceed 20% of the original amount; d) for reimbursement increases of administration funds for each participant served; e) to comply with applicable State or federal laws and regulations; and f)for matters which do not change the essential purpose of the funding. SECTION 5. The City Manager or designee is authorized to execute any future amendments to the Contract that extend the contract period or increase or decrease the amount of the grant. SECTION 6. A copy of the executed work orders or amendments shall be filed in the office of the City Secretary. Introduced and voted on the day of , 2025. PASSED and APPROVED on the day of 12025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary 1 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 LAND V t� o r 00 en w ao a 1 5 P STATE OF�� INTERLOCAL CONTRACT GLO Contract No. 26-004-004 THE GENERAL LAND OFFICE ("the GLO") and CITY OF CORPUS CHRISTI, Texas Identification Number (TIN) 17460005741 ("Provider"), each a "Party" and collectively "the Parties," enter into the following contract for services (the "Contract") pursuant to the Interlocal Cooperation Act, Chapter 791 of the Texas Government Code. This Contract is funded through the U.S. Environmental Protection Agency under the Beaches Environmental Assessment and Coastal Health Act of 2000 (BEACH Act, PL 106-284). I.DEFINITIONS/INTERPRETIVE PROVISIONS/PROJECT DESCRIPTION 1.01 DEFINITIONS "Administrative and Audit Regulations" means all applicable statutes, regulations, and other laws governing administration or audit of this Contract, which may include Title 2, Part 200, Code of Federal Regulations and Chapters 321 and 791 of the Texas Government Code. "Attachment" means documents, terms, conditions, or additional information attached to this Contract following the execution page or expressly incorporated by reference within the body of this Contract. "Contract" means this entire document, along with any Attachments. "Deliverable" means a unit or increment of work to include, any item, report, data, document, photograph, or other submission required to be delivered under the terms of this Contract, in whatever form. "Fiscal Year" means the period beginning September 1 and ending August 31 each year, which is the annual accounting period for the State of Texas. "Federal Assurances and Certifications" means Standard Form 424B (Rev. 7-97) (non- construction projects) or Standard Form 424D (Rev. 7-97) (construction projects), and U.S. Department of Commerce Form CD-512 (12-04), "Certifications Regarding Lobbying — Lower Tier Covered Transactions," attached hereto as Attachment B and incorporated herein for all purposes. "GAAP" means "generally accepted accounting principles." "GASB" means the Governmental Accounting Standards Board. "General Affirmations" means the statements, terms, and conditions attached hereto as Attachment C. To the extent they apply, Provider agrees to and affirms the General Affirmations. GLO Contract No.26-004-004 Page 1 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 "Intellectual Property" means patents, rights to apply for patents, trademarks, trade names, service marks, domain names, copyrights, schematics, industrial models, inventions, know-how, trade secrets, computer software programs, other intangible proprietary information, and all federal, state, or international registrations or applications for any of the foregoing. -Performing Agency" (or Provider) means the State agency or local governmental entity performing the services described herein "Project"means the services described in SECTION 1.03 of this Contract. "Public Information Act" means Chapter 552 of the Texas Government Code. `'Quality Assurance Project Plan (QAPP) ' means the EPA-approved document describing in comprehensive detail the technical activities to be implemented to ensure the results of work performed will satisfy the stated performance criteria. "Receiviny- Ar-ency" (or the GLO) means the State agency or local governmental entity receiving the benefits of the services described herein. "Subcontractor" means an individual or business that signs a contract, or enters into an agreement with Provider, to perform part or all of the obligations of Provider under this Contract. "Travel Regulations" means all applicable statutes, regulations, laws, and Comptroller guidance related to reimbursement for Provider's travel expenses, including: Title 34, Section 5.22, of the Texas Administrative Code; Chapter 660 of the Texas Government Code; the General Appropriations Act; and Textravel, the Comptroller's travel regulation guidance available on the Comptroller's website. "Work" means services to be performed or goods to be delivered, and any appurtenant actions performed and items produced, conceived, or developed, including but not limited to Deliverables, in the performance of the Project. "Work Order" means an individually-negotiated document authorizing Provider to perform specific services or deliver specific goods under the Contract. Upon execution by both Parties, a Work Order becomes a part of the Contract. 1.02 INTERPRETIVE PROVISIONS a) The meanings of defined terms apply to the singular and plural forms of the defined terms; b) The words "hereof," "herein," "hereunder," and similar words refer to this Contract as a whole and not to any particular provision, section, Attachment, Work Order, or schedule of this Contract unless otherwise specified; c) The term"including" means "including, without limitation." d) Unless otherwise expressly provided, references to contracts and work orders include subsequent amendments and other modifications thereto, to the extent such amendments and modifications are not prohibited by the terms of this Contract or applicable Work Order, and a reference to a statute or regulation includes statutory or regulatory provisions consolidating, amending, replacing, supplementing, or interpreting the statute or regulation; GLO Contract No.26-004-004 Page 2 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 e) The captions and headings of this Contract are for convenience of reference only and shall not affect the interpretation of this Contract; f) All Attachments to this Contract, including those incorporated by reference, and any amendments are considered part of the terms of this Contract; g) This Contract may use several limitations, regulations, or policies to regulate the same or similar matters and each such limitation, regulation, and policy is cumulative and shall be performed in accordance with its terms; h) Unless otherwise expressly provided, reference to any action of or by the GLO by way of consent, approval, or waiver is deemed modified by the phrase "in its/their sole discretion," however, the GLO shall not unreasonably withhold or delay any approval, consent, or waiver required or requested of it; i) Time is of the essence in this Contract; j) If this Contract, its Attachments, or a Work Order conflict, such conflicts shall be resolved in the following order of precedence: first, the Contract; then attachments to the Contract in this order: Attachment B, Attachment C, and Attachment A; then Work Orders, with conflicts between Work Orders being resolved by giving precedence to the Work Order with the earliest effective date. 1.03 PROJECT Provider shall, in accordance with the Beach Watch Contract Work Plan attached hereto as Attachment A and as directed in Work Order(s) issued under this Contract, perform, or cause to be performed: collection and analysis of water samples from designated sampling stations in Aransas, Nueces, and San Patricio Counties, Texas; all procedures required by, and in accordance with, the Quality Assurance Project Plan ("QAPP"), incorporated herein by reference in its entirety for all purposes, as if physically attached; and notification of the public of water quality advisories (the "Project"). Provider shall perform the Project in accordance with this Contract and all Attachments and any Work Order(s)issued under this Contract. 1.04 WORK ORDERS a) If the GLO selects Provider to carry out an individual Project, the GLO shall issue a Work Order to Provider. The GLO may issue multiple Work Orders during the term of this Contract, all of which shall be in writing and signed by the Parties. Each Work Order shall include a scope of services; a list of tasks; a schedule for completion of work; a list of any Deliverables and their due dates; a budget; and other information or special conditions necessary to describe the Work authorized therein. Each Work Order shall become an Attachment hereto upon final execution, with this Contract and all Attachments thereafter being referred to collectively as the "Contract." b) Nothing in this Contract expresses or guarantees that the GLO will issue Work Orders to Provider for any of the tasks set forth herein. All Work under this Contract will be required on an irregular and as-needed basis throughout the Contract term. The GLO makes no guarantee of volume or usage under this Contract. GLO Contract No.26-004-004 Page 3 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 1.05 REPORTING REQUIREMENTS Provider shall submit reports in accordance with each Work Order. Reporting requirements may include the status of the deliverables, schedule, and budget. Any additional reporting requirements shall be specified in the Work Order. 11. TERM 2.01 DURATION This Contract shall be effective as of September 1, 2025, and shall terminate on August 31, 2030. 2.02 EARLY TERMINATION FOR CONVENIENCE The GLO may terminate this Contract for convenience by giving written notice specifying a termination date at least 30 days subsequent to the date of the notice. Upon receipt of any such notice, Provider shall cease work, terminate all subcontracts, and incur no further expense related to this Contract. Such early termination shall be subject to the equitable settlement of the respective interests of the Parties, accrued up to the date of termination. 2.03 ABANDONMENT OR DEFAULT If Provider abandons work or defaults on the Contract and fails to cure the default within 30 days after receiving written notice of default, the GLO may terminate the Contract without notice. 111.CONSIDERATION 3.01 CONTRACT LIMIT,FEES,AND EXPENSES The GLO will compensate Provider, per Work Order, in accordance with the budget in each Work Order. 3.02 TRAVEL EXPENSES a) The GLO will not reimburse Provider for travel expenses of any kind without prior written GLO approval. The GLO will only reimburse travel expenses directly attributable to Provider's performance of this Contract and any applicable Work Order at the rates established or adopted by the Comptroller of the State of Texas, as outlined in the Travel Regulations. b) Subject to the maximum amount authorized in this Contract or applicable Work Order and upon specific, prior, written approval by the GLO, lodging, travel, and other incidental direct expenses may be reimbursed under this Contract for professional or technical personnel who are working away from the cities in which they are permanently assigned and conducting business specifically authorized in the scope of services in Attachment A or in an applicable Work Order. c) The limits for reimbursements are the rates established or adopted by the Comptroller, as outlined in the Travel Regulations. Provider understands and acknowledges that any travel-expense reimbursement by the GLO is not a per diem. The GLO will only reimburse actual, allowable expenses in GLO Contract No.26-004-004 Page 4 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 accordance with the Travel Regulations. Provider must submit itemized receipts to support any request for travel-expense reimbursement. 3.03 INVOICES Invoices must: a) be submitted to vendorinvoices(a�glo.texas. ov with a copy to lucy.flores(a_,glo.texas.gov; b) be supported by documentation (including, but not limited to, itemized receipts) that, in the judgment of the GLO, allows for full substantiation of the costs incurred; and C) prominently display GLO Contract Number 26-004-004 and the applicable GLO Work Order number. 3.04 PAYMENT If Provider does not submit invoices in strict accordance with the instructions in this Contract, payment of invoices may be significantly delayed. The GLO shall not pay interest, fees, or other penalties for late payments resulting from Provider's failure to submit invoices in strict accordance with the instructions in this section. IV.AUTHORITY,AFFIRMATIONS,ASSURANCES,AND CERTIFICATIONS 4.01 REPRESENTATION OF AUTHORITY Provider, as the Performing Agency, warrants that: (1) it has authority to perform the services described herein and any applicable Work Order; and (2) the representative executing this Contract on its behalf is authorized by its governing body to do so. The GLO, as the Receiving Agency, warrants that: (1) it has the authority to contract for the services described herein; and (2) the representative executing this Contract on its behalf is authorized to do so. 4.02 GENERAL AFFIRMATIONS To the extent they apply, Provider certifies it has reviewed the General Affirmations in Attachment C, and that Provider is in compliance with all the requirements contained therein. 4.03 FEDERAL ASSURANCES AND CERTIFICATIONS To the extent they apply, Provider certifies it has reviewed the Federal Assurances and Certifications in Attachment B, and that Provider is in compliance with all the requirements contained therein. Provider certifies it is in compliance with all other applicable federal laws,rules, and regulations. 4.04 CERTIFICATIONS FOR INTERLOCAL CONTRACT Each Party certifies that this Contract and any Work Order issued hereunder is authorized by its respective governing body, as applicable, or is otherwise authorized under procedures for entering into interlocal contracts that do not require the approval of its governing body. Each Party paying for the performance of governmental functions or services must make those payments from current revenues available to the paying Party. The Parties agree any contractual payment described in this Contract or any Work Order GLO Contract No.26-004-004 Page 5 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 issued hereunder is in an amount that fairly compensates the performing Party for the services or functions performed under this Contract and applicable Work Order. 4.05 CLEAN AIR ACT;FEDERAL WATER POLLUTION CONTROL ACT Provider must comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. 7401-7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. 1251-1387). V. STATE AND FEDERAL FUNDING 5.01 STATE FUNDING a) This Contract shall not be construed as creating any debt on behalf of the State of Texas and/or the GLO in violation of Article III, Section 49, of the Texas Constitution. In compliance with Article VIII, Section 6 of the Texas Constitution, all obligations of the GLO hereunder are subject to the availability of state funds. If such funds are not appropriated or become unavailable, this Contract may be terminated. In that event, the Parties shall be discharged from further obligations, subject to the equitable settlement of their respective interests, accrued up to the date of termination. b) Any claim by Provider for damages under this Contract may not exceed the amount of funds due and owing Provider or the amount of funds appropriated for payment, but not yet paid to Provider, under the annual budget in effect at the time of the breach. Nothing in this Contract shall be construed as a waiver of sovereign immunity. 5.02 RECAPTURE OF FUNDS The GLO may terminate the Contract and recapture and be reimbursed by Provider for any payments the GLO makes that: (i) exceed maximum allowable rates; (ii) are not allowed under applicable laws, rules, or regulations; or (iii) are otherwise inconsistent with this Contract, including any unapproved expenditures. 5.03 OVERPAYMENT Provider shall be liable to the GLO for any costs disallowed pursuant to financial or compliance audit(s) of funds Provider received under this Contract. Provider shall reimburse such disallowed costs from funds other than those Provider receives pursuant to this Contract. VI.OWNERSHIP AND INTELLECTUAL PROPERTY 6.01 OWNERSHIP AND INTELLECTUAL PROPERTY a) The GLO shall own, and Provider hereby irrevocably assigns to the GLO, all ownership rights, title, and interest in and to all Intellectual Property acquired or developed by Provider pursuant to this Contract, including, without limitation, all Intellectual Property in and to reports, drafts of reports, data, drawings, computer programs and codes, and/or any other information or materials acquired or developed by Provider under this Contract. The GLO may obtain and hold in its name any and all patents, copyrights, trademarks, service marks, registrations, or such other protections, including extensions and renewals thereof, as may be appropriate to the subject matter. Provider agrees and acknowledges that all GLO Contract No.26-004-004 Page 6 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 expressive content subject to copyright protection, including, without limitation, all reports, drafts of reports, drawings, artwork, photographs, video, computer programs and codes, and/or any other expressive content acquired or developed by Provider pursuant to this Contract is a "work made for hire" under the United States Copyright Act of 1976. If, for any reason, any expressive content subject to copyright protection or any portion of such expressive content is not a work made for hire, Provider hereby irrevocably assigns to the GLO ownership of all rights, title and interest in and to such expressive content or such portion of such expressive content. Such rights, title, and interest include, without limitation, the entire and exclusive copyright in the expressive content and all rights associated with the copyright, including reproduction rights, distribution rights, the right to prepare translations and other derivative works, and the right to display the expressive content in all formats and media now known or developed in the future. b) Provider must give the GLO and the State of Texas, as well as any person designated by the GLO or the State of Texas, all assistance and execute documents required to perfect the rights granted to the GLO herein, without any charge or expense beyond the stated amount payable to Provider for the services authorized under this Contract. VII.RECORDS,AUDIT,RETENTION,AND DISCLOSURE 7.01 BOOKS AND RECORDS Provider shall keep and maintain under GAAP or GASB, as applicable, full, true, and complete records sufficient to allow the GLO, the Texas State Auditor's Office, the United States Government, and/or their authorized representatives to determine Provider's compliance with this Contract and all applicable laws, rules, and regulations. 7.02 INSPECTION AND AUDIT a) All records related to this Contract, including records of Provider and its Subcontractors, shall be subject to the Administrative and Audit Regulations. b) The state auditor may conduct an audit or investigation of any entity receiving funds from the state directly under the Contract or indirectly through a subcontract under the Contract. Acceptance of funds directly under the Contract or indirectly through a subcontract under the Contract acts as acceptance of the authority of the state auditor, under the direction of the legislative audit committee, to conduct an audit or investigation in connection with those funds. Under the direction of the legislative audit committee, an entity that is the subject of an audit or investigation by the state auditor must provide the state auditor with access to any information the state auditor considers relevant to the investigation or audit. The Office of the Comptroller General of the United States, the Government Accountability Office, the Office of Inspector General, or any authorized representative of the U.S. Government shall also have this right of inspection. Provider shall ensure that this clause concerning the authority to audit funds received indirectly by subcontractors through Provider and the requirement to cooperate is included in any subcontract it awards. GLO Contract No.26-004-004 Page 7 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 c) State agencies authorized to audit and inspect Provider, its records, subcontractors, and subcontractors' records include the GLO, the GLO's contracted examiners, the State Auditor's Office, the Texas Attorney General's Office, the Texas Comptroller of Public Accounts, and their authorized designees. With regard to any federal funding, federal agencies authorized to audit and inspect Provider, its records, subcontractors, and subcontractors' records include: the relevant federal agency(ies), the Office of the Comptroller General of the United States, the Government Accountability Office, the Office of Inspector General, and their authorized designees. 7.03 PERIOD OF RETENTION Each Party shall retain in its records this Contract and all documents related to this Contract. Unless a longer retention period is specified by applicable federal law or regulation, the Parties may destroy the Contract and related documents only after the seventh anniversary of the date: the Contract is completed or expires; or all issues that arise from any litigation, claim, negotiation, audit, open records request, administrative review, or other action involving the Contract or related documents are resolved. 7.04 CONFIDENTIALITY To the extent permitted by law, Provider and the GLO shall keep all information, in whatever form produced, prepared, observed, or received by Provider or the GLO, confidential to the extent that such information is: (a) confidential by law; (b) marked or designated "confidential" (or words to that effect) by Provider or the GLO; or (c) information that Provider or the GLO is otherwise required to keep confidential by this Contract. Provider must not advertise that it is doing business with the GLO, use this Contract as a marketing or sales tool, or make any communications or announcements relating to this Contract through press releases, social media, or other public relations efforts without the prior written consent of the GLO. 7.05 PUBLIC RECORDS The GLO may post this Contract to the GLO's website. Provider understands that the GLO will comply with the Texas Public Information Act (Texas Government Code Chapter 552, the "PIA"), as interpreted by judicial rulings and opinions of the Attorney General of the State of Texas (the "Attorney General"). Information, documentation, and other material in connection with this Contract may be subject to public disclosure pursuant to the PIA. In accordance with Section 2252.907 of the Texas Government Code, Provider is required to make any information created or exchanged with the GLO or the State of Texas pursuant to the Contract, and not otherwise excepted from disclosure under the PIA, available to the GLO in portable document file (".pdf') format or any other format agreed upon between the Parties that is accessible by the public at no additional charge to the GLO or the State of Texas. By failing to mark any information that Provider believes to be excepted from disclosure as "confidential" or a "trade secret," Provider waives any and all claims it may make against the GLO for releasing such information without prior notice to Provider. The Attorney General will ultimately determine whether any information may be withheld from release under the PIA. Provider shall notify the GLO's Office of General Counsel within twenty-four (24) hours of receipt of any third-party written requests for information and forward a copy of said written requests to PIALegalgglo.texas.gov. If a request for information was not written, GLO Contract No.26-004-004 Page 8 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Provider shall forward the third party's contact information to the above-designated e- mail address. VIII.MISCELLANEOUS PROVISIONS 8.01 INSURANCE Pursuant to Chapter 2259 of the Texas Government Code entitled, `'Self-Insurance by Governmental Units," Provider is self-insured and, therefore, is not required to purchase insurance to perform its obligations under this Contract. 8.02 LEGAL OBLIGATIONS Provider shall procure and maintain for the duration of any Work Order issued under this Contract any license, authorization, insurance, waiver, permit, qualification, or certification required by federal, state, county, or city statute, ordinance, law, or regulation to be held by Provider to provide the goods or services required by this Contract and the applicable Work Order. Provider shall pay all taxes, assessments, fees, premiums, permits, and licenses required by law. Provider shall pay any such government obligations not paid by its subcontractors during performance of this Contract. In its performance of the Contract, Provider shall not infringe the intellectual property rights of third parties. 8.03 ASSIGNMENT AND SUBCONTRACTS a) Provider shall not assign, transfer, or delegate any rights, obligations, or duties under this Contract without the prior written consent of the GLO. Any purported assignment executed in violation of the foregoing is void and without effect. Notwithstanding this provision, Provider may subcontract with others for some or all of the services to be performed. In any approved subcontracts, Provider shall legally bind such subcontractor to perform and make such subcontractor subject to all the duties, requirements, and obligations of Provider as specified in this Contract. Nothing in this Contract shall be construed to relieve Provider of the responsibility for ensuring that the goods delivered and/or the services rendered by Provider and/or any of its subcontractors comply with all the terms and provisions of this Contract. b) Provider will provide written notification to the GLO of any such subcontractor performing fifteen percent (15%) or more of the work under this Contract, including the name and taxpayer identification number of subcontractor, the task(s) being performed, and the number of subcontractor employees expected to work on the task. 8.04 RELATIONSHIP OF THE PARTIES Provider is associated with the GLO only for the purposes and to the extent specified in this Contract. Provider is and shall be an independent contractor and, subject only to the terms of this Contract, shall have the sole right to supervise, manage, operate, control, and direct performance of the details incident to its duties under this Contract. Nothing contained in this Contract creates a partnership or joint venture, employer-employee or principal-agent relationships, or any liability whatsoever with respect to the indebtedness, liabilities, or obligations of Provider or any other Party. Provider shall be solely responsible for, and the GLO shall have no obligation with respect to: withholding of GLO Contract No.26-004-004 Page 9 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 income taxes, FICA, or any other taxes or fees; industrial or workers' compensation insurance coverage; participation in any group insurance plans available to employees of the State of Texas; participation or contributions by the State to the State Employees Retirement System; accumulation of vacation leave or sick leave; or unemployment compensation coverage provided by the State. 8.05 COMPLIANCE WITH OTHER LAWS In its performance of this Contract, Provider shall comply with all applicable federal, state, county, and city laws, statutes, ordinances, and regulations. Provider is deemed to know of and understand all applicable laws, statutes, ordinances, and regulations. 8.06 NOTICES Any notices required under this Contract shall be deemed delivered when deposited either in the United States mail, postage paid, certified, return receipt requested; or with a common carrier, overnight, signature required,to the appropriate address below: GLO Texas General Land Office 1700 N. Congress Avenue, Mail Code 158 Austin, TX 78701 Attention: Contract Management Department Provider City of Corpus Christi 1201 Leopard Street Corpus Christi, Texas 78401 Attention: Beach Watch Project Manager Notice given in any other manner shall be deemed effective only if and when received by the Party to be notified. Either Party may change its address for notice by written notice to the other Party as herein provided. 8.07 GOVERNING LAW AND VENUE This Contract and the rights and obligations of the Parties hereto shall be governed by, and construed according to, the laws of the State of Texas, exclusive of conflicts of law provisions. Venue of any suit brought under this Contract shall be in a court of competent jurisdiction in Travis County, Texas. Provider irrevocably waives any objection, including any objection to personal jurisdiction, the laying of venue, or based on forum non conveniens, it has or may have to the bringing of any action or proceeding in such jurisdiction in respect of this Contract or any related document. NOTHING IN THIS CONTRACT SHALL BE CONSTRUED AS A WAIVER OF SOVEREIGN IMMUNITY BY THE GLO OR THE STATE OF TEXAS. 8.08 SEVERABILITY If a court of competent jurisdiction determines any provision of this Contract is invalid, void, or unenforceable, the remaining terms, provisions, covenants, and conditions of this Contract shall remain in full force and effect, and shall in no way be affected, impaired, or invalidated. GLO Contract No.26-004-004 Page 10 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 8.09 FORCE MAJEURE Except with respect to the obligation of payments under this Contract, if either of the Parties, after a good faith effort, is prevented from complying with any express or implied covenant of this Contract by reason of war; terrorism; rebellion; riots; strikes; acts of God; any valid order, rule, or regulation of governmental authority; or similar events that are beyond the control of the affected Party (collectively referred to as a "Force Majeure"), then, while so prevented, the affected Party's obligation to comply with such covenant shall be suspended, and the affected Party shall not be liable for damages for failure to comply with such covenant. In any such event, the Party claiming Force Majeure shall promptly notify the other Party of the Force Majeure event in writing and, if possible, such notice shall set forth the extent and duration thereof, The Party claiming Force Majeure shall exercise due diligence to prevent, eliminate, or overcome such Force Majeure event where it is possible to do so and shall resume performance at the earliest possible date. However, if non-performance continues for more than thirty (30) days, the GLO may terminate this Contract immediately upon written notification to Provider. 8.10 ENTIRE CONTRACT AND AMENDMENT This Contract, its Attachments, and any Work Order(s) issued under this Contract constitute the entire agreement of the Parties and are intended as a complete and exclusive statement of the promises, representations, negotiations, discussions, and other agreements made in connection with the subject matter hereof. Additional or conflicting terms in Attachments or Work Order(s) shall be harmonized with this Contract to the extent possible. Unless such integrated Attachment or Work Order(s) specifically display a mutual intent to amend part of this Contract, conflicts shall be construed consistently with the terms of this Contract. This Contract, its Attachments, and any Work Order(s)issued under this Contract may only be amended by a mutual, written agreement executed by authorized representatives of the Parties. 8.11 COUNTERPARTS This Contract may be executed in any number of counterparts, each of which shall be an original, and all such counterparts shall together constitute one and the same Contract. 8.12 PROPER AUTHORITY Each Party represents and warrants that the person executing this Contract and any Work Order issued hereunder on its behalf has the authority to enter into this Contract and any Work Order issued hereunder. This Contract is effective for the term specified herein. Any services Provider performs before this Contract's effective date or after its termination or expiration are performed at Provider's sole risk. 8.13 TAXES,WORKERS' COMPENSATION,UNEMPLOYMENT INSURANCE Provider shall be solely liable and responsible for payment of Provider's and Provider's employees' taxes of whatever kind, arising out of the execution or performance of the Contract. Provider shall comply with all state and federal laws applicable to any such persons, including laws regarding wages, taxes, insurance, and workers' compensation. The GLO and the State of Texas, by entering into this Contract, shall not be liable to Provider or its officers, agents, employees, representatives, contractors, assignees, designees, or others for the payment of taxes, or the provision of unemployment GLO Contract No.26-004-004 Page 11 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 insurance, workers' compensation, or any benefit available to a state employee or employee of another governmental entity. 8.14 INDEMNIFICATION As required under the Constitution and laws of the State of Texas, each Party understands that it is solely liable for any liability resulting from its acts or omissions. No act or omission of a Party shall be imputed to the other Party. Neither Party shall indemnify or defend the other Party. 8.15 INFRINGEMENT If Provider becomes aware of an actual or potential claim of infringement of any United States patent, copyright, trade or service mark, or any other intellectual or intangible property right that occurs in the execution or performance of the Contract, or the GLO provides Provider with notice of such claim, Provider may (or in the case of an injunction against the GLO, shall), at Provider's sole expense either: (i) procure for the GLO the right to continue to use the affected portion of the product or service, or (ii) modify or replace the affected portion of the product or service with a functionally equivalent or superior product or service so that the GLO's use is non-infringing. 8.16 DISPUTE RESOLUTION Except as otherwise provided by statute, rule or regulation, Provider shall use the dispute resolution process established in Chapter 2260 of the Texas Government Code and related rules to attempt to resolve any dispute under this Contract, including a claim for breach of contract by the GLO, that the Parties cannot resolve in the ordinary course of business. Neither the occurrence of an event giving rise to a breach of contract claim nor the pendency of such a claim constitutes grounds for Provider to suspend performance of this Contract. Notwithstanding this provision, the GLO reserves all legal and equitable rights and remedies available to it. NOTHING IN THIS SECTION SHALL BE CONSTRUED AS A WAIVER OF SOVEREIGN IMMUNITY BY THE GLO. 8.17 SURVIVAL OF TERMS AND PROVISIONS The terms and conditions of this Contract related to the following subjects shall survive the termination of this Contract: definitions; interpretation; warranties; affirmations; prohibition on debts created on behalf of the State of Texas and/or the GLO; limitation of any Provider claim for damages to the amount of funds appropriated for payment but not yet paid to Provider; ownership; intellectual property; books and records; inspection and audit; records retention period; confidentiality; public records; insurance; taxes; workers' compensation; unemployment insurance; Provider's obligation to procure and maintain, at its sole expense, all government licenses, authorizations, insurance, waivers, permits, and/or qualifications necessary for Provider or any subcontractors to provide the goods or services described in this Contract; indemnity; assignment and subcontracting; relationship of the Parties; compliance with laws; notices; governing law and venue; severability; dispute resolution; merger and integration; invoice and fee verification; property rights; default; and amendment. SIGNATURE PAGE FOLLOWS GLO Contract No.26-004-004 Page 12 of 12 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 SIGNATURE PAGE FOR GLO CONTRACT NO.26-004-004 GENERAL LAND OFFICE CITY OF CORPUS CHRISTI Jennifer G. Jones Name: Chief Clerk and Deputy Land Commissioner Title: Date of execution: Date of execution: OGC �C PM MGR DiR DD sDD DGC ht� GC 96 DCC ATTACHMENTS TO THIS CONTRACT: ATTACHMENT A—BEACH WATCH CONTRACT WORK PLAN ATTACHMENT B—FEDERAL ASSURANCE AND CERTIFICATIONS ATTACHMENT C—GENERAL AFFIRMATIONS ATTACHMENTS FOLLOW Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment A GLO Contract No.26-004-004 Page 1 of 1 Beach Watch Contract Work Plan Introduction As the lead state agency charged with implementing the Beaches Environmental Assessment and Coastal Health Act of 2000(BEACH Act),the Texas General Land Office(GLO)will contract with City of Corpus Christi (Provider)to collect and analyze water samples, notify the public of beach water quality and to recommend and/or issue, water quality advisories when warranted. Beach Watch Coordinator Lucy Flores Texas General Land Office P. O. Box 12873 Austin,Texas 78711-2873 (512)463-5134 lucy.flores@glo.texas.gov I. QUALITY ASSURANCE PROJECT PLAN All monitoring data must be collected according to the EPA approved Quality Assurance Project Plan(QAPP). Provider must adhere to the QAPP which will be included in the Work Order, if any, issued under this Contract. II. SAMPLING STATIONS AND SCHEDULE All samples shall be collected in accordance with the Procedures for Providers included in the Work Order, if any, issued under this Contract. Sampling Depth, Sampling Procedures, Sampling Schedule, Laboratory Testing Methods and Public Notice requirements will be included in the Work Order. Sampling Stations. The Provider shall collect water samples from fixed sampling stations, depicted on the maps and station lists directed in the Work Order for Aransas, Nueces, and San Patricio Counties. The Provider shall follow the Sampling Schedule included in the Work Order and shall conduct additional sampling as requested by GLO. Based upon the contract amount, Provider shall collect samples in Aransas, Nueces, and San Patricio Counties over 42 sampling weeks a year. III. SPECIAL CONDITIONS 1. This Project must be completed as described in this work plan. 2. Sampling and re-sampling occurs 365 days a year including weekends and holidays. 3. The GLO must approve any changes in the scope of work and budget requests that change the total Project cost. 4. GLO and Texas Beach Watch logos, must be printed on education/outreach materials, signs, and clothing when referencing information from the Texas Beach Watch program. 5. The Provider must coordinate with the GLO prior to issuing press releases, conducting media events, or otherwise engaging in media related communications for this Project. Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment B GLO Contract No.26-004-004 Page 1 of 6 ASSURANCES—NON-CONSTRUCTION PROGRAMS OMB Approval No.4040-0007 Expiration Date:02/28/2025 Public reporting burden for this collection of information is estimated to average 15 minutes per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding the burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the Office of Management and Budget, Paperwork Reduction Project(0348-0040), Washington, DC 20503. PLEASE DO NOT RETURN YOUR COMPLETED FORM TO THE OFFICE OF MANAGEMENT AND BUDGET. SEND IT TO THE ADDRESS PROVIDED BY THE SPONSORING AGENCY. NOTE: Certain of these assurances may not be applicable to your project or program. If you have questions, please contact the awarding agency. Further, certain Federal awarding agencies may require applicants to certify to additional assurances. If such is the case, you will be notified. As the duly authorized representative of the applicant, I certify that the applicant: 1. Has the legal authority to apply for Federal assistance, prohibits discrimination on the basis of handicaps; (d)the and the institutional, managerial and financial capability Age Discrimination Act of 1975, as amended (42 U.S.C. (including funds sufficient to pay the non-Federal share §§6101-6107), which prohibits discrimination on the basis of project cost) to ensure proper planning, management of age; (e) the Drug Abuse Office and Treatment Act of and completion of the project described in this 1972 (P.L. 92-255), as amended, relating to application. nondiscrimination on the basis of drug abuse; (f) the Comprehensive Alcohol Abuse and Alcoholism 2. Will give the awarding agency, the Comptroller General Prevention, Treatment and Rehabilitation Act of 1970 of the United States and, if appropriate, the State, (P.L. 91-616), as amended, relating to nondiscrimination through any authorized representative, access to and on the basis of alcohol abuse or alcoholism; (g) §§523 the right to examine all records, books, papers, or and 527 of the Public Health Service Act of 1912 (42 documents related to the award; and will establish a U.S.C. §§290 dd-3 and 290 ee-3), as amended, relating proper accounting system in accordance with generally to confidentiality of alcohol and drug abuse patient accepted accounting standards or agency directives. records; (h) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. §§3601 et seq.), as amended, relating to 3. Will establish safeguards to prohibit employees from nondiscrimination in the sale, rental or financing of using their positions for a purpose that constitutes or housing; (i) any other nondiscrimination provisions in the presents the appearance of personal or organizational specific statute(s) under which application for Federal conflict of interest, or personal gain. assistance is being made; and, (j) the requirements of any other nondiscrimination statute(s)which may apply to 4. Will initiate and complete the work within the applicable the application. time frame after receipt of approval of the awarding agency. 7. Will comply, or has already complied, with the requirements of Titles II and III of the Uniform Relocation 5. Will comply with the Intergovernmental Personnel Act of Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. §§4728-4763) relating to prescribed 1970 (P.L. 91-646) which provide for fair and equitable standards for merit systems for programs funded under treatment of persons displaced or whose property is one of the 19 statutes or regulations specified in acquired as a result of Federal or federally-assisted Appendix A of OPM's Standards for a Merit System of programs. These requirements apply to all interests in Personnel Administration (5 C.F.R. 900, Subpart F). real property acquired for project purposes regardless of Federal participation in purchases. 6. Will comply with all Federal statutes relating to nondiscrimination. These include but are not limited to: 8. Will comply, as applicable, with provisions of the Hatch (a) Title VI of the Civil Rights Act of 1964 (P.L. 88-352) Act (5 U.S.C. §§1501-1508 and 7324-7328) which limit which prohibits discrimination on the basis of race, color the political activities of employees whose principal or national origin; (b) Title IX of the Education employment activities are funded in whole or in part with Amendments of 1972, as amended (20 U.S.C. §§1681- Federal funds. 1683, and 1685-1686), which prohibits discrimination on the basis of sex; (c) Section 504 of the Rehabilitation Act of 1973, as amended (29 U.S.C.§794), which Previous Edition Usable Standard Form 424B(Rev.7-97) Authorized for Local Reproduction Prescribed byOMB CircularA-102 Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment B GLO Contract No.26-004-004 Page 2 of 6 9. Will comply, as applicable, with the provisions of the Davis- 13. Will assist the awarding agency in assuring compliance Bacon Act (40 U.S.C. §§276a to 276a-7), the Copeland Act with Section 106 of the National Historic Preservation (40 U.S.C. §276c and 18 U.S.C. §874), and the Contract Act of 1966, as amended (16 U.S.C. §470), EO 11593 Work Hours and Safety Standards Act (40 U.S.C. (identification and protection of historic properties), and §§327-333) regarding labor standards for federally-assisted the Archaeological and Historic Preservation Act of construction subagreements. 1974 (16 U.S.C. §§469a-1 et seq.). 10.Will comply, if applicable, with flood insurance purchase 14. Will comply with P.L. 93-348 regarding the protection of requirements of Section 102(a) of the Flood Disaster human subjects involved in research, development, and Protection Act of 1973 (P.L. 93-234) which requires related activities supported by this award of assistance. recipients in a special flood hazard area to participate in the program and to purchase flood insurance if the total cost of 15. Will comply with the Laboratory Animal Welfare Act of insurable construction and acquisition is$10,000 or more. 1966 (P.L. 89-544, as amended, 7 U.S.C. §§2131 et seq.) pertaining to the care, handling, and treatment of 11. Will comply with environmental standards which may be warm blooded animals held for research, teaching, or prescribed pursuant to the following: (a) institution of other activities supported by this award of assistance. environmental quality control measures under the National Environmental Policy Act of 1969 (P.L. 91-190) and 16. Will comply with the Lead-Based Paint Poisoning Executive Order (EO) 11514; (b) notification of violating Prevention Act (42 U.S.C. §§4801 et seq.) which facilities pursuant to EO 11738; (c) protection of wetlands prohibits the use of lead-based paint in construction or pursuant to EO 11990; (d) evaluation of flood hazards in rehabilitation of residence structures. floodplains in accordance with EO 11988; (e) assurance of project consistency with the approved State management 17. Will cause to be performed the required financial and program developed under the Coastal Zone Management compliance audits in accordance with the Single Audit Act of 1972 (16 U.S.C. §§1451 et seq.); (f) conformity of Act Amendments of 1996 and OMB Circular No. A-133, Federal actions to State (Clean Air) Implementation Plans "Audits of States, Local Governments, and Non-Profit under Section 176(c) of the Clean Air Act of 1955, as Organizations." amended (42 U.S.C. §§7401 et seq.); (g) protection of underground sources of drinking water under the Safe 18. Will comply with all applicable requirements of all other Federal laws, executive orders, regulations, and policies Drinking Water Act of 1974, as amended (P.L. 93-523); and, (h) protection of endangered species under the governing this program. Endangered Species Act of 1973, as amended (P.L. 93- 19. Will comply with the requirements of Section 106(g) of 205). the Trafficking Victims Protection Act (TVPA) of 2000, as amended (22 U.S.C. 7104) which prohibits grant 12. Will comply with the Wild and Scenic Rivers Act of 1968 (16 award recipients or a sub-recipient from (1) Engaging in U.S.C. §§1271 et seq.) related to protecting components or severe forms of trafficking in persons during the period potential components of the national wild and scenic rivers of time that the award is in effect (2) Procuring a system. commercial sex act during the period of time that the award is in effect or (3) Using forced labor in the performance of the award or subawards under the award. SIGNATURE OF AUTHORIZED CERTIFYING OFFICIAL TITLE APPLICANT ORGANIZATION DATE SUBMITTED City of Corpus Christi SF-424B(Rev.7-97) Back Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment B GLO Contract No.26-004-004 Page 3 of 6 CERTIFICATION REGARDING LOBBYING Certification for Contracts, Grants, Loans, and Cooperative Agreements: The undersigned certifies,to the best of his or her knowledge and belief,that: (1)No Federal appropriated funds have been paid or will be paid,by or on behalf of the undersigned,to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan,or cooperative agreement. (2)If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. (3) The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352,title 31,U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than$10,000 and not more than$100,000 for each such failure. Statement for Loan Guarantees and Loan Insurance: The undersigned states, to the best of his or her knowledge and belief, that: If any funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this commitment providing for the United States to insure or guarantee a loan, the undersigned shall complete and submit Standard Form-LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. Submission of this statement is a prerequisite for making or entering into this transaction imposed by section 1352, title 31,U.S. Code. Any person who fails to file the required statement shall be subject to a civil penalty of not less than$10,000 and not more than$100,000 for each such failure. As the duly authorized representative of the applicant,I hereby certify that the applicant will comply with the above applicable certification. NAME OF APPLICANT AWARD NUMBER AND/OR PROJECT NAME City of Corpus Christi 26-004-004 PRINTED NAME AND TITLE OF AUTHORIZED REPRESENTATIVE SIGNATURE DATE Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment B GLO Contract No.26-004-004 Page 4 of 6 Disclosure Of Lobbying Activities OMB Number:4040-0013 Complete this form to disclose lobbying activities pursuant to 31 U.S.C. 1352 Expiration Date:02/28/2025 (See reverse for public burden disclosure) 1. *Type of Federal Action: 2. *Status of Federal Action: 3. *Report Type: a. contract a. bid/offer/application a. initial filing b. grant b.initial award b. material change c. cooperative agreement c.post-award d.loan e.loan guarantee f.loan insurance 4. Name and Address of Reporting Entity: Prime Subawardee *Name: *Street 1: Street 2: *City: State: Zip: 5. If Reporting Entity in No.4 is Subawardee,Enter Name and Address of Prime: 6. Federal Department/Agency: 7. Federal Program Name/Description: CFDA Number,if applicable: 8. Federal Action Number,ifknown: 9. Award Amount, ifknown: 10. a.Name and Address of Lobbying Registrant Prefix *First Name Middle Name *Last Name Suffix *Street 1: Street 2: *City: State: Zip: b.Individuals Performing Services (including address if different from No. IOa) Prefix *First Name Middle Name *Last Name Suffix *Street 1: Street 2: *City: State: Zip: 11.Information requested through this form is authorized by title 31 U.S.C.section 1352.This disclosure of lobbying activities is a material representation of fact upon which reliance was placed by the tier above when this transaction was made or entered into.This disclosure is required pursuant to 31 U.S.C. 1352.This information will be reported to the Congress semi-annually and will be available for public inspection.Any person who fails to file the required disclosure shall be subject to a civil penalty of not lessthan$10,000 and not more than$100,000 for each such failure. *Signature: *Name: Prefix *First Name Middle Name *Last Name Suffix Title: Telephone No.: Date: Federal Use Only: Authorized for Local Reproduction Standard Form-LLL(Rev.7-97) Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment B GLO Contract No.26-004-004 Page 5 of 6 INSTRUCTIONS FOR COMPLETION OF SF-LLL,DISCLOSURE OF LOBBYING ACTIVITIES This disclosure form shall be completed by the reporting entity,whether subawardee or prime Federal recipient,at the initiation or receipt of a covered Federal action,or a material change to a previous filing,pursuant to title 31 U.S.C. section 1352. The filing of a form is required for each payment or agreement to make payment to any lobbying entity for influencing or attempting to influence an officer or employee of any agency, a Member of Congress,an officer or employee of Congress,or an employee of a Member of Congress in connection with a covered Federal action.Complete all items that apply for both the initial filing and material change report. Refer to the implementing guidance published by the Office of Management and Budget for additional information. Federal Agency Form Instructions Form Identifiers Information Agency Owner Grants.gov Form Name Disclosure of Lobbying Activities(SF-LLL) Form Version Number 2.0 OMB Number 4040-0013 OMB Expiration Date 02/28/2025 Field Field Name Required or Information Number Optional 1. *Type of Federal Required Identify the type of covered Federal action for which lobbying activity is and/or has been Action: secured to influence the outcome of a covered Federal action.This field is required. 2. *Status of Federal Required Identify the status of the covered Federal action.This field is required. Action 2-a. a.Bid/Offer/ Check if Click if the Status of Federal Action is a bid,an offer or an application. Application applicable 2-b. b.Initial Award Check if Click if the Status of Federal Action is an initial award. applicable 2-c. c.Post-Award Check if Click if the Status of Federal Action is a post-award. applicable 3.0 *Report Type Required Identify the appropriate classification of this report. 3-a. a.Initial filing Check if Check if Initial filing. applicable 3-b. b.Material change Check if If this is a follow up report caused by a material change to the information previously reported, applicable enterthe year and quarter in which the change occurred.Enterthe date of the previously submitted report by this reporting entity for this covered Federal action.This field is required. Material Change Conditionally If this is a follow up report caused by a material change to the information previously Year Required reported,enter the year in which the change occurred. Material Change Conditionally If this is a follow up report caused by a material change to the information previously Quarter Required reported,enter the quarter in which the change occurred. Material Change Conditionally Enterthe date of the previously submitted report by this reporting entity for this covered Date of Last Required Federal action. Report 4. Name and Address Required Provide the information for Name and Address of Reporting Entity. of Reporting Entity Prime Check if Click to designate the organization filing the report as the Prime Federal recipient. applicable Subawardee Check if Click to designate the organization filing the report as the SubAwardee Federal recipient.Sub- applicable awards include but are not limited to subcontracts,subgrants and contract awards under grants. Tier if known: Optional Identify the tier of the subawardee,e.g.,the first subawardee of the prime is the 1st tier. Name Required Enter the name of reporting entity.This field is required Street 1 Required Enter Street 1 of the reporting entity.This field is required. Street 2 Optional Enter Street 2 of the reporting entity. City Required Enter City of the reporting entity This field is required. State Required Enter the state of the reporting entity.This field is required ZIP Required Enter the ZIP of the reporting entity.This field is required Congressional Optional Enter the primary Congressional District of the reporting entity.Enter in the following format: District,if known 2 character state abbreviation—3 characters district number,e.g.,CA-005 for California 5th district,CA-012 for California 12th district,NC-103 for North Carolina's 103rd district. 5. If Reporting Entity in Conditionally If Reporting Entity in No.4 is Subawardee,provide the information for the Name and Address No.4 is Subawardee, Required of Prime Enter Name and Address of Prime Name Required If the organization filing the report in item 4,checks"Subawardee",enter the full name of the prime Federal recipient. Street 1 Required If the organization filing the report in item 4,checks"Subawardee",enter the address of the prime Federal recipient. Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment B GLO Contract No.26-004-004 Page 6 of 6 Street 2 Optional If the organization filing the report in item 4,checks"Subawardee",enter the address of the prime Federal recipient. City Required If the organization filing the report in item 4,checks"Subawardee",enter the city of the prime Federal recipient. State Required If the organization filing the report in item 4,checks"Subawardee",select the appropriate state from this pull down menu. ZIP Required Enter the ZIP of Prime.This field is required Congressional Optional Enter the Congressional District of Prime.Enter in the following format:2 character state District,if known abbreviation—3 characters district number,e.g.,CA-005 for California 5th district,CA-012 for California 12th district,NC-103 for North Carolina's 103rd district. 6. Federal Department Required Enterthe name of the Federal Department or Agency makingthe award or loan commitment. /Agency This field is required. 7. CFDA Number: Required Enterthe full Catalog of Federal Domestic Assistance(CFDA)number for grants,cooperative agreements,loans and loan commitments.Pre-populated from SF-424 if using Grants.gov. CFDA Title: Required Enter the Federal program name or description for the covered Federal action.Pre-populated from SF-424 if using Grants.gov. 8. Federal Action Optional Enter the most appropriate Federal identifying number available forthe Federal action, Number identified in item 1(e.g.,Request for Proposal(RFP)number,invitation for Bid(IFB)number, grant announcement number,the contract,grant,or loan award number,the application/ proposal control number assigned by the Federal agency).Include prefixes,e.g.,"RFP-DE-90- 001". 9. Award Amount Optional For a covered Federal action where there has been an award or loan commitment by the Federal agency,enter the Federal amount of the award/loan commitment of the prime entity identified in item 4 or 5. 10.a. Name And Address Required Provide the information for the Name and Address of Lobbying Registrant. of Lobbying Registrant Prefix Optional Enterthe prefix(e.g.,Mr.,Mrs., Miss),if appropriate,forthe Lobbying Registrant. First Name Required Enter the first name of Lobbying Registrant.This field is required. Middle Name Optional Enter the middle name of Lobbying Registrant. Last Name Required Enterthe last name of Lobbying Registrant.This field is required. Suffix Optional Enter the suffix(e.g.,Jr.Sr.,PhD),if appropriate,for the Lobbying Registrant. Street 1 Required Enter the first line of street address forthe Lobbying Registrant. Street 2 Optional Enter the second line of street address forthe Lobbying Registrant. City Required Enter the city of the Lobbying Registrant. State Required Select the appropriate state of the Lobbying Registrant. ZIP Code Required Enterthe Zip Code(or ZIP+4)of the Lobbying Registrant. 10.b. Individual Required Provide the information for Individual Performing Services Performing Services Prefix Optional Enter the prefix(e.g.,Mr.,Mrs., Miss),if appropriate,for the Individual Performing Services. First Name Required Enterthe first name of the Individual Performing Services.This field is required. Middle Name Optional Enterthe middle name of the Individual Performing Services. Last Name Required Enterthe last name of the Individual Performing Services.This field is required. Suffix Optional Enterthe suffix(e.g.,Jr.Sr.,PhD),if appropriate,forthe Individual Performing Services. Street 1 Required Enter the first line of street address forthe Individual Performing Services. Street 2 Optional Enter the second line of street address forthe Individual Performing Services. City Required Enter the city of the Individual Performing Services. State Required Select the state forthe address of the Individual Performing Services from this pull down menu. ZIP Code Required Enterthe Zip Code(or ZIP+4)of the Individual Performing Services. According to the Paperwork Reduction Act,as amended,no persons are required to respond to a collection of information unless it displays a valid OMB control Number. The valid OMB control number for this information collection is OMB No. 4040-0013. Public reporting burden for this collection of information is estimated to average 10 minutes per response, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding the burden estimate or any other aspect of this collection of information,including suggestions for reducing this burden,to the Office of Management and Budget,Paperwork Reduction Project,Washington,DC 20503. Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment C GLO Contract No.26-004-004 Page 1 of 9 GENERAL AFFIRMATIONS TO THE EXTENT APPLICABLE, Provider affirms and agrees to the following, without exception: 1. Provider represents and warrants that, in accordance with Section 2155.005 of the Texas Government Code, neither Provider nor the firm, corporation, partnership, or institution represented by Provider, or anyone acting for such a firm, corporation, partnership, or institution has (1) violated any provision of the Texas Free Enterprise and Antitrust Act of 1983, Chapter 15 of the Texas Business and Commerce Code, or the federal antitrust laws, or (2) communicated directly or indirectly the contents of this Contract or any solicitation response upon which this Contract is based to any competitor or any other person engaged in the same line of business as Provider.* 2. Provider shall not assign its rights under the Contract or delegate the performance of its duties under the Contract without prior written approval from the GLO. Any attempted assignment or delegation in violation of this provision is void and without effect. This provision does not apply to subcontracting. 3. If the Contract is for services, Provider shall comply with Section 2155.4441 of the Texas Government Code, requiring the purchase of products and materials produced in the State of Texas in performing service contracts, but for contracts subject to 2 C.F.R. 200, only to the extent such compliance is consistent with 2 C.F.R. 200.319. 4. Under Section 231.006 of the Family Code, the vendor or applicant [Provider] certifies that the individual or business entity named in this Contract, bid or application is not ineligible to receive the specified grant, loan, or payment and acknowledges that this Contract may be terminated and payment may be withheld if this certification is inaccurate, in addition to other remedies set out in Section 231.006(f) of the Family Code.* 5. A bid or an application for a contract, grant, or loan paid from state funds must include the name and social security number of the individual or sole proprietor and each partner, shareholder, or owner with an ownership interest of at least 25 percent of the business entity submitting the bid or application. Provider certifies it has submitted this information to the GLO.* 6. If the Contract is for a "cloud computing service" as defined by Texas Government Code Section 2157.007, then pursuant to Section 2054.0593(d)-(f) of the Texas Government Code, relating to cloud computing state risk and authorization management program, Provider represents and warrants that it complies with the requirements of the state risk and authorization management program and Provider agrees that throughout the term of the Contract it shall maintain its certifications and comply with the program requirements in the performance of the Contract. 7. If the Contract is for the purchase or lease of computer equipment, as defined by Texas Health and Safety Code Section 361.952(2), Provider certifies that it is in compliance with Subchapter Y, Chapter 361 of the Texas Health and Safety Code, related to the Computer Equipment Recycling Program and the Texas Commission on Environmental Quality rules in Title 30 Texas Administrative Code Chapter 328. 8. If the Contract authorizes Provider to access, transmit, use, or store data for the GLO, then in accordance with Section 2054.138 of the Texas Government Code, Provider certifies that it will comply with the security controls required under this Contract and will maintain *This section does not apply to a contract with a"governmental entity"as defined in Texas Government Code Chapter 2251. 11062024.JW:M Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment C GLO Contract No.26-004-004 Page 2 of 9 records and make them available to the GLO as evidence of Provider's compliance with the required controls. 9. Provider represents and warrants that it has not given, offered to give, nor intends to give at any time hereafter any economic opportunity, future employment, gift, loan, gratuity, special discount, trip, favor, or service to a public servant in connection with the Contract. 10. Provider agrees that any payments due under the Contract shall be applied towards any debt or delinquency that is owed by Provider to the State of Texas. 11. Upon request of the GLO, Provider shall provide copies of its most recent business continuity and disaster recovery plans. 12. If the Contract is for consulting services governed by Texas Government Code Chapter 2254, Subchapter B, in accordance with Section 2254.033 of the Texas Government Code, relating to consulting services, Provider certifies that it does not employ an individual who has been employed by the GLO or another agency at any time during the two years preceding the Provider's submission of its offer to provide consulting services to the GLO or, in the alternative Provider, in its offer to provide consulting services to the GLO, disclosed the following: (i) the nature of the previous employment with the GLO or other state agency; (ii) the date the employment was terminated; and (iii) the annual rate of compensation for the employment at the time of its termination.* 13. If the Contract is not for architecture, engineering, or construction services, then except as otherwise provided by statute, rule, or regulation, Provider must use the dispute resolution process provided for in Chapter 2260 of the Texas Government Code to attempt to resolve any dispute arising under the Contract. NOTHING IN THIS SECTION SHALL BE CONSTRUED AS A WAIVER OF SOVEREIGN IMMUNITY BY THE GLO OR, IF APPLICABLE, OF GOVERNMENTAL IMMUNITY BY PROVIDER. 14. If the Contract is for architecture, engineering, or construction services, then subject to Texas Government Code Section 2260.002 and Texas Civil Practice and Remedies Code Chapter 114, and except as otherwise provided by statute, rule, or regulation, Provider shall use the dispute resolution process provided for in Chapter 2260 of the Texas Government Code to attempt to resolve all disputes arising under this Contract. Except as otherwise provided by statute, rule, or regulation, in accordance with the Texas Civil Practice and Remedies Code, Section 114.005, claims encompassed by Texas Government Code, Section 2260.002(3) and Texas Civil Practice and Remedies Code Section 114.002 shall be governed by the dispute resolution process set forth below in subsections (a)-(d). NOTHING IN THIS SECTION SHALL BE CONSTRUED AS A WAIVER OF SOVEREIGN IMMUNITY BY THE GLO OR, IF APPLICABLE, OF GOVERNMENTAL IMMUNITY BY PROVIDER. a. Notwithstanding Texas Government Code, Chapter 2260.002(3) and Chapter 114.012 and any other statute or applicable law, if Provider's claim for breach of contract cannot be resolved by the Parties in the ordinary course of business, Provider may make a claim against the GLO for breach of contract and the GLO may assert a counterclaim against Provider as is contemplated by Texas Government Code, Chapter 2260, Subchapter B. In such event, Provider must provide written notice to the GLO of a claim for breach of the Contract not later than the 180th day after the date of the event giving rise to the claim. *This section does not apply to a contract with a"governmental entity"as defined in Texas Government Code Chapter 2251. 11062024.JW:M Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment C GLO Contract No.26-004-004 Page 3 of 9 The notice must state with particularity: (1) the nature of the alleged breach; (2) the amount Provider seeks as damages; and (3)the legal theory of recovery. b. The chief administrative officer, or if designated in the Contract, another officer of the GLO, shall examine the claim and any counterclaim and negotiate with Provider in an effort to resolve them. The negotiation must begin no later than the 120th day after the date the claim is received, as is contemplated by Texas Government Code, Chapter 2260, Section 2260.052. c. If the negotiation under paragraph (b) above results in the resolution of some disputed issues by agreement or in a settlement, the Parties shall reduce the agreement or settlement to writing and each Party shall sign the agreement or settlement. A partial settlement or resolution of a claim does not waive a Party's rights under this Contract as to the parts of the claim that are not resolved. d. If a claim is not entirely resolved under paragraph (b) above, on or before the 270th day after the date the claim is filed with the GLO, unless the Parties agree in writing to an extension of time, the Parties may agree to mediate a claim made under this dispute resolution procedure. This dispute resolution procedure is Provider's sole and exclusive process for seeking a remedy for an alleged breach of contract by the GLO if the Parties are unable to resolve their disputes as described in this section. e. Nothing in the Contract shall be construed as a waiver of the state's or the GLO's sovereign immunity, or, if applicable, the governmental immunity of Provider. This Contract shall not constitute or be construed as a waiver of any of the privileges, rights, defenses, remedies, or immunities available to the State of Texas or Provider. The failure to enforce, or any delay in the enforcement, of any privileges, rights, defenses, remedies, or immunities available to the State of Texas or, if applicable, of Provider under this Contract or under applicable law shall not constitute a waiver of such privileges, rights, defenses, remedies or immunities or be considered as a basis for estoppel. The GLO does not waive any privileges, rights, defenses, or immunities available to it by entering into this Contract or by its conduct, or by the conduct of any representative of the GLO, prior to or subsequent to entering into this Contract. Provider does not waive any privileges, rights, defenses, or immunities available to it by entering into this Contract or by its conduct, or by the conduct of any representative of the Provider prior to or subsequent to entering into this Contract. f Except as otherwise provided by statute, rule, or regulation, compliance with the dispute resolution process provided for in Texas Government Code, Chapter 2260, subchapter B and incorporated by reference in subsection (a)-(d) above is a condition precedent to the Provider: (1) filing suit pursuant to Chapter 114 of the Civil Practices and Remedies Code; or (2) initiating a contested case hearing pursuant to Subchapter C of Chapter 2260 of the Texas Government Code. 15. If Chapter 2271 of the Texas Government Code applies to this Contract, Provider verifies that it does not boycott Israel and will not boycott Israel during the term of the Contract.* 16. This Contract is contingent upon the continued availability of lawful appropriations by the Texas Legislature. Provider understands that all obligations of the GLO under this Contract are subject to the availability of funds. If such funds are not appropriated or become *This section does not apply to a contract with a"governmental entity"as defined in Texas Government Code Chapter 2251. 11062024.JW:M Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment C GLO Contract No.26-004-004 Page 4 of 9 unavailable, the GLO may terminate the Contract. The Contract shall not be construed as creating a debt on behalf of the GLO in violation of Article III, Section 49a of the Texas Constitution. 17. Provider certifies that it is not listed in the prohibited vendors list authorized by Executive Order 13224, `Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism", published by the United States Department of the Treasury, Office of Foreign Assets Control. 18. In accordance with Section 669.003 of the Texas Government Code, relating to contracting with the executive head of a state agency, Provider certifies that it is not (1) the executive head of the GLO, (2) a person who at any time during the four years before the effective date of the Contract was the executive head of the GLO, or (3) a person who employs a current or former executive head of the GLO. 19. Provider represents and warrants that all statements and information prepared and submitted in connection with this Contract are current, complete, true, and accurate. Submitting a false statement or making a material misrepresentation during the performance of this Contract is a material breach of contract and may void the Contract or be grounds for its termination. 20. Pursuant to Section 2155.004(a) of the Texas Government Code, Provider certifies that neither Provider nor any person or entity represented by Provider has received compensation from the GLO to participate in the preparation of the specifications or solicitation on which this Contract is based. Under Section 2155.004(b) of the Texas Government Code, Provider certifies that the individual or business entity named in this Contract is not ineligible to receive the specified Contract and acknowledges that the Contract may be terminated and payment withheld if this certification is inaccurate. This Section does not prohibit Provider from providing free technical assistance.* 21. Provider represents and warrants that it is not engaged in business with Iran, Sudan, or a foreign terrorist organization, as prohibited by Section 2252.152 of the Texas Government Code.* 22. In accordance with Section 2252.901 of the Texas Government Code, for the categories of contracts listed in that section, Provider represents and warrants that none of its employees including, but not limited to, those authorized to provide services under the contract, were employees of the GLO during the twelve (12) month period immediately prior to the date of execution of the contract. Solely for professional services contracts as described by Chapter 2254 of the Texas Government Code, Provider further represents and warrants that if a former employee of the GLO was employed by Provider within one year of the employee's leaving the GLO, then such employee will not perform services on projects with Provider that the employee worked on while employed by the GLO.* 23. The Contract shall be governed by and construed in accordance with the laws of the State of Texas, without regard to the conflicts of law provisions. The venue of any suit arising under the Contract is fixed in any court of competent jurisdiction of Travis County, Texas, unless the specific venue is otherwise identified in a statute which directly names or otherwise identifies its applicability to any Party. 24. IF THE CONTRACT IS NOT FOR ARCHITECTURE OR ENGINEERING SERVICES GOVERNED BY TEXAS GOVERNMENT CODE CHAPTER 2254, PROVIDER, TO THE *This section does not apply to a contract with a"governmental entity"as defined in Texas Government Code Chapter 2251. 11062024.JW:M Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment C GLO Contract No.26-004-004 Page 5 of 9 EXTENT ALLOWED BY LAW, SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS THE STATE OF TEXAS AND THE GLO, AND/OR THEIR OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES, CONTRACTORS, ASSIGNEES, AND/OR DESIGNEES FROM ANY AND ALL LIABILITY, ACTIONS, CLAIMS, DEMANDS, OR SUITS, AND ALL RELATED COSTS, ATTORNEY FEES, AND EXPENSES ARISING OUT OF, OR RESULTING FROM ANY ACTS OR OMISSIONS OF PROVIDER OR ITS AGENTS, EMPLOYEES, SUBCONTRACTORS, ORDER FULFILLERS, OR SUPPLIERS OF SUBCONTRACTORS IN THE EXECUTION OR PERFORMANCE OF THE CONTRACT AND ANY PURCHASE ORDERS ISSUED UNDER THE CONTRACT. THE DEFENSE SHALL BE COORDINATED BY PROVIDER WITH THE OFFICE OF THE TEXAS ATTORNEY GENERAL WHEN TEXAS STATE AGENCIES ARE NAMED DEFENDANTS IN ANY LAWSUIT AND PROVIDER MAY NOT AGREE TO ANY SETTLEMENT WITHOUT FIRST OBTAINING THE CONCURRENCE FROM THE OFFICE OF THE TEXAS ATTORNEY GENERAL. PROVIDER AND THE GLO SHALL FURNISH TIMELY WRITTEN NOTICE TO EACH OTHER OF ANY SUCH CLAIM.* 25. IF THE CONTRACT IS FOR ARCHITECTURE OR ENGINEERING SERVICES GOVERNED BY TEXAS GOVERNMENT CODE CHAPTER 2254, PROVIDER, TO THE EXTENT ALLOWED BY LAW, SHALL INDEMNIFY AND HOLD HARMLESS THE STATE OF TEXAS AND THE GLO, AND/OR THEIR OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES, CONTRACTORS, ASSIGNEES, AND/OR DESIGNEES FROM ANY AND ALL LIABILITY, ACTIONS, CLAIMS, DEMANDS, OR SUITS, AND ALL RELATED DAMAGES, COSTS, ATTORNEY FEES, AND EXPENSES TO THE EXTENT CAUSED BY, ARISING OUT OF, OR RESULTING FROM ANY ACTS OF NEGLIGENCE, INTENTIONAL TORTS, WILLFUL MISCONDUCT, PERSONAL INJURY OR DAMAGE TO PROPERTY, AND/OR OTHERWISE RELATED TO PROVIDER'S PERFORMANCE, AND/OR FAILURES TO PAY A SUBCONTRACTOR OR SUPPLIER BY THE PROVIDER OR ITS AGENTS, EMPLOYEES, SUBCONTRACTORS, ORDER FULFILLERS, CONSULTANTS UNDER CONTRACT TO PROVIDER, OR ANY OTHER ENTITY OVER WHICH PROVIDER EXERCISES CONTROL, OR SUPPLIERS OF SUBCONTRACTORS IN THE EXECUTION OR PERFORMANCE OF THE CONTRACT. THE DEFENSE SHALL BE COORDINATED BY PROVIDER WITH THE OFFICE OF THE TEXAS ATTORNEY GENERAL WHEN TEXAS STATE AGENCIES ARE NAMED DEFENDANTS IN ANY LAWSUIT AND PROVIDER MAY NOT AGREE TO ANY SETTLEMENT WITHOUT FIRST OBTAINING THE CONCURRENCE FROM THE OFFICE OF THE TEXAS ATTORNEY GENERAL. PROVIDER AND THE GLO SHALL FURNISH TIMELY WRITTEN NOTICE TO EACH OTHER OF ANY SUCH CLAIM.* 26. TO THE EXTENT ALLOWED BY LAW, PROVIDER SHALL DEFEND, INDEMNIFY, AND HOLD HARMLESS THE GLO AND THE STATE OF TEXAS FROM AND AGAINST ANY AND ALL CLAIMS, VIOLATIONS, MISAPPROPRIATIONS OR INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHTS AND/OR OTHER INTANGIBLE PROPERTY, PUBLICITY OR PRIVACY RIGHTS, AND/OR IN CONNECTION WITH OR ARISING FROM: (1) THE PERFORMANCE OR ACTIONS OF PROVIDER PURSUANT TO THIS CONTRACT; (2) ANY DELIVERABLE, WORK PRODUCT, *This section does not apply to a contract with a"governmental entity"as defined in Texas Government Code Chapter 2251. 11062024.JW:M Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment C GLO Contract No.26-004-004 Page 6 of 9 CONFIGURED SERVICE OR OTHER SERVICE PROVIDED HEREUNDER; AND/OR (3) THE GLO'S AND/OR PROVIDER'S USE OF OR ACQUISITION OF ANY REQUESTED SERVICES OR OTHER ITEMS PROVIDED TO THE GLO BY PROVIDER OR OTHERWISE TO WHICH THE GLO HAS ACCESS AS A RESULT OF PROVIDER'S PERFORMANCE UNDER THE CONTRACT. PROVIDER AND THE GLO SHALL FURNISH TIMELY WRITTEN NOTICE TO EACH OTHER OF ANY SUCH CLAIM. PROVIDER SHALL BE LIABLE TO PAY ALL COSTS OF DEFENSE, INCLUDING ATTORNEYS' FEES. THE DEFENSE SHALL BE COORDINATED BY PROVIDER WITH THE OFFICE OF THE TEXAS ATTORNEY GENERAL (OAG) WHEN TEXAS STATE AGENCIES ARE NAMED DEFENDANTS IN ANY LAWSUIT AND PROVIDER MAY NOT AGREE TO ANY SETTLEMENT WITHOUT FIRST OBTAINING THE CONCURRENCE FROM OAG. IN ADDITION, PROVIDER WILL REIMBURSE THE GLO AND THE STATE OF TEXAS FOR ANY CLAIMS, DAMAGES, COSTS, EXPENSES OR OTHER AMOUNTS, INCLUDING, BUT NOT LIMITED TO, ATTORNEYS' FEES AND COURT COSTS, ARISING FROM ANY SUCH CLAIM. IF THE GLO DETERMINES THAT A CONFLICT EXISTS BETWEEN ITS INTERESTS AND THOSE OF PROVIDER OR IF THE GLO IS REQUIRED BY APPLICABLE LAW TO SELECT SEPARATE COUNSEL, THE GLO WILL BE PERMITTED TO SELECT SEPARATE COUNSEL AND PROVIDER WILL PAY ALL REASONABLE COSTS OF THE GLO'S COUNSEL.* 27. Provider has disclosed in writing to the GLO all existing or known potential conflicts of interest relative to the performance of the Contract. 28. Sections 2155.006 and 2261.053 of the Texas Government Code prohibit state agencies from accepting a solicitation response or awarding a contract that includes proposed financial participation by a person who, in the past five years, has been convicted of violating a federal law or assessed a penalty in connection with a contract involving relief for Hurricane Rita, Hurricane Katrina, or any other disaster, as defined by Section 418.004 of the Texas Government Code, occurring after September 24, 2005. Under Sections 2155.006 and 2261.053 of the Texas Government Code, Provider certifies that the individual or business entity named in this Contract is not ineligible to receive the specified Contract and acknowledges that this Contract may be terminated and payment withheld if this certification is inaccurate.* 29. The person executing this Contract certifies that he/she is duly authorized to execute this Contract on his/her own behalf or on behalf of Provider and legally empowered to contractually bind Provider to the terms and conditions of the Contract and related documents. 30. If the Contract is for architectural or engineering services, pursuant to Section 2254.0031 of the Texas Government Code, which incorporates by reference Section 271.904(d) of the Texas Local Government Code, Provider shall perform services (1) with professional skill and care ordinarily provided by competent engineers or architects practicing under the same or similar circumstances and professional license, and (2) as expeditiously as is prudent considering the ordinary professional skill and care of a competent engineer or architect.* 31. The state auditor may conduct an audit or investigation of any entity receiving funds from the state directly under the Contract or indirectly through a subcontract under the Contract. The *This section does not apply to a contract with a"governmental entity"as defined in Texas Government Code Chapter 2251. 11062024.JW:M Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment C GLO Contract No.26-004-004 Page 7 of 9 acceptance of funds directly under the Contract or indirectly through a subcontract under the Contract acts as acceptance of the authority of the state auditor, under the direction of the legislative audit committee, to conduct an audit or investigation in connection with those funds. Under the direction of the legislative audit committee, an entity that is the subject of an audit or investigation by the state auditor must provide the state auditor with access to any information the state auditor considers relevant to the investigation or audit. Provider shall ensure that this paragraph concerning the authority to audit funds received indirectly by subcontractors through the Contract and the requirement to cooperate is included in any subcontract it awards. The GLO may unilaterally amend the Contract to comply with any rules and procedures of the state auditor in the implementation and enforcement of Section 2262.154 of the Texas Government Code. 32. Provider certifies that neither it nor its principals are debarred, suspended, proposed for debarment, declared ineligible, or otherwise excluded from participation in the Contract by any state or federal agency. 33. If the Contract is for the purchase or lease of covered television equipment, as defined by Section 361.971(3) of the Texas Health and Safety Code, Provider certifies its compliance with Subchapter Z, Chapter 361 of the Texas Health and Safety Code, related to the Television Equipment Recycling Program. 34. Pursuant to Section 572.069 of the Texas Government Code, Provider certifies it has not employed and will not employ a former state officer or employee who participated in a procurement or contract negotiations for the GLO involving Provider within two (2) years after the date that the contract is signed or the procurement is terminated or withdrawn. This certification only applies to former state officers or employees whose state service or employment ceased on or after September 1, 2015. 35. The GLO shall post this Contract to the GLO's website. Provider understands that the GLO will comply with the Texas Public Information Act (Texas Government Code Chapter 552, the "PIA"), as interpreted by judicial rulings and opinions of the Attorney General of the State of Texas (the "Attorney General"). Information, documentation, and other material in connection with this Contract may be subject to public disclosure pursuant to the PIA. In accordance with Section 2252.907 of the Texas Government Code, Provider is required to make any information created or exchanged with the GLO or the State of Texas pursuant to the Contract, and not otherwise excepted from disclosure under the PIA, available to the GLO in portable document file (".pdf') format or any other format agreed upon between the Parties that is accessible by the public at no additional charge to the GLO or the State of Texas. By failing to mark any information that Provider believes to be excepted from disclosure as "confidential" or a "trade secret," Provider waives any and all claims it may make against the GLO for releasing such information without prior notice to Provider. The Attorney General will ultimately determine whether any information may be withheld from release under the PIA. Provider shall notify the GLO's Office of General Counsel within twenty-four (24) hours of receipt of any third-party written requests for information and forward a copy of said written requests to PIALeal(a�glo.texas.gov. If a request for information was not written, Provider shall forward the third patty's contact information to the above-designated e-mail address. *This section does not apply to a contract with a"governmental entity"as defined in Texas Government Code Chapter 2251. 11062024.JW:M Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment C GLO Contract No.26-004-004 Page 8 of 9 36. The GLO does not tolerate any type of fraud. GLO policy promotes consistent, legal, and ethical organizational behavior by assigning responsibilities and providing guidelines to enforce controls. Any violations of law, agency policies, or standards of ethical conduct will be investigated, and appropriate actions will be taken. Provider must report any possible fraud, waste, or abuse that occurs in connection with the Contract to the GLO in the manner prescribed by the GLO's website, http://glo.texas.gov. 37. If Provider, in its performance of the Contract, has access to a state computer system or database, Provider must complete a cybersecurity training program certified under Texas Government Code Section 2054.519, as selected by the GLO. Provider must complete the cybersecurity training program during the initial term of the Contract and during any renewal period. Provider must verify in writing to the GLO its completion of the cybersecurity training program. 38. Under Section 2155.0061, Texas Government Code, Provider certifies that the entity named in this Contract is not ineligible to receive the specified Contract and acknowledges that this Contract may be terminated and payment withheld if this certification is inaccurate.* 39. Provider certifies that it does not require its customers to provide any documentation certifying the customer's COVID-19 vaccination or post-transmission recovery on entry to, to gain access to, or to receive service from Provider's business. Provider acknowledges that such a vaccine or recovery requirement would make Provider ineligible for a state-funded contract. 40. Pursuant to Government Code Section 2275.0102, Provider certifies that neither it nor its parent company, nor any affiliate of Provider or its parent company, is: (1) majority owned or controlled by citizens or governmental entities of China, Iran, North Korea, Russia, or any other country designated by the Governor under Government Code Section 2275.0103, or (2) headquartered in any of those countries.* 41. If Provider is required to make a verification pursuant to Section 2276.002 of the Texas Government Code, Provider verifies that Provider does not boycott energy companies and will not boycott energy companies during the term of the Contract. If Provider does not make that verification, Provider must notify the GLO and state why the verification is not required.* 42. If Provider is required to make a verification pursuant to Section 2274.002 of the Texas Government Code, Provider verifies that it (1) does not have a practice, policy, guidance, or directive that discriminates against a "firearm entity" or "firearm trade association" as those terms are defined in Texas Government Code section 2274.001 and (2) will not discriminate during the term of the Contract against a firearm entity or firearm trade association. If Provider does not make that verification, Provider must notify the GLO and state why the verification is not required.* 43. If Provider is a "professional sports team" as defined by Texas Occupations Code Section 2004.002, Provider will play the United States national anthem at the beginning of each team sporting event held at Provider's home venue or other venue controlled by Provider for the event. Failure to comply with this obligation constitutes a default of this Contract, and immediately subjects Provider to the penalties for default, such as repayment of money received or ineligibility for additional money. In addition, Provider may be debarred from *This section does not apply to a contract with a"governmental entity"as defined in Texas Government Code Chapter 2251. 11062024.JW:M Docusign Envelope ID:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Attachment C GLO Contract No.26-004-004 Page 9 of 9 contracting with the State. The GLO or the Attorney General may strictly enforce this provision.* 44. To the extent Section 552.371 of the Texas Government Code applies to Provider and the Contract, in accordance with Section 552.372 of the Texas Government Code, Provider must (a) preserve all contracting information related to the Contract in accordance with the records retention requirements applicable to the GLO for the duration of the Contract, (b) no later than the tenth business day after the date of the GLO's request, provide to the GLO any contracting information related to the Contract that is in Provider's custody or possession, and (c) on termination or expiration of the Contract, either (i) provide to the GLO at no cost all contracting information related to the Contract that is in Provider's custody or possession or (ii) preserve the contracting information related to the Contract in accordance with the records retention requirements applicable to the GLO. Except as provided by Section 552.374(c) of the Texas Government Code, the requirements of Subchapter J, Chapter 552, Government Code, may apply to the Contract and Provider agrees that the Contract may be terminated if Provider knowingly or intentionally fails to comply with a requirement of that subchapter.* 45. If the Contract is for consulting services governed by Chapter 2254 of the Texas Government Code, Provider, upon completion of the Contract, must give the GLO a compilation, in a digital medium agreed to by the Parties, of all documents, films, recordings, or reports Provider compiled in connection with its performance under the Contract.* 46. If subject to 2 C.F.R. 200.216, Provider shall not obligate or expend funding provided under this Contract to: (a) procure or obtain; (b) extend or renew a contract to procure or obtain; or (c) enter into a contract to procure or obtain covered telecommunications equipment or services, as described in Public Law 115-232, Section 889, including systems that use covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system. 47. To the extent Texas Government Code Chapter 2252, Subchapter G applies to the Contract, any iron or steel product Provider uses in its performance of the Contract that is produced through a manufacturing process, as defined in Section 2252.201(2) of the Texas Government Code, must be produced in the United States. 48. If subject to 2 C.F.R. 200.217, Provider shall not discharge, demote, or otherwise discriminate against an employee as a reprisal for lawfully disclosing information that the employee reasonably believes is evidence of gross mismanagement, waste, abuse of authority, a danger to public health or safety, or a violation of law related to a Federal contract or grant. Provider shall inform its employees in writing of their whistleblower rights and protections under 41 U.S.C. 4712. *This section does not apply to a contract with a"governmental entity"as defined in Texas Government Code Chapter 2251. 11062024.JW:M 0 docusign Certificate Of Completion Envelope Id:ACDA9713-EOF9-46D4-987C-0131 D44FCA29 Status:Sent Subject:$0 New Contract:26-004-004 City of Corpus Christi(Texas GLO) Source Envelope: Document Pages:31 Signatures:0 Envelope Originator: Certificate Pages:4 Initials:9 Armando Montante AutoNav: Enabled 1700 Congress Ave Envelopeld Stamping: Enabled Austin,TX 78701 Time Zone: (UTC-06:00)Central Time(US&Canada) Armando.Montante@glo.texas.gov IP Address: 198.176.115.238 Record Tracking Status: Original Holder:Armando Montante Location: DocuSign 3/10/2025 2:42:41 PM Armando.Montante@glo.texas.gov Signer Events Signature Timestamp Traci Cotton [��DS Sent:3/11/2025 9:44:54 AM Traci.Cotton@glo.texas.gov Viewed:3/11/2025 9:52:47 AM Attorney Signed:3/11/2025 9:58:49 AM Texas General Land Office Security Level: Email,Account Authentication Signature Adoption: Pre-selected Style (None) Using IP Address:204.65.210.14 Electronic Record and Signature Disclosure: Not Offered via Docusign Lucy Flores °S Sent:3/11/20259:58:51 AM Lucy.Flores@glo.texas.gov Viewed:3/11/2025 11:11:17 AM Texas General Land Office Signed:3/11/2025 11:13:31 AM Security Level: Email,Account Authentication (None) Signature Adoption: Drawn on Device Using IP Address:204.65.210.236 Electronic Record and Signature Disclosure: Not Offered via Docusign Jason Pinchback LD�S Sent:3/11/2025 11:13:34 AM Jason.Pinchback@glo.texas.gov Resent:3/11/2025 11:22:25 AM Texas General Land Office Viewed:3/16/2025 7:46:42 AM Security Level: Email,Account Authentication Signed:3/16/2025 7:47:01 AM (None) Signature Adoption: Pre-selected Style Using IP Address: 166.194.200.144 Signed using mobile Electronic Record and Signature Disclosure: Not Offered via Docusign Natalie Bell °S Sent:3/16/2025 7:47:03 AM natalie.bell@glo.texas.gov Viewed:3/16/2025 11:40:39 AM Texas General Land Office Signed:3/16/2025 11:40:48 AM Security Level: Email,Account Authentication (None) Signature Adoption: Drawn on Device Using IP Address: 172.56.88.15 Signed using mobile Electronic Record and Signature Disclosure: Not Offered via Docusign Signer Events Signature Timestamp Angela Sunley E', Sent:3/16/2025 11:40:50 AM angela.sunley@glo.texas.gov Viewed:3/17/2025 7:54:46 AM Sr. Director Signed:3/17/2025 7:54:55 AM Texas General Land Office Security Level: Email,Account Authentication Signature Adoption: Drawn on Device (None) Using IP Address:204.65.210.245 Electronic Record and Signature Disclosure: Not Offered via Docusign David Green °S Sent:3/17/2025 7:54:58 AM david.green@glo.texas.gov Viewed:3/17/2025 8:07:21 AM Legal Services Signed:3/17/2025 8:07:27 AM Texas General Land Office Security Level: Email,Account Authentication Signature Adoption: Uploaded Signature Image (None) Using IP Address:75.71.30.164 Signed using mobile Electronic Record and Signature Disclosure: Not Offered via Docusign Marc Barenblat [ °SI Sent:3/17/2025 8:07:29 AM marc.barenblat@glo.texas.gov Viewed:3/17/2025 10:10:28 AM Deputy General Counsel Signed:3/17/2025 10:12:19 AM Texas General Land Office Security Level: Email,Account Authentication Signature Adoption: Pre-selected Style (None) Using IP Address:204.65.210.238 Electronic Record and Signature Disclosure: Not Offered via Docusign Jeff Gordon E�DS Sent:3/17/2025 10:12:23 AM jeff.gordon@glo.texas.gov Viewed:3/17/2025 3:26:57 PM General Counsel Signed:3/17/2025 3:27:05 PM Texas General Land Office Security Level: Email,Account Authentication Signature Adoption: Pre-selected Style (None) Using IP Address:68.216.63.19 Signed using mobile Electronic Record and Signature Disclosure: Not Offered via Docusign Adrian Piloto FD5S Sent:3/17/2025 3:27:08 PM adrian.piloto@glo.texas.gov Viewed:3/18/2025 8:07:55 AM Senior Deputy Director Signed:3/18/2025 8:10:25 AM Texas General Land Office Security Level: Email,Account Authentication Signature Adoption: Pre-selected Style (None) Using IP Address:204.65.210.25 Electronic Record and Signature Disclosure: Not Offered via Docusign Dante Gonzalez Sent:3/18/2025 8:10:30 AM danteg@cctexas.com Viewed:3/18/2025 8:15:09 AM Security Level: Email,Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Jennifer G.Jones jennifer.jones@glo.texas.gov Security Level: Email,Account Authentication (None) Electronic Record and Signature Disclosure: Signer Events Signature Timestamp Not Offered via Docusign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp CMD Drafting Requests COPIED Sent:3/10/2025 3:28:35 PM drafting requests@GLO.TEXAS.GOV Texas General Land Office Security Level: Email,Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Kelly McBride *C Sent:3/10/2025 3:28:36 PM kelly.mcbride@glo.texas.gov i L Director of CMD Texas General Land Office Security Level: Email,Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Lance White Sent:3/10/2025 3:28:36 PM lance.white@glo.texas.gov ED Manager,Contracts Management Division Texas General Land Office Security Level: Email,Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Clay Sebek � Sent:3/10/2025 3:28:36 PM clay.sebek@glo.texas.gov COPED Resent:3/11/2025 9:44:53 AM Team Lead,General Contracts Security Level: Email,Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Rachel Rios *C Sent:3/18/2025 8:10:28 AM rachelr@cctexas.com i G Viewed:3/18/2025 8:15:18 AM Security Level: Email,Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Payton Ray payton.ray@glo.texas.gov Security Level: Email,Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Carbon Copy Events Status Timestamp HUB HUB@glo.texas.gov Security Level: Email,Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via Docusign Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 3/10/2025 3:28:36 PM Envelope Updated Security Checked 3/11/2025 9:44:52 AM Envelope Updated Security Checked 3/11/2025 9:44:52 AM Envelope Updated Security Checked 3/11/2025 9:44:52 AM Envelope Updated Security Checked 3/11/2025 9:44:52 AM Envelope Updated Security Checked 3/11/2025 9:44:52 AM Envelope Updated Security Checked 3/11/2025 9:44:52 AM Envelope Updated Security Checked 3/11/2025 9:44:53 AM Envelope Updated Security Checked 3/11/2025 9:44:53 AM Envelope Updated Security Checked 3/11/2025 9:44:53 AM Envelope Updated Security Checked 3/11/202.5 9:44:53 AM Envelope Updated Security Checked 3/11/2025 9:44:53 AM Envelope Updated Security Checked 3/11/2025 9:44:53 AM Envelope Updated Security Checked 3/11/2025 9:44:53 AM Envelope Updated Security Checked 3/11/2025 9A4:53 AM Envelope Updated Security Checked 3/11/2025 9:44:53 AM Envelope Updated Security Checked 3/11/2025 9:44:53 AM Envelope Updated Security Checked 3/11/2025 9:44:53 AM Envelope Updated Security Checked 3/11/2025 11:22:25 AM Envelope Updated Security Checked 3/11/2025 11:22:25 AM Envelope Updated Security Checked 3/11/2025 11:22:25 AM Envelope Updated Security Checked 3/11/2025 11:22:25 AM Payment Events Status Timestamps Texas Beach Watch 5-Year Contract to Collect & Analyze Recreational Beach Water FY26-FY30 Ordinance Authorizing an Interlocal Agreement for an estimated$700,000.00 with the Texas General Land Office (GLO) Health Department Interim Director Dr.Dante Gonzalez June 10, 2025 Ordinance Ordinance authorizing an Interlocal Agreement for an estimated $700,000.00 with the Texas General Land Office to provide beach water sampling in Nueces, Aransas, and San Patricio counties under the Texas Beach Watch (TBW) Program for a five-year period ending August 31, 2030. Summary Information Texas Beach Watch Contract Overview: 5-Year Texas Beach Watch Contract No. 26-004-004 awarded to Corpus Christi- Nueces County Public Health District (CCNCPHD) by the General Land Office (GLO). Contract term: September 1, 2025 - August 31, 2030 The purpose is to collect and analyze recreational beach water samples from designated sampling stations and report results to GLO. The Texas Beach Watch program protects public health by monitoring coastal water quality and issuing advisories when bacteria levels exceed safe limits. GLO will issue annual Work Orders during the contract term to conduct water sample collection & analysis in Nueces, Aransas, and San Patricio Counties Background Information Texas Beach Watch 5-year Contract Overview Continued: GLO awarded a contract to CCNCPHD to: • Collect and analyze recreational beach water samples • Notify the public about beach water quality • Issue or recommend advisories when necessary The Corpus Christi - Nueces County Public Health District (CCNCPHD) is a contractor for the Texas Beach Watch Program funded to monitor recreational beaches for bacteria levels. If bacteria levels exceed EPA standards, GLO works with local governments to issue public advisories. Funding has been awarded to CCNCPHD since 2015. Background Information Sampling & Testing Schedule: Year-round collection & testing: • Peak beach season (May-October) —> Weekly sampling • Off-season —> Biweekly sampling (except March, which is weekly for spring break) FY24 sample collection: • 2,000 initial samples • 500 recollected samples • 50 sampling stations monitored Repeat sampling continues until bacteria levels return to a safe range. Sample reimbursement amount determined by annual work orders. ' 5-Year TBW Budget Breakdown $44,000.00 $44,000.00 $44,000.00 $44,000.00 $44,000.00 • $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 • $716.04 $716.04 $716.04 $716.04 $716.04 Retirement $11,012.40 $11,012.40 $11,012.40 $11,012.40 $11,012.40 $8,500.00 $8,500.00 $8,500.00 $8,500.00 $8,500.00 • $78.00 $78.00 $78.00 $78.00 $78.00 Clinical Supplies $25,000.00 $25,000.00 $25,000.00 $25,000.00 $25,000.00 $500.00 $500.00 $500.00 $500.00 $500.00 $400.00 $400.00 $400.00 $400.00 $400.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 Minor computer equipment $2,000.00 $2,000.00 $2,000.00 $2,000.00 $2,000.00 • $12,000.00 $12,000.00 $12,000.00 $12,000.00 $12,000.00 Fuel&Lubricants $5,000.00 $5,000.00 $5,000.00 $5,000.00 $5,000.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $4,193.56 $4,193.56 $4,193.56 $4,193.56 $4,193.56 Vehicle repairs $4,000.00 $4,000.00 $4,000.00 $4,000.00 $4,000.00 $600.00 $600.00 $600.00 $600.00 $600.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00 $10,000.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $2,500.00 $140,000.00 $140,000.00 $140,000.00 $140,000.00 $140,000.00 Total estimated amount of Texas Beach Watch Contract is $700.000.00. Fiscal Impact & Recommendation Fiscal Impact: Funding is based on annual Work Orders from GLO, with an estimated $700,000 allocated over five years. • Contract is effective September 1, 2025, through August 31, 2030. • Contract agreement funds one FTE o Public Health Technician Recommendation: Staff recommends approval of the Ordinance to apply, approve, and appropriate GLO contract and annual work orders. Texas Beach Watch 5-Year Contract to Collect & Analyze Recreational Beach Water FY26-FY30 Questions ? se GO � O� A H AGENDA MEMORANDUM "`°pP°""`E First Readingfor the City Council Meeting June 17, 2025 1s52 Y 9 Second Reading for City Council Meeting of June 24, 2025 DATE: May 30, 2025 TO: Mayor and Council FROM: Rebecca Huerta, City Secretary RebeccaH@cctexas.com (361) 826-3105 Adding annexed territory into City Council Districts 1 and 3 CAPTION: Ordinance adding annexed areas to City Council District 1 and District 3. SUMMARY: The City annexed property near Highway 44 and Clarkwood Road per Ordinance #033496 (10/22/2024). The city annexed property at 4750 IH-37, 802 McKinzie Road, and 2634 Joe Fulton International Trade Corridor per Ordinance #033533 (12/10/2024). The annexed areas, while unpopulated, need to be incorporated into a Council district. Based on the location of the area, staff is recommending the property identified in Ordinance #033496 be added to District 3 (see map exhibit D) and Ordinance #033533 be added to District 1 (see map exhibits A, B, and C). BACKGROUND AND FINDINGS: The City Charter provides that five council members are elected by majority vote from single member districts, and each district will have the same population to the extent possible [Article II, Section 1(a)]. Since the annexed areas are not populated, adding the territory to any Council district would not cause the 2022 redistricting plan to become out of balance for "one person, one vote" purposes. The City Charter provides that any ordinance to equalize territory/population may not be enacted less than 90 days before any general election. Staff is recommending the annexed areas be added to Districts 1 and 3 as illustrated in the attached map exhibits A, B, C, and D. FISCAL IMPACT: None LIST OF SUPPORTING DOCUMENTS: • Ordinance with Exhibits A, B, C, and D — Maps of annexed areas Ordinance adding annexed areas to City Council District 1 and District 3. WHEREAS, the City of Corpus recently annexed territory pursuant to City Ordinances # 033496 and 033533-1 WHEREAS, the City of Corpus Christi's recently disannexed territory (Ord #033534 & Ord #032720) is removed from the assigned single-member council district by operation of law; and WHEREAS, there remains annexed unpopulated territory within the City limits that must be assigned to an existing single-member council district; and WHEREAS, Article II, Section 1(a) of the City Charter requires that such adjustment to the single-member council districts occur prior to the next general election, which is scheduled to occur in November 2026; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, THAT: Section 1. The City Council specifically finds that the foregoing statements included in the preamble of this ordinance are true and correct and adopts such findings for all intents and purposes related hereto. Section 2. The boundary of the existing Single-Member Council District #1 for the City of Corpus Christi is hereby amended to add the areas annexed by City Ordinance #033533 as depicted on the maps attached hereto as EXHIBIT A, EXHIBIT B, and EXHIBIT C. Section 3. The boundary of the existing Single-Member Council District #3 for the City of Corpus Christi is hereby amended to add the areas annexed by City Ordinance #033496, as depicted on the map attached hereto as EXHIBIT D. Section 4. This Ordinance shall take and be given effect immediately upon passage. Introduced and voted on the day of 12025. PASSED and APPROVED on the day of , 2025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary EXHIBIT A -�,1 •;� �, dhi Robstown / � a,—ti—rvea 4;^ Co w \ r. \ I l I » 1 4 1 Legend N r r City Limits Council District One j Proposed Council District One City Parcels QQ Sli M .00 ®QgM-- rogc s eques urring exa ims_�sannexa ions_arming _ _n erP— V 11 ons_UtYVIP EXHIBIT B i Annexation \Area . r \ — Lj e a s _ *L _.. r Legend ^� r City Limits s q _ Proposed Council District One ` City Parcels \ �- Council District One 6ISPro]uG\RequesY�\Ruurring\Mneatlons_Dlsanneatlons PI—ing\S-14519 N—.BaV_CNMap EXHIBIT C M `l eces eta { Preserve c 4 � � Annexation A?ea \ r \ ` TX 44 -—i 4pur a Y J' y IiFFT 4dwl=- ® ® Ik a,4 Legend 7 r� City Limits N ► ti Council District One Proposed Council District One City Parcels 10 e - GISProjed\Regues\Recurring\M.e.ati..s Dienneicab—P1...i.g\SR_18519_RobertSaid—CtyMap EXHIBIT D IV 77 I\ \ Zr\r J r Annexation Area J (NSI� J Legend 8 N City Limits c Council District 3 Proposed Council District 3 ICU ROW Annexation po Sj�o ee •ee ®MV-N�2 GISProj cE R�u�tr Re rring Mne ations_D'sanne atlons_P arming SR_18568_Car woo Estate_CityMap se 0 0 U NCORPO0.1¢ AGENDA MEMORANDUM ss52 First Reading Ordinance - City Council Meeting of June 17, 2025 Second Reading Ordinance— City Council Meeting of June 24, 2025 DATE: June 6, 2025 TO: Mayor & Council FROM: Council Member Everett Roy, Chairman Municipal Court Committee Rebecca Huerta, City Secretary RebeccaH@cctexas.com (361) 826-3105 Appointment of Municipal Court Judges CAPTION: Ordinance appointing Gabriel Rodriguez as Division 1 Judge, Jason Supplee as Division 2 Judge, David Walsh as Division 3 Judge, William Gregory "Bill' Bonilla as Division 4 Judge, and George Picha as Division 5 Judge of the Municipal Court; appointing Christopher E. Matt as part-time judge #1, Douglas K. DeFratus as part-time judge #2, William Holt Feemster as part- time judge #3, Mara Schechter as part-time judge #4, Mario A. Olivarez as part-time judge #5, and Robert Reyna as part-time judge #6 of the Municipal Court; determining salary; providing a two year term of office; and declaring an effective date. SUMMARY: Municipal Court judges are appointed by the City Council, per the recommendation of the Municipal Court Committee, which consists of four City Council members: Chairman Everett Roy, Eric Cantu, Gil Hernandez, and Carolyn Vaughn. A panel, led by Presiding Judge Jackie Chapa, interviewed the part-time judge applicants on May 16. The Municipal Court Committee conducted interviews for full-time judges on June 6. The committee recommends the reappointments of full-time judges David Walsh, Bill Bonilla, and George Picha. and part-time judges Christopher Matt, Douglas DeFratus, William Holt Feemster, and Mario Olivarez. The committee recommends the new appointments of full-time judges Gabriel Rodriguez and Jason Supplee, and part-time judge Mara Schechter. BACKGROUND AND FINDINGS: Per Sec. 29-54 of the city code, the Municipal Court Committee will provide oversight responsibilities for municipal court judicial operations and monitoring judges (appointment, annual review and salary oversight). The municipal court committee consists of four (4) council members appointed by the mayor at the beginning of each council term. The mayor appoints one (1) of the council members as the chairperson. Municipal Court judges serve two-year terms. ALTERNATIVES: The Council could choose to amend the ordinance. FISCAL IMPACT: Funding Detail: Fund: Organ ization/Activity: Mission Element: Project # (CIP Only): Account: RECOMMENDATION: The Municipal Court Committee recommends approval of the ordinance as presented. SUPPORTING DOCUMENTS: Ordinance Ordinance appointing Gabriel Rodriguez as Division 1 Judge, Jason Supplee as Division 2 Judge, David Walsh as Division 3 Judge, William Gregory"Bill" Bonilla as Division 4 Judge, and George Picha as Division 5 Judge of the Municipal Court; appointing Christopher E. Matt as part-time judge #1, Douglas K. DeFratus as part-time judge #2, William Holt Feemster as part- time judge #3, Mara Schechter as part-time judge #4, Mario A. Olivarez as part-time judge #5, and Robert Reyna as part-time judge #6 of the Municipal Court; determining salary; providing a two year term of office; and declaring an effective date. WHEREAS, the City Council shall by ordinance appoint its municipal judges pursuant to Texas Government Code §30.00006, City Charter Art. 11, Sec. 26, and Corpus Christi Code Sec. 29-4; WHEREAS, the City Council finds the following appointees meet the qualifications for Municipal Court judge pursuant to Corpus Christi Code and State law; and WHEREAS, this Ordinance does not constitute an employment contract, and appointees are not employees but are public officers authorized by law to independently exercise functions subject to revision and correction only according to the standing laws of this state. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, THAT: SECTION 1. Gabriel Rodriguez is appointed as full time Municipal Judge of Division 1 , Jason Supplee is appointed as full time Municipal Judge of Division 2, David Walsh is appointed as full time Municipal Judge of Division 3, William Gregory "Bill' Bonilla is appointed as full time Municipal Judge of Division 4, and George Picha is appointed as full time Municipal Judge of Division 5 for the Municipal Court of Record in the City of Corpus Christi, Texas. SECTION 2. The Full-time judges of Divisions 1 ,2,3,4, and 5 shall each receive the fixed salary of $131 ,070.18. SECTION 3. Christopher E. Matt is appointed as part-time judge#1, Douglas K. DeFratus is appointed as part-time judge #2, William Holt Feemster is appointed as part-time judge #3, Mara Schechter is appointed as part-time judge #4, Mario A. Olivarez is appointed as part-time judge #5, and Robert Reyna is appointed as part-time judge #6. SECTION 4. Part-time judges shall receive an hourly rate of$49.69 per hour. SECTION 5. Each judge shall hold office for a definite term of two years upon appointment by ordinance, unless sooner removed. Terms begin June 24, 2025, and end June 24, 2027. 1 SECTION 6. This ordinance constitutes an action by the City Council not to reappoint any and all judges not appointed herein per Texas Government Code §29.005. SECTION 7. This ordinance takes effect immediately upon passage on second reading. Introduced and voted on the day of 12025. PASSED and APPROVED on the day of , 2025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary 2 se GO � O� A H 'NCOHPOP AGENDA MEMORANDUM 1852 Action Item for the City Council Meeting June 24, 2025 DATE: June 24, 2025 TO: Peter Zanoni, City Manager FROM: Brandon Wade, Fire Chief BrandonWa-cctexas.com (361) 826-3935 Sergio Villasana, Director, Finance & Procurement SergioV2�cctexas.com (361) 826-3227 Purchase of Firefighter Protective Clothing for the Corpus Christi Fire Department CAPTION: Motion authorizing the purchase of 450 new flame-resistant Tecasafe Plus wildland fire protective equipment (pants) from Casco Industries, of Houston, Texas, through the BuyBoard Cooperative, for the Corpus Christi Fire Department for a total amount of$112,625.00, with FY 2025 funding in the amount of$112,625.00 from the General Fund. SUMMARY: This motion authorizes the purchase of a total of 450 pieces of new flame-resistant Tecasafe Plus wildland protective pants from Casco Industries, Inc., of Houston, Texas, through BuyBoard Cooperative, for $112,625.00. The protective clothing will be used by the Corpus Christi Fire Department's (CCFD) firefighters. This protective clothing is also known as wildland pants. BACKGROUND AND FINDINGS: Firefighter protective clothing is essential Personal Protective Equipment (PPE) designed to safeguard firefighters when responding to wildland and brush fires. This gear provides critical protection against extreme heat, ensuring firefighters can perform their duties safely. In recent years, the Corpus Christi Fire Department (CCFD) has standardized its PPE inventory, issuing specialized wildland protective equipment—including coats, shrouds, and masks—to all firefighters. The Tecasafe Plus Brush pants, made from high-quality fabric, offer a lightweight and breathable design for optimal moisture management while maintaining exceptional protection. These pants are certified to meet or exceed NFPA 1977-2011 standards for wildland firefighting safety, and are completely free of PFAS. The wildland pants are manufactured utilizing the highest quality and safety standards available on the market. Casco Industries is the main supplier for all firefighting PPE. Casco Industries provides the highest quality, lowest price, and the timeliest production and delivery of the PPE. Casco Industries is located in Houston, Texas. Currently, CCFD has 421 firefighters in its Operations Division. The 421 firefighters in the Operations Division are each currently equipped with specialized wildland protective jackets. The wildland protective jackets are specifically designed for wildland and brush fire scenarios. The jackets offer reliable protection while remaining lightweight and breathable, enhancing comfort and moisture management in high-heat environments. The purchase of these new wildland protective pants will complete the wildland protective gear required PPE for all 421 firefighters assigned to the Operations Division, ensuring they are fully equipped for any wildland fire challenges. It will also allow for CCFD to have 29 extra wildland protective pants to be used for loaners or replacements if any of the 421 firefighters in the Operations Division have their wildland protective pants damaged or destroyed. Like the wildland protective jackets, the wildland protective pants are specifically designed for wildland and brush fire scenarios. The pants offer reliable protection while remaining lightweight and breathable, enhancing comfort and moisture management in high-heat environments. This purchase is part of CCFD's FY 2025 Uniform and Protective Clothing budget. If the wildland protective pants are not purchased, firefighters will have to wear heavier structural PPE. The heavier structural PPE is significantly more physically demanding for firefighters to operate in, making firefighters vulnerable to serious or even life-threatening injuries. PROCUREMENT DETAIL: This procurement is through the Buyboard Cooperative. Contracts awarded through Buyboard Cooperative have been competitively procured in compliance with local and state procurement requirements. The City receives cost savings of 22%through the BuyBoard Cooperative as compared to savings of 17% through the HGABuy Cooperative for the same items. The table below demonstrates Casco Industries, Inc cost savings through the BuyBoard Cooperative and compared to the HGACBuy Cooperative. Item Description BuyBoard HGACBuy Variance Flame-resistant Tecasafe Plus firefighter protective $112,625.00 $118,399.80 -$5,774.80 ants ALTERNATIVES: The alternative is not to purchase the wildland protective equipment pants. However, if the wildland protective pants are not purchased, firefighters will have to wear heavier structural PPE. The heavier structural PPE is significantly more physically demanding for firefighters to operate in, making firefighters vulnerable to serious or even life-threatening injuries. FISCAL IMPACT: The fiscal impact for CCFD in FY 2025 is an amount of $112,625.00 which will be paid through the General Fund. FUNDING DETAIL: Fund: 1020 General Fund Organization/Activity: 12010 Fire Stations Department: 10 Fire Department Project # (CIP Only): N/A Account: 540045 Uniforms & Protective Clothing Amount: $112,625.00 RECOMMENDATION: Staff recommends approval of the purchase of 450 new flame-resistant Tecasafe Plus wildland protective equipment (pants) for the Corpus Christi Fire Department from Casco Industries, Inc., of Houston, through the BuyBoard cooperative, as presented. LIST OF SUPPORTING DOCUMENTS: Price Sheet CITY OF CORPUS CHRISTI Price Sheet Purchase of flame-resistant Tecasafe Finance & Procurement Plus firefighter protective pants Senior Buyer: Marco Lozano Casco Industries, Inc., of Houston Bu Board coo erative #698-23 ITEM DESCRIPTION QTY. UNIT TOTAL 1 GroundPounder Yellow Tecasafe 7oz Pants S-XL 375 $ 245.00 $ 91,875.00 2 jGroundPounder Yellow Tecasafe 7oz Pants 2X 50 $ 268.00 $ 13,400.00 3 jGroundPounder Yellow Tecasafe 7oz Pants 3X 25 $ 294.00 $ 7,350.00 GRAND TOTAL $ 112,625.00 so 00 � w o F U NOORPORpS Ea AGENDA MEMORANDUM 1852 Action Item for the City Council Meeting June 24, 2025 DATE: June 24, 2025 TO: Peter Zanoni, City Manager FROM: Mike Markle, Chief of Police mikema(a)-cctexas.com (361) 886-2603 Juan Rivera, Interim Director of Asset Management JuanR7(a)-cctexas.com (361) 826-1674 Sergio Villasana, Director of Finance & Procurement SergioV2a-cctexas.com (361) 826-3227 Purchase of one Ford F-150 Police Responder for the Corpus Christi Police Department CAPTION: Motion authorizing the purchase of one replacement 2024 Ford F-150 Police Responder from Silsbee Ford, of Silsbee, Texas, through the TIPS Cooperative, for a total amount of $51,397.53 to be used by the Corpus Christi Police Department for the Operation Stonegarden Program (drug and human trafficking), with FY 2025 funding in the amount of$50,000.00 available through the Police Grants Fund and $1,397.53 from the General Fund. SUMMARY: This motion authorizes the purchase of one replacement 2024 Ford F-150 Police Responder from Silsbee Ford through the TIPS Cooperative. The replacement Ford F-150 Police Responder will be used by the Corpus Christi Police Department for law enforcement operations relating to the Operation Stonegarden Program. BACKGROUND AND FINDINGS: Each year the City applies for and receives grant funds from the Texas Governor's Homeland Security Grant's Division for the Corpus Christi Police Department's (CCPD) participation in the Operation Stonegarden Program. The Operation Stonegarden Program focuses on law enforcement operations relating to drug and human trafficking. For FY 2025, the City received $247,669.00 in grant funding for the Operation Stonegarden Program. As planned, CCPD is using $50,000 of the FY 2025 Operation Stonegarden Program grant funding for the purchase of one replacement 2024 Ford F-150 Police Responder for law enforcement activities relating to the Operation Stonegarden Program. The replacement Ford F-150 Police Responder unit will replace the previous police unit that was used for law enforcement activities relating to the Operation Stonegarden Program. The previous police unit had exceeded its useful service life and was sold due to severe rust damage which rendered it unsafe and unserviceable for continued law enforcement use. Specifically, CCPD will use the replacement Ford F-150 Police Responder to conduct interdiction operations individually and in conjunction with federal, state, and local partners as part of the Operation Stonegarden Program. The operations will be focused along routes of ingress and egress, both on state and local highways, to include SH44, SH77, SH181. This replacement Ford F-150 is not part of the 75 police vehicles purchase that was approved as part of the FY 2025 Budget. Instead, the funds to purchase the replacement Ford F-150 are coming from grant funds that were awarded by the FY 2025 Operation Stonegarden Program grant. The grant funding from the FY 2025 Operation Stonegarden Program grant included $50,000 to be specifically used for the purchase of this replacement vehicle. The remaining $1,397.53 will come from the General Fund. PROCUREMENT DETAIL: This procurement is through the TIPS Cooperative. Contracts awarded through the cooperative have been competitively procured in compliance with Texas Local and State procurement requirements. Procurement has modified their business practices for a proactive approach to the City's vehicle procurement process. The modified business practice uses all resources available to ensure that vehicles and equipment are sourced and delivered in a timely manner while using economically favorable methods. Both TIPS Cooperative and the BuyBoard Cooperative provided quotes for the replacement Ford F-150 Responder. The TIPS Cooperative pricing is $51,397.53, while the BuyBoard Cooperative pricing is $57,164.73. Below is a table that provides the cost comparison between the TIPS Cooperative and the BuyBoard Cooperative. Cooperative Price Variance $ Variance % TI PS $51,397.53 BuyBoard $57,164.73 In addition to better pricing, the TIPS Cooperative currently has the Ford F-150 Police Responder unit available and will deliver it the to the City within 30 days of purchase. The BuyBoard Cooperative does not currently have the Ford F-150 Police Responder Unit available and would instead have to submit an order to Ford once a purchase is made. Once the purchase is made, the vehicle will then have to be built, with an estimated delivery timeline of four to six months. ALTERNATIVES: The alternative is not to approve this purchase and instead continue to have one less officer able to conduct law enforcement activities relating to the Operation Stonegarden Program. However, this will affect CCPD's ability to meet required metrics under the program which will negatively impact the City's ability to continue received funding from the annual Operation Stonegarden Program Grant. FISCAL IMPACT: The FY 2025 fiscal impact of this purchase totals $51,397.53, with $50,000 coming from the FY 2025 Police Grants Fund and $1,397.53 coming from the FY 2025 General Fund. FUNDING DETAIL: Fund Name Accounting Account Activity Amount Unit No. Police Grants Fund 1061-29-89 550020 822724F $50,000.00 General Fund 1020-29-11740 550020 NSA $1,397.53 Total $51,397.53 RECOMMENDATION: Staff recommends approval of the purchase of one replacement 2024 Ford F-150 Police Responder from Silsbee Ford, of Silsbee, Texas, through the TIPS Cooperative, for a total amount of $51,397.53 to be used by the Corpus Christi Police Department for the Operation Stonegarden Program, as presented. LIST OF SUPPORTING DOCUMENTS: Price Sheet City of Corpus Christi Price Sheet Finance&Procurement FORD F-150.POLICE RESPONDER Sr.Buyer:Marco Lozano Silsbee Ford,1211 Hwy 96 N.,Silsbee TX 77656 TIPS USA 240901 TRANSPORTATION ITEM DESCRIPTION QTY UNIT EXTENDED TOTAL 1 2024 FORD F-150. POLICE RESPONDER 1 $52,105.00 $52,105.00 Crew Cab, Power Locks, Rear Camera,Air,33.5L Eco, 10 SPD Auto, Black, Cruise, 145"Wheel Base, Remote Keyless Entry 1 $340.00 $340.00 Blac Running Boards 1 $250.00 $250.00 Key Alike 1 $450.00 $450.00 Published Options Discount 1 5% $(52.00) Dual Spotlights 1 $800.00 $800.00 TriFold Bed Cover 1 $999.00 $999.00 Bed Management System 1 $295.00 $295.00 Int. Bed Rails 1 $285.78 $285.78 Contract Price Adjustment 1 ($4,175.00) ($4,175.00) Additional Delivery Charge @ 57miles 1 $99.75 $99.75 1 $0.00 TOTAL PURCHASE PRICE $51,397.53 se �C O F v NCORPOR I AGENDA MEMORANDUM 1852 Action Item for the City Council Meeting June 24, 2025 DATE: June 24, 2025 TO: Peter Zanoni, City Manager FROM: Mike Markle, Chief of Police mikema(u-)-cctexas.com (361) 886-2603 Juan Rivera, Interim Director of Asset Management JuanR7(a)-cctexas.com (361) 826-1674 Sergio Villasana, Director of Finance & Procurement SergioV2(u-)cctexas.com (361) 826-3227 Purchase of a Mobile Lift Trailer for the Corpus Christi Police Department CAPTION: Resolution authorizing the purchase of a new 2025 Low Profile Deck Trailer from Mobile Lift Concepts, of Corona, California, for on-site vehicle inspections and catalytic converter investigations for the Corpus Christi Police Department's Auto Theft Task Force, for a total amount of $59,000.00, with FY 2025 funding from the Police Grants Fund SUMMARY: This resolution authorizes the purchase of a new Low Profile Deck Trailer from Mobile Lift Concepts, of Corona, California, for the Corpus Christi Police Department. The additional custom-built mobile lift trailer will be used for on-site vehicle inspections and catalytic converter investigations by the Corpus Christi Police Department's Auto Theft Task Force. BACKGROUND AND FINDINGS: The Corpus Christi Police Department's (CCPD) Auto Theft Task Force focuses not only on detection and apprehension of stolen and burglarized vehicles, but also on motor vehicle fraud and proactive policing of automotive businesses in the City and County to reduce the sale of stolen vehicles and parts. Additionally, the Auto Theft Task Force conducts an extensive public awareness campaign which includes crime prevention programs focusing on reducing motor vehicle crime. CCPD will use funding from the FY 2025 Motor Vehicle Crime Prevention Authority (MCVPA) grant to purchase a new 2025 Low Profile Deck Trailer for personal cargo trailer registration inspections and for catalytic converter investigations conducted by CCPD's Auto Theft Task Force. The personal cargo trailer registration inspections are conducted on a weekly basis by CCPD at the Corpus Christi Police Impound yard (5485 Greenwood Drive). The purpose of these inspections is to identify the personal cargo trailers' Vehicle Identification (VIN) numbers, as well as the year, make, and model. These inspections are required for the owner to obtain state registration for their personal cargo trailer. CCPD offers the personal cargo trailer registration to all residents of Nueces County. In addition to the personal cargo trailer registration process, CCPD receives requests from surrounding law enforcement agencies to inspect the VIN numbers and other information on personal cargo trailers in their possession that have been involved in crimes. Currently, CCPD inspectors have to crawl under the cargo trailers as part of the inspection process which poses safety issues as well as longer turn around times for the inspections to be completed. Some cargo trailers do not have enough room for CCPD inspectors to crawl underneath them, so CCPD has to transport those cargo trailers to another site in order to use a lift to raise the vehicle so that they can inspect underneath it. The purchase of the 2025 Low Profile Deck Trailer will allow CCPD's inspectors to raise each cargo trailer on-site, which will prevent them from having to crawl under them or transport them off- site to have the cargo trailer put onto a lift. This will increase safety for CCPD's inspectors and increase the number of inspections that CCPD is able to complete. CCPD will also use the 2025 Low Profile Deck Trailer for catalytic converter investigations. As part of the catalytic converter investigations, CCPD inspectors have to look for the VIN number in multiple locations including underneath the vehicle. As with the personal cargo trailers, if there is not enough room under the vehicle then CCPD inspectors have to transport the vehicle off-site to a lift so that the vehicle can be lifted and the CCPD inspectors can continue. their investigative work. The 2025 Low Profile Deck Trailer being purchased is a specialized, self-contained vehicle lift trailer that has been designed specifically for the Corpus Christi Auto Theft Task Force to inspect vehicles during catalytic converter investigations. The trailer is designed specifically to enhance safety and efficiency during operations, especially in remote or outdoor settings. The trailer will include a 70" lift, generator, compressor, battery charger, operator chair, stabilizer jacks, and a winch (all built specifically for field vehicle inspections). The trailer's towable lift system features a patented sliding ergonomic undercarriage inspection chair that enables law enforcement personnel to lift and inspect vehicles more efficiently and safely. This will enable investigators to inspect for missing, tampered, or altered converters in the field. The mobile lift trailer also allows for secure and elevated vehicle inspections onsite, including Vehicle Identification Numbers (VIN) verifications and undercarriage assessments on automobiles and trailers as part of investigations into stolen vehicles. Lastly, this trailer will also enhance community outreach efforts, as it can be used during converter etching events to deter theft and assist with recovery and identification. CCPD's Auto Theft Task Force does not currently have any trailers. Traditional automotive trailers are primarily designed for transportation, not inspection, and they typically lack onboard power, lifting mechanisms, or operator safety features. Conversely, the mobile lift trailer from Mobile Lift Concepts is significantly more advanced than a typical utility or transport trailer. In addition to enhanced safety and efficiency, the purchase of this trailer will increase CCPD's ability to meet several MVCPA grant performance goals, many of which are tied to mobile enforcement and outreach events. The mobile lift trailer from Mobile Lift Concepts will be the first of its kind for CCPD and the Auto Theft Task force. This is the first time that CCPD has purchased trailers from Mobile Lift Concepts. As part of the FY 2025 MVCPA grant award, the grantor awarded funds to CCPD for the purchase of a mobile lift trailer. This specific unit was strongly recommended by the MVCPA grantor due to its proven effectiveness in law enforcement operations. Several other Auto Theft Task Forces across Texas, including Lubbock, Eagle Pass, Laredo, and Kleberg County, have purchased the same low-profile deck trailer and have shared highly positive feedback regarding its safety, functionality, and impact on their field investigations. Furthermore, there is no equivalent mobile lift trailer to the one manufactured by Mobile Lift Concepts. PROCUREMENT DETAIL: This procurement is a direct purchase with Mobile Lift Concepts, for one additional custom-built mobile lift trailer, under the Local Government Code, Section 252.022(a) (7), items that are available from only one source because of patents, copyrights, secret processes, or natural monopolies. This is the first time that CCPD has purchased trailers from Mobile Lift Concepts. As part of the FY 2025 MVCPA grant award, the grantor awarded funds to CCPD for the purchase of a mobile lift trailer. This specific unit was strongly recommended by the MVCPA grantor due to its proven effectiveness in law enforcement operations. Several other Auto Theft Task Forces across Texas, including Lubbock, Eagle Pass, Laredo, and Kleberg County, have purchased the same low-profile deck trailer and have shared highly positive feedback regarding its safety, functionality, and impact on their field investigations. Furthermore, there is no equivalent mobile lift trailer to the one manufactured by Mobile Lift Concepts. ALTERNATIVES: The alternative is not to approve the purchase; however, without this mobile lift trailer, CCPD will have to continue using outdated and less safe methods for conducting undercarriage inspections.This will increase the safety risk to police officers and limit efficiency during field operations. The lack of proper equipment will also impact CCPD's ability to meet several MVCPA grant performance goals, many of which are tied to mobile enforcement and outreach events. Falling short of these objectives will affect the City's competitiveness for future grant funding. FISCAL IMPACT: The FY 2025 fiscal impact of this purchase is in the amount of $59,000.00 with funding from the Police Grants Fund. The purchase of a new 2025 Low Profile Deck Trailer was planned as part of the FY 2025 MVCPA Grant award, which the City previously received. FUNDING DETAIL: Fund: 1061 Police Grants Organization/Activity: 89 Grants & Capital Project Funds Department: 29 Police Project # (CIP Only): 822523S SB224 Catalytic Converter Grant Account: 550020 Vehicles & Machinery Amount: $59,000.00 RECOMMENDATION: Staff recommends approval of this item authorizing purchase of a new 2025 Low Profile Deck Trailer from Mobile Lift Concepts of Corona, California through statutory exemption for the Corpus Christi Police Department, as presented. LIST OF SUPPORTING DOCUMENTS: Resolution Price Sheet Resolution authorizing the purchase of an additional mobile lift trailer from Mark Adler dba Mobile Lift Concepts, of Corona, California, in the amount of $59,000.00 for the Corpus Christi Police Department's vehicle undercarriage/chassis inspections, with FY 2025 funding from the SB224 Catalytic Converter Grant in the Police Grants Fund. WHEREAS, an additional mobile lift trailer is necessary to facilitate more efficient evidence gathering operations conducted by the Police Department during vehicle undercarriage/chassis inspections; WHEREAS, State law provides that such procurements, as outlined above, are subject to statutory procurement requirements, including competitive bids, unless an exemption applies; WHEREAS, there is a statutory exemption for this procurement in Local Government Code, Section 252.022(a)(2), as this purchase is necessary to preserve or protect the public health or safety of the municipality's residents: and WHEREAS, there is an additional statutory exemption for this procurement in Local Government Code, Section 252.022(a)(7)(A), as this purchase is for items that are available from only one source because of patents, copyrights, secret processes, or natural monopolies. Be it resolved by the City Council of the City of Corpus Christi, Texas: Section 1. The City Council specifically finds that the foregoing statements included in the preamble of this resolution are true and correct and adopts such findings for all intents and purposes related to the authorization of this procurement. Section 2. The City Manager, or his designee, is authorized to purchase a mobile lift trailer from Mark Adler dba Mobile Lift Concepts of Corona, California, for$59,000.00, with FY 2025 funding from the SB224 Catalytic Converter Grant in the Police Grants Fund. PASSED and APPROVED on the day of , 2025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary MOBILE LIFT CONCEPTS S Methhu,gter Mobile Lift- Ultimate Interdiction MobrleMech Mobile Lift- The Mechanic's Cage TO Corpus Christi Auto Theft Task Force Corpus Christ, TX (0)361-886-2872 SALES JOB SHIPPING SHIPPING PAYMENT TERMS METHOD TERMS Ground Customer pay 50%deposit, balance at ship QTY DESCRIPTION UNIT PRICE LINE TOTAL 1.00 Low Profile Deck MobileMech Mobile Lift Trailer $57,995.00 $57,000.00 1.00 Transportation to Corpus Christi, Tx. $2,000.00 $2,000.00 COMMENTS: All pricing is in US dollars 50%deposit to start build, balance due at ship Cash or U.S.bank check made out to: Mobile Lift Concepts/Mark Adler i Please reply with your payment to: Mobile Lift Concepts P.O. Box 79371 Corona,CA 92877 (877)999-1950 Phone @ Fax SUBTOTAL $59,000.00 info aamobileliftconcepts.com www.mobileliftconcepts.com TOTAL $59,000.00 THANK YOU FOR THE OPPORTUNITY TO SERVE YOU .�..�,tier 1h• .` 1 i ' .� r Z a •� r m r erg 4 � � i31 �n k -- - �_ a r .��Ar -�, qAV MII Af 80 6-775-1569 • �' � A r r. 1. ;y I / Y } Vp POW 5�. x, IN - v .•a ar 81 r j Ij l� 11 k u_ _ ,r.�aiar►�am i 1�II11�luill��11�II 1111111111111111111i�A�+fit ='��y - -- 806-775-15�69 .xaan °•rF,. �..■.,r...,_3—.a...��.�: ass .ems"..... ._ -- -- - ky fsI■!r�t R PAWS'pFF —�- r� T I v �l. rJ rt mop - y r , f - 76 N y r T az3� �y so 00 � w o F v NOORPORAt E AGENDA MEMORANDUM 1852 Action Item for the City Council Meeting June 24, 2025 DATE: June 24, 2025 TO: Peter Zanoni, City Manager FROM: Juan Rivera, Interim Directorof Asset Management JuanR7(a)cctexas.com (361)826-1674 Sergio Villasana, Director of Finance & Procurement Serg ioV2(a)-cctexas.com (361)826-3227 Ratifying the Purchase of Eight Western Star 12-yard Dump Trucks for Corpus Christi Water CAPTION: Resolution ratifying the purchase of one replacement Western Star 12-yard dump truck and the lease- purchase of three additional and four replacement Western Star 12-yard dump trucks due to the originally ordered Freightliner model 12-yard dump trucks not being available in inventory, from Doggett Freightliner, of Austin, Texas, through the Buyboard Cooperative, for Corpus Christi Water for the same total price previously authorized by Resolution 033175. SUMMARY: This resolution ratifies the purchase substitution of one replacement Western Star 12-yard dump truck and the lease-purchase substitutions of three additional and four replacement Wester Star 12-yard dump trucks from Doggett Freightliner, of Austin, Texas, through the Buyboard Cooperative, for Corpus Christi Water. BACKGROUND AND FINDINGS: On September 19, 2023, by Resolution 033175, City Council authorized the acquisition of 65 vehicles and equipment for various City departments. As part of the 65 vehicles and equipment order, there were eight 2024 Freightliner 12-yard dump trucks. The buildout for the eight 2024 Freightliner 12-yard dump trucks was expected to take between 12 to 18 months to complete. However, in November 2024, the Freightliner manufacturer notified the City that the eight 2024 Freightliner 12-yard dump trucks would not be available for production due to a lack of vehicle availability. The price per unit for the originally ordered 2024 Freightliner model was $170,000.00, whereas the price per unit for the 2025 Western Star model was $180,707.14. However, as a result of the manufacturer not being able to fulfill the eight 2024 Freightliner models from the City's order, the Freightliner manufacturer offered eight 2025 Western Star 12-yard dump trucks through Doggett Freightliner to the City for the same original purchase price of$1,765,146.16 as the eight 2024 Freightliner 12-yard dump trucks. By offering the upgraded models, the vendor was attempting to ensure that it could meet or exceed the spec and price agreed upon with the City. In February 2024, the Sales Representative for Daimler Truck North America (manufacturer of both Freightliner and Western Star Models) notified Asset Management that they would be unable to fulfill the order of the requested eight Freightliner units and asked if a substitution of a higher grade-model at the same price would be acceptable. Asset Management notified Procurement of the requested change in model and was advised to proceed only with approval of the change from Corpus Christi Water (CCW). CCW authorized the change, and with both Departments' authorizations, Asset Management notified the vendor that the change was approved in March of 2024. Then, in November of 2024, Daimler Truck North America notified the City in writing of the model change from Freightliner to Western Star as substitutes for the same price and that the vendor was changing from the HGAC Cooperative to the BuyBoard Cooperative. Since the substitutions were authorized by Procurement and CCW, Asset Management did not see an issue with accepting the substitute units as they began to arrive. When four of the Western Star units were received as stated above, documents were sent through the proper City channels to JP Morgan to initiate the financial obligation, and the units were subsequently placed into service. When Asset Management's leadership team audited the monthly unit receipts from November 2024, the change in Cooperatives for the Western Stars was realized. Asset Management then determined that Legal and Procurement needed more visibility as to the vendor not being the same as what was originally approved by City Council. That began a lengthy process to determine the proper course of action to appropriately accept the substitutions. As the deliberations took place and the remaining four units for CCW arrived, Asset Management interrupted delivery to the Department until a plan of action was reached. Ultimately, the Director of Finance and Procurement determined that City policy did not grant authority for any City employee to sanction a change to a City Council approved action without ratification. As a result, staff is bringing this item to City Council to ratify the purchase substitution of one replacement Western Star 12-yard dump truck and the lease-purchase substitutions of three additional and four replacement Wester Star 12-yard dump trucks. By receiving the eight 2025 Western Star model units for the same pricing as the previously ordered eight 2024 Freightliner model units, the City will realize cost savings of $10,707.14 per unit. Additionally, if the City were to initiate a new order for these units, the current base price would start at $210,000.00 as opposed to the locked in price of $170,000.00 per unit. This would have increased the cost to the City by $40,000 per unit or $320,000.00 in total. Asset Management and Corpus Christi Water (CCW) have both agreed to accept the Wester Star model units as substitution for the originally requested Freightliner model units. The differences between the originally ordered Freightliner model units and the Western Star model units are that the Wester Star units have higher driver comfort features such as ergonomic seating, larger cab, advanced climate control, and higher quality material including premium grade aluminum. Also, the Freightliner model units have a lightweight design while the Western Star model units have a reinforced steel frame. These units are mission critical to CCW as they are used to carry materials to and from job sites. They also carry spoils from job sites such as easements, ROWs, and streets. When an emergency water line or wastewater line repair occurs, these trucks are called to carry the soiled/contaminated material off site and to a secure location. Once all materials are removed, these trucks carry backfill material to the job site to properly fill in the void. ALTERNATIVES: The alternative is not to approve these substitution purchases. However, the four units already in service would have to be sold under public sale practices and the City would be responsible for paying the difference between the sale price and loan balance of the financed vehicles. The four units not yet in service would be returned to the vendor as used, as they have already been decaled with the City logo, and the City would be responsible for the difference in price back to the vendor. Additionally, the City could initiate a new order for eight Freightliner 12-yard dump trucks at 2025 model year prices. However, this would lead to a significant delay in the delivery of the required equipment for manufacturing as well as increased pricing. FISCAL IMPACT: The total price for the purchased and lease-purchased substitutions units (purchase of one replacement Western Star 12-yard dump truck and the lease-purchase of three additional and four replacement Western Star 12-yard dump trucks) is for the same total price of$1,765,146.16 as previously authorized by Resolution 033175. The FY 2025 fiscal impact of the outright purchase totals $199,243.00, which will come from the FY 2025 Fleet Equipment Replacement Fund. The FY 2025 fiscal impact of the lease purchases totals $176,882.04, with lease purchase payments of $50,343.90 from the FY 2025 Water Fund, and $126,538.14 from the FY 2025 Wastewater Fund. The total interest for the lease purchase items over the life of the loan is $174,502.16 and is based upon a 4.75% interest rate and a term of 60 months. The remaining balance of $1,389,021.12 for the lease purchase items will be funded through the annual budget process. FUNDING DETAIL: Outright Purchase Fund Name Accounting Unit Accoount Amount Fleet Equipment Replacement Fund 5111-13-31502 550020 $199,243.00 Total $199,243.00 Lease-Purchases Fund Name Accounting Unit Accoount Amount Water Fund 4010-31520-45 530190 $ 50,343.90 Wastewater Fund 4200-33400-46 530190 $ 66,990.78 Wastewater Fund 4200-33600-46 530190 $ 59,547.36 Total $176,882.04 RECOMMENDATION: Staff recommends approval of the purchase substitution of five replacement and three additional Western Star 12-yard dump trucks from Doggett Freightliner, through the Buyboard Cooperative, in the amount of $1,765,146.16, as presented. LIST OF SUPPORTING DOCUMENTS: Resolution Resolution ratifying the substitute acquisitions of eight Western Star 12- yard dump trucks in place of eight Freightliner 12-yard dump trucks for Corpus Christi Water for same total price previously authorized by Resolution 033175 of $1,765,146.16 Whereas on September 19, 2023, by Resolution 033175, City Council authorized the acquisition of 65 vehicles and equipment by various departments; Whereas Sections 3 and 4 of Resolution 033175 provided as follows regarding vehicles for Corpus Christi Water: "Section 3. Corpus Christi Water—Water Division is authorized to acquire by lease-purchase (i)three Freightliner 12-yard dump trucks, one Freightliner six-to eight-yard dump truck, and one Freightliner truck with service body from Houston Freightliner for a total amount of $1,055,832.43, with funding for item (i) from the FY 2024 Fleet Equipment Replacement Fund. Additionally, the Water Division is authorized to acquire by purchase: (ii) one Freightliner 12-yard dump truck from Houston Freightliner for $199,243.00; and (iii) one Chevrolet 2500 extended cab service body truck, one Chevrolet 2500 extended cab service body truck with liftgate, and one Chevrolet 2500 extended cab truck with liftgate and airfrom Lake Country Chevrolet for a total amount of$234,555.47, with funding for items (ii) and (iii) from the FY2023 Fleet Equipment Replacement Fund. Items identified in the section will be sourced as follows: items (i) and (ii) through HGAC; and item (iii) through TIPS." "Section 4. Corpus Christi Water—Wastewater Division is authorized to acquire by lease- purchase: (i)four Freightliner 12-yard dump trucks and one Freightliner flatbed truck with 15- ton crane from Houston Freightliner for a total amount of$1,238,028.00; and (ii) one Western Star 47X with GAPVAX from Lonestar Abilene for$750,010.63, with funding for items (i) and (ii) from the FY 2024 Wastewater Fund. Additionally, the Wastewater Division is authorized to acquire by purchase: (iii) one Kubota tractor from Kubota Tractor Corp, of Corpus Christi, for$69,498.78, (iv) one modern 7-foot mower from John Deere Company ("John Deere"), of Corpus Christi for $7,511.01; and (v) six Chevy 2500 extended cab service body trucks from Lake Country Chevrolet for a total amount of$440,851.98, with funding for items (iii), (iv), and (v) from the FY 2023 Fleet Equipment Replacement Fund. Items identified in this section will be sourced as follows: item (i) through HGAC; items (ii) and (iv) through BuyBoard; item (iii) through the Sourcewell Cooperative ("Sourcewell"); and item (v) through TIPS." Whereas, subsequent to approval of Resolution 033175, the Freightliner manufacturer notified the City that the Freightliner dump truck product was sold out for an entire year and offered the same or better replacement Western Star product at same pricing through Doggett Freightliner so long as they possessed the BuyBoard contract for Western Star; Whereas, Doggett Freightliner had the necessary BuyBoard contract in place at time of delivery of Western Star dump trucks; Whereas, City Council finds that there is a statutory exception for this substitute procurement pursuant to Local Government Code Section 252.022(a)(2) as this substitute procurement is necessary to preserve or protect the public health and safety of the City's residents; Now, therefore, be it resolved by the City Council of the City of Corpus Christi, Texas: Section 1. The City Council specifically finds that the foregoing statements included in the preamble of this resolution are true and correct and adopts and ratifies such findings for all intents and purposes related to the authorization of this procurement. Section 2. The substitute acquisition of four Western Star 12-yard dump trucks for Corpus Christi Water — Water Division, from Doggett Freightliner, through a Buyboard contract, in place of the four original Freightliner 12-yard dump trucks previously authorized in Section 3 of Resolution 033175, is ratified and approved for same prices previously authorized, with funding for the substitute acquisitions as follows: Three will be lease-purchases with funding from the FY 2025 Water Fund and one to be purchased with funding from the FY 2025 Fleet Equipment Replacement Fund. Section 3. The substitute lease-purchase acquisitions of four Western Star 12- yard dump trucks for Corpus Christi Water — Wastewater Division, from Doggett Freightliner through a Buyboard contract, in place of the four original Freightliner 12-yard dump trucks previously authorized in Section 4 of Resolution 033175, is tatified and approved for the same prices previously authorized and with funding for the four lease-purchases from the FY 2025 Wastewater Fund. PASSED AND APPROVED on the day of 2025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary se GO � O� A H "CORPOR^`E° AGENDA MEMORANDUM 1852 Action Item for the City Council Meeting June 24, 2025 DATE: June 24, 2025 TO: Peter Zanoni, City Manager FROM: Sergio Villasana, Director of Finance SergioV2(d�cctexas.com 361-826-3169 Miles Risley, City Attorney M ilesR(a-)cctexas.com 361-826-3739 Motion authorizing execution of a three-year professional services agreement, with two one-year options, with CAS-Claims Administrative Services, Inc., dba Claims Administrative Services, of Tyler, Texas, in an amount up to $675,000.00, with a potential up to $1,125,000.00 if options are exercised, for workers' compensation claims third party administrator services, with FY 2026 funding of $225,000.00 from the Risk Fund, subject to approval of the annual budget. CAPTION: Motion authorizing execution of a three-year professional services agreement, with two one-year options, with CAS-Claims Administrative Services, Inc., dba Claims Administrative Services, of Tyler, Texas, in an amount up to $675,000.00, with a potential up to $1,125,000.00 if options are exercised, for workers' compensation claims third party administrator services, with FY 2026 funding of $225,000.00 from the Risk Fund, subject to approval of the annual budget. SUMMARY: The motion authorizes a three-year agreement with the potential of two option year renewals with Claims Administrative Services, for workers' compensation third party claims adjusting services, and Injury Management Organization (IMO) for medical cost containment and pharmacy benefit services. The City is currently paying $19,201 monthly or $230,411 this fiscal year in a month to month contract with TRISTAR expiring September 30, 2025. Municipalities in the state of Texas are required to provide workers' compensation insurance to its employees. The City of Corpus Christi, although self- insured, contracts out workers' compensation claims adjusting, claims information, medical cost containment and pharmaceutical benefits services and process all workers' compensation indemnity and medical claims filed by city employees in accordance to strict Texas Department of Insurance statutory requirements. The committee selected interview finalists after reviewing and scoring the technical segment, which included several criteria including value-added services. On May 20, and 21 , 2025, interviews were conducted with the top four scoring proposers. After the interview process was completed, the Procurement Department incorporated technical and interview scores as well as pricing analysis. Based on these three scoring factors, staff is recommending Claims Administrative Services as the worker's compensation claims third-party administrator. BACKGROUND AND FINDINGS: The City of Corpus Christi employs approximately 4,100 people and is self-insured up to $1 ,000,000 per employee for injuries that City employees suffer on the job. Since the City of Corpus Christi is self-insured, the City therefore contracts the following workers' compensation TPA claims adjusting services which include the following: • Workers' Compensation Claim ➢ Provide claims adjusting for medical and indemnity claims for claims submitted by employees who are injured on the job • Claims Management Information System ➢ Customized claims system to provide the City of Corpus Christi with a full array of claims reports • Medical Cost Containment Provider Program ➢ Includes a full array of services required by state law including, medical bill review, peer reviews, pre-authorization, required medical examination, designated doctor exam coordination, independent medical examinations as well as life care plan review services ➢ Access to 504 Health Care Network • Pharmaceutical Benefits Program Manager ➢ Handles dispensing of medication under workers' compensation Texas Department of Insurance Division of Workers' Compensation medical fee guidelines to injured employees • Banking infrastructure ➢ All workers' compensation employee claims including indemnity, medical expenses, and other allocated lost adjustment expenses are disbursed by the third-party administrator from an established City account PROCUREMENT DETAILS: On March 24, 2025, the City's Procurement team issued a Request for Proposal for workers' compensation claims third-party administrator services. Six proposals were received and of those five were reviewed, evaluated and scored according to the technical criteria determined by the selection committee consisting of representatives from Risk Management, Human Resources and Legal Department. Of the five evaluated and scored proposals, the four highest scoring companies were selected and interviewed on May 20 and 21, 2025. Each proposer was scored according to 1.) company's experience 2.) account team experience in public entity worker's compensation TPA industry, 3.) understanding the project scope 4.) pricing both at a flat annual rate program cost and/or a per claim service fee not to exceed annual amount. 5.) Added value within the fee proposed. ALTERNATIVES: Currently, Risk Management does not have licensed staff with expertise or experience capable of providing workers' compensation claims adjusting services in accordance with the state requirements nor does the city currently have a claims management information system or medical cost containment provider or health network infrastructure to support an in-house worker's compensation program of this size and complexity. In lieu of awarding this contract, the City would be required to organically create an inhouse workers' compensation program that would entail incalculable expenses to create qualified claims adjusting staff, develop an in house claims or purchase a workers' compensation claims management information system, create its own banking system, hire qualified medical cost containment experts, create a pharmacy benefits program and manager, and create its own health network of doctors therapist and medical providers to allow the City to provide a comprehensive workers' compensation program compliant with the Texas Department of Insurance requirements. These startup costs are difficult to forecast but it would be reasonable to conclude the startup cost to greatly exceed the flat rate proposed herein. FINANCIAL IMPACT: Risk Management budgeted for this expenditure in FY2025-26 Liability/Employee Benefits & Workers' Compensation Fund 5612. The Risk Management fund is an internal operating fund based on cost allocation to each department. Approval of this item is an annual reoccurring expenditure. FUNDING DETAIL: Fund: 5612 Liability/Employee Benefits & Workers' Comp Organization/Activity: 40510 Worker's Compensation Mission Element: 005 Process Claims against City Project # (CIP Only): N/A Account: 537204 Third Party Admin — W/C RECOMMENDATION: Staff recommends approval of this motion as presented to award a service contract to Claims Administrative Services. LIST OF SUPPORTING DOCUMENTS Service agreement Evaluation Matrix RFP No.6360 Workers'Compensation TPA Sr.Buyer: Cynthia Perez CAS Claims Sedgwick Claims Tristar Claims Johnston& Athens Associates- Prodigy Care Proposal Evaluation Score Administrative Management Management Services,Inc. Services,Inc. Administrators Management Inc. OccuSure Claim Services Services Tyler,TX. Memphis,TN San Antonio,TX Long Beach,CA ThompsoTn's Station, Houston,TX Minimum Qualifications Licensing-Workers'Compensation or All Lines Claims Adjusters F*tisSFCft,,,,, . i License At least one employee of the Cites assigned Service team with a Chartered Property Casualty Underwriter(CPCU)certification,or Associates in Risk Management(ARM)or Certified Risk Management(CRM),or Certified insurance Counselor(CIC),or bachelor's degree in Risk Management/Insurance Required 10 years in business """' #,SS `7(""" V-1 1 No outstanding lawsuits during last 5 years or current litigation with the City during last 5 years No outstanding regulatory issues last five years i`F?fSS "{it_;`„ 1 V/ }� References Provided for firm ,,,,, rS I.. �40' 1✓ Minimum Qualifications Local Preference 10.0 Points 10.0 0.00 0.00 0.00 0.00 0.00 0.00 Technical Proposal Ability to provide on-site service 10.0 1.33 1.33 1.33 1.33 0.33 0.33 Firms'Experience 15.0 13.67 14.00 13.67 12.00 8.67 4.00 Team Experience 20.0 16.33 18.33 14.67 14.67 13.00 3.33 Ability to perform project 15.0 12.33 13.33 13.67 13.33 10.67 1.67 Subtotal Technical Proposal 60.0 43.66 46.99 43.34 41.33 32.67 9.33 Interview Firms'Experience 10.0 7.67 9.00 6.67 6.00 0.00 0.00 Team Identification 5.0 4.33 4.33 4.00 3.67 0.00 0.00 Ability to perform project 5.0 4.67 4.67 4.00 5.00 0.00 0.00 Subtotal Interview 20.0 16.67 18.00 14.67 14.67 0.00 0.00 Price Cost information Subtotal Pricing 10.0 10.00 4.24 6.71 7.08 0.00 0.00 Totall 100.0 1 70.33 69.23 64.72 63.08 32.67 9.33 PROFESSIONAL SERVICES AGREEMENT NO. 6360 a � Workers' Compensation Third-Party Administrator Services xss2 THIS Workers' Compensation Third-Party Administrator Services Agreement ("Agreement") is entered into by and between the City of Corpus Christi, a Texas home- rule municipal corporation ("City") and CAS-Claims Administrative Services, Inc., dba Claims Administrative Services, Inc. ("Contractor"), effective upon execution by the City Manager or the City Manager's designee ("City Manager"). WHEREAS, Contractor has bid to provide Workers' Compensation Third-Party Administrator Services in response to Request for Bid/Proposal No. 6360 ("RFB/RFP"), which RFB/RFP includes the required scope of work and all specifications and which RFB/RFP and the Contractor's bid or proposal response, as applicable, are incorporated by reference in this Agreement as Exhibits 1 and 2,respectively,as if each were fully set out here in its entirety. NOW, THEREFORE, City and Contractor agree as follows: 1. Scope. Contractor shall provide Workers' Compensation Third-Party Administrator Services ("Services") in accordance with the attached Scope of Work, as shown in Attachment A, the content of which is incorporated by reference into this Agreement as if fully set out here in its entirety, and in accordance with Exhibit 2. 2. Term. (A) The term of this Agreement is three years beginning on the date provided in the Notice to Proceed from the Contract Administrator or the City's Procurement Division. The parties may mutually renew the term of this Agreement for up to two additional one-year periods ("Option Period(s)"), provided, the parties do so in writing prior to the expiration of the original term or the then-current Option Period. (B) At the end of the Term of this Agreement or the final Option Period, the Agreement may, at the request of the City prior to expiration of the Term or final Option Period, continue on a month-to-month basis for up to six months with compensation set based on the amount listed in Attachment B for the Term or the final Option Period. The Contractor may opt out of this continuing term by providing notice to the City at least 30 days prior to the expiration of the Term or final Option Period. During the month-to-month term, either Party may terminate the Agreement upon 30 days' written notice to the other Party. 3. Compensation and Payment. This Agreement is for an amount not to exceed $675,000.00, subject to approved extensions and changes. Payment will be made for Services performed and accepted by the City within 30 days of acceptance, Professional Services Agreement- Workers' Comp TPA Page 1 of 7 subject to receipt of an acceptable invoice. All pricing must be in accordance with the attached Bid/Pricing Schedule, as shown in Attachment B, the content of which is incorporated by reference into this Agreement as if fully set out here in its entirety. Invoices must be mailed to the following address with a copy provided to the Contract Administrator: City of Corpus Christi Attn: Accounts Payable P.O. Box 9277 Corpus Christi,Texas 78469-9277 4. Contract Administrator. The Contract Administrator designated by the City is responsible for approval of all phases of performance and operations under this Agreement, including deductions for non-performance and authorizations for payment. The City's Contract Administrator for this Agreement is as follows: Gilbert Sanchez Risk Management Div. - Legal Dept. Phone: (361) 826-3739 Email: GilbertS2@cctexas.com 5. Insurance; Bonds; License. (A) Before performance can begin under this Agreement, the Contractor must deliver a certificate of insurance ("COI"), as proof of the required insurance coverages, to the City's Risk Manager and the Contract Administrator. Additionally, the COI must state that the City will be given at least 30 days' advance written notice of cancellation, material change in coverage, or intent not to renew any of the policies. The City must be named as an additional insured. The City Attorney must be given copies of all insurance policies within 10 days of the City Manager's written request. Insurance requirements are as stated in Attachment C, the content of which is incorporated by reference into this Agreement as if fully set out here in its entirety. (B) In the event that a payment bond, a performance bond, or both, are required of the Contractor to be provided to the City under this Agreement before performance can commence, the terms, conditions, and amounts required in the bonds and appropriate surety information are as included in the RFB/RFP or as may be added to Attachment C, and such content is incorporated here in this Agreement by reference as if each bond's terms, conditions, and amounts were fully set out here in its entirety. (C) Prior to beginning Services and work, Contractor must provide evidence of any valid professional license necessary for the performance of the Services under this Agreement. Professional Services Agreement-Workers' Comp TPA Page 2 of 7 6. Standard of Care. Contractor warrants that all Services will be performed in accordance with the standard of care used by similarly situated professionals performing the some or similar Services under an identical kind of professional license, if a license is required. 7. Quality/Quantity Adjustments. Any Service quantities indicated on the Bid/Pricing Schedule are estimates only and do not obligate the City to order or accept more than the City's actual requirements nor do the estimates restrict the City from ordering less than its actual needs during the term of the Agreement and including any Option Period. Substitutions and deviations from the City's product requirements or specifications are prohibited without the prior written approval of the Contract Administrator. S. Non-Appropriation. The continuation of this Agreement after the close of any fiscal year of the City, which fiscal year ends on September 30th annually, is subject to appropriations and budget approval specifically covering this Agreement as an expenditure in said budget, and it is within the sole discretion of the City's City Council to determine whether or not to fund this Agreement. The City does not represent that this budget item will be adopted, as said determination is within the City Council's sole discretion when adopting each budget. 9. Independent Contractor. Contractor will perform the Services and work required by this Agreement as an independent contractor and will furnish such professional Services in its own manner and method, and under no circumstances or conditions will any agent, servant, or employee of the Contractor be considered an employee of the City. 10. Subcontractors. In performing the Services, the Contractor may use subcontractors in connection with the work performed under this Agreement. When using subcontractors, however, the Contractor must obtain prior written approval from the Contract Administrator unless the subcontractors were named in the bid or proposal or in an attachment to this Agreement, as applicable. In using subcontractors, the Contractor is responsible for all their acts and omissions to the some extent as if the subcontractor and its employees were employees of the Contractor. All requirements set forth as part of this Agreement, including the necessity of providing a COI in advance to the City, are applicable to all subcontractors and their employees to the some extent as if the Contractor and its employees had performed the work. The City may, at the City's sole discretion, choose not to accept Services performed by a subcontractor that was not approved in accordance with this paragraph. 11. Amendments. This Agreement may be amended or modified only in writing executed by authorized representatives of both parties. Professional Services Agreement- Workers' Comp TPA Page 3 of 7 12. Waiver. No waiver by either party of any breach of any term or condition of this Agreement waives any subsequent breach of the same. 13. Taxes. The Contractor covenants to pay payroll taxes, Medicare taxes, FICA taxes, unemployment taxes and all other applicable taxes. Upon request, the City Manager shall be provided proof of payment of these taxes within 15 days of such request. 14. Notice. Any notice required under this Agreement must be given by fax, hand delivery, or certified mail, postage prepaid, and is deemed received on the day faxed or hand-delivered or on the third day after postmark if sent by certified mail. Notice must be sent as follows: IF TO CITY: City of Corpus Christi Attn: Gilbert Sanchez, Risk Manager Legal Dept. - Risk Management Div. 1201 Leopard St., Corpus Christi, TX 78401 Phone: (361) 826-3739 Fax: (361) 826-3697 IF TO CONTRACTOR: CAS-Claims Administrative Services, Inc. Attn: Dan Campbell, Executive Vice President 501 Shelley Dr., Tyler, TX 75701 Phone: (903) 509-8485 ext. 5745 Fax: (903) 509-1888 15. CONTRACTOR SHALL FULLY INDEMNIFY, HOLD HARMLESS, AND DEFEND THE CITY OF CORPUS CHRISTI AND ITS OFFICERS, EMPLOYEES AND AGENTS ("INDEMNITEES") FROM AND AGAINST ANY AND ALL LIABILITY, LOSS, CLAIMS, DEMANDS, SUITS, AND CAUSES OF ACTION OF WHATEVER NATURE, CHARACTER, OR DESCRIPTION ON ACCOUNT OF PERSONAL INJURIES, PROPERTY LOSS, OR DAMAGE, OR ANY OTHER KIND OF INJURY, LOSS, OR DAMAGE, INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS, ATTORNEYS' FEES AND EXPERT WITNESS FEES, WHICH ARISE OR ARE CLAIMED TO ARISE OUT OF OR IN CONNECTION WITH A BREACH OF THIS AGREEMENT OR THE PERFORMANCE OF THIS AGREEMENT BY THE CONTRACTOR OR RESULTS FROM THE NEGLIGENT ACT, OMISSION, MISCONDUCT, OR FAULT OF THE CONTRACTOR OR ITS EMPLOYEES OR AGENTS. CONTRACTOR MUST, AT ITS OWN EXPENSE, INVESTIGATE ALL CLAIMS AND DEMANDS, ATTEND TO THEIR SETTLEMENT OR OTHER DISPOSITION, DEFEND ALL ACTIONS BASED THEREON WITH Professional Services Agreement-Workers' Comp TPA Page 4 of 7 COUNSEL SATISFACTORY TO THE C.7Y ATTORNEY, AND PAY ALL CHARGES OF ATTORNEYS AND ALL OTHER COSTS AND EXPENSES OF ANY KIND ARISING OR RESULTING FROM ANY SAID LIABILITY, DAMAGE, LOSS, CLAIMS, DEMANDS, SUITS, OR ACTIONS. THE INDEMNIFICATION OBLIGATIONS OF CONTRACTOR UNDER THIS SECTION SHALL SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS AGREEMENT. 16. Termination. (A) The City may terminate this Agreement for Contractor's failure to comply with any of the terms of this Agreement. The City must give the Contractor written notice of the breach and set out a reasonable opportunity to cure. If the Contractor has not cured within the cure period, the City may terminate this Agreement immediately thereafter. (B) Alternatively, the City may terminate this Agreement for convenience upon 30 days advance written notice to the Contractor. The City may also terminate this Agreement upon 24 hours written notice to the Contractor for failure to pay or provide proof of payment of taxes as set out in this Agreement. 17. Limitation of Liability. The Contractor's maximum liability under this Agreement is limited to the total amount of errors and omissions coverage stated in Attachment C to this Agreement. In no event shall the Contractor be liable for incidental, consequential, or special damages. 18. Assignment. No assignment offhis Agreement by the Contractor, or of any right or interest contained herein, is effective unless the City Manager first gives written consent to such assignment. The performance of this Agreement by the Contractor is of the essence of this Agreement, and the City Manager's right to withhold consent to such assignment is within the sole discretion of the City Manager on any ground whatsoever. 19. Severability. Each provision of this Agreement is considered to be severable and, if, for any reason, any provision or part of this Agreement is determined to be invalid and contrary to applicable law, such invalidity shall not impair the operation of nor affect those portions of this Agreement that are valid, but this Agreement shall be construed and enforced in all respects as if the invalid or unenforceable provision or part had been omitted. 20. Order of Precedence. In the event of any conflicts or inconsistencies between this Agreement, its attachments, and exhibits, such conflicts and inconsistencies will be resolved by reference to the documents in the following order of priority: A. this Agreement (excluding attachments and exhibits); B. its attachments; Professional Services Agreement-Workers' Comp TPA Page 5 of 7 C. the bid solicitation document including any addenda (Exhibit 1); then, D. the Contractor's bid response (Exhibit 2). 21. Certificate of Interested Parties. Contractor agrees to comply with Texas Government Code Section 2252,908, as it may be amended, and to complete Form 1295 "Certificate of Interested Parties" as part of this Agreement if required by said statute. 22. Governing Law. Contractor agrees to comply with all federal,Texas, and City laws in the performance of this Agreement. The applicable law for any legal disputes arising out of this Agreement is the law of the State of Texas, and such forum for such disputes is the appropriate district or county court in Nueces County, Texas. In accordance with Chapter 2271, Texas Government Code, Contractor verifies that Contractor does not boycott Israel and will not boycott Israel during the term of this agreement. In accordance with Chapter 2274, Texas Government Code, Contractor verifies that Contractor does not have a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade association and will not discriminate during the term of the contract against a firearm entity or fire trade association. In accordance with Chapter 2276, Texas Government Code, Contractor verifies that Contractor does not boycott energy companies and will not boycott energy companies during the term of this agreement. 23. Public Information Act Requirements. This paragraph applies only to agreements that have a stated expenditure of at least $1,000,000 or that result in the expenditure of at least $1,000,000 by the City. The requirements of Subchapter J, Chapter 552, Government Code, may apply to this contract and the Contractor agrees that the contract can be terminated if the Contractor knowingly or intentionally fails to comply with a requirement of that subchapter. 24. Entire Agreement. This Agreement constitutes the entire agreement between the parties concerning the subject matter of this Agreement and supersedes all prior negotiations, arrangements, agreements and understandings, either oral or written, between the parties. Professional Services Agreement-Workers' Comp TPA Page 6 of 7 CONTRACTOR Signature: Danie��20,202513:41 CDT) Printed Name: Title: Executive Vice President Date: CITY OF CORPUS CHRISTI Sergio Villasana Director of Finance & Procurement Date: Attached and Incorporated by Reference: Attachment A: Scope of Work Attachment B: Fee/Bid/Pricing Schedule Attachment C: Insurance and Bond Requirements Attachment D: Warranty Requirements Incorporated by Reference Only: Exhibit 1 : RFB/RFP No. 6360 Exhibit 2: Contractor's Bid/Proposal Response Professional Services Agreement-Workers' Comp TPA Page 7 of 7 Attachment A - Scope of Work 1.1. General Requirements A. The City of Corpus Christi is seeking qualified Contractor/Third-Party Administrator (TPA) to provide professional claim services to the Risk Management Division for its self-funded workers' compensation program. The City has administered its self-funded program for over 20 years and is currently contracted with Tristar for TPA services in full compliance with the State's Governmental Accounting Standards (GASB 10) requirements. The City's Managed Care Provider workers' compensation injuries is Injury Management Organization (IMO) contracted by TRISTAR under its 504 network. B. The City of Corpus is a home-rule city which operates under the Council Manager form of government. The City provides a full range of municipal service as prescribed by statute or charter. These services include police, fire and emergency medical services, parks and recreational facilities, library services, street maintenance and construction, public improvements, water and wastewater utilities, solid waste and landfill, marina, airport operations and gas utilities services and systems. The City of Corpus Christi employs 3,433 full-time employees, 30 part-time, and 145 City temporary/seasonal. This number reflects 479 firefighters and 488 police officers. C. The City of Corpus Christi's self-retention for workers' compensation is $1 ,000,000. The City's excess carrier provides the excess workers' compensation policy up to statutory limits. D. The Contractor must provide a broad representation of medical providers in its proposed workers' compensation health care network, to include vetted treating physicians, clinics, specialists, physical therapists, rehabilitation services, and pharmacies. E. The City of Corpus Christi maintains the right to bundle or unbundle services proposed in the RFP. F. The Contractor shall indemnify, defend, and hold harmless the City of Corpus Christi from all fines and penalties levied against the City, TPA, or TPA subcontractors for TPA's failure to comply with federal and state RFP Template 02/03/2025 Page 1 of 13 requirements. In no way will selected TPA pass cost on to the City or cause the City to be responsible for fines or fees levied against the TPA or any subcontractor. G. The TPA will indemnify the City of Corpus Christi for all overpayments and duplicate payments. Any overpayments and duplicate payments must immediately be reimbursed to the City. H. The TPA shall prepare and file with appropriate state agencies the forms required for the City to maintain its qualifications as a self-insured political subdivision, as authorized under the State Labor Code, Chapter 504, unless otherwise advised by the Safety and Risk Manager. I. The TPA will assume the role and responsibilities of the City's Reporting and Recovery Agent pursuant to the Medicare, Medicaid, SCHIP Extension Act (MMSEA) 2007 42 USCA Section 1395, amended. The TPA will prepare and submit all queries and quarterly reports to the Center for Medicare and Medicaid Services (CMS) in accordance with the (MMSEA) act at no additional cost to the City including, but not limited to: 1 . Timely responding to each Conditional Payment Notice (CPN) and each Conditional Payment Letter (CPL) and Conditional Payment Response (CPR) received from the Conditional Repayment Center (CRC) and take all necessary actions accordingly. 2. Timely investigate and respond to each recovery demand letter issued by the CRC and take all necessary action thereto. 3. Investigate all notices and demands received from the CRC to determine whether the claims listing of all line items and services paid are related to the City employee workers' compensation claim. 4. Timely dispute any line item and services that are not related to City of Corpus Christi employees. 5. Handle negotiations with either the Benefits Coordination Recovery Center or the CRC as appropriate. 6. Submit payment when appropriate and take all necessary actions thereto. 7. Keep City apprised of all CPNs, CPLs, and appeals with action taken. RFP Template 02/03/2025 Page 2 of 13 J. The Loss information is in Exhibit A, through fiscal year 2024. K. Notwithstanding the existence of mutual options, the contractor has indicated it will honor pricing for these services totaling $225,000 ($210,000-CAS/$15,000-IMO) annually for up to a total of five years effective October 1, 2025. 1.2 Scope of Work A. Workers' Compensation TPA Program Requirements/Responsibilities 1 . The Contractor shall assign an account team to be available 90 days prior to the start of the contract to ensure a smooth transition with the current Contractor. The team is expected to be responsive daily to the City's administrative needs and data reporting needs. 2. The Contractor's account team must include: a. One senior account executive with at least 5 years' public entity experience. b. One dedicated senior workers'compensation adjuster to handle indemnity claims with at least five years of experience in workers' compensation, with experience in insurance matters for municipalities handling no more than 150 open indemnity claims. c. One qualified, dedicated medical only claims adjuster handling maximum of 300 medical only claims. d. One claims supervisor with at least 10 years supervisory public entity experience. e. All dedicated adjusters to the City of Corpus Christi account shall maintain proper adjuster licensing requirements as required by the Texas Department of Insurance. Also, it is equally important to provide a list of back-up personnel detailing, title, position, license and other designations should this be required. Contractor will replace any member of the account team who has departed for any reason with a permanent replacement named no later than 30 days after separation with equal or greater experience. RFP Template 02/03/2025 Page 3 of 13 3. The Contractor shall provide a list of all servicing personnel on this account with a current resume of the designated adjuster(s) and backup adjuster who will handle City claims. Any additional personnel to be involved in City claims handling at a later date should have a resume submitted for prior consultation with the City. 4. In the event an assigned adjuster be unable to perform the assigned duties satisfactorily as determined by the City, immediate replacement of such adjuster is required. The City's Risk Manager will be consulted in decisions regarding adjusters who will be handling City claims. 5. The Contractor's hours of operation will be Monday through Friday 8:00 a.m. to 5:00 p.m. 6. The Contractor will collect and report data as required by federal, State and local authorities, for the purpose of income filings for those claim payments made by the Contractor and in accordance to best claims adjusting practice. 7. The Contractor shall provide a full range of workers' compensation claims administration services in accordance with all requirements of the Texas Labor Code, Texas Insurance Code, Texas Department of Insurance Administrative Rules, and the Texas Workers' Compensation Act. 8. All administrative fines, fees and legal expenses levied by the Texas Department of Insurance, or any other regulatory body for any matters under the Contractor's control for failure to comply with the Texas Workers' Compensation Act and related rules shall be handled and paid by the Contractor. 9. The Contractor shall follow all rules applicable to HIPPA and any other similar law. 10. The Contractor shall act as the City's designated Reporting Agency for Section 111 : Mandatory Reporting for Medicare and Medicaid Extension Act of 2007. B. Medical Cost Containment must include the following services within their 504 Network and shall treat employees in accordance with the Official Disability Guideline: RFP Template 02/03/2025 Page 4 of 13 1 . Medical Case Management 2. Utilization review (prospective, concurrent, retrospective and pre- procedure) 3. Pre-authorization services 4. Medical bill audits 5. Rehabilitation services and work hardening services 6. Vocational case management services 7. Telephonic case management 8. On-line computer services 9. Impairment ratings/review 10. Run-off (per-claim basis) 11 . Run-in (per-claim basis) 12. Re-opened prior (per-claim basis) 13. Peer review 14. Attendance at mediation hearings 15. Surveillance C. Pharmacy Benefit Management (PBM) must include the following services 1 . Audit and pay pharmacy bills in accordance to TDI-DWC fee guidelines or special discounts negotiated with the providers. 2. Provide bill review, utilization review (prospective, concurrent, retrospective, pre-procedure) peer review, pre-authorization, and other workers' compensation PBM services as requested and approved by the City for non-network claims. RFP Template 02/03/2025 Page 5 of 13 3. Implement early medication intervention protocols where medication peer panel reviews are done. 4. Monitor appropriateness of prescription(s) necessity, and continuation prescription use in relation to the compensable injury. 5. Review pharmacy bills for irregularities, overlapping dates of service, unrelated fees, and upcoding. 6. Comply with all rules and regulations promulgated by the Commissioner of Workers' Compensation and all requirements pursuant to the Texas Workers' Compensation statute. 7. Provide monthly reporting, analysis, trends and improvement opportunities. D. Risk Management Information System Requirements (RMIS) 1 . The Contractor will provide an on-line, web/cloud based computer claims services and tracking system to the City that includes, but is not limited to, diary narrative, supervisor and adjuster notes, and electronic access to claims files. The claims system must have a standard statistical reporting package. 2. The Contractor must identify and proceed to correct any problems of inoperative software immediately upon notification by the City. 3. The claims system must be capable of generating IRS Form 1099 to vendors and service providers as required by the Internal Revenue Code. The Contractor will forward the Forms 1099 as required by applicable law to the IRSelectronically or magnetically based on IRS guidelines. 4. The claims system must be able to provide special/customized reports, and the City must be provided access to all claims data with the capability to generate its own reports when needed. The claim breakdown is to include, but not be limited to department; accident type; worker's compensation class code, claimant age, gender and occupation;claim severity; line of coverage;claimant experience level; time of day, week and year of accident; and type of equipment involved. RFP Template 02/03/2025 Page 6 of 13 5. Should a claims data conversion be required, Contractor shall accurately convert all claims data and electronic imaging from the system of the current vendor into useable claims files and provide the City access to all data no longer than one month from the beginning of the contract period. 6. The claims system must allow the City to enter the first report of injury electronically. The City will designate its authorized personnel by department and Contractor shall be updated monthly. 7. All claims are to be electronic/paperless. 8. The Contractor shall scan and attach all claim documents to the electronic claim. Physical storage for historical workers' compensation claim files must be provided. 9. The Contractor must have a comprehensive business continuity/disaster plan for data recovery in order to continue daily operations. 10. The Contractor will utilize the same injury codes, classification codes and departmental codes as the City's current system and recommended by the City's payroll consultant. E. Banking/Fund Requirements 1 . The City will make funds available that the Contractor may draw from for indemnity and medical claims and/or loss or expense payments. The City will hold all funds for outstanding claims and reserves. A loss fund will be maintained in an amount agreeable to the Contractor and to the City. 2. All payments made shall be made by issuance of checks from the designated City-administered checking account established at the City's depository bank.The Contractor shall electronically transmit a check register to the City's Financial Services Department on a monthly basis. Such check register shall be transmitted by the Contractor no later than the second business day of the month following the month to which the check register refers. Weekly check runs, flash reports and new claims report shall be made in timely fashion and submitted to the budget analyst and Risk Manager every Monday morning prior to 12:00 p.m. 3. The Contractor shall transmit, via email, the check number, check amount and date of the check to the City's depository before a RFP Template 02/03/2025 Page 7 of 13 check is mailed. In lieu of issuing stop payment requests, the Contractor shall void the check with the City's depository so that the request to deny payment remains in effect indefinitely. For each voided check the Contractor shall transmit to the City's depository via electronic file transfer the check number, check amount and the date of the check. 4. The City shall be responsible for balancing and reconciling this account monthly, including processing of all unclaimed checks. 5. The Contractor will advise the City at least quarterly on the status of outstanding checks so that the Contractor may determine whether payment(s) to any payee should be voided and reissued or be processed as unclaimed property. 6. Duplicate payments of any type which are unrecovered by the Contractor shall be reimbursed to the City by the Contractor. 7. The Contractor will furnish the City with monthly summaries of the bank account and expenditures, including a list of all checks, vouchers and voidedchecks, in numerical sequence. The summaries must include the following: a) Claimant Name and Claim Number b) Date of Issue c) Amount d) Payee e) Type of Benefit Paid f) Benefit Period 8. The Contractorwill review open reserves with the City's Risk Manager monthly. 9. The Contractor will be subject to the approval of the excess workers' compensation insurance company, if requested by the excess insurer, as maybe applicable. F. Claims Administration RFP Template 02/03/2025 Page 8 of 13 1 . The Contractor will provide claims reporting services on a 24-hour basis. 2. Contractor shall contact the claimant and create a file within one working day from receipt of the initial report. 3. The Contractor agrees to use investigative forms provided by the City, or otherwise may furnish the forms to the City as may be necessary. 4. The Contractor will investigate, reserve, adjust, settle or decline all reported claims in accordance with state workers' compensation statutes and best claims adjusting practices. 5. All claims reported under the contract, including records only, medical only, indemnity claims, and subrogation will be administered until fully settled, regardless of the period of time involved or required, in accordance with the fee structures indicated in the contract for services. Approval of the City's Risk Manager is required before discounting any subrogation lien. 6. Contesting the decision of any hearing officer requires the approval of the City's Risk Manager. 7. The Contractor shall assign a reported claim to an adjuster within 24 hours ofthe Contractor's receipt of notice of injury. 8. The assigned adjusterwill contact, or attempt to contact, all claimants within 24 hours of receiving notice of claim assignment. 9. The Contractor will contact the injured employee's department and medical provider within two business days of notification of an injury. 10. The Contractor will obtain recorded statements from claimants within two (2) business days of notification of injury. In addition, the Contractor will obtain recorded statements from any witness when there is any lost time involved inthe claim. 11 . The Contractorwill advise the City prior to denying any claimorpriorto final disposition of any claim settlement that is outside the settlement authority granted to the Contractor by the City. Any request for settlement authority or declinations will be submitted in writing to the City with the following information: a) A description of the facts and nature of the incident RFP Template 02/03/2025 Page 9 of 13 b) A description of the damages and/or injuries c) An evaluation of the incident d) The claimant's demand e) The amount forwhich authority is requested 12. The City will reserve the right to direct the handling of any claim or to take over the handling of any claim at any time during the life of the service agreement and/or the life of the claim only when necessary. 13. The Contractor will monitor medical treatment of injured employees and obtain appropriate medical reports. 14. On all claims reserved in excess of $50,000, periodic written reports, at least bi-monthly, will be provided by the Contractor/TPA to City accompanied by any pertinent file materials. As an alternative, Contractor/TPA shall have the ability to submit reports electronically through the Information System (IS). 15. The Contractorwill keep all open claims on a current diary system,which provides for periodic review by the assigned adjuster. Each file shall be reviewed and updates as necessary, but not less than once every 30 days. 16. The Contractorwill audit medical, hospital and miscellaneous invoices prior to approving for payment. 17. The City will retain the right to select its own medical service providers, as well asothers utilized forspecial claims handling procedures, inclusive of internal medical resources; i.e., nurse practitioners. 18. The Contractor will authorize medical treatment and indemnity benefits considered related, customary and necessary, issue checks or authorize payments for treatment and benefits. The payment of indemnity and medical benefits must be in accordance with the express authorization issued by the Cityto the Contractor. 19. The Contractor will conduct an on-site investigation of any claim at the request of the City within 24 hours of receiving the first notice of loss. At the discretion of the City, claims with severe loss potential will be investigated on the same day the claim is reported. RFP Template 02/03/2025 Page 10 of 13 20. The Contractor will prepare and provide the City with narrative reports for seriousor contested injuries, when appropriate and as requested by the City. 21 . The Contractor will be alert and aggressively pursue subrogation, excess insurance reimbursement and third-party liens and make every effortto secure and pursue the City's rights of recovery. 22. The Contractor shall prepare and maintain files necessary for legal defense of claims or litigation. 23. The Contractor shall report all indemnity claims to the Index Bureau upon file creation at no charge to the City with a copy to the file 24. The Contractor will negotiate settlement with injured employees, their attorney or representatives within the discretionary settlement authority. 25. The Contractor will consult with the City and defense attorneys in the settlementof litigated claims, and provide and monitor files for the defense and outcome ofthese litigated claims. 26. The Contractor may assist in the recommendation and selection of defense attorney(s); however, the City will retain the right to select the attorney(s) it chooses. 27. The Contractor will be available to assist in the development and/or implementation of written procedures and instructions to assure quality and ongoing operation of the City's claims management program. 28. Medical Claims shall be reviewed by the handling claims adjuster and supervisor every 30 days for possible closure. 29. Reserves will be reviewed by Claims Supervisor every 90 days and adjusted according to claim development. 30. Reserves for death benefit claims shall be approved by the Safety and Risk Manager. 31 . Approval from the Safety and Risk Manager will be required for surveillance, life expectancy plans and vocational rehabilitation. RFP Template 02/03/2025 Page 1 1 of 13 32. Contractor shall adhere by the Salary Continuation policies of the City for Police and Fire uniformed personnel. 33. Contractor shall notify and provide the injured employee with an explanation of Temporary Benefits (TIBS), Impairment Income Benefits (IIBS), Supplemental Income Benefits, Lifetime Income Benefits (LIBS) and Death Income Benefits (DIBS) as applicable. 34. Contractor shall request review of all impairment ratings over 10% and notify the City of all impairment ratings above 15%. 35. Contractor shall allow the City the opportunity to participate in regular training sessions or seminars held for its servicing personnel. 36. Upon expiration or termination of the contract resulting from this RFP, within 30 days of the City's request, at no additional cost to the City, the current Contractor shall provide the new Contractor with all data requested by the City. 37. Contractor will meet with the City's Safety and Risk Manager at a location of the City's choosing at least quarterly to review the status and/or handling of all open claims and any other matters at the discretion of the City. An annual stewardship meeting will also be conducted. 38. Contractor shall cooperate and comply with the City, the City's Insurance Broker of Record, City Liability claims adjusters/attorneys, the excess insurance carrier and Actuarial Consultant. Contractor shall respond to inquiries within one business day. 39. The Contractor will notify the City's Risk Manager via email within 48 hours that a Benefit Review Conference or Contested Case Hearing has kanscheduled. 1.3 Quality Control A. Contractor must have policies and procedures in place to ensure and measure internal quality control. The policies and procedures should address all aspects ofthe claims handling process, including, but not limited to: 1 . Claims adjuster/supervisor caseloads for employers' liability and workers'compensation 2. Claims file documentation requirements RFP Template 02/03/2025 Page 12 of 13 3. Web-based training program upon request 4. Investigation and communication 5. Initial contact with injured employee 6. Recorded statements 7. Reserving guidelines 8. Frequency of reviews of open claim reserves 9. Diary system maintained for all claim activities 10. Frequency of supervisor's review of each adjuster's claim files 11 . Frequency of follow-up contacts with workers' compensation lost-timeclaimants 12. Subrogation procedures 13. Litigation/attorney management 14. Expense controls of other vendors 15. Special investigation or surveillance procedures 16. Compliance with excess insurance reporting requirements 17. General client servicing requirements and guidelines 18. Index bureau query and reporting guidelines B. Contractor will furnish administration with best practice operation manuals, including instructions and forms within 30 days following the effective date of the awarded contract. 1.4 Quality Assurance The Contractor will be subject to periodic claims audits by an independent firm at the discretion of the City. The purpose of such an audit is to measure compliance with the agreed-upon claims administration servicing standards desired by the City. RFP Template 02/03/2025 Page 13 of 13 i Vao Attachment B - Bid/Pricing Schedule CITY OF CORPUS CHRIISTI Y Pricing Form CONTRACTS AND PROCUREMENT RFP No. 6360 xas Workers' Compensation Third-Party Administrator Services PAGE 1 Of 2 DATE: 4/16/2025 CAS-Claims Administrative Services PROPOSER 'AUTHORInD SIGNATURE 1 Refer to "Instructions to Proposers" and Contract Terms and Conditions before completing proposal. 2. Provide your best price for each item. 3. In submitting this proposal, Proposer certifies that: a. The prices in this proposal have been arrived at independently, without consultation, E communication, or agreement with any other Proposer or competitor, for the purpose I of restricting competition with regard to prices. l b. Proposer is an Equal Opportunity Employer, and the Disclosure of Interest information on file with City's Contracts and Procurement office, pursuant to the Code of Ordinances, is current and true. c. Proposer has incorporated any changes issue through Addenda to the RFP in this pricing. i *504 Network Pricing Opt on TOM K 1 Indemnity Per claim $Quoting flat fee. 2 Medical -Only Per claim ,$Quoting flat fee 3111111 Report-.Only Per claim $ Quoting,flat.fee_ ��l � 4 Indemnity Per claim $ Quoting flat fee 5 p Medical- Only Per claim $ Quoting flat fee i 6 Other Per claim $ Quoting flat fee 7 Indemnity Per claim $ Quoting flat fee: 8 Medical - Only Per claim $ Quoting flat fee 9 Other Per clai m $ Quoting flat fee �w << Case 10 Utilization Co Management Per claim $95,00/100 + Mileage Review Services Per claim $170 12 Medical Bill Audits Per claim $�fr 9.00 1 13 Use of 504 Physician Panel Network Per claim $36G*includes 3 hours of TCM 150* ••� F_ 14 Rehabilitation Services Per claim $95 93 Page 1 of 3 Page 2 of 2 15 Vocational Case Management Services Per claim $95.00 16 Return to Work/Medical Provider Programs Per claim $Include"Access Fee 17 Online Computer Services Per claim $Included 18 Attending DWC Hearings(BRC and CCH) Per claim $See Note 19 Attending Mediation Hearings Per claim $At Cost 20 Impairment Rating Review Per claim $350 21 Pursuing Subrogation Per claim $See Note 22 Re-open prior claims Per claim $Quoting flat fee 23 Peer Review Per claim $270 + provider fee 24 ' Attorney Fees Per claim $At cost 25 Precertification Per claim $Included in UR Fee _._. 1. :.. _.' _4.. _Mvy sue.Y..r' ._.: Administrative Fee 12 months $Quoting flat fee Optional Flat Annual Fee (in lieu of all costs $210,000 for items 1-9 and fees shown above) Additional Cost Containment Services Offered E-Intelemed Early Intervention $150.00 per call Retrospective Review $165.00 per request IRO $170.00 per request DD's and RME's $375.00 per request Liability Medical Assessments Cost as quoted above +2%of Medical Cost Savings Not to Exceed$1,000) Pharmacy Benefit Manager:9% of savings fi *The assigned adjuster will handle BRC and CCH hearings at no additional cost. For more complex cases that require and attorney, the file will be charged at cost. *The majority of cases are handled in-house by the CAS Adjuster at no additional cost. For more complex cases, an outside vendor or attorney may be hired at a percentage of recovery, which is allocated to the file at cast. i I f [ I I i 94 Page 2 of 3 CorpusCity of Christi I R s 636014.22.2025 CBS Option 1 -51 O CAS is confident that we can provide your injured employees the best possible services while simultaneously controlling costs by utilizing a comprehensive, custom-designed self-insured program. CAS' efforts to accomplish this goal are driven by taking a preemptive approach to safety and claims handling. This approach has resulted in the successful retention of 98% of our clients since program inception. Annual Flat Fee $210,000 Bill Review $9.00 per bill Annual Administration Fee $15,000 504 Healthcare Network t 50 "GGper cfaim filed , ✓ Claim Setup ✓ Check stock&Issuing ✓ Answering WC legal ✓ Initial contact with checks questions claimant ✓ Regular meetings with client ✓ Supervisor review of claims ✓ Initial contact with insured ✓ Reports ✓ Monitoring medical treatment ✓ Initial contact with doctor ✓ Litigation management ✓ Reviewing claims with clients ✓ Faxes ✓ Travel expenses ✓ Excess carrier reporting ✓ Photocopying ✓ Communication with ✓ Compliance with EDI ✓ Photographs employee Requirements for Insurance ✓ Telephone ✓ Mileage,except extraordinary Carrier ✓ Mail ✓ Express mail,except 504 Network Admin Includes: ✓ Filing of 1Ogg's extraordinary ✓ Network Access ✓ Airfare,except ✓ Obtain records,except ✓ TCM for Medical Only&Lost extraordinary extraordinary Time Claims ✓ Loss runs ✓ Communication with doctor ✓ Complaint Process ✓ Optimum Care Program ✓ Visits by adjuster ✓ Appeal Process ✓ Setting IME appointments ✓ Recorded statements ✓ TDI Data Call ✓ Administering benefits ✓ Filing state forms timely ✓ quality Improvement Plan timely ✓ Subrogation management ✓ Provide Direct ✓ Annual re rts Credentialin Cantractin Attorney fees ✓ Cost for obtaining/copying ✓ Extraordinary travel expenses ✓ Court costs of public/medical records incurred by CAS ✓ Medial opinions ✓ Cost for photography, ✓ Cost associated with ✓ Independent Medical preparation of maps, occupational rehabilitation Examination diagrams,or physical ✓ Medical case management ✓ Cost of surveillance analysis ✓ Pre-authorization or ✓ Cost of employing experts' ✓ Cost for property damage utilization testimony appraisal fees ✓ Peer Review ✓ Witness fees ✓ Cost for auto damage ✓ Risk Services ✓ Witness travel expenses appraisal fees ✓ Subrogation recovery(96 of ✓ Interest paid as result of ✓ Cost associated with bank recovery) litigation account or its'maintenance ✓ Specialty bill review ;2 mollt Page 3 of 3 Attachment C - Insurance Requirements A. Contractor must not commence work under this agreement until all insurance required herein has been obtained and approved by the City's Risk Manager. Contractor must not allow any subcontractor to commence work until all similar insurance required of the subcontractor has been so obtained. B. Contractor must furnish to the City's Risk Manager and Contract Administrator, two (2) copies of Certificates of Insurance with applicable policy endorsements showing the following minimum coverage by an insurance company(s) acceptable to the City's Risk Manager. The City must be listed as an additional insured for the General Liability and Auto Liability policies by endorsement, and a waiver of subrogation is required on all applicable policies. Endorsements must be provided with Certificate of Insurance. Project name and/or number must be listed in Description Box of COI. TYPE OF INSURANCE MINIMUM INSURANCE COVERAGE 30-written day notice of Bodily Injury and Property Damage cancellation, required on all Per occurrence - aggregate certificates or by applicable policy endorsements. PROFESSIONAL LIABILITY $1,000,000 Per Claim (Errors and Omissions) (Defense costs not included in face value of the policy) If claims made policy, retro date must be prior to inception of agreement, have extended reporting period provisions and identify any limitations regarding who is insured. CRIME/EMPLOYEE DISHONESTY $1,000,000 Per Occurrence Contractor shall name the City of Corpus Christi, Texas as Loss Payee Additional Reauirements - A. The Professional liability and Crime coverage through a licensed insurance company must be written on a policy and endorsements approved by the Texas Department of Insurance. The workers' Page 1 of 3 compensation coverage provided must be in an amount sufficient to assure that all workers' compensation obligations incurred by the Contractor will be promptly met. An All States endorsement shall be required if Contractor is not domiciled in the State of Texas. B. Contractor shall obtain and maintain in full force and effect for the duration of this Contract, and any extension hereof, at Contractors sole expense, insurance coverage written on an occurrence basis, by companies authorized and admitted to do business in the State of Texas and with an A.M. Best's rating of no less than A- VII. C. Contractor shall be required to submit replacement Certificate of Insurance to City at the address provided below within ten days of any change made by the Contractor or as requested by the City. Contractor shall pay any costs incurred resulting from said changes. All notices under this Article shall be given to City at the following address: City of Corpus Christi Attn: Risk Management P.O. Box 9277 Corpus Christi, TX 78469-9277 D. Contractor agrees that with respect to the above required insurance, all insurance policies are to contain or be endorsed to contain the following required provisions: 1. List the City and its officers, officials, employees, and volunteers, as additional insureds by endorsement with regard to operations, completed operations and activities of or on behalf of the named insured performed under contract with the City, with the exception of the workers' compensation policy. 2. Provide for an endorsement that the "other insurance" clause shall not apply to the City of Corpus Christi where the City is an additional insured shown on the policy; 3. Workers' compensation and employers' liability policies will provide a waiver of subrogation in favor of the City; and 4. Provide 30 calendar days advance written notice directly to City of any cancellation, non-renewal, material change or Page 2 of 3 termination in coverage and not less than ten calendar days advance written notice for nonpayment of premium. E. Within five calendar days of a cancellation, non-renewal, material change or termination of coverage, Contractor shall provide a replacement Certificate of Insurance and applicable endorsements to City. City shall have the option to suspend Contractor's performance should there be a lapse in coverage at any time during this contract. Failure to provide and to maintain the required insurance shall constitute a material breach of this contract. F. In addition to any other remedies the City may have upon Contractor's failure to provide and maintain any insurance or policy endorsements to the extent and within the time herein required, the City shall have the right to order Contractor to stop work hereunder, and/or withhold any payment(s) which become due to Contractor hereunder until Contractor demonstrates compliance with the requirements hereof. G. Nothing herein contained shall be construed as limiting in anyway the extent to which Contractor may be held responsible for payments of damages to persons or property resulting from Contractor's or its subcontractor's performance of the work covered under this contract. H. It is agreed that Contractor's insurance shall be deemed primary and non-contributory with respect to any insurance or self-insurance carried by the City of Corpus Christi for liability arising out of operations under this contract. I. It is understood and agreed that the insurance required is in addition to and separate from any other obligation contained in this agreement. 2025 Insurance Requirements Exhibit Legal Dept./Risk Management Worker's Compensation TPA Services 2/3/2025 Risk Management - Legal Dept. Page 3 of 3 Attachment 0 - Warranty Requirements "No warranty required for this Agreement." Page 1 of 1 SC G� a O CORPOR IE0 1852 AGENDA MEMORANDUM Action Item for the City Council Meeting of June 24, 2025 DATE: June 24, 2025 TO: Peter Zanoni, City Manager FROM: Jeff H. Edmonds, P.E., Director of Engineering Services Aeffreyea-cctexas.com (361) 826-3851 Nick Winkelmann, P.E., Director of Water Systems and Support Services nickw(o-)cctexas.com (361) 826-1796 Construction Change Order Ship Channel Waterline and Gas Line Crossing Project CAPTION: Motion authorizing the approval of Change Order No. 1 with Clark Pipeline Services, LLC., of Corpus Christi, Texas, for the Ship Channel Waterline and Gas Line Crossing Project, in the amount of $1,288,049.28 with at least 50% of the water line funding from the Port of Corpus Christi for a total amount not to exceed $13,214,182.72 with FY 2025 funding available from the Water Capital Fund. SUMMARY: The scope of the project is to install a new 24-inch waterline and an 8-inch gas line crossing the Ship Channel at Tule Lake. This change order authorizes payment for construction revisions that were required to make alignment revisions due to conflicts with a 30" dredge material pipeline and to accommodate future Port of Corpus Christi (PCCA) dock plans. BACKGROUND AND FINDINGS: On December 12, 2023, the City Council awarded a construction contract to Clark Pipeline Services, LLC., of Corpus Christi, Texas, for the Ship Channel Waterline and Gas Line Crossing Project. The purpose of this project was to comply with the United States Army Corps of Engineers (USACE) directive from April 23, 2018, to remove the existing twin 16-inch water mains crossing the ship channel and install a new 24-inch waterline beneath the ship channel at Tule Lake. The scope also included a new 8-inch gas line to be installed beneath the ship channel parallel to the new waterline. The installation would create a looped water main with increased pressure for fire protection and extend the gas service to the area along Joe Fulton. Port of Corpus Christi entered into an Interlocal Cooperation Agreement (ILA) to reimburse the City 50% of the actual costs of planning, engineering and design, project management, geotechnical, environmental, cultural and engineering studies, surveying, removing the two 16- inch waterlines, and installing the new 24-inch waterline. The ILA was approved on August 29, 2023. Under the ILA, PCCA will reimburse half the cost of the change order ($644,024.64). Early in construction, it was discovered that the pipeline alignment conflicted with a planned dock. Deconflicting with the dock required the entry and exit points to be revised, and the line needed to be installed 25 feet deeper to mitigate any possible conflicts with the dock piers and footings. Additionally, the 30" dredge material pipeline was installed after the project was bid. Avoiding the dredge pipeline required temporary bridges, alignment changes and additional timber matting. The changes were identified last year and a field directive was issued to make the necessary changes. The City has been in negotiation over the value of the change order for over a year. Engineering Services' staff reached an agreement in May 2025 with the contractor over the value for the change order. Clark Pipeline Services, LLC., Inc. work is proceeding per the revised schedule. The project is approaching completion and requires approval of the change order to avoid stopping work before completion. PROJECT TIMELINE: Change Order No. 1 adds 90 additional calendar days to the construction contract. The new anticipated substantial completion date of the project is July 2025 with final completion by August 2025. ALTERNATIVES: The City Council could choose not to approve Change Order No. 1 with Clark Pipeline Services, LLC., Not approving the change order will require stopping work on the project before completion. This would result in negative impacts to the water distribution network affecting water supply the Joe Fulton Corridor and North Beach. There would also be additional time and expenses to re-bid this work, additional cost for new contractor mobilization, and an increased risk of receiving a higher bid. FISCAL IMPACT: The initial fiscal impact for Corpus Christi Water in FY 2025 is $1,288,049.28, with funding available from the Water Capital Fund. The change order is funded through project savings as identified as part of the annual capital improvement program close-out. The PCCA will reimburse half the cost of the change order ($644,024.64) as per ILA. FUNDING DETAIL: Fund: Water 2023 C I P (Fund 4486) Department: Water(45) Org: Grants and Capital Projects (89) Account: Construction (550910) Activity: 18156-A-4486-EXP Amount $1,288,049.28 TOTAL: $1,288,049.28 RECOMMENDATION: Staff recommends approval of this Change Order No. 1 in an amount up to $1,288,049.28 for the Ship Channel Waterline and Gas Line Crossing Rebid Project with Clark Pipeline Services, LLC. LIST OF SUPPORTING DOCUMENTS: C I P Page Location and Vicinity Map Change Order Change Order No. 1 FY 25 thru FY 27 Capital Improvement Plan Project Pages` Corpus Christi, Texas Project# 18156 Project Name Ship Channel Water Line Relocation Contact Director of Corpus Christi Water Department Water Type Improvement/Additions Category Water Distribution Priority Priority Level 1 Status Active Useful Life 40 years Council District 1 Description This project is to relocate the existing two 16-in water line crossing the Ship Channel at the Avery Point.The U.S Army Engineering District,Galveston (USAED)will soon commence the deepening and widening of the Corpus Christi Ship Channel.This project is to relocate the existing two 16-in water line crossing the Ship Channel at the Avery Point as required by the USAED to facilitate the construction of Ship Channel deepening.The demolition of the existing two 16-in water lines was planned by the Utilities in-house engineering.City has requested a Consultant Engineer to evaluate the relocation options.This is a 50/50 cost sharing project between the city and the Port of Corpus Christi. justification This project was a necessary component of the deepening and widening project for the Corpus Christi Ship Channel. Expenditures Prior FY 25 FY 26 FY 27 Total Construction/Rehab 10,734,369 0 0 0 10,734,369 Design 4,239,496 0 0 0 4,239,496 Eng,Admin Reimbursements 906,183 0 0 0 906,183 Total 15,880,048 0 0 0 15,880,048 Funding Sources Prior FY 25 FY 26 FY 27 Total Grant-Port of Corpus Christi 7,940,024 0 0 0 7,940,024 Revenue Bonds 7,940,024 0 0 0 7,940,024 Total 15,880,048 0 0 0 15,880,048 Budget Impact The operational budget impact will be favorable as reliability of service will improve and the need for emergency repairs will decrease.The Port of Corpus Christi is funding 50%of this project. Capital Improvement Plan 2025 2027 City of Corpus Christi, Texas Project# 18156 Project Name Ship Channel Gas Line Addition Type Improvement/Additions Department Gas Department Useful Life 40 years Contact Director of Gas Operations v Category Gas Priority Priority Level 1 Council District City-Wide Status Active Description The U.S Army Engineering District,Galveston(USAED)will soon commence the deepening and widening of the Corpus Christi Ship Channel. Due to this the existing water main crossing the Ship Channel at the Avery Point needs to be relocated as required by the USAED to facilitate the construction of Ship Channel deepening.As part of this a new gas main is being included in the relocation project to provide redundancy to gas customers north of the Ship Channel and provide significant cost savings to the City by installing the two mains at the same time. Justification Provide redundancy to gas customers north of the Ship Channel. Expenditures Prior Years 2025 2026 2027 Total Construction/Rehab 2,851,483 2,851,483 Eng,Admin Reimbursements 270,636 270,636 Total 3,122,119 3,122,119 Funding Sources Prior Years 2025 2026 2027 Total Revenue Bonds 3,122,119 3,122,119 Total 3,122,119 3,122,119 Budget Impact/Other 71 There is no projected operational impact with this project at this time. 272 . ULE LAKE11"us W °ar PROJECT LOCATIONi IN llp ° m _+ S 3 8 CORPUS CHRISTI BAY VICINITY MAP NOT TO SCALE O Q cc PROP.24 INCH WATER& 8—INCH GAS STEEL LINES U .' LL Lu o,A" 11 lStl _i1t 1 P �I4 TWO REMOVED 16—INCH yip O WATERLINE �Z GN Z LEGEND PROP.24—INCH WATER& 8—INCH GAS STEEL LINES + TWO REMOVED 16—INCH WATERLINE + AERIAL MAP f NOT TO SCALE PROJECT NUMBER: 18156A a SHIP CHANNEL WATERLINE AND CITY COUNCIL EXHIBIT RISTI,TEXAS GAS LINE CROSSING — REBID CITYENT OF OFENGINRPUS ENGINEERING DEPARTMENT OF ENGINEERING SERVICES �' CITY OF CORPUS CHRISTI ENGINEERING SERVICES CHANGE ORDER VENDOR ID NO.: 129203 PROJECT: Ship Channel Waterline and Gas Line Crossing Re-Bid CONTRACT NO.: 5312 CONTRACTOR: CPC Interests LLC dba Clark Pipeline Services LLC ENGINEER: LVN,LLC.,an Ardurra Company PROJECT NUMBER: 18156A PROJECT MANAGER: Sandra Gomez CHANGE ORDER NO: 1 OPERATING DEPT.: Water CHANGE ORDER DATE: drafted 6/10/25 Make the following additions,modifications or deletions to the work described in the Contract Documents: ADDITIONS Quantity Unit Unit Price Total Re-Aligned 24"HDD w/Intersect Drill&Reduced Open Cut PART A-WATER GENERAL A-NI Up River Rd TCP for Staging and Welding Areas 1 LS $ 49,304.25 $ 49,304.25 Subtotal: S 49,304.25 PART B-WATER IMPROVEMENTS B2 HDD Staging&Construction Areas-Includes Clearing and Dirtwork,as Necessary 0.5 LS $ 78,000.00 $ 39,000.00 133.1 24"Steel Waterline Welding,Staging Handling&Testing(HDD Support)-New Price 6181 LF $ 335.50 $ 2,073,725.50 134.1 24"Steel Waterline HDD Installation-New Price 6181 LF $ 626.00 $ 3,869,306.00 B5 Remove 24"HDD-Installed Steel Waterline 2 LF $ 81.33 $ 162.66 136.1 24"Steel Waterline Welding,Staging,Handling&Testing(Conventional Trenching Support)-New Price 496 LF $ 380.50 $ 188,728.00 137.1 24"Steel Waterline Installation Via Conventional Trenching-New Price 496 LF $ 408.50 $ 202,616.00 138 24"C900(DR 18)PVC Waterline Installation Via Conventional Trenching 7 LF $ 353.45 $ 2,474.15 1310 Temporary Dragline Timber Mat Roadway-Tule Lake(LI 60'x64'Double Mat) 12960 SF $ 10.20 $ 132,192.00 1312.1 Trench Dewatering-New Price 583 LF $ 175.00 $ 102,025.00 Subtotal: S 6,610,229.31 Additional Contract Time Due To:Scope of Work qty. DAY $ - $ - Additional Contract Time Due To:Rain/Weather qty. DAY $ - $ - Additional Contract Time Due To:Critical Path Delays qty. DAY $ - $ - Additional Contract Time Due To:Other qty. DAY $ - $ - Additions Total: S 6,659,533.56 DELETIONS Quantity Unit Unit Price Total Re-Aligned 24"HDD w/Intersect Drill&Reduced Open Cut PART B-WATER IMPROVEMENTS B3 24"Steel Waterline Welding,Staging Handling&Testing(HDD Support) -4749 LF $ 305.00 $ (1,448,445.00) B4 24"Steel Waterline HDD Installation -4749 LF $ 489.22 $ (2,323,305.78) B6 24"Steel Waterline Welding,Staging,Handling&Testing(Conventional Trenching Support) -1975 LF $ 305.00 $ (602,375.00) B7 24"Steel Waterline Installation Via Conventional Trenching -1975 LF $ 335.50 $ (662,612.50) B9 Pipe Trench Safety -1472 LF $ 18.00 $ (26,496.00) B12 Trench Dewatering -2055 LF $ 150.00 $ (308,250.00) Subtotal: S (5,371,484.28) Deletions Total: S (5,371,484.28) Additional Calendar Days requested 0� NET TOTAL OF THIS CHANGE ORDER: S 1,288,049.28 CITY OF CORPUS CHRISTI ENGINEERING SERVICES CHANGE ORDER VENDOR ID NO.: 129203 PROJECT: Ship Channel Waterline and Gas Line Crossing Re-Bid CONTRACT NO.: 5312 CONTRACTOR: CPC Interests LLC dba Clark Pipeline Services LLC ENGINEER: LVN,LLC.,an Ardurra Company PROJECT NUMBER: 18156A PROJECT MANAGER: Sandra Gomez CHANGE ORDER NO: 1 OPERATING DEPT.: Water CHANGE ORDER DATE: drafted 6/10/25 Why was this Change necessary: This Contract Modification represents Final Adjustment for any and all amounts due or to become due to Contractor for changes referred to herein.Contractor further releases all other claims,if any (except those claims previously submitted in writing in strict accordance with the Contract),for additional compensation under this Contract,including without limitation any rights Contractor may have for additional compensation arising out of delays or disruption of Contractor's schedule as may have arisen prior to the date of this Contract Modification.Unless otherwise expressly provided herein,the time of completion and all other terms and conditions of the Contract remain unchanged Original Contract Amount $ 11,926,113.40 Proposed Change Order Maximum Change Order Contingency Amount(25%) $ 2,981,528.35 Funding Source(s) Remaining Available Contingency Amount(including this CO) $ 1,693,479.07 SECTION/FUND FUND: xxxx-xx-xx Previously Approved Change Order Amount $ - ACCOUNT: XXXXXX Proposed Change Order Amount S 1,288,049.28 for use by CAP ACTIVITY:I XXXXXX-XX-XXXX-XXX Revised Contract Amount $ 13,214,162.68 for use by CAP AMOUNT: $0.00 Percent of Total Change Orders(including this CO) 10.80% SECTION/FUND Original Contract Time for Substantial Completion 390 CD's FUND: XXXX-XX-XX Notice to Proceed Date 2/23/2024 ACCOUNT: XXXXXX Original Substantial Completion Date 3/19/2025 ACTIVITY:I XXXXXX-XX-XXXX-XXX AMOUNT: $0.00 Previously Approved Change Order Time 0 CD's Additional Time on This Change Order 0 CD's SECTION/FUND Revised Contract Time for Substantial Completion 390 CD's FUND: XXXX-XX-XX Revised Substantial Completion Date 3/19/2025 for use b CAP ACCOUNT: XXXXXX ACTIVITY:I xxxxxx-xx-xxxx-xxx CONTRACTOR AMOUNT: $0.00 REQUESTED BY: CPC Interests LLC dba Clark Pipeline Services LLC SECTION/FUND FUND: xxxx-xx-xx ACCOUNT: xxxxxx Alyssa Ramos Date ACTIVITY: XXXXXX-XX-XXXX-XXX Contractor AMOUNT: $0.00 CITY OF CORPUS CHRISTI REVIEWED BY: APPROVED BY: Arnulfo Garcia Date ($50,000.00-$100,000.00)Jeff FL Edmonds,P.E. Date Finance&Resource Manager Director of Engineering Services RECOMMENDED BY: Joseph Johnson Date Assistant Director of Construction Inspection initials APPROVED AS TO Authorized Legistrar No. FORM: Janet Whitehead Date Assistant City Attorney By Council Council Date RECOMMENDED BY: ATTEST: Rodolfo Pena Date (Council)Rebecca Huerta Date Capital Budget Manager (>$100,000.00 or>_25%)City Secretary se GO � O� A H "CORPOR^`E° AGENDA MEMORANDUM 1852 Action Item for the City Council Meeting June 17, 2025 DATE: June 17, 2025 TO: Peter Zanoni, City Manager FROM: Wesley Nebgen, Director of Water System Infrastructure WesleyN(a�cctexas.com 361-826-3111 Agreed Order with TCEQ for improvements at Oso Wastewater Treatment Plant in lieu of administrative penalty CAPTION: Resolution to authorize City Manager to execute Texas Commission on Environmental Quality Agreed Order in Docket No. 2021-0986-MWD-E which allows credit for improvements underway at Oso Wastewater Treatment Plant in lieu of$236,955.00 administrative penalty. SUMMARY: In April 2021, TCEQ conducted investigation at the Oso Wastewater Treatment Plant (WWTP) and made findings of corrective actions needed which will be resolved in accordance with the proposed Agreed Order. BACKGROUND AND FINDINGS: The TCEQ conducted its investigation at the Oso WWTP facility in April 2021 which documented findings at the facility including the following: a) West and East train experienced offline clarifiers and missing skimmer arms; b) need to maintain appropriate quality and quantity of solids inventory to properly operate; c) screening and grit storage containers at the 4 chlorine contract chambers were uncovered; d) discharge exceedance from the facility into the outfall of Blind Oso Bay; e) no notification was provided to TCEQ Region 14 office when conditions at the facility resulted in partially treated wastewater and sludge to discharge into Blind Oso Bay on April 2, 2021. Subsequent to the investigation in 2021, repairs to the west and east clarifiers were completed and replacements skimmer system was installed. In addition, procedures were reviewed and additional employee training was conducted regarding TCEQ notification requirements. In 2023, TCEQ staff provided an initial proposed Agreed Order to resolve its enforcement action. The City requested changes to the initial proposed AO to specifically include corrective actions taken by the City and submitted a request for a Supplemental Environmental Project in lieu of an administrative penalty. In December 2024, TCEQ staff provided a revised Agreed Order (AO) which incorporated the requested changes. In lieu of an administrative penalty of $236,955, the AO allows the City to implement and complete a Supplemental Environmental Project for Scum and Slotted Skimmer Improvements in the amount of$236,955 to offset the penalty in its entirety. This Project for Scum and Slotted Skimmer Improvements is to purchase and install six skimmer pipes for secondary clarifiers. The AO also requires replacement of West Clarifier No.1. Both projects must be completed within 360 days of final TCEQ approval. These projects are included in the on-going CIP construction project of Oso WRP Process Upgrade & Breakpoint Chlorination Facility Decommissioning awarded by City Council in March 2024. The AO also requires development of solids management plan and additional employee training on the plan. The City's compliance with the AO will result in improvements to the Oso WWTP with no financial penalty to be paid. ALTERNATIVES: If the AO is not approved, then the TCEQ may continue enforcement action against the City. FISCAL IMPACT: Funding Detail: Fund: Organ ization/Activity: Department: Project # (CIP Only): Account: RECOMMENDATION: Approve the TCEQ Agreed Order LIST OF SUPPORTING DOCUMENTS: Resolution TCEQ Agreed Order Resolution to authorize Texas Commission on Environmental Quality Agreed Order in Docket No. 2021-0986-MWD-E which allows for improvements at Oso Wastewater Treatment Plant in lieu of $236,955.00 administrative penalty BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: Section 1. The City Manager or his designee is authorized to execute an Agreed Order with Texas Commission of Environmental Quality in Docket No. 2021-0986- MWD-E which allows for improvements at Oso Wastewater Treatment Plant in lieu of $236,955.00 administrative penalty. A copy of the proposed Agreed Order is attached in substantial form as Exhibit A. Section 2. The City Manager's designee, the Chief Operating Officer for Corpus Christi Water, is authorized to sign and submit all notices and certifications to demonstrate compliance with the terms of the Agreed Order. PASSED and APPROVED on the day of , 2025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary TEXAS COMMISSION ON ENVIRONMENTAL QUALITY y E 0 IN THE MATTER OF AN § BEFORE THE ENFORCEMENT ACTION § CONCERNING § TEXAS COMMISSION ON CITY OF CORPUS CHRISTI § RN101610327 § ENVIRONMENTAL QUALITY AGREED ORDER DOCKET NO. 2021-0986-MWD-E On , the Texas Commission on Environmental Quality("the Commission" or "TCEQ") considered this agreement of the parties, resolving an enforcement action regarding the City of Corpus Christi(the "Respondent")under the authority of TEx.WATER CODE chs. 7 and 26. The Executive Director of the TCEQ through the Enforcement Division, and the Respondent presented this Order to the Commission. The Respondent understands that it has certain procedural rights at certain points in the enforcement process, including the right to formal notice of violations, notice of an evidentiary hearing, the right to an evidentiary hearing, and a right to appeal. By entering into this Order, the Respondent agrees to waive all notice and procedural rights. It is further understood and agreed that this Order represents the complete and fully-integrated agreement of the parties. The provisions of this Order are deemed severable and,if a court of competent jurisdiction or other appropriate authority deems any provision of this Order unenforceable, the remaining provisions shall be valid and enforceable. The duties and responsibilities imposed by this Order are binding upon the Respondent. The Commission makes the following Findings of Fact and Conclusions of Law: I.FINDINGS OF FACT 1. The Respondent owns and operates a water reclamation facility located at 601 Nile Drive in Corpus Christi, Nueces County, Texas (the "Facility"). The Facility is near or adjacent to water in the state as defined in TEx.WATER CODE§26.001(5). 2. During an investigation at the Facility conducted from April 2, 2021 through April 21, 2021, an investigator documented that: a. In the West Train, Clarifier No. 1 was offli.ne, and the skimmer arms were removed from Clarifier Nos. 3 and 4. In the East Train, Clarifier Nos. 5 and 7 were offline, and the skimmer arm was removed from Clarifier No.8. b. The Respondent was not maintaining an appropriate quantity and quality of solids inventory to properly operate the Facility. Excessive foam was noted on the aeration and reaeration basins.Additionally, excess scum, foam, and sludge were observed in both the east and west clarifier trains(East Clarifier Nos. 6 and 8; and West Clarifier Nos. 2, 3, and 4). An excess of settleable solids, a low food- to-microorganism ratio, high ammonia nitrogen levels, and low dissolved oxygen ("DO")levels were noted. f City of Corpus Christi DOCKET NO. 2021-0986-1VIWD-E Page 2 C. The screening and grit storage containers at the four chlorine contact chambers were not covered. d. Screenings, foam, and grease balls were discharged in other than trace amounts from the outfall into Blind Oso Bay. Additionally, sludge and bloodworms were observed around the outfall. Also, a fish kill of approximately 30 fish was observed. e. Upset conditions at the Facility caused partially treated wastewater and sludge to discharge into Blind Oso Bay on April 2, 2021, and the TCEQ Region 14 Office and Enforcement Division were not notified. 3. The Executive Director recognizes that the Respondent implemented the following corrective measures at the Facility: a. By July 28, 2021,removed the chlorine contact chamber screening storage containers; b. By July 29, 2021,repaired East Clarifier No. 5 and brought it back online; C. By September 29, 2021, replaced the mechanical skimmer arms on the West Clarifier Nos. 3 and 4,with the TCEQ approved spray bar systems and brought them back online; d. By January 26, 2024,removed excess scum,foam, and sludge from the East and West Clarifier Trains (East Clarifier Nos. 6 and 8; and West Clarifier Nos. 2 and 3); e. By January 30, 2024, ceased the discharge of floating solids and sludge from the outfall; f. By February 5, 2024, developed and implemented procedures and conduct employee training to report any noncompliance which may endanger human health or safety, or the environment to the Regional Office within 24 hours of becoming aware, and in writing to the TCEQ Region 14 Office and Enforcement Division within five working days of becoming aware of the noncompliance; g. By February 6, 2024, developed and implemented procedures and conduct employee training to keep the areas in and around Blind Oso Bay clean; h. By February 17, 2024, repaired East Clarifier No. 7 and brought it back online; and i. By February 22, 2024, replaced the mechanical skimmer arms on the East Clarifier No. 8 and brought it back online. City of Corpus Christi DOCKET NO. 2021-0986-MWD-E Page 3 Q. CONCLUSIONS OF LAW 1. As evidenced by Finding of Fact No. 1, the Respondent is subject to the jurisdiction of the TCEQ pursuant to TEx.WATER CODE ch. 26 and the rules of the TCEQ 2. As evidenced by Finding of Fact No. 2.a, the Respondent failed to ensure the Facility and all of its systems of collection, treatment, and disposal are properly operated and maintained,in violation of 30 TEx.ADMIN.CODE§305.125(1)and(5) and Texas Pollutant Discharge Elimination System("TPDES")Permit No.WQ0010401004, Operational Requirements No. 1. 3. As evidenced by Finding of Fact No. 21, the Respondent failed to ensure the Facility and all of its systems of collection, treatment, and disposal are properly operated and maintained,in violation of 30 TEx.ADMIN.CODE§305.125(1) and(5) and TPDES Permit No.WQ0010401004, Operational Requirements No. 1. 4. As evidenced by Finding of Fact No. 2.c, the Respondent failed to ensure the Facility and all of its systems of collection, treatment, and disposal are properly operated and maintained, in violation of 30 TEx.ADMIN.CODE§305.125(1) and (5) and TPDES,Permit No.WQ0010401004, Operational Requirements No. 1. S. As evidenced by Finding of Fact No. 2.d, the Respondent failed to take all reasonable steps to minimize or prevent any sludge use or disposal or other permit violation that has a reasonable likelihood of adversely affecting human health or the environment,in violation of 30 TEX.ADMIN.CODE §§305.125(1) and(4)and 307.4(b)(2),TEX.WATER CODE §26.121(a)(1), and TPDES Permit No.WQ0010401004,Permit Conditions Nos. 2.d and 2.g and Interim I Effluent Limitations and Monitoring Requirements No. 4. 6. As evidenced by Finding of Fact No. 2.e, the Respondent failed to report any noncompliance which may endanger human health or safety, or the environment orally to the Regional Office within 24 hours of becoming aware of the noncompliance, and in writing to the Regional Office and the Enforcement Division within five working days of becoming aware of the noncompliance,in violation of 30 TEx.ADMIN.CODE§305.125(1) and TPDES Permit No.WQ0010401004,Monitoring and Reporting Requirements No. Ta. 7. Pursuant to TEx.WATER CODE§7.051, the TCEQ has the authority to assess an administrative penalty against the Respondent for violations of state statutes within the TCEQ's jurisdiction, for violations of rules adopted under such statutes, or for violations of orders or permits issued under such statutes. 8. An administrative penalty in the amount of$236,955 is justified by the facts recited in this Order, and considered in light of the factors set forth in TEx.WATER CODE§ 7.053. Pursuant to TEx.WATER CODE§ 7.067, $236,955 of the penalty shall be conditionally offset by the Respondent's timely and satisfactory completion of a Supplemental Environmental Project("SEP") as defined in the attached SEP Agreement("Attachment A" -incorporated herein by reference). The Respondent's obligation to pay the conditionally offset portion of the penalty shall be discharged upon full compliance with all the terms and conditions of this Order,which includes the timely and City of Corpus Christi DOCKET NO. 2021-0986-MWD-E Page 4 satisfactory completion of all provisions of the SEP Agreement, as determined by the Executive Director. III.ORDERING PROVISIONS NOW,THEREFORE,THE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY ORDERS that: 1. The Respondent is assessed a penalty as set forth in Conclusion of Law No. 8 for violations of state statutes and rules of the TCEQ. The payment of this penalty and the Respondent's compliance with all the requirements set forth in this Order resolve only the matters set forth by this Order in this action. The Commission shall not be constrained in any manner from requiring corrective actions or penalties for violations that are not raised here. Penalty payments shall be made payable to "TCEQ' and shall be sent with the notation"Re: City of Corpus Christi, Docket No. 2021-0986-MWD-E" to: Financial Administration Division, Revenue Operations Section Attention: Cashier's Office, MC 214 Texas Commission on Environmental Quality P.O. Box 13088 Austin,Texas 78711-3088 2. The Respondent shall implement and complete the SEP as set forth in Conclusion of Law No. 8. The amount of$236,955 of the assessed penalty is conditionally offset based on the Respondent's implementation and completion of the SEP pursuant to the terms of the SEP Agreement, as defined in Attachment A. Penalty payments for any portion of the SEP deemed by the Executive Director as not complete shall be paid within 30 days after the date the Executive Director demands payment. 3. The Respondent shall undertake the following technical requirements: a. Within 30 days after the effective date of this Order submit notification to the TCEQ Region 14 Office and Enforcement Division in writing for the noncompliance which may endanger human health or safety, or the environment which started on April 2, 2 02 1, in accordance with TPDES Permit No. WQ0010401004,Monitoring and Reporting Requirements No. Ta. b. Within 45 days after the effective date of this Order, submit written certification, and include detailed supporting documentation including photographs, receipts, and/or other records to demonstrate compliance with Ordering Provision No. 3.a,in accordance with Ordering Provision No. 3.g. C. Within 60 days after the effective date of this Order: L Begin the replacement of West Clarifier No. 1.Provide quarterly progress reports to the addresses listed in Ordering Provision No. 3.g; ii. Remove excess scum, foam, and sludge from West Clarifier No.4; and City of Corpus Christi DOCKET NO. 2021-0986-IviWD-E Page 5 iii. Develop a solids management plan.Address operational targets and procedures for solids management throughout each unit. d. Within 75 days after the effective date of this Order, submit written certification, and include detailed supporting documentation including photographs,receipts, and/or other records to demonstrate compliance with Ordering Provision No. 3.c.ii, in accordance with Ordering Provision No. 3.g. e. Within 80 days after the effective date of this Order,implement the solids management plan procedures, and conduct employee training on the plan, drafted in accordance with Ordering Provision No. 3.c.iii. f. Within 360 days after the effective date of this Order: i. Submit written certification, and include detailed supporting documentation including photographs, receipts, and/or other records to demonstrate compliance with Ordering Provision No. 3.e,in accordance with Ordering Provision No. 3.g; and ii. Bring new West Clarifier No. 1 online and ensure proper operational status. g. Within 375 days after the effective date of the Order, submit written certification, and include detailed supporting documentation including photographs,receipts, and/or other records to demonstrate compliance with Ordering Provision No. ILL The certification shall be signed by the Respondent and shall include the following certification language: "I certify under penalty of law that I have personally examined and am familiar with the information submitted and all attached documents, and that based on my inquiry of those individuals immediately responsible for obtaining the information, I believe that the submitted information is true, accurate and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fines and imprisonment for knowing violations." The certification shall be submitted to: Enforcement Division,MC 149A Texas Commission on Environmental Quality P.O. Box 13087 Austin,Texas 78711-3087 City of Corpus Christi DOCKET NO. 2021-0986-lvfWD-E Page 6 with a copy to: Water Section Manager Corpus Christi Regional Office Texas Commission on Environmental Quality 500 North Shoreline Boulevard, Suite 500 Corpus Christi,Texas 78401-0318 4. All relief not expressly granted in this Order is denied. S. The duties and provisions imposed by this Order shall apply to and be binding upon the Respondent. The Respondent is ordered to give notice of this Order to personnel who maintain day-to-day control over the Facility operations referenced in this Order. 6. The Executive Director may grant an extension of any deadline in this Order or in any plan,report, or other document submitted pursuant to this Order, upon a written and substantiated showing of good cause. All requests for extensions by the Respondent shall be made in writing to the Executive Director. Extensions are not effective until the Respondent receives written approval from the Executive Director. The determination of what constitutes good cause rests solely with the Executive Director. Extension requests shall be sent to the Enforcement Division at the address listed above. 7. The Executive Director may, without further notice or hearing,refer this matter to the Office of the Attorney General of the State of Texas("OAG")for further enforcement proceedings if the Executive Director determines that the Respondent has not complied with one or more of the terms in this Order. 8. This Order shall terminate five years from its effective date or upon compliance with all the terms and conditions set forth in this Order, whichever is later. 9. This Order,issued by the Commission, shall not be admissible against the Respondent in a civil proceeding, unless the proceeding is brought by the OAG to: (1) enforce the terms of this Order; or (2) pursue violations of a statute within the Commission's jurisdiction, or of a rule adopted or an order or permit issued by the Commission under such a statute. 10. This Order may be executed in separate and multiple counterparts,which together shall constitute a single instrument. Any page of this Order may be copied, scanned, digitized, converted to electronic portable document format("pdf'), or otherwise reproduced and may be transmitted by digital or electronic transmission, including but not limited to facsimile transmission and electronic mail. Any signature affixed to this Order shall constitute an original signature for all purposes and may be used, filed, substituted, or issued for any purpose for which an original signature could be used. The term "signature" shall include manual signatures and true and accurate reproductions of manual signatures created, executed, endorsed, adopted, or authorized by the person or persons to whom the signatures are attributable. Signatures may be copied or reproduced digitally, electronically,by photocopying, engraving, imprinting, lithographing,electronic mail, facsimile transmission, stamping, or any other means or process which the Executive Director deems acceptable. In this paragraph exclusively, City of Corpus Christi DOCKET NO. 2021-0986-fvM-E Page 7 the terms: electronic transmission, owner, person,writing, and written, shall have the meanings assigned to them under TEX.Bus.ORG.CODE § 1.002. 11. The effective date of this Order is the date it is signed by the Commission. A copy of this fully executed Order shall be provided to each of the parties. City of Corpus Christi DOCKET NO. 2021-0986-NIWD-E Page 8 SIGNATURE PAGE TEXAS COMMISSION ON ENVIRONMENTAL QUALITY For the Commission Date --------------------------------- -------------------------- For the Executive Director Date I, the undersigned, have read and understand the attached Order. I am authorized to agree to the attached Order, and I do agree to the terms and conditions specified therein. I further acknowledge that the TCEQ in accepting payment for the penalty amount, is materially relying on such representation. I also understand that failure to comply with the Ordering Provisions,if any,in this Order and/or failure to timely pay the penalty amount,may result in: • A negative impact on compliance history; • Greater scrutiny of any permit applications submitted; • Referral of this case to the Attorney General's Office for contempt,injunctive relief, additional penalties, and/or attorney fees, or to a collection agency; • Increased penalties in any future enforcement actions; • Automatic referral to the Attorney General's Office of any future enforcement actions; and • TCEQ seeking other relief as authorized by law. In addition, any falsification of any compliance documents may result in criminal prosecution. ------------------------------ -------------------------- Signature Date ------------------------------ ------------------------- Name (Printed or typed) Title Authorized Representative of City of Corpus Christi ❑ If mailing address has changed, please check this box and provide the new address below. Instructions: Send the original, signed Order with penalty payment to the Financial Administration Division,Revenue Operations Section at the address in Ordering Provision 1 of this Order. Attachment A Docket Number: 2021-0986-MWD-E SUPPLEMENTAL ENVIRONMENTAL PROJECT Respondent: City of Corpus Christi Penalty Amount: $236,955 SEP Offset Amount: $236,955 Type of SEP: Compliance Project Name: Scum and Slotted Skimmer Improvements Location of SEP: Nueces County The Texas Commission on Environmental Quality("TCEQ')agrees to offset the administrative Penalty Amount assessed in this Agreed Order in exchange for Respondent's performance of a Supplemental Environmental Project("SEP"). The SEP Offset Amount is set forth above and such offset is conditioned upon completion of the project in accordance with the terms of this Attachment A. Respondent is a Local Government that qualifies under Texas Water Code § 7.067 to apply the SEP Offset Amount set forth above to correct violations at its wastewater treatment facility(the "Facility"),which are described in this Agreed Order.This Agreed Order cites violations at Respondent's Facility. 1. Project Description A. Project Respondent shall hire a contractor to purchase and install six slimmer pipes for secondary clarifiers at the Oso Water Reclamation Plant. Specifically, the SEP Offset Amount shall be used for materials, supplies, and equipment for six stainless steel slotted skimmer pipes(the "Project").Respondent shall solicit bids from qualified contractors to perform the Project.Any advertisement,including publication,related to the SEP must include the enforcement statement as stated below in Section 6, Publicity.The SEP will be performed in accordance with all federal, state, and local environmental laws and regulations,including permits that may be required prior to commencement of the SEP.The Commission's approval and issuance of this Agreed Order shall not itself be construed to authorize any activity for which Respondent is required by statute or rule to obtain authorization from the Commission. Respondent shall use the SEP Offset Amount only for the direct cost of implementing the Project, including supplies,materials, and equipment rentals, as listed below in Subsection C. Minimum Expenditure,Estimated Cost Schedule.No portion of the SEP Offset Amount shall be spent on administrative costs, including operating costs,reporting expenses,handling of expenses,project coordination, liability, or equipment breakdowns. Respondent's signature affixed to the attached Agreed Order certifies that Respondent has no prior commitment to perform this Project and that the SEP is being performed solely as part of the terms of settlement in this enforcement action. B. Environmental Benefit This SEP will provide a discernible environmental benefit by enabling better treatment of wastewater, and preventing inadequately treated wastewater discharges being released into the environment.Inadequately treated wastewater discharges can carry bacteria,viruses,protozoa (parasitic organisms),hehninths (intestinal worms), and bioaerosols (i.nhalable molds and fungi).The diseases they may cause range in severity from mild gastroenteritis to life- threatening ailments such as cholera, dysentery,infectious hepatitis,and severe gastroenteritis. Page 1 of 4 City of Corpus Christi Docket No. 2021-0986-MWD-E Attachment A Additional risks include occurrences of low dissolved oxygen, fish kills, algal bloom, and bacterial contamination in waterways. C. Minimum Expenditure Respondent shall spend at least the SEP Offset Amount to complete the project described above in Section 1.A., and comply with all other provisions of this SEP. Respondent understands that it may cost more than the SEP Offset Amount to complete the Project. Costs in excess of the SEP Offset Amount shall not be grounds to relieve Respondent of its obligations to perform this SEP. Estimated Cost Schedule Item Cost Quantity Total Pipe Skimmers $40,600 6 $243,600 Total $243,600 2. Performance Schedule Within 30 days after the effective date of this Agreed Order, Respondent shall begin implementation of the SEP. Respondent shall have completed the SEP in its entirety within 360 days after the effective date of this Agreed Order. Executive Director ("ED") staff may grant an extension to any deadline for Respondent's performance of the SEP described herein,upon a written and substantiated showing of good cause.All requests for extensions must be made by Respondent and shall be made in writing to ED staff. Extensions are not effective until Respondent receives written approval from ED staff. The determination of what constitutes good cause rests solely with ED staff. Extension requests shall be sent to the SEP Coordinator by first class mail and electronic mail, at: Texas Commission on Environmental Quality Litigation Division Attention: SEP Coordinator, MC 175 P.O. Box 13087 Austin, Texas 78711-3087 Email: sci)reports@tcgq.texas.gov 3. Records and Reporting A. Progress Report Within 30 days after the effective date of this Agreed Order, Respondent shall submit a Notice of Commencement to TCEQ describing actions performed to date to implement the Project. Within 90 days after the effective date of this Agreed Order, Respondent shall submit a report detailing the progress made and all actions completed on the Project during the previous 60- day period and setting forth a schedule for achieving completion of the Project within the 360- day timeframe set forth above in Section 2, Performance Schedule. Thereafter, Respondent shall submit progress reports to TCEQ in 90-day increments containing detailed information on all actions completed on the Project to date as set forth below in the Reporting Schedule table: Reporting Schedule Days from Effective Information Required Order Date 30 Notice of Commencement describing actions taken to begin project Page 2 of 4 Q City of Corpus Christi Docket No. 2021-0986-MWD-E Attachment A 90 Actions completed during previous 60-day period 180 Actions completed during previous 90-day period 270 Actions completed during previous 90-day period 360 Notice of SEP completion B. Final Report Within 365 days after the effective date of the Agreed Order, or within 30 days after completion of the SEP, whichever is earlier, Respondent shall submit a Final Report to TCEQ which shall include the following: 1. An itemized list of expenditures and total cost of the Project; 2. Copies of invoices or receipts corresponding to the itemized list in paragraph 3.13.1.,above; 3. Copies of cleared checks or payment records corresponding to the itemized list in paragraph 3.B.1.,above; 4. Copies of proof of advertisement of invitation for bids,if applicable; S. A certified statement of SEP completion and document authentication; 6. A detailed map showing the specific location of the Project site(s); 7. Copies of all engineering plans related to work performed pursuant to the Project,if applicable; 8. Dated photographs of the purchased materials and supplies;before and after work being performed during the Project; and of the completed Project; and 9. Any additional information Respondent believes will, or that is requested by TCEQ to demonstrate compliance with this Attachment A. C. Submittals Respondent shall submit all SEP reports and any additional information as requested to the SEP Coordinator at the address provided above. 4. Additional Information and Access Respondent shall provide additional information as requested by TCEQ staff and shall allow access to all records related to the SEP Offset Amount. Respondent shall also allow representatives of TCEQ access to the site of any work being financed in whole or in part by the SEP Offset Amount.This provision shall survive the termination of this Agreed Order. S. Failure to Fully Perform If Respondent does not perform its obligations under this Attachment A, including full expenditure of the SEP Offset Amount and submittal of the required reporting described above in Sections 2 through 4, the ED may require immediate payment of all or part of the SEP Offset Amount as set forth in the attached Agreed Order. In the event the ED determines that Respondent failed to fully implement and complete the Project, Respondent shall remit payment for all or a portion of the SEP Offset Amount, as determined by the ED, and as set forth in the attached Agreed Order.After receiving notice of failure to complete the SEP, Respondent shall include the docket number of the attached Agreed Order and a note that the enclosed payment is for reimbursement of a SEP, shall make Page 3 of 4 City of Corpus Christi • Docket No. 2021-0986-MWD-E Attachment A the check payable to "Texas Commission on Environmental Quality," and shall mail it to the SEP Coordinator at the address provided above. 6. Publicity Any public statements concerning this Project made by or on behalf of Respondent must include a clear statement that the Project was performed as part of the settlement of an enforcement action brought by TCEQ. Such statements include advertising, public relations, and press releases. 7. Recognition Respondent may not seek recognition for this project in any other state or federal regulatory program. 8. Other SEPs by TCEQ or Other Agencies The SEP Offset Amount identified in this Attachment A and in the attached Agreed Order has not been, and shall not be, included as a SEP for Respondent under any other Agreed Order negotiated with TCEQ or any other agency of the state or federal government. Page 4 of 4 Se GO � O� A H 'NCOHPOP AGENDA MEMORANDUM 1852 Action Item for the City Council Meeting of June 24, 2025 DATE: June 24, 2025 TO: Peter Zanoni, City Manager FROM: Robert Dodd, Director of Parks and Recreation Department RobertD4(a)cctexas.com (361) 826-3133 Grant Application to the Texas General Land Office for the FY 2025 Beach Cleaning & Maintenance Assistance Program CAPTION: Resolution authorizing a grant application for the FY 2026 Beach Cleaning and Maintenance Assistance Program from the Texas General Land Office for $1,815,778.14 to provide beach cleaning and maintenance on North Padre Island and Mustang Island. SUMMARY: The City is required to pass a Resolution annually in order to apply for the Texas General Land Office (TGLO) Beach Cleaning & Maintenance Assistance Program. The TGLO Beach Cleaning & Maintenance Assistance Program provides an annual reimbursement to offset a portion of the City's beach maintenance expenditures. BACKGROUND AND FINDINGS: The TGLO Beach Cleaning & Maintenance Assistance Program uses a funding formula to reimburse cities/counties annually for beach cleaning/maintenance expenditures. The reimbursement amount varies based on the formula and available funds. Currently, the principal portion of the beach maintenance appropriations is distributed among twelve communities that contain public beaches within their jurisdiction and have made applications for funding. Cities that qualify for eligibility under the Natural Resources Code may receive up to, but no greater than, two-thirds reimbursement for eligible expenses incurred in maintaining beaches. However, actual state appropriations have typically limited this reimbursement to the range of 10 to 20 percent of actual local costs. The total cost for Corpus Christi for FY 2025 is an estimated $2,751,179.00. The City's Beach Operations Division cleans/maintains a total of 7.8 miles of beach front which includes 1.7 miles along Access Road 6, 4.1 miles along Access Road 2, and 1.99 miles along Packery Channel. These sections of beach are included in the application for the estimated cost of$1,815,778.14 for FY 26 of requested assistance. If awarded, these funds will be used to aid with costs associated with beach cleaning and maintenance on North Padre Island and Mustang Island, including equipment rental fees, labor, signage, supervision of litter debris removal, solid waste collection/disposal, portable toilet rentals and servicing fees, barricades, bollards, traffic signs, lifeguard expenses, litter/beach patrol expenses, and administration. For FY 2026, the City expects to receive $70,000. ALTERNATIVES: The alternative would be to not apply for beach maintenance funding. However, the City has applied for and been granted this funding annually for over a decade. These funds help offset costs that the City would have incurred if it were not to receive this grant. FISCAL IMPACT: There is no fiscal impact at this time. RECOMMENDATION: Staff recommends approval of this resolution approving FY 2026 grant application for the Beach Cleaning and Maintenance Assistance Program from the Texas General Land Office for an estimated amount of$70,000 to provide beach cleaning and maintenance on North Padre Island and Mustang Island, as presented. LIST OF SUPPORTING DOCUMENTS: GLO FY 2026 Application for Beach Cleaning & Maintenance Program Resolution Resolution authorizing a grant application for the FY 2026 Beach Cleaning and Maintenance Assistance Program from the Texas General Land Office for $1,815,778.14 to provide beach cleaning and maintenance on North Padre Island and Mustang Island. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS THAT: SECTION 1. The City Council authorizes the submission of the grant application to the Texas General Land Office for $70,000 for funding available under the FY 2026 Beach Cleaning and Maintenance Assistance Program to provide an annual reimbursement for the City's beach cleaning and maintenance on North Padre Island and Mustang Island. SECTION 2. The City Council designates the Director of Parks & Recreation as the grantee's authorized official. The authorized official may apply for, accept, reject, alter, or terminate the grant. PASSED and APPROVED on the day of , 2025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary Application for the Beach Cleaning and Maintenance Assistance Program f,RAL Fiscal Year 2026 I, � (September 1,2025-August 31,2026) y - ` Texas General Land Office x ^ Commissioner Dawn Buckingham, M.D. Y P.O. Box 12873 ` Austin, Texas 78711-2873 www.glo.texas.gov 1-800-998-4GLO City or County making application (applicant): City of Corpus Christi Name and mailing address of administrative body responsible for beach cleaning: City of Corpus Christi Parks and Recreation Department P.O. BOX 9277 Corpus Christi, TX 78469 Name,title, email address, and phone of official with day-to-day responsibility for project: Charles(Darren)Gurley Superintendent 8185 Highway 361 Corpus Christi,TX 78418 CharlesGu@cctexas.com 361-826-1934 Name,title, mailing and email address, and phone of official authorized to receive state reimbursement: Heather Hurlbert Assistant City Manager City of Corpus Christi P.O. Box 9277 Corpus Christi TX 78469 HeatherH3@cctexas.com 361-286-3506 The applicant understands and agrees that the requirements set forth in Section 61.069 of the Texas Natural Resources Code must be met, and the applicant expressly pledges and represents that it has met or will meet the requirements through the following: 1. The applicant has a duly constituted beach park board or like body with adequate authority to administer an effective program of keeping the public beaches under its jurisdiction clean. (OBA §61.069 (1)) 2. The applicant shall provide for receipt of all project funds by its treasurer or like official who shall adequately safeguard such funds and assure same are expended solely for project purposes.The applicant agrees to reimburse the General Land Office for any project funds lost or spent for non- project purposes. (OBA§61.069 (2)) 3. The applicant shall submit such reports as to amounts and types of project expenditures as may be required by the General Land Office. (OBA§61.069 (3)) 4. The applicant provides free entrance to all public beaches within its jurisdiction. (OBA§61.069 (4)) 5. The applicant operates and maintains one or more coastal parks which are satisfactory to the General Land Office with respect to size and facilities. (OBA§61.069 (5)) Page 1 of 2 Application for the Beach Cleaning and Maintenance Assistance Program Total linear feet of beach to be cleaned 36,379 Estimate of Expenses 1. Equipment rental,litter and debris removal $373,511.00 2. Labor,litter and debris removal 828,090.00 3. Signs,litter-related 3,950.00 4. Supervision,litter and debris removal 181,196.00 5. Solid waste collection and disposal,including purchase of containers 20,000.00 6. Portable toilet rental and servicing 35,700.00 7. Barricades,bollards,and traffic signs 14,000.00 8. Lifeguard expenses 784,000.00 9. Litter patrol expenses 62,000.00 10. Beach patrol expenses 368,321.00 11. Administration 81,411.00 TOTAL $2,751,179.OQ Amount of state assistance requested for current state fiscal year(may not exceed ivvu-thirds of amount shown in line above as provided by Section 61.076 of the Texas Natural Resources Code): $1,815,778.14 The General Land Office reserves the right to require of the applicant any additional evidence it may deem necessary for the approval of the application or management of the program. Supporting documents:(The application is incomplete unless the following documents are included.) Mark the applicable box as the corresponding document is included with the application. Fl A current resolution authorizing application for funds and vesting an official with full authority to act for purposes of the program. A Texas Department of Transportation county map upon which are delineated the public beaches to be cleaned and the linear feet of beach therein. ❑ A site plan of applicant's beach park which meets the minimum requirements established by the state. ❑ A certified copy of documentation establishing a beach park board or like body. ❑ A current written statement attesting that the maintenance to be provided is consistent with the applicant's community adopted plan for Beach Access and Dune Protection. ❑ A current written statement acknowledging that compliance with the regulations for collection and expenditure of beach user fees,contained in Section 15.8 of the state's beach access and dune protection regulations,is a requirement of the program. ❑ A current written statement that the applicant will supply an adequate number of garbage and litter receptacles for that area of the beach which the applicant cleans and maintains in this program.Receptacles for recyclables are suggested,but not required. ❑ A current list,adopted by the governing body,of the equipment rates to be charged per hour or per day which also indicates whether with or without operator. ❑ A current beach-cleaning proposal describing the cleaning and maintenance operations at the beach. City of Corpus Christi acting by and through Robert Dodd, Director, Parks and Recreation Applicant Official hereunto duly authorized,submits this application and certifies its contents are true and correct,and agrees to the above terms and conditions. by Robert Dodd Name Signature Robert Dodd, Director,Parks and Recreation Title Date Page 2 of 2 O -TI 9 P a 3 o - C O_ D c� c> ' cu a rn ao cfl rn - Qo 0 cfl . v T w f• 44 co co Cl _ �. �liv, 444 m-.- N N A co N -f. ciY � .n• rn o - cn 0 N r T ERAL O y o X w � TEXAS GENERALGENERAL LAND OFFICE COMMISSIONER DAWN BUCKINGHAM, M.D. May 1,2025 Via Electronic Mail Dear Coastal Local Government Partners: Enclosed is the Application for the Beach Maintenance Reimbursement Program (BMR) for Fiscal Year 2026. The Application Checklist instruction sheet details what is needed and explains how to submit the required attachments with the application for state assistance. The beach maintenance you provide must be consistent with your community's Beach Access and Dune Protection Plan that has been certified by the General Land Office (GLO). BMR Program rules specify the Texas Department of Transportation area rates be used as the agency's source for determining reason- able equipment rates.FEMA rates are also acceptable.Your equipment rates should be a reflection of your incurred costs,and you should be prepared to provide justification for the GLO to approve your equipment rates. Additionally, if your community collects a Beach User Fee, your participation in the BMR Program is contingent upon adherence to the rules of the Beach User Fee Program. If this applies,please remember to include with your application a written statement acknowledging adherence to the regulations governing fees collected from beach users as found in 31 TAC § 15.8. Please submit your application packet no later than June 30, 2025 by mail or email to begin the review process. Send applications to meiling.valdes(aglo.texas.gov. The mailing address is Texas General Land Office,Coastal Resources,Attn: Mel ling Valdes,P.O.Box 12873,Austin,TX 78711-2873. Please contact me by email at natalie.bellkglo.texas.gov or by phone at(512) 463-0413 if you have any questions. Sincerely, Nat ie Bell Director,Resource Management Coastal Resources Division BMR and BUF Programs Texas General Land Office 1700 North Congress Avenue,Austin,Texas 78701-1495 P.O.Box 12873,Austin,Texas 78711-2873 512-463-5001 glo.texas.gov June 20, 2025 Texas General Land Office, Coastal Resources Attn: Mei Ling Valdes P.O. Box 1273 Austin,TX 78711-2873 PARKS&RECREATION Dear Ms.Valdes: DEPARTMENT The signed application for state assistance for beach maintenance for fiscal year 2026 is attached.We PO Box 9277 will present the application to the City Council for their approval on June 24, 2025, and the signed Corpus Christi resolution is also attached. An estimate of expenditures is included in the application, along with a Texas 78469-9277 copy of our payroll burden rate methodology. Phone 361-826-3460 Fax 361-880-3864 A Current Equipment Rate Sheet www.cctexas.com A current equipment rate sheet has been attached and is based on the current TxDOT/FEMA schedule www,ccparkandrec.con of equipment rates or current lease rates. Live. Learn. Play! Garbage and Litter Statement An adequate number of garbage and litter receptacles are available on the beaches. The receptacles are positioned along the city-maintained beaches so that they are convenient for the beach user, but also not so many as to make maintenance too costly. Beach Dune Rule Compliance Statement The beach cleaning and maintenance performed by the city personnel is consistent with the plan our community adopted for Beach Access and Dune Protection. It adheres to the City of Corpus Christi Code of Ordinances Chapter 10: Beachfront Management and Construction. Beach User Fees Regulations Compliance Statement The City of Corpus Christi is in compliance with State Regulation 31 TAC 15.8 concerning the collection and expenditure of beach user fees.The city is collecting fees for parking on the gulf beach areas. A Texas Department of Transportation (TxDOT) County Map A TxDOT map is attached with the beaches maintained and the linear footage written on the map. Site Map of all Applicable Beach Parks Attached is a site map which shows the city,county,and state parks, maintenance areas as well as the user fee and free areas. Beach Cleaning Proposal The City of Corpus Christi welcomes visitors and residents alike to our carefully groomed beaches.The Parks and Recreation Department has a staff of eleven employees that maintain the 36,379 linear feet of beaches. They use motor graders, loaders, tractors, pickups, garbage trucks, and dump trucks to CORPUS remove the seaweed from above the mean tide line (MTL) and place it in the fore dunes to reinforce CHRISTI the sand dunes with the organic material or grade the sand and bury the seaweed in windrows above PARKS& the MTL. RECREATION Page 1 of 2 Every day our staff empties the 200 trash containers along the beach. The portable restrooms are serviced three times a week on a regular basis and daily on holiday weekends. The department also provided lifeguards at stands along the heavily used city beach PARKS&RECREATION areas. Our beach maintenance crew, lifeguards, and beach parking permit sales staff DEPARTMENT g p g work from our Beach Office located on Mustang Island. PO Box 9277 Corpus Christi The city police department makes regular patrols on the beach and the surrounding Texas78469-9277 areas. Phone361-826-3460 Fax 361-880-3864 www.cctexas.com There are several events on the beach for which our staff prepares and performs the www.ccparkandree.com clean-up afterwards. Among the events are Spring Break, Memorial Day, Beach to Bay Live. Learn. Play! Relay Marathon, July 41h cleanup (heavy resident displays), Labor Day, and various sporting activities. Along with the City of Port Aransas and Nueces County, the city shares the revenues from a beach parking permit that is sold to beach users. The city uses a city-identified vehicle and temporary canopies from which the sales of parking permits are made. The parking permit is required for parking on the beach in the areas identified as "permit required". There are some areas that are free, and parking permits are not required. The City of Corpus Christi recognizes the valuable asset of the gulf beaches and the expectations of its users to have clean and well-maintained beaches for recreational activities. We support the General Land Office's management of the Beach Maintenance Assistance Program. We also believe that the program should be expanded to more adequately support local efforts to maintain our beaches for tourism and local recreation activities. If you require any further information, please contact Darren Gurley, Superintendent, Beach and Natural Resources, for the City of Corpus Christi Parks and Recreation Department at 361-826-1934. Sincerely, CORPUS CHRISTI Robert Dodd, Director PARKS& City of Corpus Christi Parks and Recreation Department RECREATION Attachments Page 2 of 2 - I CORPUS CHRISTI PARKS& RECREATION - Grant Application to the Texas General Land Office for the FY 2026 Beach Cleaning & Maintenance Assistance Program City Council Meeting June 24, 2025 Background qW CORPUS CHF=1 STI PARKSS R EGR EAT60N • The City is required to pass a Resolution annually in order to apply for the Texas General Land Office Beach Cleaning & Maintenance Assistance Program • The Program uses a funding formula to reimburse cities/counties for beach cleaning/maintenance expenditures. • If awarded, funds will be used towards 7.8 miles of beach front along North Padre Island & Mustang Island in which the City's Beach Operations Division cleans/maintains. • Funds will be used to aid with costs for items such as equipment rental fees, labor, signage, supervision of litter/debris removal, solid waste collection/disposal, portable toilet rentals & servicing fees, barricades, bollards, traffic signs, lifeguard expenses, litter/beach patrol expenses & administration. 2 t� Background Continued CORPUS OHRISTI PARKS&. R ECFEATfON FISCAL 1 • AMOUNT $93,356 $99,258 $101,334 i To be received in September (applied for $70,000) Ni Recommendation CORPUS OHRISTI PARKS&. R ECFEATfON Staff recommends approval of the TGLO Grant for Beach Cleaning & Maintenance for Fiscal Year 2026. 4 se GO � O� A H AGENDA MEMORANDUM 'NCORPOP Action Item for the City Council Meeting of June 24, 2025 1852 DATE: June 24, 2025 TO: Peter Zanoni, City Manager FROM: Mike Markle, Chief of Police mikema�cctexas.com (361) 886-2603 Accepting and appropriating a grant for the FY 2025 Texas Coastal Corridor High Intensity Drug Trafficking Initiative for the Corpus Christi Police Department CAPTION: Ordinance authorizing acceptance of a grant from the Executive Office of the President, Office of National Drug Control Policy, for overtime for two sworn officers and lease payments on two vehicles for identification and disruption of narcotics trafficking as part of the FY 2025 Texas Coastal Corridor High Intensity Drug Trafficking Area Initiative in an amount of$41,800.00; and appropriating $41,800.00 in the Police Grants Fund. SUMMARY: This ordinance authorizes the acceptance of a grant and appropriation of funds from the Office of the President, Office of National Drug Control Policy, to be used for overtime for two sworn officers and lease payments on two vehicles for the FY 2025 High Intensity Drug Trafficking Area Initiative. BACKGROUND AND FINDINGS: The Texas Coastal Corridor High Intensity Drug Trafficking Area Initiative was created by the Executive Office of the President, Office of National Drug Control Policy. Its purpose is to focus on the identification and disruption of narcotics trafficking organizations throughout the United States. The Texas Coastal Corridor applies to Aransas, San Patricio, Refugio, Nueces, Kleberg, Kennedy, Jim Wells, Brooks, and Victoria counties. This specific geographical area serves as a conduit for narcotics into Corpus Christi and other metropolitan cities in Texas and throughout the United States. Money launderers also conduct illegitimate business in the corridor, creating a consumer base that affects the local populations with residual crime. Other agencies participating in the program are the Nueces County Sheriff, Texas Department of Public Safety, Drug Enforcement Administration, Internal Revenue Service, U. S. Customs, and the Bureau of Alcohol, Tobacco, and Firearms. With the awarded grant funding, the Corpus Christi Police Department (CCPD) anticipates that shipments of narcotics through this area will be intercepted, and narcotics traffickers will be apprehended. The data gathered during this initiative will be uploaded and shared with other drug trafficking initiatives and programs across the country in order to further suppress criminal activity. CCPD is in its twenty eighth year as a participant in the Texas Coastal Corridor High Intensity Drug Trafficking Area Initiative. The FY 2025 grant provides funding for approximately a combined 300 hours of overtime for two Corpus Christi Police Officers and two lease vehicles as part of the High Intensity Drug Trafficking Area Initiative. As part of the initiative, CCPD police officers will be working within the counties that constitute the Texas Coastal Corridor (Aransas, San Patricio, Refugio, Nueces, Kleberg, Kennedy, Jim Wells, and Victoria Counties). Thie City has received this grant for 28 years. Last year, the City received $45,640.00 from this grant. The City is not required to provide a match for this grant funding. This grant award is for activities conducted during January 01, 2025 through December 31, 2026. ALTERNATIVES: The alternative is to not accept the grant, which would result in less punitive measures for narcotics traffickers and money launderers. In order for there not to be less punitive measures, CCPD would need to identify additional funding through the General Fund in order to make up for the loss of$41,800.00 from not accepting this grant award. FINANCIAL IMPACT: The financial impact in FY 2025 is the acceptance of grant funds in an amount of$41,800.00 and appropriating $41,800.00 to the FY 2025 Police Grants Fund. There is no required match funding for this grant. Funding Detail: Fund: 1061 Police Grants Fund Department: 29 Police Dept Org/Activity: 89 Grants & CIP/ TBD Account: 510200 Overtime 530160 Rentals Amount: $41,800.00 RECOMMENDATION: Staff recommends acceptance of the grant from the Executive Office of the President, Office of National Drug Control Policy, for overtime for two sworn officers and lease payments on two vehicles for the FY 2025 Texas Coastal Corridor High Intensity Drug Trafficking Area Initiative in an amount of$41,800.00; and appropriating $41,800.00 in the Police Grants Fund, as presented. LIST OF SUPPORTING DOCUMENTS: Ordinance Grant Award Ordinance accepting a grant from the Executive Office of the President, Office of National Drug Control Policy in the amount of $41,800.00 for the FY 2025 Texas Coastal Corridor High Intensity Drug Trafficking Area Initiative (HIDTA) grant to fund overtime for two sworn officers and lease payments on two vehicles; designating the Chief of Police as the authorized official; appropriating $41,800.00 in the Police Grants Fund. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. That the award of $41 ,800.00 for the FY 2025 Texas Coastal Corridor High Intensity Drug Trafficking Area Initiative, HIDTA Grant HID0925G0512-00, is hereby accepted and appropriated into the Police Grants Fund. SECTION 2. The City Manager, or his designee ("City Manager"), is authorized to execute all documents necessary to accept the funding indicated in Section 1 of this ordinance. SECTION 4. The City Manager, or designee, may reject or terminate this grant. Furthermore, the City Manager, or designee, is authorized to execute contract amendments pertaining to these grant funds in the following instances: a) for the carry- over of funds, when ascertained and approved by the funding agency through a revised notice of award; b) a no-cost extension; c)when an amendment will provide supplemental grant funds in an amount not to exceed 20% of the original grant amount; d) for reimbursement increases of administration funds for each participant served; e)to comply with applicable State or federal laws and regulations; and f) for matters which do not change the essential purpose of the grant. SECTION 2. That the Chief of Police is designated as the Authorized Official to execute all documents necessary to accept a grant from the Executive Office of the President, Office of National Drug Control Policy for the FY 2025 HIDTA grant program to support overtime pay for two sworn officers and lease payments on two vehicles. SECTION 4. In the event of the loss or misuse of these funds, the City of Corpus Christi assures that the funds will be returned to the Executive Office of the President, Office of National Drug Control Policy in full. Introduced and voted on the day of , 2025. PASSED and APPROVED on the day of , 2025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary EpfiESIDFNT Office of National Drug Control Policy Notice of Award 71 o Award# HID0925GO512-00 °O�'x�. saidys FAIN# HID0925GO512 Federal Award Date: 05/23/2025 Recipient Information Federal Award Information 1. Recipient Name 11.Award Number CITY OF CORPUS CHRISTI I IID0925G0512-00 1201 Leopard St 12.Unique Federal Award Identification Number(FAIN) 1IID0 J25GO512 Corpus Christi,TX 78401-2120 13.Statutory Authority P.L. 119-4 14.Federal Award Project Title 2. Congressional District of Recipient Iligh Intensity Drug Trafficking Areas(HIDTA)Program Fiscal Year(FY)2025 Grant Award 27 3. Payment System Identifier(ID) 832150963 15.Assistance Listing Number 4. Employer Identification Number(EIN) 95.001 746000574 16.Assistance Listing Program Title S. Data Universal Numbering System(DUNS) High Intensity Drug Trafficking Areas 6. Recipient's Unique Entity Identifier(UEI) 17.Award Action Type XETBTIIKCL995 New 7. Project Director or Principal Investigator 18.Is the Award R&D? No Michelle Pritchard Finance Accountant Il Summary Federal Award Financial Information michellepCacctexas.com 19. Budget Period Start Date 01/01/2025 -End Date 12/31/2026 361-826-3602 B. Authorized Official 20. Total Amount of Federal Funds Obligated by this Action $41,800.00 20a.Direct Cost Amount $41,800.00 Pat Eldridge 20b.Indirect Cost Amount $0.00 Police Management Services Director pat@cctexas.com 21. Authorized Carryover $0.00 361-886-2696 22. Offset $0.00 23. Total Amount of Federal Funds Obligated this budget period $0.00 Federal Agency Information 24. Total Approved Cost Sharing or Matching,where applicable $0.00 Office of National Drug Control Policy(ONDCP) 25. Total Federal and Non-Federal Approved this Budget Period $41,800.00 9. Awarding Agency Contact Information 26. Period of Performance Start Date 01/01/2025 -End Date 12/31/2026 Shannon L.Kelly Assistant Director 27. Total Amount of the Federal Award including Approved Shannon-L.-Kelly@ondcp.eop.gov Cost Sharing or Matching this Period of Performance $41,800.00 202-841-5240 28.Authorized Treatment of Program Income 10.Program Official Contact Information Shannon L.Kelly 29.Grants Management Officer-Signature Assistant Director Lisa Newton Shannon-L.-Kelly(Uondcp.eop.gov Grants Management Specialist 202-841-5240 30. Remarks New Award The funding amount in Box 33 may not necessarily reflects the budget breakout by object class.Refer to the attached budget reports for details. i Page 1 Ill�OftESIpFNT 1 zj Office of National Drug Control Policy Notice of Award y 71 Award# HID0925GO512-00 - FAIN# HID092500512 Federal Award Date: 05/23/2025 Recipient Information 33. Approved Budget (Excludes Direct Assistance) Recipient Name I. Financial Assistance from the Federal Awarding Agency Only CITY OF CORPUS CHRISTI II. Total project costs including grant funds and all other financial participation 1201 Leopard St a. Salaries and Wages $0.00 Corpus Christi,TX 78401-2120 b. Fringe Benefits $0.00 c. TotalPersonnel Costs $0.00 Congressional District of Recipient d. Equipment $0.00 27 e. Supplies $0.00 Payment Account Number and Type L Travel $0.00 832150963 Employer Identification Number(EIN)Data g• Construction $0.00 746000574 It. Other $41,800.00 Universal Numbering System(DUNS) i. Contractual $0.00 Recipient's Unique Entity Identifier (UEI) j. TOTAL DIRECT COSTS $41,800.00 XETBTPKCL895 IL INDIRECT COSTS $0.00 31.Assistance Type 1. TOTAL APPROVED BUDGET $41,800.00 Project Grant nI. Federal Share $41,800.00 32.Type of Award Other n. Non-Federal Share $0_00 34,Accounting Classification Codes FY-ACCOUNT NO. DOCUMENT NO. ADNIINISTRATIVE CODE OBJECT CLASS I CFDA NO. I AMT ACTION FINANCIAL ASSISTANCE APPROPRIATION FY 2025 HIDTA HID0925GO512 HID 410001 1 95.001 1 S41,800.001 011202520261070000 1 I i Page 2 u /RESIDF� Office of National Drug Control Policy Notice of Award r, yil Award# HID0925GO512-00 o�x3.saydy FAIN# HID0925GO512 Federal Award Date: 05/23/2025 35.Terms And Conditions Terms and Conditions 1.A. GENERAL TERMS AND CONDITIONS (1) This award is subject to the Uniform Administrative Requirements,Cost Principles,and Audit Requirements in 2 C.F.R. §200(the"§200 Uniform Requirements"),as adopted and implemented by the Office of National Drug Control Policy(ONDCP)in 2 C.F.R.§3603.For this award,the§200 Uniform Requirements supersede,among other things,the provisions of 28 C.F.R. §§ 66 and 70,as well as those of 2 C.F.R. §§215,220,225,and 230.For more information on the§200 Uniform Requirements,see littl2s://www.eefr.gov/current/title-2/subtitle-A/clia tep r-lI/part-200.For specific,award-related questions, recipients should contact ONDCP promptly for clarification. (2) This award is subject to the following additional regulations and requirements: • 28 C.F.R. §69—"New Restrictions on Lobbying" • 2 C.F.R. § 25—"Universal Identifier and System of Award Management" • Conflict of Interest and Mandatory Disclosure Requirements • Non-profit Certifications(when applicable) (3) Audits conducted pursuant to 2 C.F.R. §200,Subpart F,"Audit Requirements"must be submitted no later than 9 months after the close of the recipient's audited fiscal year to The Federal Audit Clearinghouse(fac.eov) (4) Recipients are required to submit Federal Financial Reports(FFR)to the Department of Health and Human Services,Payment Management Services(HHS/PMS).The Federal Financial Report is required to be submitted quarterly and within 90 days after the grant is closed out. (5) The recipient gives the awarding agency or the Government Accountability Office,through any authorized representative,access to,and the right to examine,all paper or electronic records related to the grant. (6) Recipients are not agents of ONDCP.Accordingly,the recipient,its fiscal agent(s),employees, contractors,as well as state,local,and federal participants,either on a collective basis or on a personal level,shall not hold themselves out as being part of,or representing,the Executive Office of the President or ONDCP. (7) These general terms and conditions,as well as archives of previous versions of these general terms and conditions,are available online at the ONDCP website. (8) Failure to adhere to the General Terms and Conditions as well as the Program Specific Terms and Conditions may result in the termination of the grant or the initiation of administrative action.ONDCP may also terminate the award if it no longer effectuates program goals or agency priorities. See 2 C.F.R. § 200.340. (9) Conflict of Interest and Mandatory Disclosures Conflict of Interest Requirements As a recipient entity,you must follow ONDCP's conflict of interest policies for federal awards. Recipients must disclose in writing any potential conflict of interest to an ONDCP Program Officer; Page 3 prrESlDF ® c\Office of National Drug Control Policy Notice of Award y/ Award# HID0925GO512-00 FAIN# FUD0925GO512 Federal Award Date: 05/23/2025 recipients that are pass-through entities must require disclosure from sub-recipients or contractors.This disclosure must take place immediately whether you are an applicant or have an active ONDCP award. The ONDCP conflict of interest policies apply to sub-awards as well as contracts,and are as follows: As a recipient entity,you must maintain written standards of conduct covering conflicts of interest and governing the performance of your employees engaged in the selection,award,and administration of subawards and contracts. None of your employees may participate in the selection,award,or administration of a sub-award or contract supported by a federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee,officer,or agent,any member of his or her immediate family,his or her partner,or an organization which employs or is about to employ any of the parties indicated herein,has a financial or other interest in or a tangible personal benefit from an organization considered for a sub-award or contract.The officers,employees,and agents of the recipient entity must neither solicit nor accept gratuities, favors,or anything of monetary value from sub-recipients or contractors or parties to sub-awards or contracts. If you have a parent,affiliate,or subsidiary organization that is not a state,local government,or Indian tribe, you must also maintain written standards of conduct covering organizational conflicts of interest. Organizational conflicts of interest means that because of relationships with a parent company,affiliate, or subsidiary organization,you are unable or appear to be unable to be impartial in conducting a sub- award or procurement action involving a related organization. Mandatory Disclosure Requirement As a recipient entity,you must disclose,in a timely manner,in writing to ONDCP all violations of federal criminal law involving fraud,bribery,or gratuity violations potentially affecting the federal award. Recipient entities that have received a federal award are required to report certain civil,criminal,or administrative proceedings,including the terms and conditions outlined in 2 C.F.R part 200, Subpart F, Appendix XII,to the System for Award Management(SAM),currently the Federal Awardee Performance and Integrity Information System.Failure to make required disclosures can result in any of the remedies described in 2 C.F.R. § 200.339.(See also 2 C.F.R. § 180,31 U.S.C. §3321,and 41 U.S.C. §2313.) None of the funds appropriated or otherwise made available by this grant or any other Act may be used to fund a contract,grant,or cooperative agreement with an entity that requires employees or contractors of such entity seeking to report fraud,waste,or abuse to sign internal confidentiality agreements or statements prohibiting or otherwise restricting such employees or contractors from lawfully reporting such waste,fraud, or abuse to a designated investigative or law enforcement representative of a federal department or agency authorized to receive such information.This limitation shall not contravene requirements applicable to Standard Form 312,Form 4414,or any other form issued by a federal department or agency governing the nondisclosure of classified information. (10) Federal Funding Accountability and Transparency(FFATA)/Digital Accountability and Transparency Act(DATA Act).Each applicant is required to(i)be registered in SAM before submitting its application;(ii)provide a valid Unique Entity Identifier number in its application;(iii)continue to maintain an active SAM registration with current information at all times during which it has an active federal award;and(iv)provide all relevant recipient information required for ONDCP to collect for reporting related to FFATA and DATA Act requirements. Page 4 I �pRESIp' 4 ® ' Office of National Drug Control Policy Notice of Award a, �'�ra saLdyyoi Award# HID0925GO512-00 - FAIN# HID0925GO512 Federal Award Date: 05/23/2025 (11) Subawards are authorized under this grant award. Subawards must be monitored by the award recipient as outlined in 2 C.F.R.§200.331. (12) Recipients must comply with the Government-wide Suspension and Debarment provision set forth at 2 C.F.R. § 180,dealing with all sub-awards and contracts issued under the grant. (13) As specified in 2 C.F.R. §200.303 Internal Controls,recipient must: • Establish and maintain effective internal controls over the federal award that provides reasonable assurance that federal award funds are managed in compliance with federal statutes,regulations and award terms and conditions. These internal controls should be in compliance with the guidance in "Standards for Internal Control in the federal Government,"issued by the Comptroller General of the United States and the"Internal Control Integrated Framework,"issued by the Committee of Sponsoring Organizations of the Treadway Commission(COSO). • Comply with federal statutes,regulations,and the terms and conditions of the federal awards. • Evaluate and monitor the recipient entity's compliance with statute,regulations,and the terms and conditions of the federal award. • Take prompt action when instances of noncompliance are identified,including noncompliance identified in audit findings, • Take reasonable measures to safeguard protected personally identified information(PII)and other information ONDCP or pass-through entity designates as sensitive or the recipient entity considers sensitive consistent with applicable federal,state,and local laws regarding privacy and obligations of confidentiality. (14) Recipients are prohibited from using federal grant funds to purchase certain telecommunication and video surveillance services or equipment in alignment with§ 889 of the National Defense Authorization Act of 2019,Pub.L.No. 115-232.See 2 C.F.R. §200.216. (15) Recipients should provide a preference,to the extent permitted by law, to maximize use of goods, products,and materials produced in the United States.See 2 C.F.R. §200.322. (16) When issuing statements,press releases,requests for proposals,bid solicitations and other documents describing projects or programs funded in whole or in part with federal money,all recipients receiving federal funds shall clearly state— • the percentage of the total costs of the program or project which will be financed with federal money; • the dollar amount of federal funds for the project or program;and • percentage and dollar amount of the total costs of the project or program that will be financed by non-govermnental sources. B. RECIPIENT INTEGRITY AND PERFORMANCE MATTERS Reporting of Matters Related to Recipient Integrity and Performance (1) General Reporting Requirement If the total value of your currently active grants,cooperative agreements,and procurement contracts from all federal awarding agencies exceeds$10,000,000 for any period of time during the period of performance of this federal award,then you as the recipient during that period of time must maintain the currency of information reported to SAM that is made available in the designated integrity and Page 5 Office of National Drug Control Policy Notice of Award O ti Award# HID0925GO512-00 �Jg-Yd•Sa1�1, FAIN# HID0925GO512 Federal Award Date: 05/23/2025 performance system(currently the Federal Awardee Performance and Integrity Information System (FAPIIS))about civil,criminal,or administrative proceedings described in paragraph 2 of this award term and condition.This is a statutory requirement under§ 872 of Public Law 110-417,as amended(41 U.S.C. §2313).As required by§3010 of Public Law 111-212,all information posted in the designated integrity and performance system on or after April 15,2011,except past performance reviews required for federal procurement contracts,will be publicly available. See 2 C.F.R.Part 200,Appendix XII. (2) Proceedings About Which You Must Report Submit the information required about each proceeding that: 1.Is in connection with the award or performance of a grant,cooperative agreement,or procurement contract from the federal Government; 2.Reached its final disposition during the most recent 5-year period;and 3.Is one of the following: • A criminal proceeding that resulted in a conviction,as defined in paragraph 5 of this award term and condition; • A civil proceeding that resulted in a finding of fault and liability and payment of a monetary fine, penalty,reimbursement,restitution,or damages of$5,000 or more; • An administrative proceeding,as defined in paragraph 5 of this award term and condition,that resulted in a finding of fault and liability and your payment of either a monetary fine or penalty of $5,000 or more or reimbursement,restitution,or damages in excess of$100,000;or • Any other criminal,civil,or administrative proceeding if: (i) It could have led to an outcome described in paragraph 2.c.(1),(2),or(3)of this award term and condition; (ii) It had a different disposition arrived at by consent or compromise with an acknowledgment of fault on your part;and (iii) The requirement in this award term and condition to disclose information about the proceeding does not conflict with applicable laws and regulations. (3) Reporting Procedures Enter in the SAM Entity Management area the information that SAM requires about each proceeding described in paragraph 2 of this award term and condition.You do not need to submit the information a second time under assistance awards that you received if you already provided the information through SAM because you were required to do so under federal procurement contracts that you were awarded. (4) Reporting Frequency During any period of time when you are subject to the requirement in paragraph 1 of this award term and condition,you must report proceedings information through SAM for the most recent 5-year period, either to report new information about any proceeding(s)that you have not reported previously or affirm that there is no new information to report.Recipients that have federal contract,grant,and cooperative agreement awards with a cumulative total value greater than$10,000,000 must disclose semiannually any information about the criminal,civil,and administrative proceedings. (5)Definitions For purposes of this award term and condition: Page 6 I S�pRESIpF1� LL�az Office of National Drug Control Policy Notice of Award w Award# HID0925GO512-00 FAIN# HID0925GO512 Federal Award Date: 05/23/2025 (a)Administrative proceeding means a non judicial process that is adjudicatory in nature in order to make a determination of fault or liability(e.g.,Securities and Exchange Commission Administrative proceedings,Civilian Board of Contract Appeals proceedings,and Armed Services Board of Contract Appeals proceedings).This includes proceedings at the federal and state level,but only in connection with performance of a federal contract or grant.It does not include audits,site visits,corrective plans,or inspection of deliverables. (b) Conviction,for purposes of this award term and condition,means a judgment or conviction of a criminal offense by any court of competent jurisdiction,whether entered upon a verdict or a plea,and includes a conviction entered upon a plea of nolo contendere. (c) Total value of currently active grants,cooperative agreements,and procurement contracts includes— (1)Only the federal share of the funding under any federal award with a recipient cost share or match; and (2)The value of all expected funding increments under a federal award and options,even if not yet exercised. C.PAYMENT BASIS (1) A request for advance or reimbursement shall be made using the HHS/PMS system (httPS7//prns,Dsc.gov . (2) The recipient,must utilize the object classes specified within the initial budget/grant application each time they submit a disbursement request to ONDCP.Requests for payment in the PMS system will not be approved unless the required disbursements have been entered using the corresponding object class designations.Payments will be made via Electronic Fund Transfer to the award recipient's bank account. The bank must be Federal Deposit Insurance Corporation(FDIC)insured. The account must be interest bearing. (3) Except for interest earned on advances of funds exempt under the Intergovernmental Cooperation Act (31 U.S.C.§6501 et seq.)and the Indian Self-Determination and Education Assistance Act(25 U.S.C. §§ 5301—5423)awardees and sub-awardees shall promptly,but at least annually,remit interest earned on advances to HHS/PMS using the remittance instructions provided below. Remittance Instructions—Remittances must include pertinent information of the payee and nature of payment in the memo area(often referred to as"addenda records"by Financial Institutions)as that will assist in the timely posting of interest earned on federal funds. Pertinent details include the Payee Account Number(PAN),reason for check(remittance of interest earned on advance payments),check number(if applicable),awardee name,award number,interest period covered,and contact name and number.The remittance must be submitted as instructed in https://pms.pse.gov/grant-recipients/returning-funds-interest.html. (4) The recipient or subrecipient may keep interest amounts up to$500 per year for administrative purposes. Page 7 i E1?{tES1®r) ® �\Office of National Drug Control Policy Notice of Award O Y Award# HID0925GO512-00 �d�x�•saydyy�t FAIN# H 1D0925GO512 Federal Award Date: 05/23/2025 Program Specific Requirements 1.D.PROGRAM SPECIFIC TERMS AND CONDITIONS The grant conditions are as follows: • This award is subject to the requirements in the SUPPORT for Patients and Communities Act,21 U.S.C. §§ 1701 et seq.and in the ONDCP National HIDTA Program Office HIDTA Program Policy and Budget Guidance(September 9,2021)(PPBG).The HIDTA PPBG is issued pursuant to authority granted the Director of ONDCP by the SUPPORT for Patients and Communities ACT (21U.S.C. § 1706)and the Uniform Administration Requirements(2 C.F.R. §200)which provide the Director of ONDCP authority to coordinate funds and implement oversight and management function with respect to the HIDTA Program.The HIDTA PPBG can be accessed at the following website: https://www.nhac.org/PDF/Program_Policy_and Budget_Guidance2021.1)df In addition,as a condition for receiving this award,recipients must complete safe and respectful workplace trainings as outlined in the PPBG. • Recipients are prohibited from using federal grant funds to purchase certain telecommunication and video surveillance services or equipment in alignment with§ 889 of the National Defense Authorization Act of 2019,Pub. L.No. 115-232. See 2 C.F.R. §200.216.See also,HIDTA PPBG, § 7.20,Prohibited Uses of HIDTA Funds. E.FEDERAL AWARD PERFORMANCE GOALS HIDTA award recipients must adhere to the performance measures,goals and requirements set forth in the PPBG Performance Management chapter(§ 10.0)and the HIDTA Performance Management Process (PMP)database. Page 8 i 0 > MAO - o O t O O vas' Oo0 � £A U U H a� `o 0 U co m j0 U LM x C U) 2 U V) D a (j) U � L = L O U CD a U ® m O c� ® Z U ALL cc co 'v U O N � 9 LO O 0 }+ N o 0 0 i Budget Detail 2025 - Houston Initiative-Texas Coastal Corridor Initiative (TCCI) Investigation Award Recipient- CITY OF CORPUS CHRISTI (HI®24,000206) Resource Recipient- CITY OF CORPUS CHRISTI Awarded Budget(as approved by ONDCP) $41,800.00 • -rtime Quantity Amount Investigative-Law Enforcement Officer 2 $22,000.00 Total Overtime $22,000.00 Services Quantity Amount Equipment rentals $1,800.00 Vehicle allowance 2 $18,000.00 Total Services $19,800.00 Total Budget $41,800.00 Executive Office of the President High Intensity Drug Trafficking Area Initiative Ordinance Authorizing Acceptance of Grant Award Police Department Chief of Police,Mike Markle June 17, 2025 Background Information Ordinance authorizing acceptance of a grant from the Executive Office of the President, Office of National Drug Control Policy, under the FY 2025 Texas Coastal Corridor High Intensity Drug Trafficking Area Initiative. The City has been awarded $41,800.00. Background Information This grant will provide funding for: This funding will be used to fund overtime for two sworn officers and lease payments on two vehicles. With the awarded grant funding, the Corpus Christi Police Department (CCPD) anticipates that shipments of narcotics through this area will be intercepted, and narcotics traffickers will be apprehended. The data gathered during this initiative will be uploaded and shared with other drug trafficking initiatives and programs across the country in order to further suppress criminal activity. Background Information This grant award is for activities conducted during January 01, 2025, through December 31, 2026. The City is not required to match funding. Last year's award was in the amount of $45,640.00. Executive Office of the President High Intensity Drug Trafficking Area Initiative Questions ? se GO � O� A H AGENDA MEMORANDUM First Reading for City Council Meeting of June 24, 2025 CORPOR Second Reading for City Council Meeting of July 15, 2025 DATE: June 24, 2025 TO: Peter Zanoni, City Manager FROM: Daniel McGinn, AICP, Interim Assistant City Manager DanielMc@cctexas.com 361-826-7011 Ordinance ratifying the acceptance of a grant amendment increasing the HOME Investment Partnerships Program - American Rescue Plan award by $6,329 to serve persons who are homeless, at-risk of homelessness, and other special populations CAPTION: Ordinance ratifying the acceptance of an amendment in the amount of $6,329 increasing the HOME Investment Partnerships Program - American Rescue Plan (HOME-ARP) grant M-21-MP- 48-0502 from the U.S. Department of Housing and Urban Development and amending the Fiscal Year 2025 budget by appropriating $6,329.00 into Grant Fund 9045. SUMMARY: The U.S. Department of Housing and Urban Development (HUD) has increased the amount awarded to the City of Corpus Christi of HOME Investment Partnerships Program (HOME) funds from the American Rescue Plan Act of 2021 (ARP) by $6,329 for a total of $4,220,266. Funds are to serve individuals or families who are homeless, at-risk of homelessness, fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking, or human trafficking, other populations where providing supportive services or assistance would prevent the family's homelessness or serve those with the greatest risk of housing instability, and veterans and families that include a veteran family member that meet one of the preceding criteria. BACKGROUND AND FINDINGS: The American Rescue Plan Act of 2021 appropriated $5 billion to be allocated by formula to communities that qualify for the HOME entitlement allocations. The City of Corpus Christi is a HOME participating jurisdiction and its original HOME-ARP allocation was $4,213,937. The City was notified on June 4, 2025, that while HUD was conducting quality control efforts, an administrative error in HUD's calculation was discovered in the allocation amounts of HOME-ARP funds. This has resulted in an increase to the City's HOME-ARP award of$6,329 from $4,213,937 to $4,220,266. This increase is less than one percent (0.15 percent) of the original award. This is one-time funding and is in addition to the annual entitlement allocation the City receives from HUD. Funds must be expended by September 30, 2030. The signed amended award agreement was required to be submitted to HUD by June 11, 2025. The timeline did not provide adequate notice to present the additional funds to City Council for acceptance and appropriation before the executed grant agreement's required submission. Planning and Community Development Department staff discussed this with the City Attorney's Office and Finance and Procurement. It was agreed that the increase in award funds would be presented to City Council for ratification after the June 11, 2025 submission deadline. On March 25, 2025, after a competitive application process and in accordance with the HOME- ARP Allocation Plan, City Council awarded program funds to three organizations. HOME-ARP funds are required to benefit individuals or families who are homeless, at-risk of homelessness, fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking, or human trafficking, other populations where providing supportive services or assistance would prevent the family's homelessness or serve those with the greatest risk of housing instability, and veterans and families that include a veteran family member that meet one of the preceding criteria. Due to the amount of the amendment (0.15 percent of the original award), a Substantial Amendment to the City's Annual Action Plan and City Council action on the subrecipient agreements are not required. The subrecipient awards with this amendment are: Agency Activity Original Increase Revised Amount Amount Corpus Christi Tenant Based Rental Assistance $1,369,740 $6,329 $1,376,069 Housing Authority and Administration Endeavors Supportive Services, Operating, $1,210,696 $0 $1,210,696 and Capacity Building Coastal Bend Center Supportive Services, Operating, $1,210,696 $0 $1,210,696 for Independent Living and Capacity Building City of Corpus Christi Administration $422,805 $0 $422,805 The City Manager, or designee, may reject or terminate this grant. Furthermore,the City Manager, or designee, is authorized to execute contract amendments pertaining to these grant funds in the following instances: a) for the carry-over of funds, when ascertained and approved by the funding agency through a revised notice of award; b) a no-cost extension; c) when an amendment will provide supplemental grant funds in an amount not to exceed 20% of the original grant amount; d) for reimbursement increases of administration funds for each participant served; e) to comply with applicable Federal, State, or laws and regulations; and f) for matters which do not change the essential purpose of the grant. ALTERNATIVES: City Council can choose not accept and appropriate the funds. FISCAL IMPACT: The City will act as a pass-through and administrator of the HOME-ARP funds from HUD. Funds are on a reimbursement basis. FUNDING DETAIL: Fund: 9045 Organization/Activity: TBD Department: 24 Project # (CIP Only): N/A Account: 530000 RECOMMENDATION: Staff recommend ratifying the acceptance and appropriating the increase in grant funds. LIST OF SUPPORTING DOCUMENTS: Ordinance Memo to City Manager with Grant Agreement Ordinance ratifying the acceptance of an amendment in the amount of $6,329 increasing the HOME Investment Partnerships Program - American Rescue Plan (HOME-ARP) grant M-21-MP-48-0502 from the U.S. Department of Housing and Urban Development and amending the Fiscal Year 2025 budget by appropriating $6,329 into Grant Fund 9045 Whereas, the U.S. Department of Housing and Urban Development ("HUD") allocated $4,213,937 to the City of Corpus Christi ("City") from the American Rescue Plan Act of 2021 for the HOME Investment Partnership Program to be expended by September 2030; Whereas, Ordinance 032701 passed and approved on March 22, 2022, accepted and appropriated $4,213,937 of HOME-ARP to benefit individuals or families who are homeless, at-risk of homelessness, fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking, or human trafficking, other populations where providing supportive services or assistance would prevent the family's homelessness or serve those with the greatest risk of housing instability, and veterans and families that include a veteran family member that meet one of the preceding criteria; Whereas, HUD conducted quality control activities on the HOME-ARP allocation process and found that HUD had made an error in the formula allocation; Whereas, HUD issued an Amendment #1 to the HOME-ARP Grant Agreement increasing the allocation by $6,329 from $4,213,937 to $4,220,266-1 Now, Therefore, be it ordained by the City Council of the City of Corpus Christi, Texas that: Section 1. The City Council specifically finds that the foregoing statements included in the preamble of this ordinance are true and correct and adopts such findings for all intents and purposes. Section 2. The acceptance of the award increase of $6,329 of HOME-ARP funds is ratified. Section 3. The FY2025 Operating Budget adopted by Ordinance No. 033451 is amended to increase expenditures by $6,329 through Grant Fund 9045. Section 4: The City Manager or his designee is authorized to execute all documents necessary for acceptance and appropriation of the HOME-ARP funds. Section 5: The City Manager, or designee, may reject or terminate this grant. Furthermore, the City Manager, or designee, is authorized to execute contract amendments pertaining to these grant funds in the following instances: a) for the carry- over of funds, when ascertained and approved by the funding agency through a revised notice of award; b) a no-cost extension; c) when an amendment will provide supplemental grant funds in an amount not to exceed 20% of the original grant amount; d) for reimbursement increases of administration funds for each participant served; e) to comply with applicable Federal, State, or laws and regulations; and f) for matters which do not change the essential purpose of the grant. Introduced and voted on the day of , 2025. PASSED and APPROVED on the day of , 2025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary CITY OF CORPUS CHRISTI PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT TO: Peter Zanoni, City Manager THRU: Daniel McGinn, AICP, Interim Assistant City Manager FROM: Jennifer Buxton,Assistant Director,Planning and Community Development _ SUBJECT: Request for Signature for HOME-ARP Grant Award Increase DATE: June 05, 2025 Attached for your signature is the U.S.Department of Housing and Urban Development(HUD)form HUD- 40093a increasing the City's HOME Investment Partnerships Program—American Rescue Plan (HOME- ARP) grant award by $6,329. This increase brings the total award from $4,213,937 to$4,220,266. This is a 0.15 percent (less than one percent) increase in award funds caused by an administrative error in the federal allocation formula. HUD notified the City of the increase on June 4, 2025, and has requested the signed form be returned by June 11,2025.The timeline does not provide adequate notice to present the additional funds to City Council for acceptance and appropriation before the form's required submission. Staff have discussed this with the City Attorney's Office and Finance and Procurement. It has been agreed that the increase in award funds can be presented to City Council for ratification at an upcoming City Council meeting. The July 24, 2025, meeting is the target meeting. Due to the small amount of the increase in the award (0.15 percent of the original), it does not trigger a Substantial Amendment to the City's Annual Action Plan or Council action on the subrecipient awards. HOME-ARP funds are required to benefit individuals or families who are homeless, at-risk of homelessness, fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking, or human trafficking, other populations where providing supportive services or assistance would prevent the family's homelessness or serve those with the greatest risk of housing instability,and veterans and families that include a veteran family member that meet one of the preceding criteria. Funds must be expended by September 30,2030. City Council awarded HOME-ARP funds to agencies on March 25,2025.The increase will be added to the tenant based rental assistance portion of the award. Awards for services are shown below: Agency Activity Original Amount Increase Revised Amount Corpus Christi Tenant Based Rental Assistance and $1,369,740 $6,329 $1,376,069 Housing Authority Administration Memo regarding Request for Signature for HOME-ARP Grant Award Increase Page#2 Endeavors Supportive Services,Operating,and $1,210,696 $0 $1,210,696 Capacity Building Coastal Bend Center Supportive Services,Operating,and $1,210,696 $0 $1,210,696 for Independent Capacity Building Living City of Corpus Christi Administration $422,805 $0 $422,805 Attachments: HOME-ARP Grant Agreement-Amended Docusign Envelope ID:AB7ADB5C-6BD4-4893-B991-4DCC95FBE917 U.S.Department of Housing and Urban Development HOME ARP Grano Agreement Office of Community Planning and Development Title II of the Cranston-Gonzalez National Affordable Housing Act Assistance Listings#14.239-HOME Investment Partnerships Program 1. Grantee Name(must match name associated with 3b.)and 2. Grant Number(Federal Award Identification Number(FAIN) Address M21 MP480502 City of Corpus Christi 3a Tax Identification Number 3b. Unique Entity Identifier(formerly DUNS) 1201 Leopard Street 746000574 XETBTPKCL895 P.O.Box 9277 4.Appropriation Number 5. Budget Period Start and End Date Corpus Christi,TX 78401-2120 861/50205 FY 2021-09/30/2030 6. Previous Obligation(Enter"0"for initial FY allocation) $4,213,937.00 a. Formula Funds $4,213,937.00 7. Current Transaction(+or-) $6,329.00 a. Administrative and Planning Funds Available on Federal Award Date $ b. Balance of Administrative and Planning Funds $ c. Balance of Formula Funds $6,329.00 8. Revised Obligation $4,220,266.00 a. Formula Funds $4,220,266.00 9. Special Conditions(check applicable box) 10.Federal Award Date(HUD Official's Signature Date) ® Not applicable ❑Attached (mm/dd/yyyy) 9/20/2021 11.Indirect Cost Rate* 12.Period of Performance Administerina Agency/Dei)t. Indirect Cost Rate Direct Cost Base Date in Box#10-09/30/2030 —% *If funding assistance will be used for payment of indirect costs pursuant to 2 CFR 200, Subpart E-Cost Principles, provide the name of the department/agency, Its % indirect cost rate(including if the de minimis rate is charged per 2§CFR 200.414),and the direct cost base to which the rate will be applied. Do not include cost rates for subrecipients. The HOME-ARP Grant Agreement(the"Agreement")between the Department of Housing and Urban Development(HUD)and the Grantee is made pursuant to the authority of the HOME Investment Partnerships Act(42 U.S.C.12701 at seq.)and Section 3205 of the American Rescue Plan(P.L.117-2)(ARP).HUD regulations at 24 CFR part 92(as may be amended from time to time),the CPD Notice entitled"Requirements for the Use of Funds in the HOME-American Rescue Plan Program"(HOME-ARP Implementation Notice)(as is now in effect and as may be amended from time to time)„the Grantee's HOME-ARP allocation plan(as of the date of HUD's approval,and as amended from time to time),and this HOME-ARP Grant Agreement,form HUD-40093a,including any special conditions(in accordance with 2 CFR 200.208),constitute part of this Agreement. HUD's payment of funds under this Agreement is subject to the Grantee's compliance with HUD's electronic funds transfer and information reporting procedures Issued pursuant to 24 CFR 92.502 and the HOME-ARP Implementation Notice(both as are now in effect and as may be amended from time to time).To the extent authorized by HUD regulations at 24 CFR part 92,HUD may,by its execution of an amendment,deobligate funds previously awarded to the Grantee without the Grantee's execution of the amendment or other consent. The Grantee agrees that funds invested in HOME-ARP activities under the HOME-ARP Implementation Notice are repayable in accordance with the requirements of the HOME- ARP Implementation Notice as it may be amended from time to time.The Grantee agrees to assume all of the responsibility for environmental review,decision making,and actions, as specified and required in regulation at 24 CFR 92.352 and 24 CFR Part 58,as well as the HOME-ARP Implementation Notice. The Grantee must comply with the applicable requirements at 2 CFR part 200, as amended, that are incorporated by the program regulations and the HOME-ARP Implementation Notice,as may be amended from time to time.Where any previous or future amendments to 2 CFR part 200 replace or renumber sections of part 200 that are cited specifically in the program regulations or HOME-ARP Implementation Notice,activities carried out under the grant after the effective date of the 2 CFR part 200 amendments will be governed by the 2 CFR part 200 requirements,as replaced or renumbered by the part 200 amendments. The Grantee shall comply with requirements established by the Office of Management and Budget(OMB)concerning the Universal Numbering System and System for Award Management(SAM)requirements in Appendix I to 2 CFR part 200,and the Federal Funding Accountability and Transparency Act(FFATA)in Appendix A to 2 CFR part 170. The Period of Performance for the funding assistance shall begin on the date specified in item 12 and shall end on September 30th of the 6th fiscal year after the expiration of the period of availability for obligation.Funds remaining in the grantee's Treasury account after the end of the budget period will be cancelled and thereafter not available for obligation or expenditure for any purpose.Per 31 U.S.C.1552,the Grantee shall not incur any obligations to be paid with such assistance after the end of the Budget Period. The Grantee must comply with the requirements of the Build America,Buy America(BABA)Act,41 U.S.C.8301 note,and all applicable rules and notices,as may be amended, if applicable to the Grantee's infrastructure project.Pursuant to HUD's Notice,"Public Interest Phased Implementation Waiverfor FY 2022 and 2023 of Build America,Buy America Provisions as Applied to Recipients of HUD Federal Financial Assistance"(88 FR 17001) 202"-%98.odf aovirrfo ao+r,any funds obligated by HUD on or after the applicable listed effective dates,are subject to BABA requirements,unless excepted by a waiver. 13.For the U.S.Department of HUD(Name and Title of Authorized Official) 14.Signature 15.Date Valerie Reed-sweed Director -�'�►' 6/,d/Z025 16_For the Grantee(Name and Title of Aut , rized Official) . rrat M7177"' i 5_Date �- 1 =' IN 19.Check one: ❑ Initial Agreement ®Amendment#1 20.Funding Information: HOMEARP Source of Funds Appropriation Code PAS Code Amount 2021 861/50205 HMX $6,329.00 Page 1 form HUD40093a se GO � O� A H "CORPOR^`E° AGENDA MEMORANDUM 1852 Action Item for the City Council Meeting June 24, 2025 DATE: June 20, 2025 TO: Peter Zanoni, City Manager FROM: Heather Hurlbert heatlierli3@cctexas.com 826-3506 Finding the recent acquisition of Apartment Complexes by Corpus Christi Housing Authority void and illegal. CAPTION: Resolution finding the authorization and purchase of the properties by the Corpus Christi Housing Authority related to the apartment complexes of Armon Bay, Azure, Churchill Square, Ocean Palms Apartments, Sandcastle, Sawgrass, South Lake Ranch, Stoneleigh Apartment, The Icon, The Summit, The Veranda, Tuscany Bay South, Villas of Ocean Drive, Arts at Ocean Drive, Caspian Apartments, Gulf Breeze, Shadow Bend, Bay Vista, Bay Vista Point, Baypoint, and Solana Vista void by operation of law; and finding the related memorandum of understandings, ground leases, and operating agreements illegal; requesting the Corpus Christi Housing Authority to acknowledge the findings herein and to immediately terminate the void/illegal land acquisitions, related contracts, and actions. SUMMARY: This resolution identifies the illegalities of the recent acquisition of Apartment Complexes by the Corpus Christi Housing Authority and requests that the CCHA immediately act to terminate the agreements and return the land to the prior owners. BACKGROUND AND FINDINGS: The Corpus Christi Housing Authority is a public body corporate and politic, operating independently from the city but governed by a board of commissioners. The Corpus Christi Housing Authority was created to address the shortage of housing for persons of low income. It is the policy of the state that a housing authority manages and operates its housing projects in an efficient manner to enable it to set rentals at the lowest possible rates consistent with providing decent, safe, and sanitary housing. The Corpus Christi Housing Authority has recently deviated from this policy to partner with private apartment complex owners to secure property tax exemptions for the privately operated apartment complexes, to the detriment of the citizens of Corpus Christi, including low-income residents. These partnerships with privately operated apartment complexes do not provide any additional housing to the City, while also depriving the respective taxing entities of revenue to provide services to the residents of these apartment complexes. The affected taxing entities include the City of Corpus Christi, Nueces County, Nueces County Hospital District, Del Mar College, Calallen ISD, and Corpus Christi ISD. On May 13, 2025, the City Council passed a resolution authorizing active opposition to improper and/or illegal use of property tax exemptions by the Corpus Christi Housing Authority, affiliates, and entities connected thereto. On May 28, 2025, the CCHA Commission, by unanimous vote of 5, ordered a pause on all real estate transactions related to the Workforce Housing Opportunity, WHO, including all pending closures and any new MOUs. The pause prevented the closing of the following apartment complexes: Arts at Ocean Drive, Caspian Apartments, Gulf Breeze, Shadow Bend, Bay Vista, Bay Vista Point,Baypoint,and Solana Vista.The combined taxable value ofthese Apartment Complexes is $213,650,416. The board further tabled the proposed agreements with Cameron County Housing Finance Corporation to continue a similar tax scheme to acquire the apartment complexes of Island Villa, Fncore Crossing, and The Retreat. The combined appraisal value of these properties is $208,557,706.Due to the passage ofBB21 in the 89'Legislature,these properties will likelyreturn to the tax rolls in 2027 . Prior to the CCHA Commission's order, the potential estimated loss of tax revenue to the City is $3,371,354.00, and a total loss of$12,241,356.00 to all taxing entities for tax year 2025. The CCHA took the first step in remedying this situation by putting a pause on any new closings or agreements. This resolution is requesting the CCHA to take a final step to terminate and rescind the land purchases and agreements associated with the recent illegal Apartment Complex acquisitions. ALTERNATIVES: Take no action FISCAL IMPACT: Funding Detail: Fund: Organization/Activity: Department: Project # (CIP Only): Account: RECOMMENDATION: Approval LIST OF SUPPORTING DOCUMENTS: Resolution finding the authorization and purchase of the properties by the Corpus Christi Housing Authority related to the apartment complexes of Armon Bay, Azure, Churchill Square, Ocean Palms Apartments, Sandcastle, Sawgrass, South Lake Ranch, Stoneleigh Apartment, The Icon, The Summit, The Veranda, Tuscany Bay South, Villas of Ocean Drive, Arts at Ocean Drive, Caspian Apartments, Gulf Breeze, Shadow Bend, Bay Vista, Bay Vista Point, Baypoint, and Solana Vista void by operation of law; and finding the related memorandum of understandings, ground leases, and operating agreements illegal; requesting the Corpus Christi Housing Authority to acknowledge the findings herein and to immediately terminate the void/illegal land acquisitions, related contracts, and actions. Whereas, Corpus Christi Housing Authority (herein after referred to as ("CCHA") engaged in a scheme to sell its tax-exempt status through an elaborate set of transactions and agreements with private entities, for the following existing apartment complexes: Armon Bay, Azure, Churchill Square, Ocean Palms Apartments, Sandcastle, Sawgrass, South Lake Ranch, Stoneleigh Apartment, The Icon, The Summit, The Veranda, Tuscany Bay South, Villas of Ocean Drive,Arts at Ocean Drive, Caspian Apartments, Gulf Breeze, Shadow Bend, Bay Vista, Bay Vista Pointe, Baypoint, and Solana Vista (Herein after referred to as "Apartment Complexes"); Whereas, the Texas Open Meetings Act requires a governmental body to give written notice of the date, hour, place, and subject of each meeting held by the governmental body; Whereas, the Court of Appeals, Thirteenth District, has found that in determining the adequacy of a notice under the Texas Open Meetings Act, courts consider if the notice informs the reader that some action will be considered regarding the topic for consideration; and a heightened standard for the notice is required regarding subjects slated for discussion that represent special interest to the public; and the required specificity of the notice is directly related to the level of public interest in the topic to be discussed and increases as the public's level of interest increases; Whereas, under the Texas Open Meetings Act, action taken by a governmental body in violation of the Act is voidable; Whereas, under the CCHA Bylaws, "The CEO may not enter into contracts for the purchase or sale of Real Property without specific Commission Resolution so authorizing."; Whereas, Texas Local Government Code §392.053 requires the commissioners to hold a public meeting at the closest available facility to the site of the proposed housing project; Whereas, Texas Local Government Code §392.054 requires, in addition to any other notice required by law, the commissioners of an authority to post notice of a meeting 1 for a proposed housing project before the 30th day before the date of the meeting on a bulletin board at a place convenient to the public in: (1) the county courthouse of the county in which the proposed site is located; (2) the city hall of the municipality in which the proposed site is located; (3) in a newspaper with, or in newspapers that collectively have, general circulation in the county in which the proposed project is located; and (4) At a location at the proposed site that is visible from a regularly traveled thoroughfare; Whereas, Texas Local Government Code §392.055 provides that a housing authority may rent or lease housing only to persons of low income and only at rentals that persons of low income can afford; Whereas, Texas Local Government Code §392.055 provides that a housing authority may not rent or lease housing to a tenant that consists of a greater number of rooms than the number the authority considers necessary to provide safe and sanitary housing to the proposed occupants without overcrowding; Whereas, the CCHA creation of limited liability companies in Delaware pursuant to the Memorandum of Understanding(s) does not evade the legal requirements of Texas Local Government Code §392.055. Whereas, each private owner of the apartment complex has the right to compel the transfer of the real property upon loss of the tax exemption, and said tax exemption cannot be granted for the issues identified in this resolution, and therefore each private apartment complex owner hold "equitable title" in the land and improvement there on; Whereas, the Apartment Complexes provided rent at levels below 80% AMI prior to the transactions with the CCHA, and such transactions did not create any new affordable housing for low-income persons; Whereas, the Texas Constitution Article III, Sec. 52 provides that "the Legislature shall have no power to authorize any county, city, town or other political corporation or subdivision of the State to lend its credit or to grant public money or thing of value in aid of, or to any individual, association or corporation whatsoever, or to become a stockholder in such corporation, association or company."; and Whereas, the CCHA failed to ensure that the agreements for the Apartment Complexes met industry best practices for analysis and operations of affordable housing including but not limited to conducting market analysis that compared existing rents to affordable rent limits to demonstrate need, providing compliance requirements and materials at the commencement of operations ensuring standard income verification processes and documentation requirements across the WHO portfolio, failing to include 2 tenant paid utilities in the affordable rent limits, and failed to include provisions for supportive services for those at the 60 percent area median income. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS, THAT: Section 1. The City Council finds that the notices for the CCHA meetings (See Exhibit A) violate the Texas Open Meetings Act because they failed to adequately inform the public that some action would be considered regarding the purchase of real estate for the housing project related to the Apartment Complexes, and consequently the CCHA purchase of real estate for the housing project related to the Apartment Complexes and related contracts are void. Section 2. The City Council finds that the CCHA commission did not give the CCHA CEO "specific authority" to purchase or sell real property for the housing project related to the Apartment Complexes (See sample Resolutions in Exhibit B) as required by the CCHA Bylaws (Exhibit C) and consequently the purchase of real estate for the housing project related to the Apartment Complexes was ultra vires act and is void (See sample Special Warranty Deed in Exhibit D). Section 3. The City Council finds that the CCHA commission meetings (See Exhibit E) to approve the housing projects for Apartment Complexes failed to meet the meeting location and 30-day notice requirements of Texas Local Government Code Sec. 392.053 and 392.054, and consequently, such approvals are void. Section 4. The City Council finds the memorandum of understandings (See sample MOU in Exhibit F), ground lease (See sample ground lease in Exhibit G), Regulatory Agreement (See sample regulatory agreement Exhibit H) operating agreements (See sample operating agreement in Exhibit 1) do not limit all units of the Apartment Complexes to rent only to person of low income per CCHA Policy (Exhibit J) and rooms numbers necessary to provide safe and sanitary housing, therefore, such agreements exceed the powers and duties of the CCHA pursuant to Texas Local Government Code 392.055, and consequently such memorandum of understandings, ground leases, and operating agreements related to the Apartment Complexes are illegal. Section 5. The City Council finds that the ground leases (See sample ground lease in Exhibit G) and operating agreements (See Sample operating agreement in Exhibit 1) provide the non-public company an exclusive right to purchase the land for the Apartment Complexes, therefore, granting "equitable title" to the non-public owner and hence the land is not tax exempt under Texas Local Government Code §392.005. Section 6. The City Council finds that the Grantor of real property for the Apartment Complexes retained equitable title to "ANY IMPROVEMENTS, STRUCTURES, BUILDINGS, OR FIXTURES PLACED, CONSTRUCTED, AND/OR INSTALLED UPON THE PROPERTY," and therefore, such buildings are not tax exempt under Texas Local Government Code §392.005. (See sample Special Warranty Deed in Exhibit D) 3 Section 7. The City Council finds that the structure of the transactions for Apartment Complexes results in the lending credit of the CCHA, which violates Article III, Section 52 of the Texas Constitution and is therefore unconstitutional. Section 8. The City Council requests that the CCHA take immediate action to acknowledge the findings herein. Section 9. The City Council requests that the CCHA take immediate action to terminate the agreements related to the Apartment Complexes. Section 10. The City Council requests that the CCHA take immediate action to revoke the property acquisitions for the Apartment Complexes and return the land for the Apartment Complexes to the prior owners. Section 11. The City Council requests that the CCHA take immediate action to dissolve the CCHA subsidiaries formed in Delaware (See Sample Delaware LLC in Exhibit K) in furtherance of CCHA's attempt to sell its property tax exemption. PASSED and APPROVED on the day of , 2025. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary 4 EXH I BIT A CCHAAGENDAS APR 2024 THRU MARCH 2O25 BOARD OF COMMISSIONERS CORPUS CHRISTI HOUSING AUTHORITY ANNUAL BOARD MEETING April 24, 2024 11:30 a.m. AGENDA CALL TO ORDER Roll Call INSTALLATION OF BOARD MEMBERS: OATH OF OFFICE a. Cathy Mehne: Reappointment b. Dr. Brian Tietje: Reappointment c. Richard Balli: Reappointment d. Christine Belin: New Appointment ELECTION OF OFFICERS EXECUTIVE SESSION (Scheduled 11:30a.m. - 12:30 p.m) a. Legal Matters(Texas Government Code Ann.Section 551.071) (Vernon 1994) b. Deliberations about Real Property(Texas Government Code Ann.Section 551.072) c. Personnel Matters (Texas Government Code Ann.Section 551,074) MINUTES Regular Board Meeting of March 20, 2024 Sea Breeze Board of Directors Meeting of March 20, 2024 Special Board Meeting of March 25, 2024 PUBLIC COMMENTS CONSENT AGENDA Write Offs:Tax Credit & BBG Properties for March ITEMS FOR CONSIDERATION Action Item No. 24-HR-11 Consider Approval of Changes to Personnel Policy Action Item No. 24-EO-12 Consider Ratification of Bylaws for the Corpus Christi Housing Authority Action Item No. 24-EO-13 Consider Ratification of Bylaws for Corpus Christi Finance Corporation Action Item No. 24-EO-14 Consider Ratification of Bylaws for Bahia Properties Action Item No. 24-EO-15 Consider Ratification of Bylaws for Bluebonnet Gardens Action Item No. 24-EO-16 Consider Ratification of Bylaws for Royal Palm Gardens Action Item No. 24-EO-17 Consider Ratification of Bylaws for Thanksgiving Homes Action Item No. 24-EO-18 Consider Ratification of Bylaws for Sea Breeze Action Item No. 24-EO-19 Consider Letter of Support COMMENTS/REPORTS • Financial Report • Chief Executive Officer Report • Chair/Board Comments UPCOMING MEETINGS May 29, 2024 ADJOURNMENT BOARD 0r' COMM ISSIOMFRS CORPUS CHRISTI HOUSIW-2 AUTHORITY REGULAR BOARD MEETING June 12, 2024. 11:30 a.m. A(3FNDA CALL TO ORDER Roll Call EXKUTIVE SESSION (Scheduled 11:30a.rn. - 12:3-0 p.m) a. Legal Matrers(Texas Government Cade Ann.Section 551.071}(Vernon 1994) b. Deliberatlons about Real property(Texas Government Code Ann.Section 551.072) c. Personnel Matters(Texas Government Code Ann. Section 551.074) MINUTES Annual Board Meeting of April 24, 2024 PUBLIC COMMENTS CONS ENT AG EN DA Write Offs: Tax Credit & BBG Properties for April ITEMS FOR CONSIDERATION Action Item No 24-E -20 Consider Memorandum of Understanding Autiun Item No, 24-ECG-21 Consider Approval of Corpus Christi Housing Authority Annual PICA, Plan COMMENTS!REPORTS Financial Report + Chief Executive Officer Report Chair/Board Comments UPCOMING MEETINGS July 24, 2024 ADJOURNMENT BOARD OF COMMISSIONERS CORPUS CHRISTI HOUSING AUTHORITY REGULAR BOARD MEETING June 12, 2024 11:30 a.m. AGENDA CALL TO ORDER Roll Call EXECUTIVE SESSION (Scheduled 11:30a.m. - 12:30 p.m) a. Legal Matters(Texas Government Code Ann. Section 551.071) (Vernon 1994) b. Deliberations about Real Property(Texas Government Code Ann. Section 551.072) c. Personnel Matters (Texas Government Code Ann. Section 551.074) MINUTES Annual Board Meeting of April 24, 2024 PUBLIC COMMENTS CONSENT AGENDA Write Offs:Tax Credit & BBG Properties for April ITEMS FOR CONSIDERATION Action Item No. 24-EO-20 Consider Memorandum of Understanding Action Item No. 24-EO-21 Consider Approval of Corpus Christi Housing Authority Annual PHA Plan COMMENTS/REPORTS • Financial Report • Chief Executive Officer Report • Chair/Board Comments UPCOMING MEETINGS July 24, 2024 ADJOURNMENT BOARD OF COMMISSIONERS CORPUS CHRISTI HOUSING AUTHORITY REGULAR BOARD MEETING July 31, 2024 11:30 a.m. AGENDA CALL TO ORDER Roll Call EXECUTIVE SESSION (Scheduled 11:30a.m. - 12:30 p.m) a. Legal Matters (Texas Government Code Ann. Section 551.071) (Vernon 1994) b. Deliberations about Real Property (Texas Government Code Ann. Section 551.072) c. Personnel Matters (Texas Government Code Ann. Section 551.074) MINUTES Regular Board Meeting June 12, 2024 PUBLIC COMMENTS CONSENT AGENDA Write Offs:Tax Credit & BBG Properties for May &June ITEMS FOR CONSIDERATION Action Item No. 24-HCV-22: Consider Approval Amendments to Housing Choice Voucher Program Administrative Plan Action Item No. 24-FIN-23: Consider Approval of Organizational Restructure/Realignment Action Item No. 24-EO-24: Consider Approval of Bahia Properties, DBA, Coastal Housing Partners Bylaws Action Item No. 24-FIN-25: Consider Approval of Contractual Agreement for Road and Concrete Work Planned Unit Development at the corner of Aztec and Osage Action Item No. 24-FIN-26: Consider Approval of Contractual Agreement for the La Armada II HVAC Retrofit Upgrades Action Item No. 24-EO-27: Consider Approval of Memorandum of Understanding—Cameron County Housing Finance Corporation Action Item No. 24-EO-28: Consider Approval of Memorandum of Understanding Brixton Sawgrass, LLC et. Al Action Item No. 24-EO-29: Consider Approval of Memorandum of Understanding Brixton Everhart,TIC et. Al Action Item No. 24-EO-30: Consider Approval of Memorandum of Understanding 6533 Patti, LP Action Item No. 24-EO-31: Consider Approval of Memorandum of Understanding 802 Barry 3 LLC COMMENTS/REPORTS • Financial Report • Chief Executive Officer Report • Chair/Board Comments UPCOMING MEETINGS August 27, 2024 ADJOURNMENT BOARD OF COMMISSIONERS CORPUS CHRISTI HOUSING AUTHORITY REGULAR BOARD MEETING August 28, 2024 11:30 a.m. AGENDA CALL TO ORDER Roll Call EXECUTIVE SESSION (Scheduled 11:30a.m. - 12:30 p.m) a. Legal Matters (Texas Government Code Ann. Section 551.071) (Vernon 1994) b. Deliberations about Real Property (Texas Government Code Ann. Section 551.072) c. Personnel Matters (Texas Government Code Ann. Section 551.074) MINUTES Regular Board Meeting July 31, 2024 PUBLIC COMMENTS CONSENT AGENDA Write Offs:Tax Credit & BBG Properties ITEMS FOR CONSIDERATION Action Item No. 24-HCV-32: Consider Approval of Amendment to Housing Choice Voucher Program Administrative Plan Action Item No. 24-HR-33: Consider Approval of Addendum to 2024 CCHA Personnel Policy—Sick Leave Action Item No. 24-AS-34: Consider Approval of Renewal of Interlocal Agreement with Texas Municipal League Intergovernmental Risk Pool Action Item No. 24-FIN-35: Consider Acceptance of 2023 CCHA Audit Fiscal Year Ended 09/30/2023 Action Item No. 24-EO-36: Consider Approval of Memorandum of Understanding—TX Azure Apartments 1, LLC Action Item No. 24-EO-37: Consider Approval of Memorandum of Understanding— PRE Baypoint, LLC COMMENTS/REPORTS • Financial Report • Chief Executive Officer Report • Chair/Board Comments UPCOMING MEETINGS September 18th or 24th ADJOURNMENT BOARD OF COMMISSIONERS CORPUS CHRISTI HOUSING AUTHORITY REGULAR BOARD MEETING October 30, 2024 11:30 a.m. AGENDA CALL TO ORDER Roll Call EXECUTIVE SESSION (Scheduled 11:30a.m. - 12:30 p.m) a. Legal Matters (Texas Government Code Ann. Section 551.071) (Vernon 1994) b. Deliberations about Real Property (Texas Government Code Ann. Section 551.072) c. Personnel Matters (Texas Government Code Ann. Section 551.074) MINUTES Regular Board Meeting August 28, 2024 PUBLIC COMMENTS CONSENT AGENDA Write Offs: Tax Credit & BBG Properties ITEMS FOR CONSIDERATION Action Item No. 24-HCV-38: Consider Approval of CLEAR Program Action Item No. 24-EO-39: Consider Memorandum of Understanding—Churchill Square Apartments Action Item No. 24-EO-40: Consider Memorandum of Understanding—Caspian Apartments Action Item No. 24-FIN-41: Consider Ratifying Purchase of Real Property Action Item No. 24-FIN-42: Consider Ratifying Purchase of HVAC Equipment Action Item No. 24-FIN-43: Consider Approval of CCHA & CHP 2024-2025 Budget Action Item No. 24-FIN-44: Consider Ratifying Installation of HVAC Equipment—CC Breeze Heating Action Item No. 24-FIN-45: Consider Approval Installation of HVAC Equipment—J.A.G. Heating & Cooling Action Item No. 24-FIN-46: Consider Approval Installation of HVAC Equipment— 681 Contactors, LLC COMMENTS/ REPORTS • Financial Report • Chief Executive Officer Report • Chair/Board Comments UPCOMING MEETINGS December Retreat ADJOURNMENT 521 HOUS/N��G CORPUS CHRISTI HOUSING AUTHORITY o� Q �O EXECUTIVE Q PARTNERS usIi4raV TO THE COMMISSIONERS OF THE CORPUS CHRISTI HOUSING AUTHORITY PUBLIC NOTICE TAKE NOTICE THAT THE SPECIAL BOARD MEETING OF THE Commissioners of the Corpus Christi Housing Authority will be held at the Corpus Christi Housing Authority located at 3701 Ayers Street, Corpus Christi, Texas, 78415 commencing on Wednesday, November 6, 2024 at 10:00 a.m. Action Items: Action Item No. 24-EO-47: Consider Memorandum of Understanding—South Lake Ranch Action Item No. 24-EO-48: Consider Memorandum of Understanding—Villas of Ocean Drive Action Item No. 24-EO-49: Consider Memorandum of Understanding—The Icon Action Item No. 24-EO-50: Consider Memorandum of Understanding—Tuscany Bay South DATED: November 1, 2024 Gary Allsup, Secretary 3701 Ayers Street � Corpus Christi I'Texas 78415 ��w / (361)889-3309 i www.hacc.org �gt1 HODS/N��G CORPUS CHRISTI Ho USING AUTHORITY o�CID p i �J+ PARTNERS HOUSING Qa�� 3701 Dyers Street C;orptrs Christi j Texas 7€3415 (361)889-3300 www.hace.org % BOARD OF COMMISSIONERS CORPUS CHRISTI HOUSING AUTHORITY REGULAR BOARD MEETING December 9, 2024 2:00 p.m. AGENDA CALL TO ORDER Roll Call EXECUTIVE SESSION a. Legal Matters (Texas Government Code Ann. Section 551.071) (Vernon 1994) b. Deliberations about Real Property (Texas Government Code Ann. Section 551.072) c. Personnel Matters (Texas Government Code Ann. Section 551.074) PUBLIC COMMENTS CONSENT AGENDA Write Offs: Tax Credit & BBG Properties ITEMS FOR CONSIDERATION Restatement Action Item No. 24-EO-51: Consider Resolution for MOU -Arts at Ocean Drive Action Item No. 24-EO-52: Consider Resolution for MOU -Azure Action Item No. 24-EO-53: Consider Resolution for MOU -Churchill Square New Action Item No. 24-EO-54: Consider Resolution for MOU- GWR Armon Bay Action Item No. 24-EO-55: Consider Resolution for MOU- Breakers Action Item No. 24-EO-56: Consider Resolution for MOU- Sandcastle Action Item No. 24-EO-57: Consider Resolution for MOU —The Summit Action Item No. 24-EO-58: Consider Resolution for MOU—The Veranda Action Item No. 24-EO-59: Consider Resolution for MOU — Bay Vista Action Item No. 24-EO-60: Consider Resolution for MOU — Bay Vista Pointe Action Item No. 24-EO-61: 2025 BOC Meeting Dates COMMENTS/ REPORTS • Financial Report (Included in Packet) • Chief Executive Officer Report • Chair/Board Comments ADJOURNMENT BOARD OF COMMISSIONERS CORPUS CHRISTI HOUSING AUTHORITY REGULAR BOARD MEETING January 22, 2025 11:30 p.m. AGENDA CALLTO ORDER Roll Call EXECUTIVE SESSION a. Legal Matters (Texas Government Code Ann. Section 551,071) (Vernon 1994) b. Deliberations about Real Property (Texas Government Code Ann. Section 551.072) c. Personnel Matters (Texas Government Code Ann. Section 551.074) MINUTES Regular Board Meeting of October 30, 2024 Special Zoom Meeting of November 6, 2024 Regular Board Meeting of December 9, 2024 PUBLIC COMMENTS CONSENT AGENDA Write Offs:Tax Credit & BBG Properties for Nov. & Dec., 2024 ITEMS FOR CONSIDERATION Action Item No. 25-FIN-01: Approval of 2025 Tax Credit Properties Budget Plan Action Item No. 25-AS-02: Approval of 457(B) Deferred Compensation Plan COMMENTS/REPORTS • Financial Report • Chief Executive Officer Report • Chair/Board Comments UPCOMING MEETING(S) February 26, 2025 ADJOURNMENT BOARD OF COMMISSIONERS CORPUS CHRISTI HOUSING AUTHORITY REGULAR BOARD MEETING February 21, 2025 3:00 p.m. AGENDA CALL TO ORDER Roll Call EXECUTIVE SESSION a. Legal Matters (Texas Government Code Ann. Section 551.071) (Vernon 1994) b. Deliberations about Real Property (Texas Government Code Ann. Section 551.072) c. Personnel Matters (Texas Government Code Ann. Section 551.074) PUBLIC COMMENTS ITEMS FOR CONSIDERATION Action Item No. 25-EO-03: Consider Resolution for MOU —Shadow Bend Action Item No. 25-EO-04: Consider Resolution for MOU—Ocean Palms Apartments COMMENTS/REPORTS • Housing Choice Voucher Presentation • Chief Executive Officer Report • Chair/Board Comments ADJOURNMENT BOARD OF COMMISSIONERS CORPUS CHRISTI HOUSING AUTHORITY REGULAR BOARD MEETING March 25, 2025 11:30 p.m. AGENDA CALL TO ORDER Roll Call EXECUTIVE SESSION a. Legal Matters (Texas Government Code Ann. Section 551.071) (Vernon 1994) b. Deliberations about Real Property (Texas Government Code Ann. Section 551.072) c. Personnel Matters (Texas Government Code Ann. Section 551.074) • Including Annual CEO Performance Evaluation MINUTES Regular Meeting of January 22, 2025 Regular Meeting of February 21, 2025 PUBLIC COMMENTS CONSENTAGENDA Write Offs: Tax Credit & BBG Properties—January & February 2025 ITEMS FOR CONSIDERATION Action Item No. 25-EO-05: Consider Resolution for MOU —Stoneleigh Apartment Action Item No. 25-AS-06: Consider Approval of Contractual Agreement for Construction Of CHP Administrative Building& Warehouse COMMENTS/REPORTS • Financials • Chief Executive Officer Report • Chair/Board Comments UPCOMING MEETING April 23, 2025 ADJOURNMENT EXHIBIT B SAMPLE CCHA RESOLUTIONS C04A Action item No.2 4-FO-S? Presented to the Board on December 4_2024 RESOLUTIONS OF CORPUS CHRISTI HOUSING AUTHORITY RESOLVED, that the hoard of Commissioners of the Corpus Christi Housing Authorit% ("CCHA") hereby authorises and directs GARY ALLSUP,its Chief Executive Officcr("CEO"), to negotiate and enter into a Memorandum of Understanding c+ith TX Azure Apartments 1, LLC, and thereafter carry out and perform the terms and conditions of such Memorandum, including organizing an entity awned by CCHA (the"CCHA Sub Entity-) for the purpose ofdcvcloping and financing a mixed income. multi-family development in Corpus Christi,Texas, the -'Corpus Christi Project`. same being the multilamily project Inn-,,;n as Azure Apartments located at 7221 S. Staples Ocean Drive, Corpus Christi,Texas 78413. through TX Azure Apartments I, LLC_ a Texas limited liability company (the "Azure Apartments Borrower Entity"-), the Managing Member of►vhich is Azure Apartments-CCHA, LLC, a Delaware limited liability company_ being a CCi IA-Suh Lntity owned by CCHA. RESOLVED FLiRTHER. that CCHA shall own the Corpus Christi Project sul:iect to a 99 year ground lease heMeen CCHA,_ as Landlord. and the Azure Apartments Borrower Entity,as Tenant. RESOLVED FURTHER.,that Azure Apartments-CCHA, LLC,as Managing Member of the Azure Apartments Borrower Entity,, shall execute and deliver all documents and instruments and perform all acts necessary or reasonably requested to obtain funding of a refinance of the existing financing for the Corpus Christi Pr(7ject, RESOLVED FURTHER. that CCHA and Azure Apartments-CCHA, LLC, shall execute and deliver all documents and instniments and perform all acts necessan or reasonably requesters to obtain. and retain indefinitely_ a tax exempt status for ad valorein taxes for the Corpus Christi Project. RESOLVED FURTHER. that the Board authorizes and directs GARY ALLSUP. acting in his capacitz as CEO and Sec:retan of CCHA, to execute and deliver all documents and instruments_ and to perform all acts necessary, or reasonably requested. to cam out the instructions, terms and autltcrization of the foregoing Resolutions_ pursuant to all applicable local_state and federal la%ks. LATHY ME hs;ir CCHA Board Commis Loners 7 GAR 'ALI,S 'P,Secretan — CCHA Board of Commissioners +:knife Aparintenl-,t CCHA Action Item No. 24-EO-36 Presented to the Board on August 28, 2024 A RESOLUTION Of THE CORPUS CHRISTI HOUSING AUTHORITY Memorandum of Understanding BE IT RESOLVED, that the Board of Commissioners of the Corpus Christi Housing Authority hereby authorizes the CEO to negotiate and enter into a Memorandum of Understanding with TX Azure Apartments 1, LLC for the purpose of developing and financing mixed income, multi-family development(s) in Corpus Christi. Such authorization to be contingent upon successful legal review by CCHA General Counsel. The Board of Commissioners authorizes and directs the Secretary/Chief Executive Officer to take the actions required to implement this Resolution, and to do such acts and /or execute such documents as necessary commensurate with instructions and authorizations of this resolution, and pursuant to all local, state and federal laws. Cathy Meh e hair CCHA Board f Commissioners Gary Allsup, Secretary CCHA Board of Commissioners EXH I BIT C CCHA BYLAWS CORPUS CHRISTI HOUSING AUTHORITY BY-LAWS ARTICLE I-THE AUTHORITY SECTION 1. NAME.OF THE. AUTHORITY: The .name of the Authority shall .be. the. Housing Authority of the City of Corpus Christi. SECTION 2. ABOUT THE AUTHORITY- Pursuant to Chapter 392 of the Texas Local Government Code the Authority is for.all purposes a unit of government an6its functions are essential governmental functions. SECTION 3. NATURE OF BUSINESS CONDUCT; It shall be the Policy of the Authority that ail business.of the.Authority shall be conducted in. .a professional; transparent, and legal manner. Specifically, all actions and activities.shall be consistent with federal.,state, and or local regulations. SECTION 4. SEAL OF THE AUTHORITY: The seal of the Authority.shall be in the form of a:circle and shall.bear the na.me.of the Authority. SECTION S. OFFICE OF THE AUTHORITY: The offices of the Authority shall be at the Administrative Building, 3701 Ayers Street, Corpus Christi; Texas. Such other auxiliary offices.and locations may be designated from time.to time as needed. ARTICLE II—BOARD OF COMMISSIONERS SECTION 1. AUTHORITY: Pursuant to Chapter 392 of the Texas Local Government Code all powers of .the 'Authority are vested in .the .Board .of Commissioners. SECTION 2. BOARD OF COMMISSIONERS: The Authority:shall be governed by a Board of five. Commissioners. Each Commissioner is to be appointed by the Mayor to a two-year term. A..Commissioner of the Authority maynot be an officer or employee.of.the City: At least one Commissioner shall be.a tenant.of public housing over which the Authority has jurisdiction: When a quorum:of the Board is present the Authority may take action on a vote of a majority of the.Commissioners present. Carpus oinsa£lousiig Authority. R7t fed dprd 27.2022 Page.!of 6 The Commission may delegate.a power or duty to an agent or employee as it considers proper. Commissioners may not receive compensation, for :service as a Commissioner but are entitled to receive reimbursement for the necessary expense, including traveling expenses, incurred 'in the discharge of duties.as a Commissioner. SECTION 3. OFFICERS: The Board shall be comprised of the following officers: a Chairperson, a Vice-Chairperson, a Secretary and.an Assistant Secretary. The Secretary and Assistant Secretary are not appointed:Commissioners, but shall be non=voting officers, and are not included, in determining a quorum. SECTION 4. CHAIRPERSON: The Chairperson shall preside at ail meetings of the Authority. At each meeting, the Chairperson shall tall the roll and note the presence or absence of the Commissioners,and conduct the meeting in accordance with the items on the agenda. The. Chairperson shall submit such recommendations and information as the Chairperson may. consider proper concerning the business affairs and policies of the Authority.. SECTION S, VICE-CHAIRPERSON: The Vice-Chairperson shall perform. the duties of the Chairperson in:the absence or incapacity (if the Chairperson. In the event of the resignation or death of the Chairperson, the Vice- Chairperson shall perform such duties as are imposed:an the Chairperson for the remainder of the Chairpersons.term or until such time as. the Authority elects :by majority vote of the remaining members, a new Chairperson. SECTION 6. SECRETARY: The Chief Executive Officer (CEO) shall serve as the secretary.. The duties of the Secretary shall be: a. to.maintain the records of the Board of Commissioners; b. to.prepare,the. agendas and minutes of.the Board of Commissioners proceedings; c. to post all required notices;. d. to sign and attest to the accuracy and validity of the Board documents and actions; e. to account for the,Secretarys:duties as the Board.may require; f, to perform duties incidental to the office or as may be assigned by the Board; g. to perform such required duties.as.Secretary without compensation. !'nrpiesChrislt flnvsrrrg..4urhnriry Ratified 4pri!2.7,2022 P�ga l�f G The Secretary shall keep in safe custody :the seal of the Authority and shall. have power to affix such seal to all contracts and instrunnents aothvrixed by the Authority. "Seal" shall be mean for all purposes a signature,.and.does.not require that a metal or rubber seal also be affixed. to bind the Authority. SECTION 7. ASSISTANT SECRETARY: The Assistant Secretary shall perform the duties as assigned by the.Secretary, but shall not have, nor shall it be construed to have,the authority to perform the duties assigned to the Secretary by the Board. The assistant secretary shall be the legal counsel of the. Authority.. SECTION 8, ADDITIONAL DUTIE5: The officers of the Board shall perform such other duties and functions as.may,from time to time, be required by the Board; by these By-Caws, by the Rules and Regulations of the Authority, or as required by federal, state or local laws or regulations under which the Authority operates. SECTION 9. ELECTION OR APPOINTMENT, The Chairperson or Vice-Chairperson shall be elected at the annual meeting of the Board. SECTION 11. VACANCIES: Should the office of the Vice=Chairperson become vacant, the Board shall elect a.successor from its membership at the next regular meeting, and such election shall be for the unexpired terra of said office. it is the intent.of the Board that.the office of Vice-Chairperson not be Vacant for more than a one-month period. ARTICLE III-MEETINGS. SECTION I. ANNUAL MEETING: The Annual Meeting of the Board shall be held duri rig the month of April at a time,date and location to be designated by the Chairperson. SECTION Z. REGULAR MEETING- The regular meeting(s)of the Board shall be held on the date(s) determined by the Board at its.annual meeting, normally the fourth Tuesday of each month. SECTION 3. SPECIAL.MEETING- The Chairperson may, when deemed expedient or in case of emergency, tail a Special Meeting. Upon the request of two Commissioners, the Chairperson shall call a Special Meeting, Special Meetings are called..for the purpose of transacting business designated in the agenda. Corpus Chnsa Hous ig:A nshoriry Ratified April 272022 Page 3 of 6 SECTION.4. LOCATION; The location.ofthe meeting shall be atthe Authority's central office at 3701 Ayers Street, Corpus Christi;Texas 78415, orat such other location as the Board:designates in its.agenda. SECTION.5. QUORUM; At all meetings of the.Board,a majority of the Commissioners shall constitute a quorum for the purpose of transacting business. Non- voting Officers.shall not be counted for .the purpose. of determining a quorum.. Commissioners may participate in Regular or Special Meeting_ via telephone or other electronic. communication. Commissioners who participate via telephone pr other election means shall be counted for the purposes of determining a quorum. SECTION 6. ORDER OF BUSINESS: At a Regular Meeting of the Board the following shall normally consist.of: a: R611 Call. In. Approval of the Minutes of the previous meeting c. Open forum for public cornmer�t d. Consent Agenda e. Items for Consideration f. CEO's Report g. Chairperson Report I Comments h.. Commissioner Comments .i, Executive Session (as needed) j. Adjournment All Resolutions of the Board shall be executed bythe Chairperson or Vice= Chairperson, or,%I.rt the-event neither is available, any Commissioner may sign in addition to the Secretary. The Secretary shall sign.and attest the accuracy of Board documents, SECTION 7. MINUTES: The Secretary shall record minutes of actions and decisions of the Board. The Secretary shall.present draft minutes of each Board Meeting for the Board's consideration and approval at the following Regular meeting. .SECTION 8. MANNER OF VOTING: The voting on all questions coming before the Board. shall be. by .voice unless the vote is not unanimous; in which event a roll call vote will be.. taken and the vote of each member indicated.. Fora roll call vote the yeas and mays may be entered upon the minutes of the meeting as a "majority", unless a member requests each members vote be recorded individually. Corpus C hrisii llouing.4uArdrlry. Rarifred.f pril.2'.2020 Page.4 of'6 SECTION 9. EXPEidSE OF MEETING: Reasonable expenses incurred. in connection with the Annual, Regular and Special.Meetings of the Board are authorized for payment by the Board. SECTION 10. AMENDMENTS TO THE BY-LAWS.- The By-Laws of the Authority shall be amended only with the approval of at least four of the members of the Board. No such amendment shall be adopted unless at least seven days Written.notice thereof has been previously given to all of the members of the Board. SECTION 11. RATIFiCATION:Each .year at its Annual .Meeting, the. Board shall review and ratify these Bylaws for their.continued use. ARTICLE IV—DELEGATION OF AUTHORITY SECTION I. AUTHORITY: Pursuant to Chapter 392 of the Texas Local Government Cone all powers of the Authority are vested to the Board of Commissioners. Further, Chapter 392 authorizes the: Board of Commissioners to delegate any power or duty as the Board deems appropriate. SECTION 2. CHIEF EXECUTIVE OFFICER: The Chief Executive Officer(the"CEO")of the Authority shall have.authority and responsibility over the administration and.operation of all business affairs.of the Authority and its affiliated entities; subject to the direction of the Board. The CEO shall at all times ensure Authority compliance with HUD and/or other federal, state;,and local regulation. Specific duties and responsibilities.of the CEO include, but are not limited to, a. care and custody of all funds, including all receipts-and expenditures of'the Authority; b, deposit of funds in the,name of the Authority;. c. execution.of all contracts and orders of the Authority;. d. ,disbursement of all monies owed by the.Authority; e.: reporting of Authority operational and financial. activity, conditions, and results to.the Board at each meeting.or as directed; The CEO shall be designated.as the Contracting Officer of the Authority and shall be authorized to execute contracts on behalf of the.Authority and its.affiliates.and to designate others, in his absence, to act on behalf of the CEO,as needed.. Corpus Chri h Housink,Authorhy Ratified fpri!2 7,2022 Page oj6 The CEO may make routine purchases and expenditures up to the Federal Small Purchase Threshold as set by HUD and/or OMB (currently $250,000.00) and may bind the Authority to act without specific Commission Resolution. The Board may authorize by Resolution, the CEO or other officer to execute documents on behalf of the Authority. The CEO may, subject to budget authority, employ such employees, either permanent or temporary, as he considers necessary and shall determine the qualifications, duties, and compensation of the persons employed. The CEO may not enter into contracts for the sale or purchase of Real Property without specific Commission Resolution so authorizing. ARTICLE V-AFFILIATES AND SUBSIDIARIES SECTION 1. CREATION OF LEGAL ENTITIES: Affiliates, subsidiaries and other legal entities of the Authority may be created, dissolved or disbanded by the Authority by Resolution of the Board, as the Board deems. All operating documents of the appropriate entities shall expressly require that upon dissolution, the assets of said entity will be distributed as required by the Internal Revenue Code for Section 501(c)(3) tax-exempt charitable entities. SECTION 2. AUTHORITY APPROVAL OF ACTIONS or OTHER ENTITIES: Through its Board Meetings, the Authority Board shall act on behalf of its affiliates and other legal entities without the necessity of a separate Board Meeting or distinct Resolution of such affiliate or other legal entity. The Secretary shall be authorized to attest to the validity and accuracy of any Board Action on behalf of an affiliate or to make and execute other certificates or resolutions as evidence of Board Action. ARTICLE VI—APPROVAL These Bylaws Approved this 27"day of April, 2022 per Resolution 22-EO-04-960, Cathy Me ne Chair Gary Allsup,Secretary rr,ra. + Ir,,srr 1lr,rrsdrr NO;, ,n EXHIBIT D SAMPLE SPECIAL WARRANTY DEED 2024 -2024044397 12130/2024 02:58 PM Page 1 of 7 Execution Version NOTICE OF CONFIDENTIALITY RIGHTS:IF YOU ARE A NATURAL PERSON,YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS.YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. SPECIAL WARRANTY DEED STATE OF TEXAS § § KNOW ALL BY THESE PRESENTS: COUNTY OF NUECES § TX AZURE APARTMENTS 1,LLC,a Delaware limited liability company("Grantor"),whose address is 1240 E 2100 S, Suite 300, Salt Lake City, UT 84106, for and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00) paid to Grantor by CORPUS CHRISTI HOUSING AUTHORITY, a Texas public nonprofit housing authority organized under Chapter 392 of the Texas Local Government Code("Grantee"),whose address is 3701 Ayers Street, Corpus Christi,Texas 78415,Attn: Chief Executive Officer, and other good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged has GRANTED, BARGAINED, SOLD and CONVEYED, and by these presents does hereby GRANT, BARGAIN, SELL and CONVEY unto Grantee, that certain land situated in the County of Nueces, State of Texas, as more particularly described on Exhibit A attached hereto and made a part hereof(the"Pro pert '). For the same consideration, Grantor has GRANTED, BARGAINED, SOLD, and CONVEYED, and by these presents does GRANT,BARGAIN,SELL, and CONVEY unto Grantee,without warranty, express or implied, all interest of Grantor, if any, in (1) strips and gores, if any, between the Property and any abutting properties,whether owned or claimed by deed, limitations,or otherwise, and whether located inside or outside the Property; (2) any land lying in or under the bed of any creek, stream, or waterway or any highway,avenue,street, road,alley,easement or right-of-way,open or proposed, in,or across,abutting or adjacent to the Property; and (3)any benefits, privileges,easements,tenements, hereditaments, and appurtenances thereon or appertaining to the Property. SAVE AND EXCEPT:and there is hereby reserved unto Grantor,Grantor's successors and assigns,(a)all of Grantor's right, title and interest in and to all oil, gas, and other minerals in, under and that may be produced from the Property and (b) all royalties, benefits, bonuses, rents, funds, claims and other proceeds of any kind attributable to or that may accrue in connection with any oil,gas,and other minerals in, under and that may be produced from the Property. SAVE AND EXCEPT:GRANTOR RESERVES FOR ITSELF,AND DOES NOT HEREBY GRANT,BARGAIN, SELL, OR CONVEY TO GRANTEE, ANY IMPROVEMENTS, STRUCTURES, BUILDINGS, OR FIXTURES PLACED, CONSTRUCTED,AND/OR INSTALLED UPON THE PROPERTY,ALL OF WHICH SHALL REMAIN THE SOLE AND EXCLUSIVE PROPERTY OF GRANTOR FOR ALL PURPOSES. This conveyance is made and accepted subject to those matters set forth on Exhibit B attached hereto and made a part hereof(the"Permitted Encumbrances"). 2024 -2024044397 12130/2024 02.58 PM Page 2 of 7 TO HAVE AND TO HOLD the Property, subject to the Permitted Encumbrances, unto Grantee and Grantee's successors and assigns forever; and Grantor does hereby bind itself and its successors to warrant and forever defend the Property unto Grantee and Grantee's successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof, by, through, or under Grantor,but not otherwise. EXCEPTAS OTHERWISE EXPRESSLY SET FORTH IN THIS SPECIAL WARRANTY DEED,THE PROPERTY IS BEING SOLD"AS IS,""WHERE IS,"AND"WITH ALL FAULTS"AS OF THE DATE OF THIS SPECIAL WARRANTY DEED, WITHOUT ANY REPRESENTATION OR WARRANTY WHATSOEVER AS TO ITS CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE,MERCHANTABILITY,OR ANY OTHER WARRANTY,EXPRESS OR IMPLIED. GRANTOR SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY, OR REPRESENTATION, ORAL OR WRITTEN, PAST OR PRESENT, EXPRESS OR IMPLIED, CONCERNING THE PROPERTY. UPON ACCEPTANCE OF THIS SPECIAL WARRANTY DEED, GRANTEE ACKNOWLEDGES THAT GRANTEE IS PURCHASING THE PROPERTY BASED SOLELY UPON GRANTEE'S OWN INDEPENDENT INVESTIGATIONS AND FINDINGS AND NOT IN RELIANCE UPON ANY INFORMATION PROVIDED BY GRANTOR OR GRANTOR'S AGENTS OR CONTRACTORS. [Signature page follows] 2024-2024044397 12/30/2024 02:58 PM Page 3 of 7 EXECUTED on the date set forth in the acknowledgment below to be effective as of the 30 day of Pecernbe-r , 2024. Grantor: TX AZURE APARTMENTS 1, LLC, a Delaware limited liability company By:Sundance Bay Income and Growth Fund GP, LLC a Delaware limited liability company,General Partner By: Ryan Baughman, Manage STATE OF § COUNTY OFiQgh(tA I HEREBY CERTIFY that on or about this day of 2024, before me, a Notary Public for the state aforesaid, personally appeared Ryan Baughman, known to me or satisfactorily proven to be the person whose name is subscribed to the foregoing, who acknowledged that he is the Manager of the General Partner of TX Azure Apartments 1, LLC, that he has been duly authorized to execute, and has executed,such instrument on its behalf for the purposes therein set forth;and that the same is its act and deed. IN WITNESS WHEREOF, I have set my hand and otarial Seal,th ay nd year first above written. oil KARLI OLSON Notary Public,State of Utah r ubli Commission#724081 My Commission Expires On April 11,2026 My commission expires on 2024 -2024044397 12/30/2024 02:58 PM Page 4 of 7 EXHIBIT A Legal Description of the Property Lot One(1),Block One(1), SAN MARIN, a subdivision situated in the City of Corpus Christi, Nueces County,Texas,commonly known as San Marin Apartments,as shown by the map or plat thereof,recorded in Volume 57,Page 193, Map Records of Nueces County,Texas and being more particularly described by metes and bounds as follows,to-wit: All that certain tract,piece or parcel of land containing 9.5316 acres(415,196 sq. ft.)of land, more or less, and being portion of that certain 90.043 acre tract deeded to Tristar Development, Inc.,recorded in Volume 1919,Page 216,Deed Records of Nueces County,Texas: BEGINNING at a found 5/8th inch iron rod being the most Easterly corner of Lot 1,Block 1, of said San Marin, same being a point in the Northwest line of South Staples Street(F.M.2444) (100 feet wide); THENCE South 28 degrees 56 minutes 00 seconds West,along said Northwest line of South Staples Street,a distance of 150.00 feet to a found 5/8th inch iron rod for corner of the herein described tract, said corner also being the most Easterly corner of Lot 2,Block 1, of said San Marin; THENCE North 61 degrees 04 minutes 00 seconds West,departing said line along the Northeasterly line of said Lot 2, a distance of 150.00 feet to a found 5/8th inch iron rod for corner of the herein described tract; THENCE South 28 degrees 56 minutes 00 seconds West,along the Northwesterly line of said Lot 2, a distance of 200.00 feet to a set 5/8th inch iron rod for corner of the herein described tract; THENCE South 61 degrees 04 minutes 00 seconds East,along the Southwesterly line of said Lot 2,a distance of 150.00 feet to a found 5/8th inch iron rod returning to said Northwest line of South Staples Street for corner of the herein described tract, said corner also being the most southerly corner of said Lot 2; THENCE South 28 degrees 56 minutes 00 seconds West,along said Northwest line of South Staples Street, a distance of 433.23 feet to a set 5/8th inch iron rod for corner, a point of curvature of a curve to the right; THENCE in a Southwesterly direction,around a curve to the right whose radius equals 15.00 feet,having a central angle of 89 degrees 58 minutes 35 seconds, an arc length of 23.56 feet, a chord bearing South 73 degrees 56 minutes 43 seconds West,21.21 feet to a set 5/8th inch iron rod for corner in the Northeast line of Henderson Street(60 feet wide),the most Southerly corner of the herein described tract; THENCE North 61 degrees 02 minutes 35 seconds West, along the Northeast line of said Henderson Street,a distance of 627.27 feet to a set 5/8th inch iron rod for corner,a point of curvature of a curve to the right; 4 SPECIAL WARRANTY DEED 2024 -2024044397 12/30/2024 02:58 PM Page 5 of 7 THENCE in a Northwesterly direction, around a curve to the right whose radius equals 10.00 feet,having a central angle of 90 degrees 00 minutes 15 seconds, an arc length of 15.71 feet,a chord bearing North 16 degrees 02 minutes 42 seconds West, 14.14 feet to a set 5/8th inch iron rod for corner,the most Westerly corner of the herein described tracts; THENCE North 28 degrees 57 minutes 10 seconds East,along the Northwest line of said San Marin,a distance of 557.29 feet to a found 5/8th inch iron rod for corner of the herein described tract, same being a point in the Southwesterly line of said Stonehenge Unit 1 Subdivision; THENCE South 61 degrees 02 minutes 50 seconds East, along said Southwesterly line,a distance of 326.00 feet to a found 5/8th inch iron rod for corner of the herein described tract; THENCE North 28 degrees 57 minutes 10 seconds East, along said Southwesterly line, a distance of 230.89 feet to a found 5/8th inch iron rod for corner of the herein described tract; THENCE South 61 degrees 02 minutes 50 seconds East, along a Southwesterly line,a distance of 326.00 feet returning the POINT OF BEGINNING of the herein described tract containing 9.5316 acres (415,196 sq. ft.) of land,more or less. 5 SPECIAL.WARRANTY DEED 2024 -2024044397 12/30/2024 02:58 PM Page 6 of 7 EXHIBIT B Permitted Encumbrances (a) Any and all liens not yet delinquent for real property and personal property taxes and for general and special assessments; (b) All matters of record; (c) All applicable zoning and land use regulations; (d) All matters which would be disclosed by a current survey of the Property;and (e) Interests of parties in possession,and any existing leases or tenancies. 6 SPECIAL WARRANTY DEED EXHIBIT E CCHA NOTICES POSTED AT CITY HALL AP Ill L 2024 THRU MARCH 2O25 FRebe OSTED 4:23:23 PM cca Huerta HOUSING Secretary Gary Alisup President & Chief Executive Officer Affiliates TO THE COMMISSIONERS OF THE Bahia CORPUS CH RISTI HOUSING AUTHORITY Properties Bluebonnet PUBLIC NOTICE Gardens Thanksgiving TAKE NOTICE THAT THE ANNUAL BOARD MEETING OF THE Homes Corban Commissioners of the Corpus Christi Housing Authority will be held at the Townhomes Corpus Christi Housing Authority located at 3701 Ayers Street, in the City of Corpus Christi, Texas, 7841:S commencing on Wednesday, April 24, 2024 at Hampton 11:30 a.m.. Port Apartments Sea Breeze Apartments Corpus Christi Finance Corporation DATED: April 19, 2024 A&- --- Gary Jlsup, secretary PO:2:17:0:6PM � � 5/24/2024,r, h; �; RebecnTa, i ` u�� ;' City S n '�V'I�lG.7 M�mttt !,. a v�ika� r� Gary Allsup President & Chief Executive Officer Affiliates TO THE COMMISSIONERS OF THE Bahia CORPUS CHRISTI HOUSING AUTHORITY Properties Bluebonnet PUBLIC NOTICE Gardens Thanksgiving TAKE NOTICE THAT THE REGULAR BOARD MEETING OF THE Homes Corban Commissioners of the Corpus Christi Housing Authority will be held at the Townhomes Corpus Christi Housing Authority located at 3701 Ayers Street, in the City of Corpus Christi, Texas, 7841S commencing on Wednesday, May 29, 2024 at Hampton 11:30 a.m. Port Apartments Sea Breeze Apartments Corpus Christi Finance Corporation DATED: May 24, 2024 Gary A Isup, Secretary POSTED fill°i 6/7/2024 2:25:57 PM Rebecca Huerta w, arha% �ro mi ° , City Secretary Gary Allsup President & Chief Executive Officer Affiliates TO THE COMMISSIONERS OF THE Bahia CORPUS CHRISTI HOUSING AUTHORITY Properties Bluebonnet PUBLIC NOTICE Gardens Thanksgiving TAKE NOTICE THAT THE REGULAR BOARD MEETING OF THE Homes Corban Commissioners of the Corpus Christi Housing Authority will be held at the Townhomes Corpus Christi Housing Authority located at 3701 Ayers Street, in the City of Corpus Christi, Texas, 78415 commencing on Wednesday, June 12, 2024 at Hampton 11:30 a.m. Port Apartments Sea Breeze Apartments Corpus Christi Finance Corporation DATED: June 7, 2024 Gary A s , Secr tary ��St,NousiH�gG r CORPUS CHRISTI HOUSING AUTHORITY z �,;, , O EXECUTIVE �f PARTNERS POSTED r9�youS11"Is Q� 10/251 024 9:10:35 AM Rebecca Huerta City Secretary TO THE COMMISSIONERS OF THE CORPUS CHRISTI HOUSING AUTHORITY PUBLIC NOTICE TAKE NOTICE THATTHE REGULAR BOARD MEETING OF THE Commissioners of the Corpus Christi Housing Authority will be held at the Corpus Christi Housing Authority located at 3701 Ayers Street, Corpus Christi, Texas, 78415 commencing on Wednesday, October 30, 2024 at 11:30 a.m. DATED: October 25, 2024 a y Allsup, Secretary 3701 dr;y k S "a'tre(�1 CV,"1P jdel.S ChPf";d fre M i' 8415 .� p HOUS/N�QG CORPUS CHRISTI HOUSING AUTHORITY .i/,..,c,i, /,,.u., l V 7� 7� EXECUTIVE Q POSTED 9f�'4! PANTNENS 11/1/2024 12:12:04 PM HQUSIN�Qa Rebecca Huerta City Secretary TO THE COMMISSIONERS OF THE CORPUS CHRISTI HOUSING AUTHORITY PUBLIC NOTICE TAKE NOTICE THAT THE SPECIAL BOARD MEETING OF THE Commissioners of the Corpus Christi Housing Authority will be held at the Corpus Christi Housing Authority located at 3701 Ayers Street, Corpus Christi, Texas, 78415 commencing on Wednesday, November 6, 2024 at 10:00 a.m. Action Items: Action Item No. 24-EO-47: Consider Memorandum of Understanding — South Lake Ranch Action Item No. 24-EO-48: Consider Memorandum of Understanding — Villas of Ocean Drive Action Item No. 24-EO-49: Consider Memorandum of Understanding —The Icon Action Item No. 24-EO-50: Consider Memorandum of Understanding —Tuscany Bay South DATED: November 1, 2024 Gary Allsup, Secretary r',r, ( t 61) r y � Kau 4el CORPUS CHRisn HOUSING AUTHORITY nv EXECUTIVE PARTNERS POSTED jQ!HpUS9K� 12/6/2024 1:18:38 PM Rebecca Huerta City Secretary TO THE COMMISSIONERS OF THE CORPUS CHRISTI HOUSING AUTHORITY PUBLIC NOTICE TAKE NOTICE THATTHE REGULAR BOARD MEETING OF THE Commissioners of the Corpus Christi Housing Authority will be held at the Corpus Christi Housing Authority located at 3740 S. Port Street, Corpus Christi, Texas, 78415 commencing on Monday, December 9, 2024 at 2:00p.m. DATED: December 6, 2024 ze�n�� Gary Allsup, Secretary 3701 Ayers Street Corpus Christi Texas 78415 (361) 889-3300 www,hacc.org `HOIIS1yrC�G CORPUS C HRISTI HOUSING AUTHORITY 'G EXECUTIVE Q V,p PARTNERS lq!#01is NrI POSTED 1/17/2025 1:49:44 PM Rebecca Huerta TO THE COMMISSIONERS OF THE City Secretary CORPUS CHRISTI HOUSING AUTHORITY PUBLIC NOTICE TAKE NOTICE THAT THE REGULAR BOARD MEETING OF THE Commissioners of the Carpus Christi Housing Authority will be held at the Carpus Christi Housing Authority located at 3701 Ayers Street, Carpus Christi, Texas, 78415 commencing on Wednesday January 22, 2025 at 11:30 a.m. DATED: January 17, 2025 Gary Allsup, Secretary 3701 Ayers Street Carpus Christi Texas 78415 iit (361)889-3300 www.hacc.org 14i0t15ly�9G CORPUS CHRISTI HOUSING AUTHORITY . y p EX€CUTIVE e Aj+ PARTNERS POSTED 2/14/2025 1:40:51 PM Rebecca Huerta City Secretary TO THE COMMISSIONERS OF THE CORPUS CHRISTI HOUSING AUTHORITY PUBLIC NOTICE TAKE NOTICE THAT TH E REGULAR BOARD MEETING OF THE Commissioners of the Corpus Christi Housing Authority will be held at the Carpus Christi Housing Authority Located at 3740 S. Port Street, Corpus Christi, Texas, 78415 commencing on Friday, February 21, 2025 at 3:00 p.m. DATED: February 14, 2025 Gary AIISup, Secretary 3701 Ayers Street Carpus Christi Texas 78415 (361) 969-3300 www.hacc.org 514 HO(1SI�yQG ly CORPUS CHRISTI HOUSING AUTHORITY U � v EXECUTIVE POSTED ,lr PARTNERS 3/21/2025 3:18:43 PM �#0vSI Qp� Rebecca Huerta City Secretary TO THE COMMISSIONERS OF THE CORPUS CHRISTI HOUSING AUTHORITY PUBLIC NOTICE TAKE NOTICE THAT THE REGULAR BOARD MEETING OF THE Commissioners of the Carpus Christi Housing Authority will be held at the Corpus Christi Housing Authority located at 3701 Ayers Street, Corpus Christi, Texas, 78415 commencing on Tuesday, March 25, 2025 at 11:30 a.m. DATED: March 21, 2025 Gary Allsup, Secretary 3701 Ayers Street I Corpus Christi i Texas 78415 (361)889-3300 1 www.hacc.org BOARD OFCOMMISSIONERS CORPUS CHR|5T| HOUSING AUTHORITY REGULAR BOARD MEETING March 25, 2O25 11:3Op.nn. AGENDA CALL TO ORDER Roll Call EXECUTIVE SESSION a. Legal Matters (Texas Government Code Ann. Section 55l.0/l) (Vernon l994) b. Deliberations about Real Property (Texas Government Code Ann. Section 55l.072) c. Personnel Matters (Texas Government Code Ann. Section 55l.O74) m Including Annual CEO Performance Evaluation MINUTES Regular Meeting Of January 22, 2O25 Regular Meeting Of February Zl, ZOZ5 PUBLIC COMMENTS CONSENTAGENDA _ Write Offs: Tax Credit & BBG Properties—January & February 2025 ITEMS FOR CONSIDERATION Action Item No. 25-EO'05: Consider Resolution for K4OU —Stone|eigh Apartment Action Item NO. 25-AS-06: Consider Approval Of Contractual Agreement for Construction DfCHPAdministrative Building &VVarehouse COMMENTS/REPORTS * Financials ° Chief Executive Officer Report • Chair/Board Comments MEETINGUPCOMING Apri| Z3, 2O25 ADJOURNMENT EXHIBIT F SAMPLE MOU FOR APARTMENT COMPLEXES Excention Vel'SloO 1IEti• ORANDUN,I.OF UNDERS'I`ANI) NK; BETWEEN CORPUS CHRISTI HOUSING AUTHORiTY AN iJ TX ALLURE APARTMENTS 1.LLC:, "AZURE APARTMENTS„ THIS.MENT RANDIAM QfF UNDERSTAN©iNG 0M.9 ",YO I is'baween.CCyRPLIS CHRISTI HOU S I N1 G AUTHOR I'I 4'(tltc"Agency''),a public housing atithority-organized tinder Chapter 392 of the Texas Local Government Code,and'fh,Alure Apairtments 1.LI.:C.(``0ivn r`), a Delaware limited partnership,anti is dated and effective as of Septemberl 02.4. Owrter is an mi ner of to-vv anO moderate income liousitig in the.State of Yrxas,. ikgcnc is a.public,noriproCt housing authority whose mission.is to provide safe,decent and sanitary housing ror persoils 01IoNv and:moderate inccinic. Owner and A-encv hereby agree to work couperativeh° to finance ail.approxi mate ly 220-unit multifarnily-lttiusing coii inanity located Lit 7221 S Staples Si,in the Citti-of Corp us.C"_hrkti.'f.'cxas(the"Project"), in accordance►►°ii'lt the terms ofthis-?Nll 1. 17he Project %vill be a mixed-income multii`amilY rental housing projeCL-►■'ith l e rent schedule set forth herc:iit: In order to accomplish lhi,;.p►rpose,the parties agree a f0lioty-s AGREEMENTS A. OWNERSHIP STRUCT[ RI:1'. I. Owner Nit-its affllWei wiII form a limited liability°c-anipany(the "Cbmpaty1 ')for the-purpose.of ns+ning the Project_A single-purpose entity that is.wholly-caned by Agency trill be admitted intothe Company at Closing (as hereinafter defined)as-the sale l4lanagittg Member (";�Irtttrrgiir�,�Rlrer�ab�r'°). 2. Owner may' desi-hate ail affiliate to scree as a special limited member of the. Company ("Speeiar! Limited Mena her"). 4vith certain oversight nnd:appraval rights. Any Stich rights must be agreed tt) by.Agency and may not, in the opinion of Agency's counsel, result in Speeia[ Limited Member heing.dezmed a Managing hiemher for etiercisinv its rights under the Company Agreement(as hereinafter defined). 1 The duties.uf Nelariag.iitg.Nlernherand Special Limited 1fonb"shall be set forth in a limited kability cczinp rTy agreement (tlie `'Conpp oa v Agreement") to be entered ini aniana Managing Member,' Special Limited 10ember. .and in equity invesior comprised oC investors selected by OvVner(ear its affiliate.)as tite investor member l the"Inveetor at<i`ember-].The C c,mPttlty, Agreement u.iil contain such.usttai and customar% terms fisr limited liability conip.anies funned li)r the financing, ownership, ntanagement, leasing and .sale of the Project, including, without limitation. provisions for limitation'.on transfer ofntetnber interests as mutually.agrecd upon by Managing Nflentber. Special limited li�leniber and Investor Member. Fite Cornpany.Agreement shall rurt}tcr.eantain terms pros itling forthe deliVcry•of periodic-.linancia]and other reports its may bu reasonably-required by the Agency or its affiliates. The Managing Niletttbt'r's execution or the Company Agreement shall be subject to floe following terms: (i) The Managing Mernber's representations shall he limited to those within Managing. Member's actual 1knowledge and in taco case shall dire. inquiii, be required, it being understood and agreed than Managing Member will not be looked upon by Special irimited Member or tite Investor Member to conduct Project-related diligence-...and an%, sue It diligence conducted bt'Agency is spiely f'or its ot1'n benefit,. (ii) The Managing Nletnber shall be indemnified by Special Limited Member, tite Owner. ;and Company for any actual damages andor actual liabilities. in connection With or arising out or ant' default or material breach by the.Owner or any-of its or their respective affiliates thereof under the Cotatpant'Agreement.L$cept.trir liabilities incurred as a.resent of the direct acts:actions,or omissiolis-.of Managing Mernber.andfor as-a result trfNlanaging Metnber's..grc+s-s ncY;ligence Or wiIIrul rnisct ndLiet and in no event shall such indemnification be contingent upon a ruling- tat' a court of law, all: as shall be more specifically°set forth in the Company Agreement- (iii) Agency shall be indentltified by .C:ottrF+any, Special Limited it leniber. and €lie Owner ror any actual:damages:and;`or actual liabilities incurred in connect ion.r�ith tite -pro-iect Arising out of'any default orniaterial breach by the Owner or any of its or their respective affiliates thereof, except for liabilities. incurred.as a.result of the direct acts. aeLions, or ornissiolis. of Agency attd'eir as a result.of the gross negligence or willAil misconduct of Aglt nc1_ as apfsliablc. and in no .ea'Cttl shall such. indemnification be contingent upon at ruling of a court of lade all as shall be niore specifically set forth in the Company Agreement. (iv)- Rc&crl ed_ (v) The fltanauinr� Ivlentt. shall not be rctluired to covenant to undertake .actions Or bbligations that Special Limited Member +Fill b: required to take uncles the Company Agreement. (vi) ']1h.e Company Agreement shall Contain a provisisin wherein Special Limited tMeRltier Milli l'n1•ES[Or McMber ack;n)M(i Jc that tlx= ohfig_hoils of N-lanaoira" %lc.tither under tits::t:•{Yml;mx ,Agreement arc oblicatinns O X'l�lnagilag -N1C1 bCr Und-11 rt tick [l15'lls C of Mawl"ino—Meniha or xk;oene.�,; and Nii) Agenev and its ;affiliates with the .Project ►ti�ill.ire.lrtiludeel as additicutttl insured on atll atpplicable insurance polici6 avhicli are ice be preapproved by+-Qticy, 3. Title to the lanai for the Project shall, ate taken 'in the name �!'Ageitot' ("Groulid Lessor-":). and CiroL[nd lessor shall then enter into a lon term ground lease (--Groh nel Lease") With Company,..as tenant. holding a fee interest in the improvements.that co}istitote the Project, Funding for tile acquisition.of the land-will come from the financing.nf the Project and will be paid to the.Ground I..xssor in the Form of.an ttp-front Ground Cease payment; Upon the expiration of the 99-year term of the Ground l..eawe bras set forth in the C onipany.Agreement, tt\v nersh p of the improvements cohMitutino the Project shall revert to the Ground 1,6sor. In the event that the Project is sold in compliance with this NIOU.the Ground Lease shall.provide fora transfer u!'title to the.land to a:purchaser upon paynn oil t,ofSLO0.00, 5. Neither party may.assign this MOU a ithout the prior written.consent of the tither parties,except as may otherwise be provided herein.Special.Limited Memher'S riglwto.assign its interests in the Company shall.be more sp4c..iiically set.forth in the Contpany°Agfcctnent..but shall be subject to the consent of the Nianaging Member. B. DUEDILIGENC E Asa condition to Agency='s participation in the financing and ownership of the Project, Agency requires the U►vner to provide within a reasonable time, all reasonable due dili-ence information on the Projlect And its proposed financing and operations as is reasonably"requesii-.d b • Agency or its counsel- Failure of the O7 vner.to deliver to Agency dUe.diIigenct iterns.acceptab]c to Agency shall be grounds for Agency to terminate this MOU in its discretion. C. FINANNIC ING i. Owner will apply for financing (the "l uurr') on behalf of the Company, Owner shall he responsible.ror selecting the lender and negotiating the terms on behall`of the company,. 2. Oil behalf of the Company,the C'wner►vill facilitate and.negotiatt the terms of an equity ifivestment in the Project(the'",E'yrrrty") 'flee Fquit}. financing dowments are expected to include. the Company Agreement. The Special limited Member will serve as. `'Gon�pany Representative"under the Company Agreement. i, Owner :shall pay- all cogs and fees associated with applying Ivor the Loan and facilitating the: Equity investment, which costs may be reimbursed tat Closing.(as defined herein) from any proceeds of the Logn and PquitV.In the event this MOO is.terminated,or.the trartsu .tir,sn fails to close as Contemplated Herein, the Owner shall he sF.alely.resps7nwil,ie 1` rall ct)sts dt%cribed alacwc and AgcncS`and its af°liiiatc.:shallt 11-a e no responsibilit; ror pavmcm or.reimbursernent oIf S'uc"h costs. 4. The Managing Nlentber vvii('have-the hghtto consent to a refinaitcincz orfl3e Project. �N iich consent shall not be unmasonablyL withheld.. conditioned, or delayed so lung as [i) neither Agency nor any aftil`Iate thereof is 'required to..serge as a guarantor. l-ey member, .or key person. t ii},Aecricy and Managing INIeniher are not-subject to springing ntenther provisions.�iii]the I..TV i not g'reate:r than (k)11w, DSC'lt is not lcss than I-I 5` anel (Y) the' Nfitlatitirie docurnertts -do not impose any ni]ly maturial ,;bliga loos on i! nty NicInber, Y 5. Owner and its If"iiiiates shaIi prop+ideany guarantees of operating expenses. return nn Equity investment,and the like that may be required in.c011iunction w ith the [scan t.tnancing or the Equity financing, NEITHER AGENCY, ,IMANAGLINGr MEMBER NOR ANY OF ITS AFFILIATI.5 '4t1'[I.1._ PROVIDE ANY:GUAM.NITEB OR INI?ENINIT1ES IN CONNECTION 1V[TF1 THE FINANCING OF THE PROJEC'i" D. INTENTIONALLY OiMITT Ep. IS, MANAGi''1MENT AND OPERATION RPM h'Eana+ueme'nt will servc as ilie property manager (the ' Vtrittrger") for the Project.;which wiII be nyemorializecl.in a manapernent agreemen[[tlze"'lllt�nit�•cirrcr►t.��,�re��rielrr"j in fonts and substance acceptable.to Agency. 2. Notwithstandtl)g anything to tht� contrary, the klaltagetttcttt Agreement will automatically renew-upon its scheduled termination other thah.upop a termination for cause unless either party gives ninety(90)days" notice toxenegotiate the terms or terntinatc the Management r�1 crCi'eri7Cnt- 3, The Management Agreement shall include a requirement fertile Property Manager to deliver such reports as may from 4me W time .be reasonably requested in writing by the Managing Momber, prpvided that such repeats are of the kind and nature_.that are kept in the ordinary course Of busictess.nl'prnpert} mantigers operating similarly situated proaects, I", COMMUNITY SLIPPORT A.-,00= and the Owner shall be jointly responsible fox interfacing ►v ith local government ❑ffi6als in eonOctson with support,for the Project.so Tsang as%Wh cornmunication ► hich.occur~ outside of`thc:regular board twetings of Agency is approved by Owner-The parties will consult with each other and coordinate..tle response to arty media inquiries:anther ptibIIe.opposition to the Project that may arise. (1, AD VALOREM TAX EXEMPTION The t vncrsltlp structure contemplated herein is expecteij to-generate I06[ !4k gad v alurem tax exe.trlption l6r the Project(tht.`-Exe►iplivn"),Age-ncy,can behalf'of the Company,,shalkvtt rk%vith the ()Wr,erand tilt:NUCCCS Central Ap[zraisal I)istri4t to obtain cs+njtrzrtatitrn sal the atidilahi3iiti o[ such exemption -after Closing- At Ciosing. the 0wrict- shall cause an oliinioa o .r:ogni cl to be delivered Frith respect Lo.tdt F'X;7tTtpt 0:1- In ti14 ev'vnt the €AcIliptioll is lost fi+ear wiv reasoll 01hU thin ['i) a leggy }�iiive.chatr c t;r ztJ� rse court rifling-rchatc,d to the [exemption or(ie) the action or inaction of Owner or its a.l'liliates, Agency sha-11 have one (1) year from dw idate of asry notice relating to 'a lo, of the Exemption to cau-%e the E:xemption to be r6m tated. lenity= and the lana6rA.g %lentbe.r u'ilf.at gill tiatie$ act in good faith to pi-Q--s�ry e, tiiaintaiir. and E r rei'rzsmte the l.xc:rttl)flon' It'the l-:.r:n1pf k)n is ruA re ihstcttL. WL I shirr said one (l) y.ear onle.lr<irn , then the fee v+titc ill the land shall t It Spe'oial Lzimiwd %lerlthti~4 option.)'be. convey!'I to tile. C:s:arrtpusay'4 a riorr inal.cost to the C:`ollipany. the (3roaund 1.ea4ie fall 1}e terrttin'ated for alkn% [lit; Comrany to establrsh an. eh ty:lpt struture in tlx: flexure, and Spccial Limited Member shall hl fvt tilt riAll by €attt-c:hase f"rum Agerwv-Ageticy° s ownership ilitertSt ill (br tll� sum of`100,00 pki"Fall unpaid fc,wjd unreimhurscd zxpensc�earned bN Agency, tic:t►►itl}4t,�licling the t'czragfai€aL. in the event that the ail r,41orcm c.�empik h is last, lout rcinsLatemcnt ol-the 1 _xemptic�)j is reasottahl} anticipated ahertlie aforementioned one year period, :-_so long as gency-Continu.es to pursue such reinstatement.diligently and in Wj.lod Va th ana.fbr sda long as the-reimstatetneht cal`tlw F.Nemption can continue to be reasonably anti ipated, Ag;iL: shnII be.afk)rJCd'suclt add itjonaI extensJons as. may be necessary to accomplish the Nih-Statement o17.the f-' mptts3ri, IN cot 4) thlb Consent of the Spev.ial Limited MembQr. \which coll�imt iball hot be. unrcasr}nably Ak ithheld, conditioned. or delayed,.Anyy,advalice payanent of Annual Rent (as defined in H(i) below) it)a year in Nvbigh the E%emption is last and ad valorem property taxes-arc.paydble by the Company shall be repaid to the Company prorated to the date of loss Of-Exelltption.. H. F CE.S AND EXPFNSES _N anaging MemberlAgcnsy Fees: 0) Ground.Lease Fees. ln.addition to the initial lease payimnt aniounting-to $1,32,500. paid:at.C.lo.4;i.rig. the Corn.pany shall p,%v to:the Ground I..,essor an annual lease payment("Annual lent"1 initially in.an amount equal to$82 229 Ohe-In itial Annual Rent Payment°),which Annual.Rent payment shall increase by 3."o per year.The Initial Annual Rent Payment shall be due-and payable oil or prior to t1w first.day of the second Lease Year (as Stich term shall be defined in the Ground Lease)'but shall tic refunded,along with the initial lease payment,to the t -)mpaziy upon a denial of the Exemption based on the initial application therefor, All Annual RL*nt shall be due MCI payable lair each Lease Year in advatire on the first day of Bitch.applicable Lease Year to lawful currency' of the United States.of America, to Ground l�essor by delivering.ter mailing it to they C3rt�ttnd I..essor's address,or such dither address or in.Such-other manner as(,Traund Lessor frO m time to t III)e specifies by written notice.to Compan};.prodided. hci►vd vt,that the Annual Rent shall be prorated for any partial Lease Year based on the number.oCdays in the year tliat the Ground. Lease is in effect..At Company's.option. Company may prepay the Annual Rent trot`the entire Terri or any portion thereof at any tinie. All paytiient orA rill uaI Rent is subordinate to debt service,such.amounts shall accrue and be p iyalile in Co4junetion ►%ith sul3 scyuc#nt rent payments, (5) Disposition Fie. The Manakin- Member shall. lie entitled to receive a lee equal to Li%❑#-.the gross sales price-hi.connection wiOi a Sale urdlspomtJ.on of thePrtijcm (iH) Asset Management Fee. The Managing {Member shall be entitled to receive an annual asset tmriagement fee in the.amount of$.10;000;to.he int_reased annually by.M. (iv) AgencyPINI-anaging TMerniier Costs.: All reasonable expenses tlkurred by flZT . in eortnettican erith this 1V[t]U including but nut ]united to costs #«r staffs nixie to revieEr the -proposed Project, third-party• reports, Agency's legal comigel, counsel .to Managin- :i%4e tuber and the Corm any. spec ial real estate cdnrttsel. financial advisor ;znd dither expenses incurred by Agency in connectiwi ►°ith the proposed i'roject.(Colfec(iVeb., the. "CoAv"').. shall be ruimborseij by the Company to Agency cir to such third parties cancurrentlr with (lid:c14)sing oil the Loan (tlw '!C10sing') however the total sutra to the Costs shall not exceed .$l 5.000i.t 0 1'itlaxi a hi Crests Ar<rtount")' 1f this Mill! or the Project is terminated before the Clcasing and Agency has unreinibursed out-.o(=pockct C os� ts, Agency shall iiivoice the Owner for such Costs and the O7 Nner shall reimburse Ageitcy'orthe.ttpp]icable third party tear no more than the Maximum Costs Amtyunt Within thirty(30)days.at reeeipt of said Invoice. (v) Advisor and Counsel Fees.In addition to the fees set fur i above.expenses .of-the Agency in connection with Closing. will be reimbursed to the _Agency by the Company at Closing. The parties.acknowledge that the Agency and its affiliates will he represented in this transaction by the Agency's Counsel, Anderson. L cltrman. Barre Maraist, I.LP,whose fees will he$5.000. (-vi) Owner aAaiowh° dges and agrecs that it is the intent of the parties hereto that Agency shall bear no out-of Pocket costs or expenses in Connection v�ith the Project. (V-ii) In the event this N.I.OU is terminated or the transaction Jails to,close as contatnplated herein. Owner shall.be solely- responsible ror atll costs expended by Agency andlor:its affiliates in.connection with the transaction.including.but not limited to payment of legal fees in an amount of up to $40,000. payinent.of Ageney"s owner representative in an amount of up.to:$35,000, and ri~mburscment of costs in an amount of up to S5.000. Agency and its affiliates shall have no responsibiIity.forpaynient or reimbursement al'sut:h oasts. 1. )?URCi-1:A$E C)1'TIONi1 TG1i-[`OF FIRST R.l'-:FUSAL ]. In order:to secure the Fxettipiitin_ ,kinnagiiyg Member or Agency shall have a right of first refusal to acquire the Pro ect for a.price equal to the terries of a bonafide third party.ofter which +Contpany andfor Spc6al Limited Member intends to accept. Ili addition on terms to be morc.explicitly tiet.foah.iti the Ground Leas:.Ormind l.:css it v6lI receive an option(the"Option") to acquire the l?rcrICCL during the terns oC the Ground i.:cisc, includ°trig withput linlitalion C.ornpany'.s leasehoId iiatrrest in the Land(col Iocttl cly° the"Tenan Vs.Property"),(1)on any .date thirty(30')days a fter Cirroun d Lessor deliver'1wrilti Ln nOUCC tO CQo1[N41IV 0ftirC'Und intent to exercise..the[)pt [its.(the."option T'xcreise Notice"),kind(ti)Ltpi.JF111W CODlllant srev.elpt o the PUrcfia_Sf:Pried:(as here ina(`ter del rnW;),11W—Purchase PHeC f6r tlie..'Tewant's Property ptirsuatit to tl.w Option shall be tics hzrrint?clow (a) Prige ormula.An ainiount,determined lay MAI appraisers mutually agreed to b C:iround Lessor and investor Nlember,,cgUal to('i)the hair ntarkvt value-.of the Tenant`s Properly as determined in amlrtlanee with sUbsection :(b). below, plus (ii) can. amount_(lit an af'ter.tax basis,.equal to the dilttintilion of ccanomic value tea.the Investor Member(tar Successor Member) as a result of the:purchase of tile Tenant's Property by Ground. lessor, which shall include (A) all cap.i(aI contributions sir any members bf-tlier- C'ontroliin- Entity from the date of illitia] a'ciluisiti(lh. (1.3) the ouWandiitg.balance o1"all loans (and any accrued interest thereon and Vield maintenance) made to the Controlling Ent by its members,arid the l.:ender(as here inaft.i;r defined)_►�hich►rill not Dthel-%Vise be repaid its the tinie of the purchase; (C).a 14% IRR (as hereinarter dehned) on the capital contributions gfaly members-in the C:ontrolkne Emity and oil Investor k1ember's capital cono-ib pions and (D) all costs.and expenses incurred by tv oil behalf of the Controlling Ent'ity's nnembers Mtlt respect. Io .(I) admission to the Can Pi itt. (?.) such member's activities with tespect to the Prc jest prior to Ground lxssor's purchase of the Tenant', Property under this Option, and (3) an amount to d'ss#ribute to the Controlling E ntity's members cash proceeds sufficient to enable its ettentbers to pay, after any and all federal, state and Ioeal.taxes imposed on such distribution. the taxes projected to be. iniposed can the members as a result of the sale pursuant.to the Option. (b) j-airliviarket VUILIe. Fair market value of the Tenant's Property for Purposes of this Section shall.be. calculated as follows, As soon as practicable follo vjag the delivery of the Option Exercise Notice.Groom(Lessor and the InaystorNlember(ur.ari atViate.theivoll shall select a mutually acceptable IEidepe:ndent Appraiser.(as defined in The Ground.Lease)to prepare an:appraisal of-the Latld,.1'roject and all assets o-wined by both the.Controllinrr E:ntitk and Company used in conjunction with the Project that are'available for disposition. In the event that the parties are unable to agree upon an Independent Appraiser within 1.5 business days fallowing the date of delivery of the Option Exercise Notice, Ground Lessor and the Investor (,(ember cacti shall .select an Independent Appraiser tivithiit the next.succeeding= five business Clays, I either party falls to select an Independent Appraiser within such true period,the deterritination orthe other Independent Appraiser shall.coniro1.If the difference.bet.ween the appraised rair market vafue$set forth in the two appraisals is not more than 10% of the appraised fair market talus:set forth iit the lower of the two appraisals,the fair market value for purposes of this Section shall be the.average of the two appraisals. If the difference between the two appraisals.i.s greater than 10%.of the lower of the mo appraisals. (lien the two.lndlcpmdent Appraisers.shall jointly select a third Independent Appraiser whose determin.atiott of appraised Lair mark-et- value shall he-deemed to be bindiner on all parties as lying as the third determination is between the other two determinations_ 11 the third determination is either lower or higher than both of the ether two appraisers, then the:a►verage of all three appraisalss shall be.the appraised fair market value for-purposes of this Section. Ground Leswr and the Company shall each par'one-]calf of the fees and expenses of anyF..Inde.pendent Appraiser(s)seleewd pursuant tO this subsection (13). All calculations of Fair market value shall take into consideration the Affordability Restrittions and the Exemption, provided,however,that if the .Exemption is eliminated or`rnat:ljf.ied due io-a.diange in law, the appraiml slit€l take into account such el in)ination or modification of the:Exemption.- ': Citrar rat?rs'R pur-chaw_ piiqn-l7efntill.Subject to all applicable rights to care. it 6) Mana irtti Member takes any. at.ti'e}n (or emits to take an actionAiat is.expli+c'stls required.by the. Company Agreement) within its sole and exclusiVe tontro€ and StIClt-tutiun Or iltas:tiQ1t T4slilts.in an event cif default under aaty of the financing documentation. the: Project obligatiomi, fir the Company Agreements or(6) the Managin- IMi-mlicr takes any action forCrlltiis to tame an action that is. cxpIiciIty required by the (.'aitf0any reement) %iIItin its sole and-excIusile ca III r{}I and such action or .inaction causes any gu T.ImIOrs tilt%, quantifiable liability which such miaratntor actually pays[under€is Qua ranty agreement(s)((i)and(ii)are referred to as"RepitrchfUe Events") thin each of the guarantors.andEeir their respective successors and assigns or designees,shall have the sole and exclusive upturn (with the consent of the Investor N4et)iber') to purchase either 1`rom Agency its ownership interest in the Managing Member(the-',(lid Ownership Interest.-) or Frain the Managing Member. its.manag.ing member interest in the C"ontpariv (the "41.11 Ownership Irrleresf')fir tile.surn of$106.06.plus rill Unpaid fires and unreimbursed expenses earned by the Managing klember to the date ol'the Repurchase l rent,tihich shalt be exercisable by any tine til' more of the guarantors,their Wccessors:and assigns or desigitees;.upOrt 15 business days written notice by guarantors to-the Agency and the Mitrtaging. Member(Elie "Reprrrchdst,Option") and the other guarantors. Its}fall nm be a repurchase Event and this Repurchase Option.will not apply if the event of.d6du[Cor the cause of7.guarantor s liability--is.caused in whole or part by a matter or item over which guarantors or an affiliate has full control or for whiclt it is ntltemise responsible, For.purposes of this paragrap!). the temi "caused" shall only include matters within the f'ult or partial control of the application person or entity?, In the t.vent. that the. Repurchase :Dption. is exercised.the fee estate sha1I,be.transferred to Corn pan v foT a_nominal cost: i. 5A1,E., lit the event Special Limited Member desires to seII.or refinance..the PrrrjeCt'(any suelt sale stay take the form of a sale of.a majoritNY of thi ownership iitterestin both (lie.manacling menib r attd the tither members anWor.a saIe.oC Ilie lee interest in the land); Agency and tht N1anagirig Member shall.cooperate with ilie-Special.Litnitcd Member in connection with such eff6rtS. In the event either Agency or the Managing Member do not cooperate.the Special Limited i lember shall have the right to require.or.compeI sucl3 cooperation through.;all available rcIief and remedies that may be available at lacy or in equity.Nothing.contained in this.ScctionshalI affect.limit.or impair arty purchase ofation or right of first.rcfusaI that either.Agemv or the MAnagin Member may be entitled to exercise. Notwithstanding the foregding. no transfer of. the property shall be permitted to.another govern mentai entity or its affiliate,other than Agency sir its any of'its affiliates,so lone as the E%emption has not been lost by either inaction or action bythe Agency. K. REGULATORY RESTRICTIONS Owner and. Agency agree that the. Project Will -be a mixed income rental housing development reslricted at-the ftlllowing rent schedule.: At least forty- percent (40%) of.the tinit in the Project(tile "80'Io-A-MI Affordable Units")mill be reserved for occupancy by individuals and farntilies earning at or below eighty percent.(80%) of(lie.area median farnily int:ome, adjust d.R)r household size and taking= in account,for this purpose, the combined incomes Uf each unit LICCupam resi dins, in an 80016 AIVII Afrardable Unit with in:the meaning ofSeetion 3 D3.A4.2 oftile Texas Loc al Government Code. WMq median family lncorne shall bc -eslablislted annually.ley. the LIS Department:of I lousing and U-ban De►elopownt ("HUb") and calculated. using the Novogradac Dent:and Income.Limit Calculator for the Nuec: s County -- .C:'orpus Christi, Texas, HUD .MSA and the applicable year with renj e:alculations based on "Dthcr non.!U1-11'C"' and"50 VLI"income lirnits."Stl°Fo" and Imputed Persons Per Redroom for Dent Limited Calculations set to "1: 'person'll I3er3rautrtt i' .� itlintn regard to titilit4•allowances.(the."80% Rent Restriction") and the applicable family size solected for the respwive I.:ow-Incorne Household leftsint a particular 1,ow Incorne (.lint (this`80%Applicable Median Income'"}: At least ten percent (10%) of the units in llic 11'rejco (the "60'/ti ANII Aff"ordabit Clnits")wiII lie reser►!ed f(w ocetil+. y ilk" lntli4rduals itl1C1 families errrnin��at or l5cio�ti sixty percent(60%)of the area median family incoaice.adjusted for household sin and Wking into account, f6r this purpose. the combined inconles of each unit.occupant residin,,! in a 60%. AMI Affordable Unit. HO o median fatttily income shall be established annually- by the US Depart►nent Of 110using and. Urban. IJevelopment ("HUD")and calculated using the Novogradae Rent and Income'Limit,.Calculator for the Nueces County--Corpus Christi. Texas HUD.VISA and the applicable year with resit cale.ulations based:on"Other non-I,li-{TC" and"M Vt-I' Income limits. "60%" and Imputed Persons per Bedroom far Rent Limited.Calculations set to "I Personl.I Bedroom + F i►itliout regard to.utility allowance-('the"60% Dent Restriction'' and the applicable$atttily size selected.for(lie respective Low Income Household leasing a particular Low Income Unit {the "60% Applicable Median Income"i. Notwithstanding.ifii 60%AMI AtTordabl.e.Unit becomes Vacant and a household.+with 60%Applicable Median Income does not applyto rent such unit in the two (2).weeks after the date of vacancy-, the Company is n-ot rerluired to.hood the unit open and may rent t,o a household that.otherwise qualities.f6r an 80%.AMI.Affordable Unit and wi11 striVe to.rent the next vacant unit. to.n household at 60% Applicable Wdian Income under the same teens, ■ For,tltc avoidance ol`.i ouht,the Affordability RestrictiOns Wld nmtal hinitat olis shall apply sOlef y (ti dicker runts.bu-aajuAed based upon fat iIv:sia-e. ■ o greme:r than-HIN ptrccm�50114)vrth,c L1nita ir1 the Project will he unrc-arictcd:i5.to residem incomes and may bo rented atniarket ratCti(ihw"Aisrtcet Brits"l), m 1..he unit mitt at.the PrCijei t shall be as,fi)llomq: Unit � Gll°p +Llfi fit}u„i.tio l Marl et Totals l f3edr�:6M J 35 43 _ 89 2 NA.roo n 1 1 43 54 � 108. 3 Bedroom _._.. ---- _ _. 13 Totals " 88 1 0 220 � I'ercenta>7es I }�l1 1{��'1 5()kL — 1(job _ . Inconie shalt. be verified by. the [Omer pursuant to a re-view of the tenants' federal. ineonie tits returns of other commerciall,. reasonable mathod aeei•ptabic to Agency. C Nvmr'and Agency will enter into a.regulatory Agreement-atClosing to-be.retarded in the Njueces County Ian.d retards that.will set forth the income restrii Dons and describe the.methodo[ogy. for income verification anti reporting. I... MISCELLANEOUS 1. This.MCC! ret1c:ets tli.e entire udder itanding be(�ieen the parties and.may only-be anlende.i in writing,sighed.by both parties: l"his:l•OU is a.contract and not nie-rely an-"agreernent to agree. 2. Each party- hereto is prohibited froth assigning any of its, interests. benctits..i7r respunsi'bilities.liereunder to any third party`car related Third party.Withput the priur.witlen consent of the ether party.such consent not to be unreasonably withheld,conditioned,or delayed. I The parties agree to..esecute such d0CUrnents.and do Ither such reasonable things as triaj, be necessary err appropriate to facilitate the consummation or the agreements set l°orth herein. 4 This MOU may be executed in se%vral.counterparts.each 6fwhich shall be deemed to be an original and ad]orwhich together shall constitute one contra l:bindiq,,can all patties heretic. notwithstanding that all the.patlies shall not have signed the same counterpart.. 5. THIS MOU SHALL l3E GOV E RNED AND CON MUM.IN ACCORDANCE WITt1 THE: LAWS OF THE STATE: or, '1 E AS. EXCLUSIVfr OF CONFLICT OF LAWS PRINCIPLES. 6. In case anv one or.mare of the provision contained in this MO U rot any reason is .held to. be. invalid. illegal or unenforceable in .-my respect. such -invalidity_ illetal ty ar unerifcirceabiIity«-i11 not affect atty other provision hereof, and this.MOU .will be construed as if- suc€t invalid, illegal Or unenforceable provisicin,had never been contained herein. 7. 'rhe.part ies hereto submit exclusively to the jurisdiction of the state and federal colli`ts.of Nueces County, Texas.and venue. for any.cause of action arisinL, hereunder shall lie exc'�luslvely in the state and federal courts of Nueces County Texas. 8. Should any party.employ°nn att6rney of attorneys to enforce:any,or the provisions hereof,to protect its interest in any manner:Ilrising under this--MOU_or to reuwer.damages for the breach of this MOU, the non-prevailing party in any action pursued in courts of competent jurisdiction (the finality of Which is not,legally contested).agrees to pay'to the Prevailing party all reasonable posts_ damages and expenses, including specific:ally,:but iyithaut.iniphe:d limitation, atkorneys• Cees_.expended or incurred by tlie.prevailing party in connection therewit€t. 9r The subject headings contained in this NIOU are for reference purPcases only and do-not affect in any way the meaning or interpretation hereor.. i.p. '1`iiis MOU shall continue until temiinated up6a the occurrence of any-one of tlic following conditiam: (a) Agency and the Owner siptn a mutual consent to tertitinate this rrlCyi.F: (b) Il'the terms of the Uoan.rbr the I)ki ect are unaueptable to Agency, in its.sole discretion; and Agericy provides the Owner notice ol'such fact and a 30-day opportkmi y to provide financing terms that are acceptable to Aovricy find the omier; but the O%vtier clues not do so: (c) Agency's Board of Directors takes action to disapprove of the partidipation Of Agency in the financing c+f the Project as&scribed in thin IMOt I. ►t'any time prior to the Closing. (d) Either party breaches its 01'igations under this l4 0U. the non- breaching party provid"the breach Ing party=notice-of sticli fact and.a 15-day opportunity to cure.an'd4he breiching party Fails to do so (e) Fither party files for bankruptcy prntection, makes an assignment For the benefit-of:crcditors,has a receiver appointed as to its assets, or i�tn;ral ly` becom': inst�i��ent, (t) Frior to the Closing it is determined that the,Project will not qua Iif3 for the I',xenlpt on;-_or (,g) O n&is not awarded a-contract 116r purchase ol'the Project, [,!poll te.rntirnation orthis info] for any of'the reasons cited.abov'c,neither party shall have any ongoing:obligation. to-the other with respect to this MOO trot'the Project. In addition, the provisions of this N10—U►vitlt respect to the Prtsiect i3 ill be:terntimated«hen Managing Member is adinitted to the Company and_Agency mid the Owner and their affiliates,as applicable.enter into definitive.agreements with res�iect to the go3 crnactce of the Company.and. the financing and operation of the Prniect as contemplated herein. I L The parties acknmv[edge that tile Managing :Llember.Agtmcy and its.nftitiates NOII be represented in this transaction by Anderson. Idehman, Barre& Mnai%. 1_1-I' ("Company Cnussei') in a legal capacity.. Owner, _5pe al Limited IVlember and their affiliates will be represented by separate cuunsol and NYM. not be entitled to rely can Company Counsel for representation. in this riiatter and.acknowledges.that no llFtartciaL:adviscary rclations}atp will uxisl among the Owner,Special Limited Member and their.at:fiIiatts. JRenaainder or Page Intentionally La t I3.lalik] 1.XEC CITED to be c Ffectisr as c,i'tile Mate ah,�c sfx>►�31. AGENCY: CORPUS CIIRISTI HOUSING AVI-11ORITY '1 itly. Chief Executive Officer fi111 NF.R; TX Azure Apartments 1.LLC", a Bela►rare limitc�i k�ahilit� � ,nsr3�ri H% r Re an f 3tigliman. ilanaetr EXH I BIT G SAMPLE GROUND LEASE FOR APARTMENT COMPLEXES Execution Version AZURE APARTMENTS GROUND LEASE between CORPUS CHRIST[HOUSING AUTHORITY, as Landlord and TX AZURE APARTMENTS 1, LLC, as.Tenant Dated as of December 30,2024 Section 1 DEFINITIONS........ —....... —................. ...............--_---- .......... ...... ......2 1.1 ............. ... ...... — ....................................................... —........................ .2 1.2 ............. ............................................... -----------.—.---�Q Section - TERM........................................................ 8 2.1 Length ----- ................... .......-- ...................................................... ......— .........0 %.% Surrender ......... ................... ........ ........................................_'---'—'--�Q 2.3 Holdj ng Over-.........---- ................................ ........ ______.____._____� 2.4 Tit I e to a n d Alterati ons of I m 12 rove me nts .................. — ....... ............................\D Sectionl RENT...................................................................................................................10 llAmount ...... ........................................'—__..._----------_—.—.--..lU 3'2 Tax onU Lease............ ........................... ....................................................._---lO 3.3 Security Deposit......____................... .................... ...................----_---|Q 3'4 Net iLease................ ......................... —... ------------ ........ — ................ ........ .......}D 3.5 Condition of the Property.................................... ..........____......... ................. ll Seutuao4, USE OF PROPERTY..................... ..................... — ................. ....___.................1l 4.1 Nature of Use ........ ............. ..................... .................. ......................... ..........—< | 4.2 Compliance with Law and Covenants............. — ..............................................il 4.3 Re5trictions Applicable to Units.........—................... ............ ...... ........ ...... ----l2 4.4 Landlord Control.... .... ....____...................... .............................................. ------i2 Section 5. TAXES AND OPERATING EXPENSES..................................................... ..............l3 5.1 Property Tax Exemption ....... ...... ---....... ...............................--'......_--- _i3 5.2 Tenant to1Lay— ......................... ...... ......... ........................................ .......... ....\4 5.3 ......................... _........... —.... --- ......... ................. --14 5.4 Delivery of Bills and Notices ..........-...... ............... .___ ......................___14 5.5 Operating Expenses.................................. ' ....................................... - .......... 4 5'6 Right to Pay Taxes-----------------_..._—.—_.--'—_—�i5 5.7 ...--'.................... ...........................}5 Secrioub. INSURANCE AND INDEMNIFICATION,... ............. .......... ................... ...............15 6.1 Insurance to be Maintained bV Tenant................___.... ...........— ....... — .........l5 6.2 insureds.... ........................ ............................. ......... .......................... ---------------}5 6.3 Evidence........... — ...... — ....... —..................................... ...........................--'l5 6'4 Indemnification of Landlord ... ...................... .............. _............... ..................l8 6'5 ----- ....... .......'........................ ......._------._._----|0 Section 7. MORTGAGES,................................. —....... ............... ......... -_—~—.__'__-�Q 7.1 Future Fee Estate Mortgages.... ......... ....--- .............................. .............. —]� 7.2 Foreclosure Rights of Permitted Leasehold Mortgagee............'—'—............... 8 7.3 Permitted Leasehold Mortgage.............................................. ........... ................. 8 Section 8. IMPROVEMENTS TO PREMISES; PERMITTED LEASEHOLD MORTGAGE. ...........2D GROUND LEASE i 8.1 Improvements..................................................................._..............-.---.........,....-- -'0 8.2 Mechanics' or Other Liens.....................................................................................20 8.3 Fixtures............, .....21 8.4 Joinder........................................................•----• .....................................................21 8.5 S ns...................................................,......,......,.....................................................21 Section 9. REPAIRS AND MAINTENANCE............................................................................21 9.1 Repairs ............................................................................................ ...---.....21 9.2 Maintenance........ ........................................... ........--•-------------------- ..........22 Section 10. L4NDLORO'S RIGHT OF ENTRY....................................................... ....22 10.1 Inspection and Repair---............................__.............:......... ......,.........................22 10.2 Exhibiting the Property-----------•..... .......................... Section 11. FIRE AND OTHER CASUALTIES................................................................_........... 2 11.1 Restoration....... • ---. • ...........................................................................................2? 11.2 Application of Proceeds on Termination....,...._.....................................................22 11.3 Rights of Permitted Leasehold Mortgagee..................... .. ........ . ' 11.4 Termination upon Non-Restoration ...................-..................................................23 Section 12. CONDEMNATION...................................................................... ----....................23 12.1 Notice of Taking.................. - . . ............-.................. 23 12.2 Condemnation Awards ................................... ................-.............................,_23 12.3 Total Taking....... ...-... ......... ................. 7 12.4 Partial Taking; Procedures and Criteria for Course of Action...... .................24 12.5 Restoration_-. ........ ......•-....---................. ....._-......................._--......... ---..........24 12.6 Restoration................................................................................___......................24 12.7 Termination Upon Non-Restoration......................................................................24 12.8 Rights of Permitted Leasehold Mortgagee......._..... ............................ ....____...25 Section 13. TRANSFERS..........................................___...................,...................................-25 13.1 Tenant__.,........................ ............... .............. 5 13.2 Landlord.......... .............................. .................____---- ........,.,..2G 13.3 Right of First Refusal............. Section14. DEFAULT................... ................................._..............._........___.....,,.,.,.........27 14.1 Definition ...............•--••••• ......••••• ........................................................................... 7 14.2 Notice to Tenant: Grace Period.................___.........................................._....,,...27 14.3 Landlord's Rights on Event of Default..................... .) 14.4 No Release—.............................................................____ ....30 14.5 Reserved,... ...... ................................-....... ......... ........................... ...........___.30 14.6 Reimbursement.....................................................................................................30 14.7 No Action ..............................................................................................,. ....30 14.8 Landlord Event of Default.................................... ...................... .................31 GROUND LEASE ii Section 15. ESTOPPEL CERTIFICATE;SHORT FORM.........................................................I-..-31 15.1 Estoppel Certificate............................................. .........................................,........31 Section 16, CONDITION OF TITLE AND PROPERTY. ................................. ................32 16.1 Quiet Emo went................... ....32 16.2 Limitation on Liability--...-..... .. ...32 16.3 Title to Personal Property......................................................................................32 Section17. NOTICES..........................................................................., ....... ............,...........33 Section 18. REPRESENTATIONS AND WARRANTIES. ............................................................33 18.1 Landlord's Representations and Warranties.........................................................33 18.2 Tenant's RejRresentations and Warranties........................................-.......... ......34 Section 19. Purchase Option......................................................................................... .......34 19.1 option--................................ ......... -----------....................... ---- .-......--.------.,...34 19.2 Sale of Leasehold Interest......................................................................................35 19.3 Automatic Termination of Option ..................................................................,......36 19.4 Subordination to Permitted Leasehold Mortealzes..............................................-36 Section20. GENERAL. ............ .................--...........................................................-...-......36 20.1 Effectiveness...................................... ........................................---.......................36 20.2 Complete Understandine.......................................................................................36 20.3 Amendment...................................................................................,...,.. ...------.---.36 20.4 Waiver-.... ..................................................... ............. ....... .................... .........-36 20.5 Applicable Law.................................... ...................................... ...........................36 20.6 Time of Essence .................................................. .37 20.7 Headings...................................................................................---........----.....--.....37 20.8 Construction---..........---...................-....................................................................37 20.9 Exhibits........................... ............... ............................_...._................_....................37 20.10 Severabiiity...........................................................................................--..._.-._........37 20.11 Disclaimer of Partnership Status.............................................................---........37 20.12 Commissions..........................................................................................................37 20.13 Prevailing Party......................................................................................................37 20.14 Limited 3rd Party Rights..................... 20.15 Conflict....................................................................................... 20.16 No Subordination of Leasehold Estate..................................................................38 20.17 Nan-Merger.,,...-...................................................... ...38 20.18 Approva}s, Etc .......................................................................................................38 20.19 Force Maieure....................... -.,_-........--.-............................................................38 20.20 Subordinate to Permitted Leasehold Mortgage...........................................--.......39 20.21 Contest Proceedings....,.... 20.22 Landlord Not Entitled to Proceeds.........................................................................39 20.23 Easements.............................................................................................................39 20.24 2n�.................................................................................................. . 39 GROUND LEASE ill 20.25 Memorandum of Ground Lease — ............................— ............. ........................4O 20.26 No Personal Liability..................................................... ........ —..........................40 20.27 Benefit and Burden—.......'-. _. ....................................................... 20.20Access..... ................ ............................... .—........................................................40 20.29 Suecial Conveyance RjgLir........................ ............... ..........................................4O Exhibits A— DeschptionofLand B-5chedu|e of Permitted Encumbrances C— Not|ceAddresses GROUND LEASE |v GROUND LEASE THIS GROUND LEASE (this "Lease") is dated to be effective as of December 30, 2024, by and between CORPUS CHRISTI HOUSING AUTHORITY, a public nonprofit housing authority organized under Chapter 392 of the Texas Local Government Code, having the address as set forth on Exhibit C,attached hereto ("Landlord"),and TX AZURE APARTMENTS 1,LLC,a Delaware limited liability company having the address as set forth on Exhibit C ("Tenant"). Landlord and Tenant also being referred to herein individually as a "Party" and together as the "Parties"). RECITALS. A. Concurrently herewith, Tenant has transferred the Premises to Landlord by Special Warranty Deed and retained the Improvements and Equipment. B. Landlord has agreed, under the terms and conditions hereof,to lease the Premises to Tenant for Tenant's operation upon the Premises of the Improvements, consisting of a multi- family housing community known as "Azure Apartments" and comprised of approximately 220 rental units (collectively, the "Units"). Capitalized terms utilized herein shall have the meanings assigned to such terms in Section 1.1 below. C. Tenant has agreed to lease the Premises from Landlord, and Landlord has agreed to lease the Premises to Tenant,for purposes herein stated. AGREEMENT IN CONSIDERATION of the covenants and agreements of the Parties hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the tract of land located in Corpus Christi, Nueces County, Texas, described in Exhibit A attached hereto (the "Land"); and TOGETHER WITH any and all easements, rights, alleys, right-of-ways, privileges, appurtenances,and advantages belonging to or in any way appertaining to the Land (all of which, together with the Land, are collectively referred to as the "Premises"), excluding any and all Improvements and Equipment (each hereinafter defined) now or hereafter located thereon; and TO HAVE AND TO HOLD the Premises unto Tenant, its successors and assigns, on the terms and subject to the conditions hereinafter set forth, and subject to the operation and effect of the Permitted Encumbrances. Section 1. DEFINITIONS.. 1.1 Specific. As used herein, the following terms have the following meanings: "Applicable Law" means all laws, statutes, codes, acts, constitutions, ordinances, judgments, decrees, injunctions, orders, resolutions, rules, regulations, permits, licenses, authorizations, administrative orders and other requirements of any Governmental Authority applicable to the particular subject matter, including without limitation, all Housing Requirements. "Bankruptcy" is deemed,for any Person (hereinafter defined),to occur either: (a) if and when such Person (i) applies for or consents to the appointment of a receiver, trustee or liquidator of such Person or of all or a substantial part of its assets, (ii)files a voluntary petition in bankruptcy or admits in writing its inability to pay its debts as they come due, (iii) makes an assignment for the benefit of its creditors, (iv) files a petition or an answer seeking a reorganization or an arrangement with its creditors or seeks to take advantage of any insolvency law, (e) performs any other act of bankruptcy, ❑r (v) files an answer admitting the material allegations of a petition filed against such Person in any bankruptcy, reorganization or insolvency proceeding; or (b) If (i) an order, judgment or decree is entered by any court of competent jurisdiction adjudicating such Person a bankrupt or an insolvent, approving a petition seeking such an adjudication or a reorganization, or appointing a receiver, trustee or liquidator of such Person or of all or a substantial part of its assets, or (i i)there otherwise commences with respect to such Person or a substantial part of its assets any proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment, receivership ❑r similar law; and such order, judgment, decree or proceeding continues unstayed for a period of ninety (90) consecutive days after the expiration of any stay thereof. "CCHA" means Corpus Christi Housing Authority, a public housing authority organized under Chapter 392 ❑f the Texas Local Government Code. "Claim" has the meaning given it in Section 6.5.9. "Code" means the Internal Revenue Code of 1986, as amended. "Commencement Date" has the meaning given it in Section 2.1.1. "Costs" has the meaning given it in Section 6.5.9. "Environmental Cleanup Work" has the meaning given it in Section 18.1.12. "Environmental Laws" means any and all Applicable Law pertaining to health, safety, or the environment now or at any time hereafter in effect, and any judicial ❑r administrative GROUND LEASE-AZURE 2 interpretation thereof(including, but not limited to, any judicial or administrative order,consent decree or judgment relating to the environment or Hazardous Substances(hereinafter defined), or exposure to Hazardous Substances), including without limitation, and all as may hereafter be amended,the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the Resource, Conservation and Recovery Act of 1976,the Cleary Air Act,the Federal Water Pollution Control Act,the DiI Pollution Act of 1990, the Safe Drinking Water Act, the Hazardous Materials Transportation Act,the Toxic Substances Control Act, and any other environmental or health conservation or protection laws, all as amended from time to time. "Equipment" means all of Tenant's right, title, and interest in and to all apparatus, machinery,devices,fixtures, appurtenances,equipment and personal property now or hereafter located on or within the Project and necessary or desirable for the proper operation and maintenance of the Project, including without limitation, any and all awnings, shades, screens and blinds; asphalt, vinyl, composition and other floor, wall and ceiling coverings; partitions, doors and hardware; elevators, escalators and hoists; heating, plumbing and ventilating apparatus; gas, electric and steam fixtures; chutes, ducts and tanks; oil burners, furnaces, heaters, incinerators and boilers; air-cooling and air-conditioning equipment; washroom, toilet and lavatory fixtures and equipment; engines, pumps, dynamos, motors, generators, electrical wiring and equipment; tools, building supplies, lobby decorations and window washing hoists and equipment;garage equipment,security systems,and gardening and landscaping equipment; swimming pool, recreational furniture and equipment; refrigerators, dishwashers, disposals, ranges,washers,dryers,and other kitchen appliances and all additions thereto and replacements thereof; but specifically excluding all equipment owned by third parties, whether or not brought onto the Project, and whether or used in connection with the services provided at or in the Project. "Event of Default" has the meaning given it in Section 14.1. "Exemption" has the meaning given it in Section 5.1. "Fee Estate" means Landlord's fee simple interest in the Premises, subject to the operation and effect of this Lease and the Permitted Encumbrances. "First Permitted Leasehold Mortgage" means the first lien Permitted Leasehold Mortgage encumbering the Leasehold Estate or any portion thereof at any time during the Term, which is senior in priority to all other Permitted Leasehold Mortgages encumbering the Leasehold Estate or such portion thereof, and the other documents governing, securing and/or evidencing said first lien. "First Permitted Leasehold Mortgagee" means an individual or financial institution that provides loans to the Tenant from time to time,their successors and/or assigns,together with its successors and/or assigns, and each Person from time to time serving as the beneficiary of the First Permitted Leasehold Mortgage. GROUND LEASE-AZURE 3 "Governmental Authority" means any nation, country, commonwealth, territory, government, state, county, parish, municipality, agency, or Other political subdivision and any entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government. "Hazardous Materials Contamination'' has the meaning given to it in Section 18.1.12. "Hazardous Substances" means any and all substances regulated by Environmental Laws and any other substance affecting the 'health and/or welfare of persons or adversely affecting the environment. "Holdover Rent'' has the meaning given it in Section 2.3.2. "Housing Requirements'' means at least fifty percent(50%)of the residential units will be restricted for rent to Qualifying Tenants. As used herein "Qualifying Tenants" means one or more natural persons or a family, irrespective of race, creed, religion, color, national origin, familial status, mental or physical handicap, or gender, whose current annual family income does not exceed eighty percent (80%) of the area median gross income (within the meaning of section 142(d) of the Internal Revenue Code of 1986,as amended(the"Code"))calculated using the Novogradac Rent and Income Limit Calculator for the applicable year, under the ''Other Federal, State, or Local Program" category for Nueces County — Corpus Christi, TX HUD Metro FMR Area for families of four or more persons, which calculation is based on the HUD Published Income Limit for 50%VLI,or such other reliable compilation of income statistics as Landlord may determine to employ, as adjusted by Landlord according to the most recent Consumer Price Index statistics (the "Are❑ Median Gross income"). Rent will not be calculated with regard to utility allowances; provided, however, that the rents shall not exceed 35% of 0.8 (or 0.6, as applicable) multiplied by the Area Median Gross Income, divided by twelve (12)for the qualifying Tenants. In addition, at all times: 0) 88 units will be income restricted for rent to individuals and households whose aggregate adjusted gross incomes do not exceed eighty percent (80%) of Area Median Gross Income; (ii) 22 units will be income restricted for rent to individuals and households whose aggregate adjusted gross incomes do not exceed sixty percent (60%) of Area Median Gross Income; and (iii) 110 units will be market rate. GROUND LEASE-AZURE 4 "Independent Appraiser'' means a firm which is generally qualified to render opinions as to the fair market value of assets such as those owned by the Tenant, which is mutually acceptable to the Landlord and the Tenant and which satisfies the following criteria: (i) such firm is not a partner, or an affiliate of the Landlord or the Tenant; (ii)such firm (or a predecessor in interest to the assets and business of such firm) has been in business for at least five (5) years, and at least one of the principals of such firm has been in the active business of appraising substantially similar assets for at least (10)years; (iii) such firm has regularly rendered appraisals of substantially similar assets for at least five (5) years on behalf of a reasonable number of unrelated clients, so as to demonstrate reasonable market acceptance of the valuation opinions of such a firm; (iv) one or more of the principals or appraisers of such firm are partners in good standing of an appropriate professional association or group which establishes and maintains professional standards for its partners; and (v)such firm renders an appraisal to the Tenant only after entering into a contract that specifies the compensation payable for such appraisal. "Improvements" means any and all buildings, structures, alterations, improvements, fixtures and non-movable Equipment now located or at any time in the future located an the Land, and all subsequent alterations, additions and/or replacements thereto and/or thereof. "Initial Lease Payment" has the meaning given it in Section 3.1.1. "Investor Member" means Sundance Bay Income and Growth OP, LP, a Delaware limited partnership, together with its successors and assigns admitted to, or to be admitted to, Tenant as the investor member. Landlord,by execution of this Lease,consents to such Person as Investor Member. "Land" has the meaning given it on Page 1 of this Lease. "Landlord" means Landlord and its successors and assigns as owner of the Fee Estate. "Landlord Event of Default" has the meaning given it on Section 14.8 "Landlord's Related Parties'' has the meaning given it in Section 6.5.4. "Land Records" means the Real Property Records of Nueces County,Texas. GROUND LEASE-AZURE 5 "Lease Year" means (a) for the calendar year 2024, the period commencing on the Commencement Date and terminating on December 31,and (b)for each calendar year thereafter the successive period of twelve (12) calendar months during the Term. "Leasehold Estate" means the leasehold estate in the Premises held by Tenant under this Lease, "Managing Member" means Azure Apartments-CCHA, LLC, a Delaware limited liability company, together with its successors and assigns, admitted to, or to be admitted to, Tenant. Landlord, by execution of this Lease, consents to such Person as Managing Member, "Mortgage" means any mortgage or deed of trust at any time encumbering any or all of the Property, and any other security interest therein existing at any time under any other form of security instrument or arrangement, including without limitation, any such other form of security arrangement arising under any deed of trust,sale-and-leaseback documents, lease-and- leaseback documents, security deed or conditional deed, or any financing statement, security agreement, or other documentation used pursuant to the UCC (hereinafter defined), provided that such mortgage, deed of trust or other form of security instrument, and any instrument evidencing any such other form of security arrangement, has been recorded in the Land Records or in such other place as is, under Applicable Law, required for such instrument to give constructive notice of the matters set forth therein. "Mortgagee" means the holder or beneficiary of a Mortgage. "Operating Agreement"means the Operating Agreement of the Tenant, dated as of even date herewith as such agreement may be modified or replaced from time to time. "Partial Taking" has the meaning assigned to such term in Section 12.4. "Party" and "Parties" have the meanings given to such terms on Page 1 of this Lease. "Permitted Encumbrances" means the instruments and matters listed in Exhibit B, attached hereto and made part hereof,and matters permitted in Section 7,and including without limitation, any liens or encumbrances securing any financing made to Tenant, at Tenant's request, in connection with the Property, and matters permitted by Permitted Leasehold Mortgagee. "Permitted Leasehold Mortgage'' means, collectively whether one or more, the Mortgages that are permitted by the terms of this Lease, including without limitation, the First Permitted Leasehold Mortgage, that are obtained by Tenant for the purpose of financing the Leasehold Estate,together with the instruments governing,securing, and/or evidencing any such Mortgage, and all renewals, extensions, modifications, consolidations, and replacements thereof. "Permitted Leasehold Mortgagee" means, collectively whether one or more, the beneficiary of a Permitted Leasehold Mortgage. Landlord, by execution of this Lease, consents GROUND LEASE-AZURE 6 to the First Permitted Leasehold Mortgagee as a Permitted Leasehold Mortgagee under this Lease. "Person"means a natural person,a trustee,a corporation,a partnership,a limited liability company and any other farm of legal entity. "Premises" has the meaning given it hereinabove; provided that if at any time hereafter any portion of the Premises is no longer subject to this Lease, "Premises" shall thereafter mean so much thereof as remains subject to this Lease. "Project" means, collectively,the Premises and the Improvements. "Property" means, collectively,the Premises,the Improvements, and the Equipment. "Required insurance" has the meaning given it in Section 6.1. "Restoration Criteria" has the meaning given it in Section 12.4.1. "Rent" means the rent payments payable in accordance with Section 3.1.1. "Resident'' means a tenant occupying a Unit pursuant to a Tenancy Agreement. "Social Services" shall mean public and charitable services made available by Landlord and/or its sponsor, CCHA, directly or through other governmental and nonprofit partners as part of Landlord's and CCHA's joint mission to provide safe, decent, sanitary and affordable housing to low income individuals and families in Corpus Christi, Texas, including the provision of homeownership programs, tenant educational programs, job training programs, personal debt/credit repair and management,public and community health programs,research initiatives, childcare and child development programs, and/or youth sports and programs. "Taking" has the meaning given it in Section 12.1. "Taxes" has the meaning given it in Section 5.2. "Tenancy Agreement" means the form of lease agreement between Tenant and a Resident under the terms of which such Resident is entitled to enjoy possession of a Unit. "Tenant" means Tenant and its successors and assigns as holder of the Leasehold Estate. "Tenant's Related Parties" has the meaning given it in Section 6.S.4. "Term" has the meaning given it in Section 2.1.1. "Termination Date" has the meaning given it in Section 2.1.1, "Termination Deliverables" means, collectively, (i) a special warranty deed, in form reasonably satisfactory to Tenant,(ii)a blanket conveyance and bill of sale relating to any tangible GROUND LEASE-AZURE 7 or intangible personal property, (iii) a termination of this Lease, (iv) a title affidavit in form required to delete any pre-printed exception, and any gap in coverage, (v) a "Firpta" affidavit, if applicable, (vi) any transfer tax Forms which may be required, (vii) any authority documents that may be required by the title company issuing the title policy described in the next subsection and (viii) a Texas form Owner's Title Policy from a nationally recognized title insurer, in the amount of the purchase price, subject to the liens, encumbrances and other exceptions existing as of the date hereof or otherwise approved by Tenant. "Total Taking" has the meaning given it in Section 12.3. "Transfer" has the meaning given it in Section 13.1.1. "UCC" means the Uniform Commercial Code as codified in the State of Texas, as amended and any successor statute. "Units" has the meaning given it in Recital A above. 1.2 General. Any other term to which meaning is expressly given in this Lease shall have such meaning. Section 2. TERM. 2.1 Len h. 2.1.1 Original Term. This Lease shall be for a term ("Term") commencing on the date of this Lease("Commencement Date''),and terminating at 11:59 P.M.(CST) on the day immediately before the ninety-ninth (99th)anniversary of the first(1st)day of the first(1st)full calendar month following the Commencement Date, or such earlier date (the "Termination Date," except that if the date of such termination is changed to an earlier date or postponed to a later date, the date to which it is changed or postponed shall thereafter be the "Termination Date"for all purposes of this Lease). Nothing in this Lease shall be deemed to extend or permit the extension of the Term beyond said ninety-ninth (99th) anniversary. 2.1.2 Confirmation of Commencement and Termination. Upon either Party's request,the Parties will confirm the Commencement Date and Termination Date, or any earlier termination of this Lease. 2.1.3 [Reserved . 2.2 Surrender. 2,2.1 On the Termination Date occurring as a result of the exercise by Landlord of an Acquisition Right, Tenant shall, at its expense and subject to Section 2.4, (a) promptly yield up the Property to Landlord, and (b) upon Landlord's written request, remove Tenant's personal property from the Property. Upon the expiration or termination of this Lease, neither Tenant nor its representatives shall thereafter have any right to any of the Property GROUND LEASE-AZURE 8 (including without limitation,the Improvements)or to repossess any of same, or in,to or under this Lease, and Landlord shall automatically be deemed to have succeeded to all of the same, free and clear of any Person's right, title and interest therein (but subject to the rights of any Person under the Permitted Exceptions, any Mortgagee then holding a lien, right, title or interest in or to the Leasehold Estate, and all Residents). 2.2.2 Notwithstanding the foregoing, if the Termination Date occurs as a result of the activities described in Sections 2.1.3, 13,1.2 or 13.1.3, Landlord shall promptly yield up the Premises to Tenant. 2.3 Holdi_�n Over. 2.3.1 Month-to-Month Tenancy. Nothing in this Lease shall be deemed to permit Tenant to use or occupy the Property after a Termination Date described in Section 2.2 or the final Termination Date described in Section 2.1 (a "Landlord Termination Date"); however, if Tenant continues to occupy the Property after the Landlord Termination Date, after obtaining Landlord's written consent thereto, (a) Such occupancy shall(unless the Parties agree otherwise in writing) be deemed to be a month-to-month tenancy, which shall continue until either Party notifies the other in writing, by at least thirty(30)days before the end of any calendar month,that the Party giving such notice elects to terminate such tenancy at the end of such calendar month,in which event such tenancy shall so terminate; (b) Subject to the provisions of Section 2.3.1(c), but notwithstanding anything in the remaining provisions of this Section to the contrary, the Rent payable with respect to each such monthly period shall equal one-twelfth (1/12) of$100, and the Rent shall continue to be payable under Section 3; and (c) Such month-to-month tenancy shall be on the same terms and conditions as those set forth in this Lease, unless Landlord gives Tenant written notice, at least thirty (30) days before the end of any calendar month during such month-to-month tenancy, that such terms and conditions (including any related to the amount and payment of Rent) shall, after such month, be modified in the manner specified in such notice,then such tenancy shall, after such month, be on said terms and conditions as so modified. 2.3.2 Holdover Rent. If Tenant continues to occupy the Premises after the Landlord Termination Date without having obtained Landlord's written consent thereto, then without altering or impairing any of Landlord's other rights under this Lease or Applicable Law, Tenant hereby agrees to pay to Landlord, as holdover rental for the Premises a sum equal to the Rent plus$50.00, adjusted on an annual basis, as of each January 1,to account for inflation, with the adjustment to be made on the basis of the consumer price index for Galveston County, Texas, for each day of such holdover occupancy, prorated based upon the number of days Tenant holds over(''Holdover Rent"). Nothing in this Lease shall be deemed to give Tenant the GROUND LEASE-AZURE 9 right to remain in possession of the Premises after the Landlord Termination Gate, regardless of whether Tenant has paid the Holdover Rent to Landlord,without Landlord's written approval. 2.4 Title to and Alterations of Improvements. At all times during the Term, the Improvements and the Equipment shall be owned by Tenant and Tenant alone shall be entitled to all of the tax attributes of such ownership, including without limitation, the right to claim depreciation or cost recovery deductions. Additionally, Tenant shall have the right to amortize capital costs and to claim any other federal or state tax benefits attributable to the Property. Upon the Landlord Termination date, the Improvements and the Equipment, or any portion thereof so terminated, shall become the sole property of Landlord at no cost to Landlord, and shall be free of all liens and encumbrances (other than the Permitted Encumbrances and as otherwise provided in this Lease). For state real property tax purposes or to the extent otherwise required under Applicable Law to maintain the Exemption for the Property, Landlord shall be treated as the owner of the Property. It is the parties' intent that Landlord hold title to the Land at all relevant times and to the extent it does not, Landlord can compel legal title to the Land to be conveyed to Landlord during the Term, if necessary, and by automatic operation of law pursuant to this Lease at the termination of this Lease. Section 3. RENT. 3.1 Amount. As rent for the Premises,Tenant shall pay to Landlord: 3.1.1 Rent. Rent ("Rent''), in an amount equal to 10% of the ad valorem property tax savings for the Project based on the final, non-appealable resolution of any contest of the ad valorem tax values for the Project for 2024, such tax values to be increased annually by 3%. The first payment of Rent shall be made on or before January 1, 2025, pro-rated for the number of days remaining in the calendar year following the effective date hereof. Thereafter, Rent shall be paid no later than January 1 of each following year. Notwithstanding anything herein to the contrary the payment of Rent shall be subordinate to the payment of any debt service owed by the Tenant with respect to any loans made to finance or refinance the acquisition of the Project. 3.2 Tax on Lease. If Applicable Law now or hereafter imposes any tax, assessment, levy, or other charge (other than any income tax) directly on Landlord with respect to (a) this Lease or the value thereof, (b) Tenant's use or occupancy of the Premises, (c) the Rent or any other sum payable under this Lease,or(d)this transaction,Tenant shall pay Landlord the amount thereof as Rent unless Tenant is prohibited by Applicable Law from doing so, provided Tenant shall not be obligated to pay any tax which is solely attributable to Landlord's ownership interest as owner of the Land. 3.3 Security Deposit. None. 3.4 Net Lease. Other than as expressly set forth in this Lease (and except for fees of attorneys and third-party consultants retained by Landlord,and Landlord's own personnel costs), all reasonable costs, expenses, liabilities, charges, and/or other deductions whatsoever with GROUN©LEASE-AZURE 10 respect to the Property and the ownership, leasing, operation, marketing, maintenance, repair, rebuilding, use, occupation of,and/or conveyance of any or all of Tenant's Leasehold Estate shall be the sole responsibility of and payable by Tenant, including any reasonable costs, expenses, charges or other sums incurred by Landlord in connection with this Lease that are Tenant's responsibility pursuant to the terms hereof; all of which costs, expenses, liabilities and charges shall be deemed Rent. 3.5 Condition of the Property. TENANT ACKNOWLEDGES AND AGREES THAT,EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS LEASE, THE PREMISES SHALL BE LEASED TO TENANT AND TENANT SHALL ACCEPT THE PREMISES,"AS IS,WHERE IS,AND WITH ALL FAULTS." LANDLORD HEREBY EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PREMISES. WITHOUT LIMITING THE GENERALITY OF THE PRECEDING S€NTENCE OR ANY OTHER DISCLAIMER SET FORTH HEREIN, LANDLORD AND TENANT HEREBY AGREE THAT LANDLORD HAS NOT MADE AND IS NOT MAKING ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,WRITTEN OR ORAL,AS TO(A)THE NATURE OR CONDITION,PHYSICAL OR OTHERWISE, OF THE PREMISES OR ANY ASPECT THEREOF, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF HABITABILITY, SUITABILITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE OR PURPOSE; (B) THE SOIL CONDITIONS, DRAINAGE CONDITIONS, TOPOGRAPHICAL FEATURES, ACCESS TO PUBLIC RIGHTS-OF-WAY, AVAILABILITY OF UTILITIES OR OTHER CONDITIONS OR CIRCUMSTANCES WHICH AFFECT OR MAY AFFECT THE PREMISES OR TENANT'S USE THEREOF;(C)ANY CONDITIONS AT,OR WHICH AFFECT OR MAY AFFECT,THE PREMISES WITH RESPECT TO ANY PARTICULAR PURPOSE, USE, DEVELOPMENT POTENTIAL OR OTHERWISE; (D) ANY ENVIRONMENTAL, GEOLOGICAL, METEOROLOGICAL, STRUCTURAL OR OTHER CONDITION OR HAZARD, OR THE ABSENCE THEREOF, AFFECTING THE PREMISES ON, PRIOR TO, OR AFTER THE DATE HEREOF, INCLUDING WITHOUT LIMITATION, THE ABSENCE OF ASBESTOS, LEAD PAINT, OR ANY OTHER ENVIRONMENTALLY HAZARDOUS SUBSTANCE ON, IN, UNDER OR ADJACENT TO THE 'PREMISES,AND(E)THE COMPLIANCE OF THE PREMISES OR THE OPERATION OR USE THEREOF WITH ANY APPLICABLE LAW(INCLUDING WITHOUT LIMITATION, ANY ZONING LAWS OR REGULATIONS, ANY BUILDING CODES, ANY ENVIRONMENTAL LAWS, AND THE AMERICANS WITH DISABILITIES ACT OF 1990,ALL AS AMENDED FROM TIME TO TIME). Section 4. USE OF PROPERTY. 4.1 Nature of Use. Tenant shall throughout the Term use and operate the Property only for residential rental apartments and related uses, which may include commercial tenants and uses. Tenant shall have the rightto sublease all or any portion of the Property for residential rental apartments and related uses. 4.2 Compliance with Law and Covenants. Throughout the Term and at its sole expense,Tenant shall, in all material respects: 4.2.1 Comply with(a)all Applicable Law,(b)the requirements imposed by the Required Insurance, and (c) the Permitted Encumbrances; GROUND LEASE-AZURE 11 4.2.2 Deep all licenses, consents, and permits in force that are required by Applicable Law to permit the Property to be used in accordance with this Lease; 4.2.3 Not impair Landlord's right, title, or interest in and to the Fee Estate; and 4.2.4 Not negligently or knowingly do any of the following at the Property other than in accordance with the Environmental Laws(a) cause or permit the escape,disposal, or release of any Hazardous Substances, (b) allow the storage or use of Hazardous Substances, or (c) allow any Hazardous Substances to be brought onto the Property. If any Permitted Leasehold Mortgagee or Governmental Authority reasonably requires testing to ascertain whether or not there has been any release of Hazardous Substances on, in, or under the Property while this Lease is in effect,then Tenant shall reimburse, on demand and as rent, the reasonable costs incurred by Landlord in connection thereto. Tenant shall, upon Landlord's request, execute affidavits, representations, and the like concerning Tenant's best knowledge and belief regarding the presence of Hazardous Substances on, in, or under the Property. Notwithstanding the foregoing,the use and storage of office supplies (ems., copier toner,white- out correction fluid, etc.), cleaning supplies, gasoline, and other Hazardous Substances in such amounts as are found in connection with the use of similar projects shall be permitted. 4.3 Restrictions Applicable to Units. 4.3.1 The Restricted Units are subject to and benefit from the terms and conditions of the Housing Requirements. Except as otherwise provided therein, all Housing Requirements applicable to the Restricted Units shall be binding upon Landlord and Tenant and each of their respective successors and assigns. 4.3.2 Reserved. 4.3.3 Tenant shall comply with the provisions of the Legal Requirements prohibiting discrimination in housing on the grounds of race, color, creed, national origin, sex, marital status,sexual orientation, ora physical or mental handicap, including without limitation, Title VI of the Civil Rights Act of 1964 (Public Law 88-3S2) and Title VIII of the Civil Rights Act of 1968 (Public Law 90-284)and the Fair Housing Act (42 U.S.C. §§3601-3620). 4.3.4 Tenant shall ensure that no tenant or potential tenant is discriminated against based on source of income. For the purpose of this Section 4.3.4, "source of income" means lawful,verifiable in-come paid directly to a tenant or paid to a representative of a tenant, or paid to a housing Owner or landlord on behalf of a tenant, including federal, state, or local public assistance and federal, state, or local housing subsidies, including, but not limited to, federal housing assistance vouchers under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f). 4.4 Landlord Control. Notwithstanding anything to the contrary set forth in this Lease, Landlord shall have no control or participation in the control or operation of the Property and GROUND LEASE-AZURE 12 shall not be entitled to any benefits from or uses thereof except for the Rent required hereunder or the provision of Social Services made available to tenants or potential tenants of the Restricted Units. Landlord shall assume sole responsibility for the cost or expense related to the provision of any Social Services. Prior to provision of any Social Services, Tenant and Landlord shall enter into an agreement memorializing such Social Services and providing that Landlord shall assume responsibility for any claims or causes of action that might arise from or in connection with the provision of any Social Services. Section 5. TAXES AND OPERATING EXPENSES. 5,1 Property Tax Exemption. 5.1.1 The Property is anticipated to qualify for exemption from all state and local government real estate taxes (the "Exemption"). Landlord represents, warrants, and covenants that Landlord,and/or Landlord's successors,will use commercially reasonable efforts to (i) entitle the Property to qualify and (ii) maintain such qualification, for the Exemption. Landlord agrees(a)except as pursuant to the terms of a Permitted Leasehold Mortgage, not to convey any portion of either the Premises or the Fee Estate, and (b) except as pursuant to the terms of this Lease, not to take any action within its reasonable control that would jeopardize the Exemption. Landlord further agrees to take such commercially reasonable action as Tenant or Investor Member may request(at Tenant's expense)to preserve the Exemption, unless such action is otherwise prohibited by Applicable Law. In order to qualify for the Exemption under Section 392 of the Texas Local Government Code,Tenant agrees that at least fifty percent(50%) of the residential units will be restricted for rent to Qualifying Tenants (the "Restricted Units"). 5.1.2 In the event (i) the Exemption is lost due to a change in law, (ii) the Nueces County Appraisal District issues a notice denying the Exemption to the Property or (iii) the Exemption is not reflected in the first property tax bill issued the Nueces County Appraisal District after the date hereof, the Landlord shall have a period of 60 days following such event to propose to Tenant in writing either a plan to restore the Exemption or an alternative 100% ad valorem tax exemption available under Texas law that is reasonably acceptable to Tenant (the "Proposal Period"). Landlord shall have no more than 120 days following the Proposal Period to obtain such restoration of the Exemption or alternative 100% ad valorem tax exemption available under Texas law (the "Restoration Period"), If either (i) at the end of the Proposal Period, Landlord has not presented a plan that is reasonably acceptable to Tenant or (ii) at the end of the Restoration Period the Exemption has not been restored or an alternative 100% ad valorem exemption has not been implemented (confirmation of which may be had in writing or electronic mail by Nueces County Appraisal District or verified through public records), and if Landlord has not exercised its rights under the Option or Refusal Right by the end of the Restoration Period, Tenant may direct Landlord to cooperate with Tenant to promptly terminate this Lease and surrender the Premises to Tenant. In the event of termination of this Lease pursuant to this Section 5.1.2 Landlord shall deliver to Tenant the Termination Deliverables. Any rent accruing during the Proposal Period and the Restoration Period ("Restoration Period Rent") shall be forgiven at the end of the Restoration Period, GROUND LEASE-AZURE 13 provided,however, that if the Exemption has been restored or replaced by an alternative 100% ad valorem exemption by the end of the Restoration Period, the Restoration Period Rent that remains accrued and payable shall be due within thirty (30) days of the date that the Nueces County Appraisal district has restored or replaced the Exemption in writing. Notwithstanding the foregoing, any Restoration Period Rent payable in accordance with the preceding sentence shall be reduced by any property tax payments made by Tenant during the Restoration Period. If at the end of the Restoration Period the Exemption has been restored or an alternative ad valorem tax exemption has been implemented, this Section 5.1.2 shall no longer be applicable unless the Exemption or any replacement ad valorem exemption is lost again due to a change in law. 5.2 Tenant t tom. Subject to Section 5.7, Tenant shall (a) bear the full expense of all real property and other taxes, charges, and assessments levied against any of the Property, including without limitation all payments in lieu of taxes (if applicable), that are payable with respect to any period falling within the Term ("Tax" or ''Taxes,'' as the context dictates); except that if any Tax is levied with respect to a period beginning before the Commencement Date or ending after the Termination Date,Tenant shall only pay the portion falling within the Term; (b) pay the same before past due and incurring penalties (subject to Section 5.3g; and (c) deliver to Landlord a copy of the receipted bill for such Taxes within fifteen (15) days of its receipt of Landlord's written request. 5.3 Taxes - Defer Payment. Notwithstanding the terms in Section 5.2, Tenant may contest the payment of any Tax provided that Tenant (a) is doing so in good faith and by appropriate proceedings; (b) pays to Landlord promptly after the demand therefor all reasonable costs and expenses incurred by Landlord in connection with such contest; and (c)timely pays any amount adjudged by a Governmental Authority to be due, with all costs, penalties and interest thereon, after such judgment becomes final and non-appealable. Landlord shall, upon written request by Tenant, cooperate with Tenant in any such contest, provided that Tenant reimburses Landlord for all reasonable out-of-pocket expenses incurred by Landlord in connection thereto. 5.4 Delivery of Bills and Notices. Each Party shall deliver to the other, promptly after its receipt thereof, copies of all bills for Taxes and notices of assessments or reassessments made or to be made for the purpose of levying any Taxes,to the extent such Taxes are to be paid by the other Party. If the Land is not now treated as a separate tax lot by the assessing authority, Landlord shall use its reasonable efforts to promptly hereafter have the Premises so treated. 5.5 Operating Expenses. Subject to Tenant's legal rights to dispute expenses,Tenant will pay (or cause to be paid), directly to the providers of such services, all costs and expenses incurred by Tenant in connection with the construction, development, marketing, leasing, maintenance, management, use and occupancy of the Property, including without limitation (a) energy sources such as propane, butane, natural gas, steam,electricity, solar energy and fuel oil; (b)water, sewer and trash disposal services; (c)maintenance, repair,replacement and rebuilding of the improvements, including without limitation, all Equipment; (d) landscaping and the maintenance, repair and striping of all parking areas; (e) premiums for the Required Insurance; GROUND LEASE-AZURE 14 and (f) capital improvements or repairs (whether structural or non-structural) required to maintain the Improvements in accordance with the terms of this Lease and Applicable Law. 5.6 Right to Pay Taxes. Any Permitted Leasehold Mortgagee and Investor Member shall have the right (but not the obligation)to pay any taxes payable by Landlord or Tenant with respect to the Property, and to cure any monetary or non-monetary default by Landlord or Tenant under any Permitted Leasehold Mortgage (other than such Permitted Leasehold Mortgagee's own Permitted Leasehold Mortgage) or other encumbrance on the Property which has priority over this Lease, but only to the extent permitted by the applicable Permitted Leasehold Mortgage. If a Permitted Leasehold Mortgagee or Investor Member does so pay or cure, Landlord or Tenant, as applicable, agrees that it will reimburse Permitted Leasehold Mortgagee or Investor Member, as applicable, for the amount thereof promptly following request by such Permitted Leasehold Mortgagee or Investor Member, as applicable, therefor, unless Landlord or Tenant,as applicable, is protesting such taxes or other payments in good faith. 5.7 Landlord's Payment of Certain Impositions. Notwithstanding anything to the contrary set forth in this Lease, it is expressly understood and agreed that Tenant shall not be required to pay or reimburse Landlord for (a) any of Landlord's franchise tax, gross receipts tax, revenue tax, premium tax, income tax or profits tax, or any such tax imposed after the date hereof by any Governmental Authority or jurisdiction if such tax is determined on the basis of the general assets, or the general net income or net revenue, of Landlord; or (b) any estate, inheritance, devolution, succession, transfer, stamp, legacy or gift tax which may be Imposed upon or with respect to a transfer of Landlord's interest in the Property. Section 6. INSURANCE AND INDEMNIFICATION. 6.1 Insurance to be Maintained by Tenant. Tenant shall maintain, or cause to be maintained, at its expense throughout the Term the insurance specified in the First Permitted Leasehold Mortgage, as the same may be modified from time to time due to changes in such insurance (the "Required Insurance"). 6.2 Insureds. Each policy for Required Insurance shall (a) have waiver of subrogation provisions reasonably acceptable to Landlord and Tenant, (b) be issued by companies of recognized responsibility licensed to issue such policies and otherwise transact business in the State of Texas, and (c) name as insureds thereunder (i) Tenant, (ii) as additional insureds, Landlord, each designee of Landlord and/or Tenant, including without limitation, Investor Member, and Permitted Leasehold Mortgagee. Notwithstanding anything to the contrary set forth in this Lease, Landlord's entitlement to proceeds from Tenant's insurance policies is subordinate to the rights of Investor Member, all Permitted Leasehold Mortgagees,and Tenant. 6.3 Evidence. Upon Landlord's request, Tenant shall deliver a copy of each insurance policy to Landlord. All public liability,property damage liability,and casualty policies maintained by Tenant will be written as primary policies, not contributing with and not in excess of coverage that Landlord may carry. GROUND LEASE-AZURE 15 6.4 Indemnification of Landlord. 6.4.1 TENANT SHALL DEFEND, INDEMNIFY, AND HOLD HARMLESS LANDLORD AND LANDLORD'S RELATED PARTIES FROM THIRD PARTY CLAIMS NOT ATTRIBUTABLE TO SUCH PARTIES AGAINST AND FROM ALL LIABILITY,CLAIM OF LIABILITY,OR REASONABLE 'EXPENSE INCURRED BY LANDLORD ARISING OUT OF(A)THE USE, OCCUPANCY, CONDUCT, OPERATION, OR MANAGEMENT OF THE PROPERTY DURING THE TERM, (B) ANY WORK OR THING WHATSOEVER DONE OR NOT DONE ON THE PROPERTY DURING THE TERM, (C) ANY EVENT OF DEFAULT BY TENANT UNDER THIS LEASE, (D) ANY NEGLIGENT, INTENTIONALLY TORTUOUS,OR OTHER ACT OR OMISSION DURING THE TERM OF TENANT OR ANY OF TENANT'S RELATED PARTIES, OR (E) ANY INJURY TO OR DEATH OF ANY PERSON, OR DAMAGE TO ANY PROPERTY,OCCURRING ON THE PREMISES DURING THE TERM,AND FROM AND AGAINST ALL REASONABLE EXPENSES AND LIABILITIES INCURRED IN CONNECTION WITH ANY SUCH THIRD PARTY CLAIM OR ANY ACTION OR PROCEEDING BROUGHT THEREON (INCLUDING BUT NOT LIMITED TO THE REASONABLE FEES OF ATTORNEYS, INVESTIGATORS, AND EXPERTS), ALL REGARDLESS OF WHETHER SUCH CLAIM IS ASSERTED DURING OR AFTER THE EXPIRATION OF THE TERM OR ANY EARLIER TERMINATION OF THIS LEASE, BUT EXCLUDING, HOWEVER, THE PORTION OF ANY LIABILITY, CLAIM OF LIABILITY, OR EXPENSE CAUSED WHOLLY AND DIRECTLY BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD OR ANY OF LANDLORD'S RELATED PARTIES. THIS SECTION 6.5.1 SHALL SURVIVE THE TERMINATION OF THIS LEASE. 6.4.2 TENANT AGREES THAT LANDLORD AND LANDLORD'S RELATED PARTIES SHALL NOT BE LIABLE FOR ANY DAMAGE OR LIABILITY OF ANY KIND OR FOR ANY INJURY TO OR DEATH OF PERSONS OR DAMAGE TO PROPERTY OF TENANT OR ANY OTHER PERSON FROM ANY CAUSE WHATSOEVER BY REASON OF ANY WORK, LABOR,OR MATERIALS PERFORMED OR DELIVERED TO, OR CONNECTED TO THE USE, OCCUPANCY, OR ENJOYMENT OF,THE PREMISES BY TENANT OR ANY PERSON ON THE PRE MI5ES OR HOLDING ALL OR ANY PART OF THE PREMISES UNDER TENANT, BUT EXCLUDING, HOWEVER,THE PORTION OF ANY SUCH DAMAGE CAUSED WHOLLY AND DIRECTLY BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD OR ANY OF LANDLORD'S RELATED PARTIES. 6.4.3 Tenant acknowledges that Landlord is not required to provide security for persons or property in or about the Property. Tenant hereby waives and releases any claim against Landlord for injury to or death of any person and any property damage arising out of or attributable to any criminal activity in or about the Property, specifically including, but not limited to,vandalism,theft, burglary, robbery, rape, murder and assault. 6.4.4 TENANT HEREBY AGREES TO INDEMNIFY, PROTECT, DEFEND AND HOLD LANDLORD AND LANDLORD'S RELATED PARTIES HARMLESS FROM ANY AND ALL CLAIMS, CAUSES OF ACTIONS AND SUITS FOR INJURY TO OR DEATH OF ANY OF TENANT'S RELATED PARTIES OR RESIDENTS RESULTING FROM CRIMINAL ACTIVITIES IN OR ABOUT THE PREMISES, INCLUDING ALL REASONABLE OUT-OF-POCKET COSTS, ATTORNEYS' FEES AND EXPENSES INCURRED BY LANDLORD. TENANT SHALL DEFEND ANY THIRD PARTY CLAIM, GROUND LEASE-AZURE 16 CAUSE OF ACTION OR SUIT MADE OR BROUGHT AGAINST LANDLORD OR LANDLORD'S RELATED PARTIES AT TENANT'S SOLE, REASONABLE EXPENSE, BY COUNSEL REASONABLY SATISFACTORY TO LANDLORD. AS USED HEREIN, "LANDLORD'S RELATED PARTIES" MEANS LANDLORD'S OFFICERS, DIRECTORS,AFFILIATES,AGENTS,CONTRACTORS,,VOLUNTEERS,AND EMPLOYEES, AND THEIR RESPECTIVE HEIRS AND PERSONAL REPRESENTATIVES (BUT EXCLUDING MANAGING MEMBER). AS USED HEREIN, "TENANT'S RELATED PARTIES" MEANS TENANT'S AGENTS, CONTRACTORS, EMPLOYEES, PATRONS, BUSINESS INVITEES, AND GUESTS. 6.4.5 SUBJECT TO THE LIMITATIONS SET FORTH BELOW, TENANT HEREBY AGREES TO INDEMNIFY LANDLORD AND LANDLORD'S RELATED PARTIES AND HOLD LANDLORD AND LANDLORD'S RELATED PARTIES HARMLESS FROM AND AGAINST ANY AND ALL LOSS, DAMAGES, LIABILITIES, DIRECT, REASONABLE OUT-OF-POCKET EXPENSE AND REASONABLE OUT-OF-POCKET COST, INCLUDING WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES, PAID, INCURRED OR SUFFERED BY LANDLORD AND/OR ANY OF LANDLORD'S RELATED PARTIES AS A DIRECT OR INDIRECT RESULT OF THE PRESENCE ON OR UNDER, OR THE ESCAPE, SEEPAGE, LEAKAGE, SPILLAGE, EMISSION, DISCHARGE, MIGRATION OR RELEASE FROM THE PROPERTY OF ANY HAZARDOUS SUBSTANCE. THE FOREGOING INDEMNITY SHALL BE LIMITED TO MATTERS WHICH ARE NOT CAUSED BY ACTS OF GOD AND NOT CAUSE❑ BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD OR ANY OF LANDLORD'S RELATED PARTIES. THE FOREGOING SHALL NOT BE CONSTRUED TO LIMIT THE LIABILITY OF TENANT FOR SUCH MATTERS WHICH OCCUR DURING THE TERM AND WHICH ARE CAUSED BY TENANT'S USAGE OF THE PROPERTY, BUT WHICH ARE DISCOVERED SUBSEQUENT TO THE EXPIRATION OF THE TERM. 6.4.6 NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS LEASE, NO PARTY,TENANT RELATED PARTY,OR LANDLORD RELATED PARTY SHALL, UNDER ANY CIRCUMSTANCES, BE LIABLE FOR ANY CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES CLAIME❑ BY ANY PERSON UNDER THE TERMS ❑F OR DUE TO ANY BREACH OF THIS LEASE, INCLUDING WITHOUT LIMITATION, LOSS OF REVENUE OR INCOME (OTHER THAN RENT), COST ❑F CAPITAL, OR LOSS OF BUSINESS REPUTATION OR OPPORTUNITY. 6.4.7 Notwithstanding anything to the contrary set forth in this Lease, it is the Parties' intent to look first to the Required Insurance for the payment of all applicable losses, damages, expenses, judgments, settlements, and defense costs, including all reasonable attorneys' fees, witness fees, costs of investigation and court costs (all of the foregoing are hereinafter collectively referred to as "Costs") arising in connection with any claim or allegation asserted with regard to the Property(hereinafter collectively, a "Claim''), without regard to the indemnification provisions set forth in this Lease. Therefore, notwithstanding any indemnification provisions set forth in this Lease,the Required Insurance shall take precedence over such indemnification provisions and, in the event a Claim arises which is covered by the Required Insurance, Tenant shall Cause all Costs associated with the Claim t❑ be paid in accordance with the Required Insurance,and to the extent of such payment the indemnification provisions set forth in this Lease shall not apply. To the extent a Claim is either denied or GROUND LEASE-AZURE 17 otherwise not covered by the Required Insurance or the Costs of a covered claim are not fully paid by the Required Insurance, the Parties agree that the indemnification provisions set forth in this Lease shall apply. As to any Claims paid by the Required Insurance, the Parties agree to waive all rights of subrogation, provided that such waiver does not invalidate any insurance policy,or materially increase the premium rates for such insurance. 6.5 Increase in Risk. Tenant shall not do or permit to be done any act or thing as a result of which would void or suspend any policy of insurance of any kind covering any or all of the Property or any liability of Landlord in connection therewith,unless such policy is replaced, Section 7. MORTGAGES. 7.1 Future Fee Estate Mortgages. Other than Permitted Encumbrances and any restrictive covenants, Landlord shall not consent to any future Mortgages against the Fee Estate without the prior written consent of Permitted Leasehold Mortgagee and Investor Member. Additionally, Tenant shall not subordinate its Leasehold Estate nor its interest in any Tenancy Agreement and/or rents thereunder to any future Mortgage of the Fee Estate. Landlord agrees not to convey, transfer, assign, mortgage, or encumber the Fee Estate during the Term of this Lease without the prior written consent of Tenant, Permitted Leasehold Mortgagee,and Investor Member. 7.2 Foreclosure Rights of Permitted Leasehold Mortgagee. Permitted Leasehold Mortgagee shall have the right to foreclose the Leasehold Estate,or transfer the Leasehold Estate in lieu of foreclosure, and upon such foreclosure or assignment in lieu of foreclosure of the Leasehold Estate, the First Permitted Leasehold Mortgagee shall have the right to acquire this Lease in its own name or the name of a nominee or an affiliated designee. In the event that the Leasehold Estate is acquired by Permitted Leasehold Mortgagee, or its nominee or affiliated designee,then such Permitted Leasehold Mortgagee or nominee or affiliated designee shall also have the right to further assign or sublet the Leasehold Estate to third parties without Landlord's consent. 7.3 Permitted Leasehold Mortgage. 7.3.1 Landlord hereby agrees that Tenant has the ongoing unrestricted right to (a) obtain financing secured by one or more Mortgages, including without limitation, the Permitted Leasehold Mortgage, encumbering Tenant's rights, title, and interest in and to this Lease and the Leasehold Estate, and (b) grant a security interest in Tenant's real and personal property. Landlord hereby agrees to subject and subordinate Landlord's interest in this Lease and its Fee Estate to the lien of the Permitted Leasehold Mortgage; provided, however, notwithstanding anything herein to the contrary, all Mortgages, including a Permitted Leasehold Mortgage, shall be non-recourse to Landlord and Landlord shall not be required to incur any personal liability in connection with such financing or Mortgage, or be liable for any costs or expenses thereof, including attorneys' fee, or any other indebtedness or liability of Tenant thereunder. GROUND LEASE-AZURE is 7.3.2 With respect to a Permitted Leasehold Mortgage, the following provisions shall apply: (a) Landlord shall provide notice of Tenant's default under this Lease to Permitted Leasehold Mortgagee and Investor Member at the addresses set forth in Exhibit C as a condition to the validity of Landlord's exercise of any remedies related to such default. (b) Landlord agrees to accept payment and performance of this Lease by Permitted Leasehold Mortgagee and/or Investor Member as though Tenant had done the same. (c) For so long as a Permitted Leasehold Mortgage is in effect, and without confirming any right of Landlord to terminate this Lease other than as expressly set forth in this Lease, if Landlord elects to terminate this Lease due to the existence of an Event of Default by delivery to Tenant, Investor Member, and Permitted Leasehold Mortgagee of a written notice of termination, then Permitted Leasehold Mortgagee shall have the right to nullify any such notice of termination within ninety (90) days after its receipt thereof by either (i) curing such Event of Default; or(J) initiating action to acquire or sell Tenant's interest in this Lease by foreclosure of the Permitted Leasehold Mortgage or otherwise and prosecuting the same to completion. (d) Notwithstanding anything to the contrary set forth in this Lease, Permitted Leasehold Mortgagee shall not be obligated or required to cure a default or an Event of Default of Tenant that is uniquely specific to Tenant, such as Bankruptcy, and Landlord shall not terminate this Lease based on any such default or Event of Default, provided Permitted Leasehold Mortgagee has cured any other non-specific default or Event of Default of Tenant. (e) Permitted Leasehold Mortgagee may enter upon and take possession of the Property as may be necessary to cure a default or an Event of Default of Tenant, to the extent permitted by the terms of the Permitted Leasehold Mortgage, but shall not be obligated to do so. (f) Permitted Leasehold Mortgagee shall have the right to assume this Lease as tenant in its own name or in the name of a designee upon foreclosure or assignment in lieu of foreclosure of the applicable Permitted Leasehold Mortgage. (g) Permitted Leasehold Mortgagee shall not be liable hereunder unless and until it has expressly assumes such liability in writing. Furthermore, no assumption of liability hereunder shall be inferred from Permitted Leasehold Mortgagee's foreclosure or other appropriative proceedings in lieu thereof. GROUND LEASE-AZURE 19 (h) if Landlord delivers any notice to Tenant,other than rent and other periodic billing notices, it shall deliver such notice to Permitted Leasehold Mortgagee and Investor Member at the same time and in the same manner. Section 8. IMPROVEMENTS TO PREMISES, PERMITTED LEASEHOLD MORTGAGE. 8.1 Improvements, With respect to the Improvements: 8.1.1 Utilities. Prior to the commencement of any excavation activities by Tenant, Tenant shall contact all appropriate utility agencies for the purpose of verifying the location, depth and nature of all utilities affecting the Property and any areas bordering upon the Land. 8.1.2 5a_ _fety. In connection with any construction on the Property, Tenant shall comply with the overall safety programs promulgated by any Governmental Authority that are applicable to the Property. 8.1.3 Alterations. Any new improvements made to the Property by either Party shall be made in a good and workmanlike manner in accordance in all material respects with all Applicable Law, including without limitation, all applicable building codes, and shall not be made without the prior written consent of Special Member (as defined in the Operating Agreement), which consent shall be provided in Special Member's sole discretion. Landlord's consent shall not be required for Tenant to alter, improve or modify the Property. 8.2 Mechanics' or Other Liens. 8.2.1 Tenant shall: (a) within sixty (60) days after it first becomes effective against any of the Premises or is known to Tenant,whichever is later,have released(by bonding or otherwise) any mechanics', materialmen's' or other lien filed or claimed against any or all of the Property, by reason of labor or materials provided for or about any or all of the Property during the Term, or otherwise arising out of Tenant's use or occupancy of any or all of the Property, and (b) defend, indemnify and hold harmless Landlord and Landlord Related Parties against and from any and all liability,claim of liability,and direct, reasonable expense (including but not limited to reasonable attorneys' fees) incurred by Landlord on account of any such lien or claim. 8.2.2 If Tenant fails to discharge or bond around any such lien within said 60- day period,then, in addition to any other right or remedy held by Landlord on account thereof, Landlord may (a) discharge the lien by paying the amount claimed to be due or by deposit or bonding proceedings, and/or (b) compel the prosecution of any action for the foreclosure of any such lien by the holder thereof and pay the amount of any judgment in favor of such holder. Tenant shall reimburse Landlord promptly upon Landlord's demand therefor for any reasonable amount paid by Landlord to discharge any such lien and all reasonable expenses incurred by Landlord in connection therewith. GROUND LEASE-AZURE 20 8.2.3 Nothing in this Lease shall be deemed to (a) constitute Landlord's consent or request, express or implied, that any contractor, subcontractor, laborer, or materialman provide any labor or materials for any alteration,addition, improvement,or repair to any or all of the Property, (b) give Tenant any right, power, or authority to contract for or permit to be furnished any service or materials, if doing so would give rise to the filing of any mechanics' or materialmen's' lien against any or all of the Landlord's Fee Estate,. or(c) evidence Landlord's consent that the Property be subjected to any such lien. 8.2.4 Notwithstanding anything to the contrary set forth in this Lease,Tenant shall not be in default for failure to comply with Sections 8.2.1 and 8.2.2 if Tenant is contesting any lien described in said Sections in accordance with the terms of the Permitted Leasehold Mortgage and/or this Lease. $.3 Fixtures. Any and all improvements, repairs, alterations, and all other property attached to or otherwise installed as a fixture within the Project by Landlord or Tenant shall, immediately on the completion of such installation, become part of the Improvements and remain with the Improvements at the expiration or earlier termination of this Lease, except that any machinery, equipment,or fixtures installed by Tenant at no expense to Landlord and used to conduct Tenant's business (rather than to service the Property generally) and are not a part of the Equipment shall, at Tenant's election, remain Tenant's property and be removable from the Project by Tenant at the end of the Term. 8.4 Joinder. Without limiting Landlord's obligations under any other provision of this Lease, Landlord shall, promptly at Tenant's request and expense at any time during the Term (and provided that Landlord thereby assumes no liability or obligation), join in any and all applications for building permits,subdivision plat approvals,or certificates of dedication thereon, public works and other agreements, and permits for sewer, water, and other utility services, other instruments of dedication and other permits or approvals, the granting of or entry into which by any Governmental Authority having jurisdiction over the Property is necessaryto permit (a) the subdivision, development, improvement, use, and/or occupancy of the Property for the purposes permitted by this Lease,without violating Applicable Law;and (b)the dedication to the appropriate Governmental Authority after the Commencement bate of easements and restrictions as are, in Tenant's reasonable opinion, necessary or desirable. 8.5 Si ns. Tenant shall have the right to erect signs at the Property, provided it is done in accordance with Applicable Law. Section 9. REPAIRS AN MAINTENANCE. 9.1 Repairs. Tenant shall, throughout the Term and at its expense, subject to normal wear and tear and casualty, and subject to the other terms of this Lease, including without limitation Section 11, make any and all repairs to the Property as is necessary to maintain the Property in good condition. GROUND LEASE-AZURE 21 9.2 Maintenance. Tenant shall use commercially reasonable efforts to keep and maintain all of the Property in a clean and orderly condition, subject to normal wear and tear and casualty, and to keep the Property in compliance with all Applicable Laws in effect now or in the future. Section 10. LANDLORD'S RIGHT OF ENTRY. 10.1 Inspection and Re2air. Subject to the rights of any Resident under a Tenancy Agreement and the other terms and provisions of this Lease, upon two (2) business days' prior written notice to Tenant, Landlord and its authorized representatives shall be entitled to eater the Property during Tenant's normal business hours, to inspect the Property and may take such action as Landlord is permitted to take pursuant to the terms of this Lease; provided that, in a situation in which the health, welfare, or safety of the Residents or physical condition of the Property would be materially and unreasonably jeopardized unless Landlord were to immediately take such action, Landlord shall give only such notice to Tenant as is reasonable under the circumstances. Nothing in this Section 10.1 shall be deemed to impose any duty upon Landlord to make any such repairs or take any such action, and Landlord's performance thereof shall not constitute a waiver of Landlord's right hereunder to have Tenant perform such work. 10.2 Exhibiting the Property. If requested by a Governmental Authority, Landlord, its representatives, and representatives of such Governmental Authority may from time to time, after two (2) business days' prior written notice thereof to Tenant, and subject to the rights of the Residents under Tenancy Agreements, enter the Units and the rest of the Property during Tenant's normal business hours to exhibit the Property to said Governmental Authority, provided that in doing so Landlord and each such invitee observes all reasonable safety standards and procedures which Tenant may require. In exercising its rights under this Section, Landlord shall use its good faith,reasonable efforts to minimize any interference or disruption of Tenant's work or Tenant's use or operation of the Property. Section 11. FIRE AND OTHER CASUALTIES. 11.1 Restoration. Subject to the provisions of the Permitted Leasehold Mortgage and as otherwise provided in this Lease, if any or all of the Property is damaged or destroyed,Tenant shall (a) promptly notify Landlord thereof if the cost of restoration equals or exceeds Fifty Thousand and 00/100 ($50,000.00), and (b) provided insurance proceeds are available and adequate to complete such restoration,and only to the extent that insurance proceeds are made available to Tenant by Permitted Leasehold Mortgagee and Investor Member for such restoration (or if adequate insurance proceeds are not available but Tenant chooses to provide adequate funds from other sources and to proceed with restoration at its own election), commence and complete restoration of the Property with reasonable diligence. 11.2 Application of Proceeds on Termination. Notwithstanding anything in this Lease to the contrary, upon the expiration or earlier termination of this Lease before restoration of the Property is completed free and clear of any liens,any insurance proceeds not theretofore applied to the cost of such restoration shall be paid: (a) pursuant to the applicable provisions of the First GROUND LEASE-AZURE 22 Permitted Leasehold Mortgage, during such time as a First Permitted Leasehold Mortgage encumbers the Leasehold Estate; then (b)to Landlord to the extent of any past-due Rent owing by Tenant(provided all amounts secured by any Permitted Leasehold Mortgage has been paid in full);then (c)to Tenant. 11.3 Rights of Permitted Leasehold Mortgagee_ Notwithstanding anything to the contrary set forth in this Lease, during the time that any Permitted Leasehold Mortgage encumbers the Leasehold Estate, (a) the application of insurance proceeds shall be governed by the applicable provisions of the First Permitted Leasehold Mortgage, and Permitted Leasehold Mortgagee and Tenant shall have the right to {participate in the adjustment of losses related thereto, (b)this Lease may not be terminated due to damage or destruction unless the amounts secured bythe Permitted Leasehold Mortgage have been paid in full,(c) Landlord may not receive any insurance proceeds until the Property has been restored or the sums secured by the Permitted Leasehold Mortgage have been paid in full,and(d)insurance proceeds remaining after restoration of the Property is complete shall be paid to Tenant (subject to the lien of the Permitted Leasehold Mortgage). 11.4 Termination upon Non-Restoration. Notwithstanding anything to the contrary set forth in this Lease, following a casualty, this Lease may be terminated by Tenant, with the prior written consent of Permitted Leasehold Mortgagee and Investor Member and the repayment in full of the amounts secured by the Permitted Leasehold Mortgage, if such casualty prevents the use and operation of Property in accordance with the Housing Requirements, or if the insurance proceeds made available to Tenant are insufficient to restore the Improvements to a condition substantially similarto the condition existing prior to such casualty. Section 12. CONDEMNATION. 12.1 Notice of Taking. Promptly upon receipt by either Landlord or Tenant of notice of the institution of any proceeding for the taking or condemnation of any of the Property by any Governmental Authority or any other Person under the right of eminent domain or otherwise (a ''Taking"), the Party receiving such notice shall give notice thereof to the other, as well as Permitted Leasehold Mortgagee and Investor Member,and such other Party,as well as Permitted Leasehold Mortgagee and Investor Member, may also appear in such proceeding and be represented by counsel, who may also be counsel for the Party receiving such notice. 12.2 Condemnation Awards. Tenant's share of any condemnation award, which shall be paid to the First Permitted Leasehold Mortgagee,shall be no less than the total condemnation award minus the value of Landlord's remainder interest in the Premises, considered as if unimproved but encumbered by this Lease and the Permitted Leasehold Mortgage. To the extent that Tenant is entitled to any condemnation award, it shall be paid to the First Permitted Leasehold Mortgagee in accordance with the First Permitted Leasehold Mortgage, 12.3 Total Taking. In the event of a permanent Taking of the entire Fee Estate or the entire Leasehold Estate(a''Total Taking''),this Lease shall thereupon terminate as of the effective date of such Total Taking, without liability or further recourse to the Parties, provided that any GROUND LEASE-AZURE 23 outstanding Rent payable or obligations owed by Tenant to Landlord as of the date of said Total Taking shall be paid or otherwise carried out in full, subject to the terms of any Permitted Leasehold Mortgage. 12.4 Partial Taking: Procedures and Criteria for Course of Action. In the event of a permanent Taking of less than the entire Property(a "Partial Taking"): 12.4.1 If (a) Tenant determines that the continued use and occupancy of the remainder of the Property by Tenant is or can be made to be economically viable and structurally sound based upon the amount of eminent domain proceeds and,at Tenant's option, any other funds of Tenant as are available for the purpose of paying for such restoration, and (b) Permitted Leasehold Mortgagee will permit the proceeds of the condemnation to be used for restoration in accordance with the Permitted Leasehold Mortgage,or other funds of Tenant are available for the purpose of paying for such restoration, and are sufficient to pay for the restoration (the "Restoration Criteria"), then the Property shall be restored pursuant to this Section. 12.5 Restoration. If the continued use and occupancy of the remainder of the Property by Tenant, in Tenant's reasonable determination, is not or cannot be made to be economically viable, structurally sound, consistent with the Permitted Leasehold Mortgage and otherwise feasible,then this Lease may be terminated pursuant to Sectiion� provided that Tenant shall use commercially reasonable efforts to pay any outstanding Rent or other obligations owed by Tenant to Landlord as of the date of said termination. 12.5.1 If Permitted Leasehold Mortgagee does not permit the proceeds of the condemnation to be used for restoration, they will first be applied to the reduction of the amounts secured by the Permitted Leasehold Mortgage. 12.6 Restoration. If a decision is made pursuant to Section 12.4 to restore the remainder of the Property, subject to the terms of the Permitted Leasehold Mortgage and the Operating Agreement,Tenant and Landlord shall reasonably agree upon and approve plans and specifications to modify the remaining portion of the Property, provided however, it shall be unreasonable for Landlord to object to items necessary to comply with the Housing Requirements and/or any other Applicable Law. Upon approval of said plans and specifications, Tenant shall proceed, at its expense and to the extent it has received the condemnation proceeds, to commence and complete the restoration pursuant to the provisions of Section 12. Tenant may use the entire condemnation proceeds for such restoration and may retain for its own use any portion of the condemnation proceeds remaining after the completion of the restoration. 12.7 Termination Upon Non-Restoration. Following a Partial Taking, if a decision is made pursuant to Section 12.4 that the remaining portion of the Property is not to be restored, Tenant shall surrender the Property to Landlord and this Lease shall thereupon terminate without liability or further recourse to the Parties, provided that any Rent or obligations owed by Tenant to Landlord as of the date of the Taking shall be paid in full. Additionally, following a Partial GROUND LEASE-AZURE 24 Taking, this Lease may be terminated by Tenant if such Partial Taking prevents the use and operation of Property in accordance with the Housing Requirements. Tenant's condemnation award shall be applied as set out in Section 12.2. 12.8 Rights of Permitted Leasehold Mortgagee. Notwithstanding anything to the contrary set forth in this Lease, during the time that any Permitted Leasehold Mortgage encumbers the Leasehold Estate, the receipt, supervision, control, and application of condemnation proceeds, and the operation of termination provisions set forth in this Lease, will be governed by Permitted Leasehold Mortgagee and the applicable provisions of the Permitted Leasehold Mortgage and no actions in connection therewith may be taken without Permitted Leasehold Mortgagee's consent. In any event,Tenant and Permitted Leasehold Mortgagee shall have the right to participate in all proceedings and other matters related to any Takings. Section 13. TRANSFERS. 13.1 Tenant. 13.1.1 Tenant shall have the right to assign its interest in this Lease and the Leasehold Estate, subject to delivery of written notice thereof to Permitted Leasehold Mortgagee, Managing Member, Special Member and Investor Member, provided that no assignee may be a Blocked Person. Further, where the assignee of Tenant's interest in this lease is not a Permitted Leasehold Mortgagee, Managing Member's written consent is required (except to the extent otherwise set forth in the Operating Agreement), such consent not to be unreasonably withheld, conditioned, or delayed. Any assignee of Tenant must further agree to be bound by the terms of an agreement in substantially the same form as the Operating Agreement. If the Permitted Leasehold Mortgagee (or its designee or nominee) shall acquire ownership of the Property or the Leasehold Estate, following the foreclosure or assignment in lieu of foreclosure of the Leasehold Estate,the Permitted Leasehold Mortgagee (or its designee or nominee) may further assign said interest to a third-party purchaser. Notwithstanding anything to the contrary in this Lease, Landlord's consent shall not be required for Tenant to assign or transfer its interest to Permitted Leasehold Mortgagee nor shall Landlord's consent be required in order for Permitted Leasehold Mortgagee to foreclose on the Property in accordance with the Permitted Leasehold Mortgage. 13.1.2 If at any time Investor Member desires for the Tenant to assign its interest in this Lease and the Leasehold Estate, Landlord recognizes that CCHA shall have rights under the Option and Refusal Right to compel title in itself(except to the extent otherwise set forth in the operating Agreement). If Managing Member withdraws or is removed from Tenant in accordance with the Operating Agreement and no affiliate of CCHA is thereafter a member of Tenant,and if CCHA has not exercised its tights to compel title to the Project into itself in accordance with the Option and Refusal Right, then Landlord shall cooperate with Tenant to promptly terminate this Lease and Landlord shall surrender and convey by special warranty deed the Premises to Tenant, and Landlord and Tenant shall cause the other Termination Deliverables to be executed and recorded. GROUND LEASE-AZURE 25 13.2 Landlord. Notwithstanding anything t❑ the contrary herein, during the Term of this Lease, Landlord shall not transfer, encumber, or otherwise dispose of the Premises, the Fee Estate, or any interest therein without the written consent of Tenant, Permitted Leasehold Mortgagee, and Investor Member. 13.3 Right of First Refusal.The Special Member and its respective affiliates shall have a right to market the interests in the Project, the interests in the Leasehold Estate (the"Leasehold Interest") and the ownership interest of the Special Member in the Tenant (the "Membership Interests")for sale in accordance with the provisions of the Operating Agreement and this Lease, which may include, at the Special Member's option, either (a) a sale of the unencumbered fee estate and termination of this Lease (a "Fee Sale"), (b) a sale of the Leasehold Interest ("Leasehold Sale") or (c) a sale of the Membership Interests (a "Membership Sale"). Provided that the Managing Member has not been removed or withdrawn from the Tenant, in the event that Tenant receives from a ready,willing and able third party purchaser an acceptable bona fide offer for a Fee Sale, a Leasehold Sale or a Membership Sale, including, without limitation, pursuant to a letter of intent or term sheet (the "Offer"), which Offer Tenant intends to accept, the Landlord will have an irrevocable and exclusive right of first refusal to purchase the Project, the Leasehold Estate or the Membership Interests for which the Offer has been made (the "Refusal Right")for terms not less favorable than those set forth in the Offer(including but not limited to price,conditions to closing, and timing for closing),subject to the terms and conditions of this Lease. If Tenant receives an Offer, which Offer Tenant intends to accept, the Tenant will give written notice of the Offer to Landlord,specifying the name and address of such third-party purchaser and the purchase price and a copy of the Offer which sets out all of the terms of the Offer. The Landlord will thereupon have the right to exercise the Refusal Right by giving written notice of Landlord's intent to exercise the Refusal Right on terms not less favorable than those set forth in the Offer to the Tenant within thirty (30) days after the Landlord's receipt of the written notice of the Offer from the Tenant (the "Response Period"). The Tenant may accept an Offer subject to the Landlord's Refusal Right described herein. In addition to all other applicable conditions set forth in this Lease,the foregoing grant of the Refusal Right shall be effective only if Landlord is a governmental agency currently and remains such at all times hereafter until the date that the Refusal Right has been exercised and the resulting purchase and sale has been closed. ff Landlord fails or declines to exercise its Refusal Right prior to the expiration of the Response Period in accordance with the terms of this Section 13.3, Landlord shall be deemed to have waived the Refusal Right with respect to such offer and Tenant shall be free to proceed to sell the Project, the Leasehold Estate or the Membership Interests, as the case may be, to such third party purchaser substantially on the terms contained in the Offer. In the event that a Fee Sale, a Leasehold Sale or a Membership Sale is consummated, then the Refusal Right shall terminate and have no further force or effect. In such event, if requested by Tenant, Landlord agrees to execute an instrument in recordable form evidencing the termination of the Refusal Right. Furthermore,if a Fee Sale is consummated,at or prior to the closing thereof,Landlord shall cooperate with Tenant to terminate this Lease, surrender and convey by special warranty deed the Premises to Tenant, and cause the other Termination Deliverables to be executed and recorded, and Tenant shall be solely entitled to receive and keep all of the proceeds of such sale. GROUND LEASE-AZURE 26 13.3.1 The purchase price for the Project or the Leasehold Estate under the Refusal Right (the "ROFR Purchase Price") shall be the same as the purchase price contained in the Offer, 13.3.2 If Landlord elects to exercise its Refusal Right in accordance with the terms of this Section 13.3, Tenant and Landlord shall enter into a written contract for the purchase and sale of the Project or the Leasehold Estate, as the case may be, substantially in accordance with the terms of the Offer and this Lease and providing for a closing not later than the date specified in the Offer,and shall proceed to the closing thereunder.At closing,Landlord shall pay to Tenant the ROFR Purchase Price,the parties shall cooperate to terminate or assign this Lease, surrender and convey the Premises to Landlord, and cause the other Termination Deliverables, as applicable, to be executed and recorded. In the event that the closing of the purchase and sale contemplated by such written contract fails to close as a result of a default by Landlord thereunder, Landlord shall be deemed to have waived its Refusal Rights under this Section 13.3, and Tenant shall be free to proceed to sell the Project or the Leasehold Estate, as the case may be,to such third party purchaser substantially on the terms contained in the Offer. 13.3.3 Notwithstanding any term to the contrary contained herein,the Refusal Right granted in this Section 13.3 shall be subordinate, in all respects, to the Permitted Leasehold Mortgages. Section 14. ❑EFAULT. 14.1 Definition. Each of the following events continuing beyond the expiration of all applicable notice, grace, and cure periods set forth in this Lease, including without limitation, those described in Section 14.2, shall constitute an "Event of Default 14.1.1 Tenant fails to (a) pay any Rent, or other sum that Tenant is obligated to pay under this Lease, when it is due and payable hereunder after demand therefor, or (b) perform any of its obligations under this Lease; or 14.1.2 Tenant's Bankruptcy occurs. 14.2 Notice to Tenant; Grace Period. Notwithstanding anything in this Lease to the contrary,the defaults listed in Sections 14.1.1—14.1.2 above shall not be deemed to be an Event of Default, and Landlord shall not exercise any of its rights or remedies hereunder, unless and until: 14.2.1 Landlord gives written notice thereof to Tenant, Permitted Leasehold Mortgagee, and Investor Member; and. 14.2.2 Tenant, Permitted Leasehold Mortgagee, and Investor Member fail to cure such default within thirty (30) days after Landlord delivers such written notice of default to Tenant; provided, however, if the default is not a monetary event of default and cannot reasonably be cured within said 30-day period, then Tenant, Permitted Leasehold Mortgagee, GROUND LEASE-AZURE 27 and Investor Member shall have such additional time as is reasonably necessary so long as Tenant, Permitted Leasehold Mortgagee, and/or Investor Member is proceeding with reasonable diligence to effect such cure and such cure is effected to Landlord's reasonable satisfaction within one hundred twenty (120) days of Landlord's notice to Tenant. For any default that cannot be cured without possession of the Premises, Landlord shall allow such additional time as Permitted Leasehold Mortgagee and/or Investor Member reasonably require to prosecute and complete a foreclosure, removal of Managing Member, or equivalent proceeding, and obtain such possession, including time to obtain relief from a bankruptcy stay in the case of Tenant's Bankruptcy. If Permitted Leasehold Mortgagee completes a foreclosure of this Lease, or Investor Member effects the removal of Managing Member, or either Party otherwise diligently exercises their rights and remedies hereunder, then Landlord shall waive any default and/or Event of Default that is not a monetary default and cannot reasonably be cured by Permitted Leasehold Mortgagee and/or Investor Member. 14.23 Notwithstanding the other provisions in this Section 14.2,(a) Permitted Leasehold Mortgagee shall also have a reasonable additional time period (including time to obtain relief from any bankruptcy stay in the Tenant's bankruptcy) sufficient to enable the Permitted Leasehold Mortgagee to either foreclose the lien of the Permitted Leasehold Mortgage or obtain the appointment of a receiver or secure other remedies necessary to enable the Permitted Leasehold Mortgagee to cure Tenant's default; and (b) if Tenant's default is such that Permitted Leasehold Mortgagee cannot reasonably cure it and Ground Lease mortgagee has diligently exercised its rights and remedies and cured all other curable defaults of Tenant then existing, Landlord shale waive the default that is not reasonably curable. Nothing in this Section 14.2 shall limit the right of Permitted Leasehold Mortgagee,Speical Member and Investor Member to receive notice and an opportunity to cure pursuant to the terms of this Lease. 14.3 Landlord's Rights on Event of Default, 14.3.1 If an Event of default exists, Landlord may (subject to the provisions of Section 14,2) take any or all of the following actions: (a) Re-enter and repossess any or all of the Property; and/or (b) If the Leasehold Estate is not encumbered by a Permitted Leasehold Mortgage, terminate this Lease by giving written notice of such termination to Tenant (and as otherwise required by the terms of this Lease), which termination shall be effective as of the date of delivery of such notice or any later date specified therein by Landlord (provided that, without limiting the generality of the foregoing provisions of this Section, Landlord shall not be deemed to have accepted any abandonment or surrender by Tenant of any or all of the Property or Tenant's Leasehold Estate unless Landlord has so advised Tenant in writing, regardless of whether Landlord has reentered or relet any or all of the Property or exercised any or all of Landlord's other rights under this Section GROUND LEASE-AZURE 28 or Applicable Law); and, on the date specified in such notice and subject Section 2.1.3, Tenant's right to possession of the Property will cease and the Leasehold Estate shall revest in Landlord; provided,however,such revestingof the Leasehold Estate and the entry by Landlord shall be subject to, limited by, and shall not defeat, render invalid, or limit in any way the lien of the Permitted Leasehold Mortgage or any provision of the Housing Requirements; and/or (c) In Landlord's own name (but either (i) as agent for Tenant, if this Lease has not been terminated, or (ii) for the benefit of Tenant, if this Lease has been terminated), relet any or all of the Property for any or all of the remainder of the Term (or, if this Lease has then been terminated,for any or all of the period which would, but for such termination, have constituted the remainder of the Term), or for a period exceeding such remainder, on such terms and subject to such conditions as are acceptable to Landlord in its reasonable discretion, and if this Lease has been terminated, (A) damages equaling the amount of any Rent which would have accrued during such remainder had this Lease not been terminated, less any monies received by Landlord with respect to such remainder from such reletting of any or all of the Property, plus (B) the reasonable cost to Landlord of any such reletting (including but not limited to any reasonable attorneys' fees, leasing or brokerage commissions, repair or improvement expenses, and the expense of any other actions taken in connection with such reletting), plus (C) any other sums for which Tenant is liable under Section 14.3; and/or (d) In Landlord's own name (but either (i) as agent for Tenant, if this Lease has not then been terminated, or (ii)for the benefit of Tenant, if this Lease has then been terminated), relet any or all of the Premises for any or all of the remainder of the Term (or, if this Lease has then been terminated,for any or all of the period which would, but for such termination,have constituted the remainder of the Term),or for a period exceeding such remainder,on such terms and subject to such conditions as are acceptable to Landlord in its reasonable discretion, and collect and receive the rents therefor. Anything in this Lease or applicable law to the contrary notwithstanding, (1) Landlord shall not have any duty or obligation to relet any or all of the Premises as the result of any Event of Default, or any liability to Tenant or any other Person far any failure to do so or to collect any rent or other sum due from any such reletting; (2) Tenant shall have no right in or to any surplus which may be derived by Landlord from any such reletting, if the proceeds of such reletting exceed any Rent, if any, installment thereof or other sum owed by Tenant to Landlord hereunder; and (3) Tenant's liability hereunder shall not be diminished or affected by any such failure to relet or the giving of any such initial or other concessions or "free-rent'' or reduced rent periods in the event of any such reletting. In the event of any such reletting,Tenant shall pay to Landlord, at the times and in the manner specified by Section 4, the reasonable cost to Landlord of any such reletting (including but not limited to any reasonable GROUND LEASE-AZURE 29 attorneys' fees, leasing or brokerage commissions, repair or improvement expenses and the expense of any other actions taken in connection with such reletting), plus any other sums for which Tenant is liable under 'Section 14_.6; and/or (e) Enforce any one or more of the requirements under Applicable Law; and/or (f) Cure such Event of Default in any other manner; and/or (g) Pursue any combination of such remedies and/or any other right or remedy available to Landlord on account of such Event of Default under this Lease and/or at law ❑r in equity, and all such rights and remedies shall be cumulative (i.e.,the pursuit by any one of which shall not preclude Landlord from pursuing any other, either concurrently or sequentially). 14.4 No Release. No such expiration or termination of this Lease, or summary dispossession proceedings, abandonment, reletting, bankruptcy, vacancy, or re-entry by Landlord, shall relieve Tenant of any of its liabilities and obligations under this Lease(whether or not any or all of the Property is relet)during the Term,and Tenant shall remain liable to Landlord for all of Landlord's reasonable out-of-pocket expenses resulting from any Event of Default, including but not limited to any reasonable expenses resulting from the breach by Tenant of its obligation to pay Rent and any other sums which Tenant is obligated to pay hereunder. 14.5 Reserved. 14.6 Reimbursement. If an Event of Default exists,Tenant shall,promptly on its receipt of a written demand therefor from Landlord, reimburse Landlord for all reasonable out-of-pocket expenses (including without limitation, reasonable repossession costs, management expenses, operating expenses, legal expenses and attorneys' fees) incurred by Landlord (i) in curing or seeking to cure such Event of Default, and/or (ii) in exercising ❑r seeking to exercise any of Landlord's rights and remedies under this Lease and/or at law or in equity due to such Event of ❑efault, and/or (iii) otherwise arising out of any Event ❑f Default, and/or (iv) (regardless of whether it constitutes an Event of Default) in connection with any action, proceeding or matter of the types referred to in Section 14.1.3; all of which expenses shall be Rent and shall be payable by Tenant promptly on demand therefor by Landlord. 14.7 No Action. Notwithstanding anything contained in this Lease t❑ the contrary, Landlord agrees that: 14.7.1 Reserved; 14.7.2 Landlord may not terminate this Lease as a result of status or other defaults of Tenant that by their nature are not capable of being cured by Permitted Leasehold Mortgagee, so long as Rents are being paid; GROUND LEASE-AZURE 30 14.7.3 If this Lease terminates for any reason other than expiration of the Term (including without limitation, rejection or deemed rejection in bankruptcy, a Permitted Leasehold Mortgagee's inability to cure a default, merger of title or attempted surrender by Tenant), Landlord shall be obligated to enter into a new lease with Permitted Leasehold Mortgagee or its nominee on substantially the same terms as conditions as set forth in this Lease, and with the same priority. During the term of the Permitted Leasehold Mortgage, Landlord shall not accept a voluntary surrender of the Leasehold Estate or a termination of the Lease by Tenant. 14.8 Landlord Event of Default. Landlord shall be deemed in default of its obligations under this Lease if Landlord fails to perform, in a timely manner in accordance with the terms of this Lease, any of its obligations under this Lease, or if any Landlord representation made herein is false in any material respect, or if Landlord is the subject of a Bankruptcy (each a "Landlord Event of Default"). If such Landlord Event of Default shall continue for sixty(60)days after Tenant delivers written notice thereof to Landlord, or such additional period as may be reasonably required to cure such failure if the same may not be reasonably cured within said 60-day period, so long as Landlord commences such cure within thirty (30) days after notice thereof and thereafter diligently prosecutes the same to completion, but in any event such cure must be completed to Tenant's reasonable satisfaction within one hundred twenty(120)days of Tenant's notice to Landlord, subject to the Parties' mutual agreement to extend such time period. If Landlord fails to complete such cure as provided above, then subject to the provisions of any Permitted Leasehold Mortgage, Tenant shall thereupon be entitled to exercise any and all remedies available to Tenant for such Landlord Event of Default under this Lease or at law or in equity. Without waiving or limiting any other remedies available to Tenant, upon such Landlord Event of Default (and subject to the notice and cure rights of Landlord),Tenant shall be entitled (but not obligated) to perform or cause such obligations to be s❑ performed on behalf of Landlord, and Landlord shall reimburse Tenant for its reasonable third party out-of-pocket costs and expenses, including reasonable attorney's fees, incurred by Tenant in doing so, which amount shall be due on demand. In the event Landlord or a creditor thereof files a petition for relief naming Landlord as a debtor under Title 11 of the United States Code, Landlord hereby acknowledges and agrees that Tenant's possessory interest under this Lease and ownership of the Improvements are unique interests and cannot be converted into a cash claim under Section 363 of Title 11 of the United States Code unless Tenant expressly consents to the same. Notwithstanding anything to the contrary set forth in this Lease,Tenant shall not have the right to treat this Lease as terminated in the event of Landlord's bankruptcy under Section 36S(h)(A)(1) of Chapter 11 of the U.S. Bankruptcy Code,or any successor statute,without Permitted Leasehold Mortgagee's written consent, and Tenant's exercise of such right without the Tenant without Permitted Leasehold Mortgagee's prior written consent shall be void at the option of Permitted Leasehold Mortgagee. Section 15. ESTOPPEL CERTIFICATE;SHORT FORM. 15.1 Estoppel Certificate. Each Party shall, at any time and from time to time within fifteen (15) days after being requested in writing to do so by the other Party, Investor Member, GROUND LEASE-AZURE 31 and/or Permitted Leasehold Mortgagee, execute, acknowledge, address, and deliver to the requesting party(or, at the tatter's request,to any existing or prospective Mortgagee, transferee or other assignee of the requesting party's interest in the Property or under this Lease which acquires such interest in accordance with this Lease) a certificate in recordable form, 15.1.1 Certifying (a) that this Lease is unmodified and in full force and effect (or, if there has been any modification thereof, that it is in full force and effect as so modified, stating therein the nature of such modification); (b)that Tenant has accepted possession of the Premises, and the date of the Commencement Date; (c) as to the dates to which any Rent and other charges arising hereunder have been paid; (d) as to the amount of any prepaid Rent or any credit due to Tenant hereunder; (e) as to whether, to the best of such Party's knowledge, information and belief, the requesting Party is not then in default in performing any of its obligations hereunder (and, if in default, specifying the nature of each such default); and (f) as to any other fact or condition regarding this Lease or the Property reasonably requested by the requesting Party; and 15.1.2 Acknowledging and agreeing that any statement contained in such certificate may be relied upon by the requesting party and any such other addressee. Section 16. CONDITION OF TITLE AND PROPERTY. 16.1 Quiet Enioyment.. Landlord hereby: 16.1.1 Represents and warrants that,at the time of the execution and delivery of this Lease by the Parties,Landlord (a) is the owner of the Fee Estate, subject to the operation and effect of the Permitted Encumbrances, and (b) has the full right, power and authority to enter into this Lease and thereby to lease the Premises to Tenant;and 16.1.2 Covenants and agrees that Tenant will have quiet and peaceful possession of the Premises during the Term, except if and to the extent that such possession is terminated pursuant to the terms of this Lease. 16.2 Limitation on Liability. Except as set forth in this Lease, nothing in this Lease shall be deemed to impose on Landlord any liability on account of any act or failure to act by any Person other than Landlord (or, where expressly so provided herein, any of Landlord's Related Parties) and, notwithstanding anything to the contrary in this Lease, Landlord shall not be liable under this Lease except to the extent of its ownership interest in the Property. Notwithstanding anything to the contrary in this Lease, Tenant shall not be liable under this Lease except to the extent of Its ownership interest in the Property. 16.3 Title to Personal_ Property. Landlord hereby waives any landlord's lien it might hold, whether statutory, constitutional, contractual, or otherwise, in any personal property owned or leased by Tenant and now or hereafter located in the Property. If so requested by Tenant, Landlord shall execute a waiver of any right, title, and interest, or right to seize any of Tenant's personal property on or in the Property that may be subject to a Gen or security interest GROUND LEASE-AZURE 32 in favor of Permitted Leasehold Mortgagee or a seller of Tenant's personal property or creditor holding a security interest in such personal property. Section 17. NOTICES. Any notice, demand, consent, approval, request or other communication or document to be provided hereunder to Permitted Leasehold Mortgagee, Investor Member, Special Member, Landlord, or Tenant shall be (a) in writing, and (b) deemed to have been delivered on the earlier of (i) three (3) business days after being sent certified or registered mail in the 'United States mails, postage prepaid, return receipt requested, or (ii) the next business day after having been deposited (in time for delivery by such service on such business day)with Federal Express or another national courier service,or(iii) (if such party's receipt thereof is acknowledged in writing) upon having been sent by telecopy or another means of immediate electronic communication, or (iv) (if such party's receipt thereof is acknowledged in writing) upon its having been given by hand or other actual delivery to such party, in each case to the address of such party set forth hereinabove or on Exhibit C, as applicable,or to such other address in the United States of America as such party may designate from time to time by notice to each other party hereto. Section 18. REPRESENTATIONS AND WARRANTIES. 18.1 Landlord's Representations and Warranties. Landlord hereby represents and warrants to Tenant that: 18.1.1 Landlord is organized and lawfully existing as a housing finance corporation under the laws of the State of Texas. 18.1.2 Landlord owns fee simple title to the Premises,free and clear of all liens, charges, encumbrances, encroachments, easements, restrictions, leases, tenancies, occupancies or agreements, and matters affecting title, except for the Permitted Encumbrances. 18.1.3 Landlord has full right, power and authority to make, execute, deliver and perform its obligations under this Lease, and this Lease is in full force and effect_ Landlord has obtained and received all required and necessary consents and approvals to enter into this Lease with Tenant. 18.1.4 There is no action, suit, litigation or proceeding pending or, to Landlord's knowledge, threatened against Landlord that could prevent or impair Landlord's entry into this Lease and/or performance of its obligations hereunder. 18.1.5 The person signing this Lease on behalf of Landlord is duly and validly authorized to do so. GROUND LEASE-AZURE 33 18.2 Tenant's Representations and Warranties.Tenant hereby warrants and represents to Landlord that; 18.2.1 Tenant is organized and lawfully existing as a limited liability company under the laws of the State of Texas, 18.2.2 Tenant has the full right, power,and authority to make,execute,deliver and perform this Lease, and this Lease is in full force and effect. 18.2.3 Tenant's execution and delivery of this Lease has been authorized by all requisite action on the part of Tenant, and the execution and delivery of this Lease by Tenant and the performance of its obligations hereunder will not violate or contravene any agreement or obligation to which Tenant is a party or by which it is bound. 18.2.4 There is no action, suit, litigation or proceeding pending or,to Tenant's knowledge, threatened against Tenant that could prevent or impair Tenant's entry into this Lease and/or performance of its obligations hereunder. 18.2.5 The person signing this Lease on behalf of Tenant is duly and validly authorized to do so. Section 19. Purchase Option 19.1 Option. Tenant hereby grants Landlord the right (the "Option")to purchase all of the Property owned by the Tenant at the time of purchase, including without limitation Tenant's Leasehold Estate (collectively, the "Tenant's Property"), (i) on any date thirty (30) days after Landlord delivers written notice to Tenant and the Permitted Leasehold Mortgagees of Landlord's intent to exercise the Option(the"Option Exercise Notice"),and(ii)upon the Tenant's receipt of the Purchase Price (as defined below). The "Purchase Price" for the Tenant's Property pursuant to the Option shall be set forth herein below: 19.1.1 Price Formula. An amount, determined by MAI appraisers mutually agreed to by Landlord and the investor Member,equal to the greater of(i)the fair market value as determined in accordance with subsection 19.1.2 below, or (ii) an amount, on an after tax basis, equal to the diminution of economic value to the Investor Member (or a successor Investor Member) as a result of the purchase of the Tenant's Property by the Landlord, which shall include without limitation (A) all capital contributions of any members of the Tenant, (B) the outstanding balance of all loans (and any accrued interest thereon and yield maintenance) made to the Tenant by its members and the First Permitted Leasehold Mortgagee, which will not otherwise be repaid at the time of the purchase, (C)an 14%IRR on the capital contributions of any members in the Tenant and Investor Member's capital contributions, and (D) all costs and expenses incurred by or an behalf of the Tenant's members with respect to (1) admission to the Tenant, (2) such member's activities with respect to the Project prior to the Landlord's purchase of the Tenant's Property under this Option, and (3) an amount to distribute to the Tenant's members cash proceeds sufficient to enable its members to pay, after any and all GROUND LEASE-AZURE 34 federal, state and local taxes imposed on such distribution, the taxes projected to be imposed on the members as a result of the sale pursuant to the Option. 19.1.2 Fair Market Value. Fair market value of the Tenant's Property for purposes of this Section 19.1 shall be calculated as follows:As soon as practicable following the delivery of the Option Exercise Notice, the Landlord and Investor Member (or an affiliate thereof) shall select a mutually acceptable Independent Appraiser to prepare an appraisal of the Land, Project and all assets owned by Tenant used in conjunction with the Project that are available for disposition. In the event that the parties are unable to agree upon an Independent Appraiser within fifteen (15)business days following the date of delivery of the Option Exercise Notice, the Landlord and Tenant each shall select an Independent Appraiser within the next succeeding five(5) business days. If either party fails to select an Independent Appraiser within such time period, the determination of the other Independent Appraiser shall control. If the difference between the appraised fair market values set forth in the two appraisals is not more than ten percent (10%) of the appraised fair market value set forth in the lower of the two appraisals, the fair market value for purposes of this Section 19.1 shall be the average of the two appraisals. if the difference between the two appraisals is greater than ten percent (10%) of the lower of the two appraisals, then the two Independent Appraisers shall jointly select a third Independent Appraiser whose determination of appraised fair market value shall be deemed to be binding on all parties as long as the third determination is between the other two determinations. if the third determination is either lower or higher than both of the other two appraisers,then the average of all three appraisals shall be the appraised fair market value for purposes of this Section 19.1 Landlord and Tenant shall each pay one-half of the fees and expenses of any Independent Appraiser(s) selected pursuant to this Section 19.1.2. All calculations of fair market value shall take into consideration the affordability restrictions and the Exemption, provided, however, that if the Exemption is eliminated or modified due to a change in law, the appraisal shall take into account such elimination or modification of the Exemption. 19.2 Sale of Leasehold Interest. Upon determination of the Purchase Price,Tenant and Landlord, shall enter into a written contract for the purchase and sale of the Tenant's Property in accordance with the terms of this Lease and containing such other terms and conditions as are standard and customary for similar commercial transactions in the geographic area in which the Property is located,providing for a closing not later than the date specified in the Option Exercise Notice or thirty(30)days after the Purchase Price has been determined,whichever is later. In the absence of any such contract, the Option under this Lease shall be specifically enforceable upon the exercise of the Option.The purchase and sale hereunder shall be closed through a deed-and- money escrow with the title insurer of Tenant's interest in the Property or another mutually acceptable title company. Tenant's right, title, and interest in the Tenant's Property shall be conveyed pursuant to the Termination Deliverables, which shall be delivered by Tenant to Landlord at closing. Landlord shall be responsible for all costs of the transfer and sale including, but not limited to, transfer taxes, title policy premiums and recording costs. Rents, insurance, taxes, debt service then due and payable and other costs and revenues then prepaid or accrued, as the case may be, shall be apportioned as of midnight of the day preceding the closing of title, GROUND LEASE-AZURE 35 except that rents shall be apportioned as of the date of actual collection thereof(which obligation shall survive the closing). 19.3 Automatic Termination of Option. In the event that the Caption is not exercised,cr the sale pursuant thereto is not consummated, then, upon conveyance of the Tenant's Property to anyone other than Landlord the foregoing Option and all rights of Landlord with respect thereto shall automatically terminate and have no further force or effect. If requested by Tenant, Landlord agrees to execute an instrument in recordable form evidencing the termination of the Option. 19.4 Subordination to Permitted Leasehold Mortgages. Notwithstanding any term to the contrary contained herein, the Option granted in this Section 19 shall be subordinate, in all respects,to the Permitted Leasehold Mortgages. Section 20. GENERAL. 20.1 Effectiveness. This Lease shall be effective upon its execution and delivery by both Parties. 20.2 Complete Understanding. This Lease represents the complete understanding between the Parties as to the subject matter hereof and supersedes all prior negotiations, representations, warranties, promises, statements, or agreements, whether written or oral, between the Parties as to the same. No inducements, representations, understandings, or agreements have been made or relied upon in the making of this Lease,except those specifically set forth in this Lease. Neither Party has any right to rely on any other prior or contemporaneous representation made by anyone concerning this Lease that is not set forth herein. 20.3 Amendment. This Lease may not be amended, modified, restated, terminated, surrendered,or cancelled unless done s❑ in writing executed by Landlord and Tenant,subject to the prior written consent of Permitted Leasehold Mortgagee and Investor Member. Any amendment, modification, restatement, termination, surrender, or cancellation of this Lease without Permitted Leasehold Mortgagee's written consent shall be void at the option of Permitted Leasehold Mortgagee. 20.4 Waiver. No Party shall be deemed to have waived the exercise of any right that it holds hereunder unless such waiver is made in writing(and,without limiting the generality of the foregoing, no delay or omission by any Party in exercising any such right shall be deemed a waiver of its future exercise). No such waiver made in any instance shall be deemed a waiver as to any other such instance, or any other such right. 20.5 Applicable Law, This Lease shall be governed by the laws of the State of Texas, without giving effect to any choice or conflict of law, principals, or rules, and any action or proceeding arising hereunder shall be brought in the courts of the State of Texas having jurisdiction over the City of Corpus Christi, Texas; provided,that if any such action or proceeding arises under the Constitution, laws or treaties of the United States of America, or if there is a GROUND LEASE-AZURE 36 diversity of citizenship between the parties thereto, so that it is to be brought in a United States District Court, it shall be brought in the United States District Court for the Western District of Texas. 20.6 Time of Essence. Time shall be of the essence of this Lease, except that if the last day for the exercise of any right or the discharge of any obligation hereunder falls on a Saturday, Sunday or statutory holiday, the Party having such right or obligation shall have until 5:00 p.m. on the next succeeding day that is not a Saturday, Sunday, or statutory holiday to exercise such right or discharge such obligation. 20.7 Headings. The headings of the sections, subsections, paragraphs, and subparagraphs hereof are provided herein for and only for convenience of reference and shall not be considered in construing their contents. 20.8 Construction. As used herein, all references made jaj in the neuter, masculine or feminine gender shall be deemed to have been made in all such genders, {b) in the singular or plural number shall be deemed to have been made, respectively,in the plural or singular number as well, and (c) to any section, subsection, paragraph or subparagraph shall be deemed, unless otherwise expressly indicated, to have been made to such section, subsection, paragraph or subparagraph of this Lease. 20.9 Exhibits. Each writing referred to herein as being attached hereto as an exhibit or otherwise designated herein as an exhibit hereto is hereby made a part hereof. 20.10 Severability. No determination by any court or other Governmental Authority that any provision of this Lease or any amendment hereof is invalid or unenforceable in any instance shall affect the validity or enforceability of (a) any other provision of this Lease, or (b) such provision in any circumstance not controlled by such determination. Each such provision shall remain valid and enforceable to the fullest extent allowed by law and shall be construed wherever possible as being consistent with Applicable Law. 20.11 Disclaimer of Partnership Status. Nothing in this Lease shall be deemed in any way to create any relationship of partnership,joint venture or association between the Parties, and the Parties hereby disclaim the existence of any such relationship. 20.12 Commissions. Each Party hereby represents and warrants to the other- that, in connection with the leasing of the Premises hereunder,the Party so representing and warranting has not dealt with any real estate broker, agent or finder, and there is no commission, charge or other compensation due on account thereof. Each Party shall defend, indemnify, and hold harmless the other against and from any liability, claim of liability or expense arising out of any inaccuracy in such Party's representation. 20.13 Prevailinp, Party. In the event either Party initiates judicial action against the other in order to enforce the terms, covenants and provisions of this Lease,the non-prevailing Party in such judicial action shall reimburse the prevailing Party in such judicial action for all reasonable GROUN❑LEASE-AZURE 37 expenses, fees, costs, including reasonable attorneys` fees, incurred by the prevailing Party in connection with such judicial action. 20.14 Limited 3"d Party Rights. Notwithstanding anything to the contrary set forth elsewhere in this Lease, Investor Member, Special Member and Permitted Leasehold Mortgagee shall each be deemed a third-party beneficiary of the provisions of this Lease that reference Investor Member, Special Member and/or Permitted Leasehold Mortgagee, as applicable. The foregoing rights of each of Investor Member, Special Member and Permitted Leasehold Mortgagee to be a third-party beneficiary under this Lease shall be the only rights(expressed or implied) of Investor Member, Special Member and Permitted Leasehold Mortgagee under this Lease. 20.15 Conflict. In the event of a conflict or inconsistency between any requirement contained in this Lease (or between any requirement contained in any document referred to in this Lease, including any Permitted Leasehold Mortgage), Applicable Law shall in all instances be controlling. 20.16 No Subordination of Leasehold Estate. Except as otherwise provided in this Lease, at no time shall Tenant's Leasehold Estate, or Tenant's interest in this Lease, be subordinated in any manner to the interest of any Mortgagee with a security interest in the Fee Estate. Landlord agrees that(a)any existing Mortgage on the Fee Estate shall be subordinated to Tenant's interest in the Leasehold Estate, and (b) Landlord may not hereafter place a Mortgage on the Fee Estate unless there is an express written subordination of such Mortgage to Tenant's interest under this Lease and in and to the Leasehold Estate. 20.17 Non-Merger. In the event Tenant's Leasehold Estate is conveyed to Landlord or Landlord conveys its Fee Estate to Tenant,or there is any other merger of the Fee Estate and the Leasehold Estate under any circumstances (whether voluntary of involuntary or effected by Landlord or Tenant), the Fee Estate and the Leasehold Estate shall not merge, but shall remain distinct interests in land and this Lease shall continue in existence in relation to the Permitted Leasehold Mortgage. 20.18 Approvals, Etc. Whenever a Person is required under this Lease to provide its consent or approval,or render its determination,judgment,satisfaction,or decision,such Person will act in good faith and such consent, approval, determination, judgment, satisfaction, or decision (or the denial thereof, as the case may be) shall not be unreasonably withheld, delayed, or conditioned. Force Ma eure. if curing any default or Event of default(other than failure to pay Rent or other amounts, if any, due under this Lease) or performing any other covenant or term of this Lease is delayed by reason of(a)strike, lock-out or other labor troubles, (b)governmental restrictions or limitations, (c)failure or shortage of electrical power,gas,water,fuel oil, or other utility or service, (d) riot, war, insurrection, acts of terror or other national or local emergency, (e)accident,flood,fire or other casualty,(f)adverse weather conditions, (g)any other act of God, (h) the State of Texas or the area or county in which the Premises are located is declared by a duly authorized Governmental Authority to be under a state of emergency or a disaster area, and/or (i) any other cause similar to any of the foregoing and beyond the reasonable control of GROUND LEASE—AZURE 36 the Person obligated or permitted under this Lease to do or perform the term or covenant, regardless of whether the circumstance is similar to any of those enumerated or not,each Person so delayed is excused from performance during the delay period and all applicable periods and/or deadlines shall be tolled during such delay period. 20.20 Subordinate to Permitted Leasehold Mortgage. Landlord's right to receive payment of Rent is subordinate to the right of Permitted Leasehold Mortgagee to receive all payments due pursuant to the terms of the Permitted Leasehold Mortgage. 20.21 Contest Proceedines. Tenant shall have the right to contest by appropriate legal proceedings, without cost or expense to Landlord, the validity of any Applicable Law and to postpone compliance with the same, if by the terms of any such Applicable Law compliance therewith may legally be held in abeyance without incurring any lien, charge or liability of any kind against the Property or any interest of Landlord or Tenant therein, and without subjecting Landlord to any civil or criminal liability for failure so to comply therewith. Tenant may postpone compliance therewith until the final determination of any such proceedings, provided that all such proceedings shall be prosecuted with due diligence. If Tenant initiates any such legal proceedings in the name of Landlord, or of Landlord and Tenant,Tenant shall so advise Landlord in writing not less than fifteen (I5) days before initiating such proceedings. Such notice shall give details as to the tribunal in which said proceedings are to be filed, the Applicable Law contested, and such additional data as Landlord may reasonably require to enable it to understand and evaluate the facts. If any lien, charge or civil liability, but not criminal liability, is incurred by reason of non-compliance, Tenant may nevertheless make the contest as aforesaid and delay compliance as aforesaid, provided that Tenant furnishes to Landlord security reasonably satisfactory to Landlord,against any loss or injury by reason of such non-compliance or delay and prosecutes the contest with due diligence. 20.22 Landlord Not Entitled to Proceeds. Landlord, in its role as landlord, shall not be entitled to share in the proceeds of any loan obtained as a result of any financing or refinancing undertaken by Tenant that is secured by a Permitted Leasehold Mortgage. 20.23 Easements. Tenant is hereby authorized to make, execute, acknowledge and deliver instruments granting a license or easement with respect to the Property, in the form typically used for such purposes in the applicable jurisdiction,to any Person, and the successors and assigns of such Person, for the purpose of laying mains, pipes, sewers, gas lines, cable television lines, and electrical conduits, poles, wires and supports, and such other improvements related to utilities serving the Property, in, upon or under the Property. 20.24 Zoning. Tenant is hereby authorized and empowered to execute a consent or petition for any zoning change variance or special exception relating to the Premises where the same is required for the purpose of authorizing the operation of the Property for any purpose not inconsistent with the terms of this Lease, or to join in any petition for a release from restrictive covenants which interfere with the operation or improvement of the Property for such purpose. GROUND LEASE-AZURE 39 20.25 Memorandum of Ground Lease. The Parties shall execute,for recording purposes, a memorandum of ground lease in conformity with the law and practice of the State of Texas, and the same shall be placed of record at Tenant's expense in the Real Property Records of the county in which the Property is located. If requested by Landlord,Tenant shall,upon termination of this Lease as provided herein, execute and deliver to Landlord an appropriate release, in form proper for recording, of Tenant's interest in the Property. 20.26 No Personal Liability. No Permitted Leasehold Mortgagee or its designee or affiliate, shall have any liability under this Lease for acts or omissions taking place prior to the date it acquires record title to Tenant's interest and assumes Tenant's obligations under this Lease (or a new lease), and such liability shall be limited to the value of Permitted Leasehold Mortgagee's and/or its designee's or affiliate's respective interest in this Lease and the Leasehold Estate. If Permitted Leasehold Mortgagee or its designee or affiliate, or any other party, shall succeed to the interest of Tenant under this Lease, whether as a purchaser at a foreclosure sale or by the acceptance of a deed-in-lieu of foreclosure, Permitted Leasehold Mortgagee, its designee or affiliate shall (a) not be liable for any act or omission of Tenant, and (b) be released from all liability prior to the date Permitted Leasehold Mortgagee or its designee or affiliate succeeds to the interest of Tenant and has taken record title to the Leasehold Estate,such release to be automatic with no further action required by any such party. 20.27 Benefit and Burden. This Lease shall be binding on and inure to the benefit of the Parties and their respective heirs, personal representatives, successors and assigns in interest hereunder. 20.28 Access. Tenant agrees to grant a right of access to Landlord and its authorized representatives with respect to all books, documents, papers, or other records related to this Lease in order to make audits,examinations, excerpts and transcripts. 20.29 Special Conveyance Ripht. In the event (a) all or any material portion of the Property shall become subject to ad valorem tax as a result of an intentional act or failure to act on the part of the Managing Member or Landlord ar at anytime that the loss of the tax exemption would result in a default underthe First Permitted Leasehold Mortgage,or(b)Managing Member is removed as the managing member of Tenant, Tenant shall have the right to, at any time thereafter, by written notice to Landlord and any Permitted Leasehold Mortgagee and the Investor Member, cause Landlord to convey title to the Land to Tenant or Tenant's nominee for the payment of One Hundred Dollars($100.00).Tenant shall be responsible for all costs including, but not limited to, Landlord's reasonable attorneys' fees, transfer taxes, title policy premiums and recording costs. Notwithstanding anything to the contrary contained herein, the special conveyance right granted in this Section 19.30 is and shall be subject and subordinate, in all respects, to the Permitted Leasehold Mortgages held by Permitted Leasehold Mortgagees and the exercise of such special conveyance right shall be subject to the prior written consent of each Permitted Leasehold Mortgagee. [SIGNATURES BEGIN ON THE NEXT PAGE] GROUND LEASE-AZURE 40 IN WITNESS WHEREOF, each party hereto has executed this Lease or caused it to he executed on its behalf.by its duly.authorized representatives, on the date set forth in the applicable acknowledgment,to be effective as of the day and year first above written. LANDLORD. CORPUS CHRISTI HOUSING AUTHORITY, a Texas public nonprofit housing authority By: el'110� Gary R.Allsup,Chief Executive Officer STATE OF TEXAS COUNTY OF NUECES This instrurrlent was acknowledged Before me on this'i''-day of 2024, by Gary R.Allsup,Chief Fxecutive Officer of Corpus Christi Housing.Authority,aTexas public nonprofit housing authority,.on behalf of said housing authority. a ERICA S GARCIA �. _ � n IQ# 12514565-3 ?�otary.Public Notary ublic;State of exas y P" STATE OF TEXAS My Gamm..Exp, 12-09.2G25 GROUND LEASE Signature Page TENANT: TX AZURE APARTMENTS 1, LLC, a Delaware limited liability company By: Sundance Bay Income and Growth Fund GP, LLC, a Delaware limited liability company, General Partner By: 11Zf 3r�n -- Ryan Baughman, Nfanager STATE OF j § COUNTY OF r'Ll § I HEREBY CERTIFY that an or about this 1 day of 'DI Ettj 2024, before me, a Notary Public for the state aforesaid, personally appeared Ryan Baughman, known to me or satisfactorily proven to be the person whose name is subscribed to the foregoing Regulatory Agreement and Declaration of Restrictive Covenants,who acknowledged that he is the Manager of the General Partner of TX Azure Apartments 1, LLC, that he has been duly authorized to execute, and has executed,such instrument on its behalf for the purposes therein set forth; and that the same is its act and deed. IN WITNESS WHEREOF, I have set my hand and Nptarial Seal, a day nd year first above written. // KARLI CiSGN - Notary Puhlic,Slate of Utah y UbIIC 05 Commission N 724081 My Cammission EcPines On Apr i111,2424 My commission expires an GROUND LEASE Signature Page EXHIBIT A Description of Latta# Lot One (1), Block One (t), SAN MARIN, a subdivision situated in the City of Corpus Christi, Nueces County, Texas.conuitonly known as San Marin apartments.as shown by the reap or plat thereof,recorded in Volume 57, Page 193,Map Records ofNueces County,Texas and being more particularly described by metes and bounds as follows,to-wit: All that certain tract, piece or parcel of land containing 9,5316 acres(415,196 sq, ft)of land,more or less, and being portion of that certain 90.043 acre tract deeded to Tristar Development, Inc._ recorded in Volume 1919, Page 216, deed Records of Nueces County,Texas: BEGINNING at a found 5.8th inch iron rod being the most Easterly corner of Lot 1,Block 1, of said San Marin,same being a point in the Northwest line of South Staples Street(FM.2444)(100 feet wide); THENCE South 28 degrees 56 minutes 00 seconds West, along said Northwest line of South Staples Street, a distance of 150.00 feet to a found 5j8th inch iron rod for corner of the herein described tract, said corner also being the most Easterly corner of Lot 2, Block 1, of said San Mann; THENCE North 61 degrees 04 minutes 00 seconds West, departing said line along the NortheasterIN,line of said Lot 2_a distance of 150.00 feet to a found 5i8th inch iron rod for corner of the herein described tract: THENCE South 28 degrees 56 minutes 00 seconds West,along the]Northwesterly line of said Lot ?, a distance of200.00 feet to a set 5'8th inch iron rod for corner of the herein described tract: THENCE South 61 degrees 04 minutes 00 seconds East, along the Southwesterly line of said Lot 2.a distance of 150.00 feet to a found 5 8th inch iron rod returning to said Northwest line of South Staples Street for comer of the herein described tract. said corner also being the most southerly corner of said Lot ): THENCE South 28 degrees 56 minutes 00 seconds West, along said Northwest line of South Staples Street, a distance of 433.23 feet to a set 5 8th inch iron rod for corner_a point of curvature of a curve to the right: THENCE in a Southwesterly direction.around a curve to the right whose radius equals 15.00 feet, having a central angle of 89 degrees 58 minutes 35 seconds, an are length of 23,56 feet, a chord bearing South 73 degrees 56 minutes 43 seconds West,21.21 feet to a set 5J8th inch iron rod for comer in the Northeast line of Henderson Street (60 feet wide), the most Southerly corner of the herein described tract: THENCE North 61 degrees 02 minutes 35 seconds West, alone the Northeast line of said Henderson Street, a distance of 627,27 feet to a set S±Sth inch iron rod for corner, a point of curvature of a cure to the right: GROUND LEASE Exhibit A THENCE in a Northwesterly direction,around a curve to the right whose radius equals 10.00 feet, having a central angle of 90 degrees 00 minutes 15 seconds. an arc length of 15.71 feet,. a chord bearing North 16 degrees 02 minutes 42 seconds West, 14.14 feet to a set 5i8th rich iron rod for Corner. the most Westerly corner of the herein described tracts, THENCE North 28 degrees 57 minutes 10 seconds East, along the Northwest line of said San Marro, a distance of 557.29 feet to a found 5,8th inch iron rod for corner of the herein described tract.same being a point in the Southwesterly line of said Stonehenge Unit 1 Subdivision'. THENCE South 61 degrees 02 minutes 50 seconds East. along said Southwesterly line,a distance of 326.00 feet to a found 5/8th inch iron rod for corner of the herein described tract: THENCE North 28 degrees 57 minutes 10 seconds East, along said Southwesterly line,a distance of 230.89 feet to a found 5/8th inch iron rod for corner of the herein described tract: THENCE South 61 degrees 02 minutes 50 seconds East, along a Southwesterly line,a distance of 326.00 feet returning the POINT OF BEGINNING of the herein described tract containing 9.5316 acres(415,196 sq. ft.)of land, more or less. GROUND LEASE Exhibit A EXHIBIT B Schedule of Permitted Encumbrances All documents recorded in the Real Property.Records of Nue.ces County,Texas,on the date hereof that affect the Property. GROUND LEASE bdlibit B EXHIBIT C Notice Addresses If to Landlord: Corpus Christi Housing Authority 3701 Ayers Street Corpus Christi,Texas 78415 Attention: Chief Executive Officer With a copy to: Anderson, Lehrman, Barre & Maraist, LLP 1001 Third Street, Suite 1 Corpus Christi,Texas 78404 Attention: R. Bryan Stone, Esq. If to Tenant: TX Azure Apartments 1, LLC 1240 E 2100 S, Suite 300 Salt Lake City, Utah 84106 With a copy to: Ascenda Capital 9242 Beverly Blvd. Suite 300 Beverly Hills, CA 90210 Attention: Matt Avltal Email: matt@ascendacap.com Holland & Knight LLP 1180 West Peachtree Street, NW, Suite 1800 Atlanta, Georgia 30309 Attention: Allison Dyer Email: allison.dyer@hklaw.com If to Investor Member: Sundance Bay Income and Growth OP, LP 1240 E 2100 S,Suite 300 Salt Lake City, Utah 84106 With a Copy to: Holland & Knight LLP 1180 West Peachtree Street, NW,Suite 1800 Atlanta, Georgia 30309 Attention: Allison Dyer Email: allison.dyer@hklaw.com GROUND LEASE Exhibit B EXHIBIT H SAMPLE REGULATORY AGREEMENT Execution Version, REGULATORYAGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS By and Between CORPUS CHRISTI HOUSING AUTHORITY And TX AzuRE APARTMENTS 1,LLC Relating to',Azure Apartments. ❑ATED AS or DECEMBER 34,2024` When Recorded Send to:. Holland&Knight LLP 1180 West Pea.ch:tree.St.,Suite 1800 Atlanta,Georgia 30319 Attn:Allison Dyer Table of Contents SECTION HEADING PAGE Section 1. Term of Restrictions....................................................................I........1 Section 2. Occupancy Restrictions........................................................................2 Section 3. Enforcement........................................................................................4 Section 4. Recording and Filing.......................................... .4 Section S. Amendment............................................................................ .........—5 Section 6. Severab lity..........................................................................................5 Section7. Notices.................................................................................................5 Section 8. Governing Law.....................................................................................6 Section 9. Estoppel Certificate.................. .................. ........................... ............6 EXHIBIT A Description of Land EXHIBIT B Certification of Income EXHIBIT C Certificate of Continuing Program Compliance - ii- REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS THIS REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE COVENANTS(Including the Exhibits attached hereto, and as amended, modified, or supplemented from time to time, this "Regulatory Agreement"),dated as of December 30,2024, is entered into by and between CORPUS CHRISTI HOUSING AUTHORITY, a public nonprofit housing authority organized under Chapter 392 of the Texas Local Government Code (together with its successors and assigns, "CCHA"), and TX AZURE APARTMENTS 1, LLC,a limited liability company duly organized and validly existing under the laws of the State of Delaware (together with its permitted successors and assigns,the "Owner"). WITNESSETH: WHEREAS,the Owner owns a leasehold interest in certain real property upon which exists a building or buildings and related improvements, furnishings, equipment and related property installed therein, located in the City of Corpus Christi, Nueces County, Texas, more particularly described in FxhibitA attached hereto and made a part hereof (the "Land"), comprising a 220- unit multifamily development in place and operating at 7221 S. Staples Street (such buildings, improvements,furnishings, equipment,and related property being collectively referred to as the "Development"); and WHEREAS, Azure Apartments-CCHA, LLC, a Delaware limited liability company (together with its permitted successors and assigns,the "Managing Member") is the Managing Member of the Owner; WHEREAS, the Managing Member is owned and managed by CCHA; and WHEREAS, compliance of the Development with the requirements of Section 392.005 of the Texas Housing Finance Corporations Act, Chapter 392, Texas Local Government Code, as amended (the "Art") and certain other restrictions required by CCHA, is within the control of the Owner;. and WHEREAS, it is necessary for the Owner to agree to this Regulatory Agreement,and thereby consent to be regulated as herein set forth to ensure compliance with the Act and certain other restrictions required by CCHA. Now, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth, and of other valuable consideration, CCHA,the Managing Member, and the Owner hereby agree, as follows: Section 1. Term of Restrictions. (a) Occupancy Restrictions:The terra of the occupancy restrictions set forth in Section 2 hereof (the "Occupancy Restrictions") with respect to the Development shall commence on the execution and delivery hereof and end with respect to the Development, subject to Section 1(b), on the date on which the Managing Member is no longer the managing member of the Owner and CCHA is no longer the owner of the fee interest in the Land. The Managing Member and the Owner shall be permitted to tape affirmative action to place the Land on the tax rolls maintained by the Nueces County Appraisal District upon the termination of this Regulatory Agreement. (b) Notwithstanding the provisions of paragraph (a) of this Section 1, this Regulatory Agreement and all other restrictions hereunder shall cease to apply in the event of an involuntary noncompliance caused by weather events, fire, and other casualties, seizure, requisition, foreclosure,transfer of title by deed or assignment in lieu of foreclosure, orders, or restraints of any kind of the State of Texas or of any of its departments, agencies, or officials, (c) Upon termination of this Regulatory Agreement pursuant to the terms hereof,CCHA shall, upon request by the Owner, any foreclosing lender (if applicable), or their assigns, file in the real estate records of Nueces County, Texas, any documentation necessary to evidence and provide notice of the termination of this Regulatory Agreement, Section 2. Occupancy Restrictions. The Owner represents, warrants, and covenants that: (a) In order to comply with Section 392.005 of the Act, no less than fifty percent (50%) of the residential units will be restricted for rent to Qualifying Tenants. As used herein "Qualifying Tenants" means one or more natural persons or a family, irrespective of race, creed, religion, color, national origin, familial status, mental or physical handicap, or gender, whose current annual family income does not exceed eighty percent (80%) of the area median gross income (within the meaning of section 142(d)of the Internal Revenue Code of 1980, as amended (the "Code")) calculated using the Novogradac Rent and Income Limit Calculator (the "Calculator") for the applicable year, under the "Other Federal,State, or Local Program"category for Nueces County—Corpus Christi, TX HUD Metro FMR Area for families of four or more persons, which calculation is based on the HUD Published Income Limit for 50% VLI, or such other reliable compilation of income statistics as CCHA may determine to employ, as adjusted by CCHA according to the most recent Consumer Price Index statistics(the "Area Median Gross Income"). Rent will not be calculated with regard to utility allowances; provided, however, that the rents shall not exceed 35%of 0.8(or 0,5, as applicable) multiplied by the Area Median Gross Income, divided by twelve(12)for the Qualifying Tenants. (b) In addition, it is presently intended that at all times: (i)88 units will be income restricted for rent to individuals and households whose aggregate adjusted gross incomes do not exceed eighty percent (80%) of Area Median Gross Income; and (i ) 22 units will be income restricted for rent to individuals and households whose aggregate adjusted gross incomes do not exceed sixty percent (50%) of Area Median Gross Income; and -2- (iii) 110 units will be market rate. (c) As a condition to occupancy, the property management company (the "Property Manager") shall verify the household income, by form of "Certification of Income", of each individual or household who is intended to be a Qualifying Tenant prior to occupying a residential unit or signing a lease. In addition,such Qualifying Tenant shall be required to provide whatever other information, documents or certifications as are reasonably deemed necessary by the Owner or CCHA to substantiate the initial or subsequent Certification of Income,which may include employment verifications, income tax returns, employee pay stubs, W-2s and K-Is (each to the extent applicable). (d) Beginning December 30, 2026, and continuing annually thereafter after any residential unit in the Development is available for occupancy, the Owner will cause the Property Manager to submit to CCHA the "Certificate of Continuing Program Compliance," in the form attached hereto as Exhibit C, or a form substantially similar thereto, executed by the authorized representative of the Property Manager stating the percentage of residential units in the Development which were occupied or held available for occupancy by Qualifying Tenants at all times during the preceding calendar year, as appropriate, and identifying Qualifying Tenants who commenced or terminated occupancy in the Development during such year. (e) In order to satisfy the requirements of the Act, the Owner covenants and agrees to obtain and maintain on file the Certification of 'Income for each Qualifying Tenant (in the form attached as Exhibit B, or a form substantially similar thereto,) who resides in the Development (and of any persons who reside in the same residential unit with such Qualifying Tenant) for the taxable year immediately preceding the initial occupancy or lease renewal for such Qualifying Tenant,as described in Section 2(b)above. All Certifications of Income will be maintained on file at the Development throughout the term of this Regulatory Agreement and the Owner shall, upon three (3) business days' prior request, make such Certifications of Income available for inspection by CCHA. (f) The Owner will comply with all fair housing laws, rules, regulations, or orders applicable to the Development and shall not discriminate on the basis of race, creed, color,gender, age, or national origin in the lease, use, or occupancy of the project or in connection with the employment of persons for the operation and management of the Development. (g) If at any time the project fails to satisfy the Occupancy Restrictions due to vacancy, required repairs, or an increase in the income of a Qualifying Tenant (a "Temporary Occurrence"), Owner shall achieve the Occupancy Restrictions as soon as possible and in any case,within sixty(60)days. Owner is not required to evict or otherwise displace any tenant for the purpose of achieving the Occupancy Restrictions, s❑ long as the appropriate number of the residential units in the project to achieve the Occupancy Restrictions are (x) in the case of less than 100%occupancy at the project at the time of the onset of such Temporary Occurrence, reserved for the appropriate proportion of Qualifying Tenants and leased to for the appropriate proportion of Qualifying Tenants as -3- soon as possible, and (y) in the case of 100% occupancy at the project at the time of the onset of such Temporary Occurrence, the next available residential unit(s) at the project are actually leased to far the appropriate proportion of Qualifying Tenants until such time as 50°%of the total number of residential units of the project are actually occupied by the appropriate proportion of Qualifying Tenants. For the avoidance of doubt, if a tenant household leasing a Qualifying Tenant unit completes the Certification of Income provided as Exhibit 8 and such completed Certification of Income demonstrates that the tenant household is no longer a Qualifying Tenant,such residential unit shall immediately cease to be characterized as a Qualifying Tenant unit and the provisions of this Section 2(g) with respect to a Temporary Occurrence shall apply. It is the express intent of Owner that the project strictly comply with the requirements of Section 2(a) at all times during the term, and Owner agrees to take all necessary action to cause such compliance, Section 3. Enforcement. (a)The Owner shall permit, after three(3)business days'prior notice, any duly authorized representative of CCHA to inspect any books and records of the Owner regarding the Development and with respect to the incomes of Qualifying Tenants which pertain to compliance with the provisions of this Regulatory Agreement. (b) In addition to the information provided for in Section 2 hereof, the Owner snail submit any other information, documents or certifications reasonably requested by CCHA that are reasonably necessary to substantiate continuing compliance with the provisions of this Regulatory Agreement. (c) If the Owner shall fail to observe or perform any covenant,condition, or agreement contained herein on its part to be observed or performed, and such failure continues for sixty (60) days after the Owner actually discovers or receives notice from CCHA of such failure, then and in such event,CCHA shall be entitled, in addition to all other remedies provided by law or in equity, to compel specific performance by the Owner of its obligations under this Regulatory Agreement. Notwithstanding anything in this subsection (c) to the contrary, if with respect to any calendar year for which a Certificate of Continuing Program Compliance is provided pursuant to Section 2(c) hereof,the owner has failed to comply with the Occupancy Restrictions described in Section 2(a) hereof and such failure is not cured by the later of(x) sixty (60) days after receipt of written notice from CCHA of such failure or(y) the forty-fifth (45th) day following the end of the calendar year for which such Certificate of Continuing Program Compliance pertains,then so long as the Owner fails to comply with the Occupancy Restrictions beyond any applicable notice and cure periods set forth herein,. the Managing Member shall have the right, but not the obligation to(y) withdraw as managing member of the owner and/or(z) exercise any purchase option with respect to the Development on the same terms as those set forth in that certain Purchase Option and Right of First Refusal Agreement of the Owner, as the same may be amended. Section 4. Recording and Filing. The Owner shall cause this Regulatory Agreement and all amendments and supplements hereto to be recorded and filed in the real property records of Nueces County,Texas. This Regulatory Agreement shall be recorded in the grantor-grantee index -4- to the name of the Owner as grantor and to the name of CCHA as grantee. The Owner shall pay all fees and charges incurred in connection with any such recording. Section S. Amendment. Neither this Regulatory Agreement nor any provisions hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the duly authorized representatives of CCHA and the Owner provided any such amendment shall only be effective upon the prior written notice to and consent of(i)the holder of a senior deed of trust or similar security instrument encumbering the Development, (ii) the Department, and (iii)the Fiscal Agent, Section 6. Severobdity. The invalidity of any clause, part or provision of this Regulatory Agreement shall not affect the validity of the remaining portions of this Regulatory Agreement. Section Z Notices. Any notice,demand or other communication required or permitted hereunder shall he in writing and shall be deemed to have been given if and when personally delivered and receipted for, or, if sent by private courier service, overnight maid or delivery service or United States registered or certified mail, return receipt requested, postage prepaid, shall be deemed to have been given if and when received (unless the addressee refuses to accept delivery, in which case it shall be deemed to have been given when first presented to the addressee for acceptance). Any such notice, demand or other communication shall be addressed to a party at its address set forth below or to such other address the party to receive such notice may have designated to all Other parties by notice in accordance herewith: To the Owner: TX Azure Apartments 1, LLC 1240 E 2100 5 STE 300 Salt Lake City, UT 84106 Attention: David Hatch Email: david@sundancebay.com With a copy to: Ascenda Capital 9242 Beverly Blvd. Suite 300 Beverly Hills, CA 90210 Attention: Matt Avital Email- matt[7ascendacap.com Holland & Knight LLP 1180 West Peachtree Street, NW, Suite 1800 Atlanta, Georgia 30309 Attention: Allison Dyer Email: ailison.dyerCr0hklaw.coni -5- Managing Member: Azure Apartments-CCHA, LLC c/o Corpus Christi Housing Authority 3701 Ayers Street Corpus Christi,Texas 78415 Attention: Chief Executive officer With a copy to: Anderson, Lehrman, Sarre & Maraist, LLP 1001 Third Street, Suite 1 Corpus Christi,Texas 78404 Attention: R. Bryan Stone, Esq. To CCHA: Corpus Christi Housing Authority 3701 Ayers Street Corpus Christi,Texas 78415 Attention: Chief Executive Officer With a copy to: Anderson, Lehrman, Barre & Maraist, LLP 1001 Third Street, Suite 1 Corpus Christi, Texas 78404 Attention. R. Bryan Stone, Esq. Section 8. Governing Low.This Regulatory Agreement shall be construed in accordance with and governed by the laws of the State of Texas, excluding its choice and conflict of law principles. Section 9. Estoppel Certificate. Each party hereto shall, at any time and from time to time within ten(10)days after being requested to do so by the other party and/or any mortgagee with respect to any portion or all of the Development, in writing, execute, acknowledge, and address and deliver to the requesting party (or, at the latter's request, to any existing or prospective mortgagee, transferee or other assignee of the requesting party's interest in the Development or under this Regulatory Agreement) a certificate in recordable form, (i) certifying (a)that this Regulatory Agreement is unmodified and in full force and effect(or, if there has been any modification thereof, that it is in full force and effect as so modified, stating therein the nature of such modification); (b) as to whether, to the best of such party's knowledge, information and belief,the requesting party is then in default in performing any of its obligations hereunder (and, if so, specifying the nature of each such default); and (c) as to any other fact or condition reasonably requested by the requesting party;and(ii)acknowledging and agreeing that any statement contained in such certificate may be relied upon by the requesting party and any such other addressee. [Signature Pages Follow] -6- IN WETNE55 WHEREOF, the parties hereto have caused this Regulatory Agreement to be signed by their respective; duty authorized representatives, as of the day and year first above written. CORPUS CHRISTI HOUSING AUTHORITY, a Texas public nonprofit housing authority By: Gary R,Allsup,Chief Executive Officer STATE OF TEXAS § {COUNTY OF NUECES § I HEREBY CERTIFY that an or about this. day of 2i32 before me, a Notary Public, for the state aforesaid, personally appeared Gary Ft. Allsup, the Chief Executive Officer of Corpus Christi Housing Authority,a Texas public nonprofit housing authority,on behalf of said public housing authority,for the purposes and consideration therein expressed. &1 0 ik, uu-f - No y Public in dfor the State of Texas ti,RY��8 ERICA S GARCI,A 1D# 12ssasss-3 r Notary P&ic. .OF TEXAS My CamrnSTAm�Exp.1 08.2©25 [Signature Page try Regulatory Agreement] Azure Apartments-CCHA,. LLC, a Delaware limited liability company By: Carpus.Christi Housing Authority, a Texas municipal.housing authority Its: Sole Member Gary R.Allsup,.Chief Executive Officer STATE OF TEXAS § COUNTY CIF NUECES § I HEREBY CERTIFY that on or about thisa.y of. r, 2024, before me, a Notary Public for the state aforesaid, personally appeared Gary R.Allsup, known to me or satisfactorily proven to be:the person whose name is subscribed to the foregoing Regulatory Agreement and Declaration of Restrictive Covenants, who acknowledged that he is the Chief Executive Officer, that he has been duly.authorized to execute,and has executed,such instrument on its behalf for the purposes therein.set forth;and that the same is.its act and deed, IN.WITNESS WHEREOF,I have set my hand and Notarial Seal,the day and yea rfirstabove written. Notary Public My commission expires on /' CA /fi-� o-'!-6 ER I CA.S GARCIA € � f i.4125145s5-3 rw Notary Public STATE OF TEXAS My Comm.Exg,12•©fi•2(3P5 (Signature Rage to Regu!a[ory Agreement} TX AZURE APARTMENTS 1, LLC, a Delaware limited liability company By:Sundance Bay income and Growth Fund GP, LLC, a Delaware limited liability company, General Partner By: fq` 31&�� Ryan Baughman, Manager STATE OF § COUNTY OF �'7b. � �''l."' § I HEREBY CERTIFY that on or about this day of Dcm,� dam, 2024, before me,a Notary Public for the state aforesaid, personally appeared Ryan Baughman, known to me or satisfactorily proven to be the person whose name is subscribed to the foregoing Regulatory Agreement and Declaration of Restrictive Covenants, who acknowledged that he is the Manager of the General Partner of TX Azure Apartments 1, LLC, that he has been duly authorized to execute, and has executed, such instrument on its behalf for the purposes therein set forth; and that the same is its act and deed. IN WITNESS WHEREOF, I have set my hand anrd�Notarial Seal, a and year first above written. KAFU OLSON otary Public Notary Public,State of Utat, Commission N 77081 My Commdsriorn Explres On Aj,id 11,7076 My commission expires on (Signature Page to Regulatory Agreement] EXHIBIT A DESCRIPTION OF LAND Lot One (1), Block One (1), SAN MARiN, a subdivision, situated in the City of Corpus Christi, Nueces County, Texas, conunonly known as San Marin Apartments, as shown by the reap or plat thereof, recorded in Volume 57, Page 193, Map Records of Nueces County, Texas and being more particularly described by metes and bounds as follows,to-wit: All that certain tract, piece or parcel of land containing 9.5316 acres (415.196 sq. ft.) of land. more or less. and being portion of that certain 90,043 acre tract deeded to Tristar Development, Inc., recorded in Volume 1919, page 216, Deed Records of Nueces County, Texas: BEGINNING at a found 518th inch iron rod being,the most Easterly corner of Lot 1, Block 1, of said San Marin. same being a point in the Northwest line of South Staples Street (F.M. 2444) (100 feet wide); THENCE South 28 degrees 56 minutes 00 seconds West, along said Northwest line of South Staples Street,a distance of 150.00 feet to a found 518th inch iron rod for corner of the herein described tract, said canter also being the most Easterly corner of Lot 2,Block 1,of said San Marin; THENCE North fat degrees 04 minutes 00 seconds West. departing said line along the Northeasterly line of said Lot 2, a distance of 150.00 feet to a found 5:8th inch iron rod for carrier of the herein described tract; THENCE South 28 degrees 56 minutes 00 seconds West,along the Northwesterly line of said Lot 2, a distance of 200.00 feet to a set 518th inch iron rod for comer of the herein described tract. THENCE South 61 degrees 04 minutes 00 seconds East, along the South%vesterly line of said Lot—"' a distance of 150.00 feet to a found 5 8th inch iron rod returning to said Northwest line of South Staples Street for corner of the herein described tract.said corner also being the most southerly corner of said Lot 2: Y THENCE South 28 degrees 56 minutes 00 seconds West, along said Nor l-west line of South Staples Street.a distance of=#33?3 feet to a set 5/8th inch iron rod for corner. a point of curvature of a curve to the right; THENCE in a Southwesterly direction. around a cun-e to the night whose radius equals 15.00 feet. having a central angle of 89 degrees 58 minutes 35 seconds, an arc length of 23.56 feet. a chord bearing South 73 degrees 56 minutes 43 seconds West. 21 21 feet to a set 5i8th inch iron rod for corner in the Northeast line of Henderson Street (60 feet wide), the most Southerly comer of the herein described tract:. THENCE North 61 degrees 02 minutes 35 seconds West, along the Northeast line of said Henderson Street,a distance of 627,27 feet to a set 518th inch iron rod for corner,a point of curvature of a curve to the right, THENCE in a Northwesterly direction, around a curve to the right whose radius equals 10.00 feet. having a central angle of 90 degrees 00 minutes 15 seconds, an arc length of 15,71 feet, a chord bearing North 16 degrees 02 minutes 42 seconds West, 14.14 feet to a set 5/8th inch iron rod for corner,the most Westerly confer of the herein described tracts: THENCE North 28 degrees 57 minutes 10 seconds East,along the Northwest line of said San Marin, a distance of 557.29 feet to a found 5i8th inch iron rod for comer of the herein described tract,same being a point in the Southwesterly-line of said Stonehenge Unit 1 Subdivisiow THENCE South 61 degrees 02 minutes 50 seconds East, along said Southwesterly line,a distance of 326.00 feet to a found 51th inch iron rod for corner of the herein described tract: THENCE Forth 28 degrees 57 minutes 10 seconds East. along said Southwesterly line. a distance of 230,89 feet to a found 5/8th inch iron rod for corner of the herein described tract, THENCE South 61 degrees 02 minutes 50 seconds East,along a Southwesterly line.a distance of 326.00 feet returning the POINT OF BEGINNING of the herein described tract containing 9.5316 acres(415.196 sq. ft.}of land,more or less. EXHIBIT B CERTIFICATION OF INCOME RE: DEVELOPMENT NAME—Azure Apartments Apartment Number: Primary Resident: Number of Occupants on Lease:_ Type of Unit: I/We,the undersigned,being first duly sworn,state that I/we have read and answered fully and truthfully each of the following questions for all persons who are to occupy the unit in the above apartment development for which application is made, all of whom are listed below: Check the applicable box to indicate which income limit applies to your household income for the 20 calendar year: 1. The combined income of all persons residing in the unit during the 12-month period beginning on the later of the date on which the above persons first occupy the apartment or sign a lease with respect to the apartment, including income described in (a) below, but excluding all income described in (b) below, Does not exceed the 80%AMI income limit{$ } Does not exceed the 60%AMI income limit{$ } (a) The amount set forth above includes all of the following income (unless such income is described in (b) below): (i) all wages and salaries, overtime pay, commissions, fees, tips and bonuses and other compensation for personal services, before payroll deductions; (ii) net annual income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization or capital indebtedness). (An allowance for depreciation of assets used in a business or profession may be deducted, based on straight-line depreciation, as provided in Internal Revenue Service regulations. Include any withdrawal of cash or assets from the operation of a business or profession, except to the extent the withdrawal is reimbursement of cash or assets invested in the operation by the above persons); (iii) interest and dividends; (iv) the full amount of periodic payments received from social security, annuities, insurance policies,retirement funds, pensions, disability ordeath benefits and other similar types of periodic receipts, including a lump sum payment for the delayed start of a periodic payment; (v) payments in lieu of earnings, such as unemployment and disability compensation, workers'compensation and severance pay; (vi) any welfare assistance: if the welfare assistance payment includes an amount specifically designated for shelter and utilities that is subject to adjustment by the welfare assistance agency in accordance with the actual cost of shelter and utilities, include as income (a) the amount of the allowance ❑r grant exclusive of the amount specifically designated for shelter or utilities,plus(b)the maximum amount that the welfare assistance agency could in fact allow the above persons for shelter and utilities. (If the welfare assistance is ratably reduced from the standard of need by applying a percentage, the amount calculated under clause (b) shall be the amount resulting from one application of the percentage); (vii) periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; (viii) all regular pay, special pay and allowances of a member of the Armed Forces(whether or not living in the dwelling)who is the head of the household, spouse or other household member whose dependents are residing in the unit; and (ix) any earned income tax credit to the extent it exceeds income tax liability. (b) The following income is excluded from the amount set forth above: 0) Income from employment of children (including foster, children) under the age of 18 years; (ii) Payment received for the care of foster children; (m) Lump sum additions to household assets, such as inheritances, insurance payments (including payments under health and accident insurance and workers' compensation), capital gains and settlement for personal or property losses; (iv) Amounts received by the household that are specifically for, or in reimbursement of, the cost of medical expenses for any household member; (v) Income of a live-in aide; (vi) Amounts of education scholarships paid directly to the student or to the educational institution, and amounts paid by the government t❑ a veteran, for use in meeting the costs of tuition, fees, books, equipment, materials, supplies, transportation and miscellaneous personal expenses of the student. Any amount of such scholarship or payment to a veteran not used for the above purposes that is available for subsistence is to be included in income; (vii) The special pay to a household member serving in the Armed Forces who is exposed to hostile fire; (viii) (a) Amounts received under training programs funded by Housing and Urban Development ("HUD");(b) Amounts received by a disabled person that are disregarded for a limited time for purposes of Supplemental Security Income eligibility and benefits because they are set aside for use under a Plan to Attain Self-Sufficiency ("PASS"); (c) Amounts received by a participant in other publicly assisted programs which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc_) and which are made solely to allow participation in a specific program; (ix) Temporary, nonrecurring or sporadic income(including gifts);or (x) Amounts specifically excluded by any other federal statute from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under the United States Housing Act of 1937. This Certification of Income will be maintained on file at the Development throughout the term of this Regulatory Agreement and the Owner shall, upon three (3) business days' prior request, make such Certifications of income available for inspection by Corpus Christi Housing Authority. Date: Name: EXHIBIT C CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE Reporting Month/Year: Property Name: Azure Apartments On Site Property Manager: Property Address:7221 S. Staples Street Telephone Number: Corpus Christi,Texas 78413 To: Corpus Christi Housing Authority 3701 Ayers Street Corpus Christi,Texas 78415 Attention: Chief Executive officer The undersigned, as the authorized representative of (the "Property Manager"), hereby certifies that he or she has read and is thoroughly familiar with the provisions of the Regulatory Agreement and Declaration of Restrictive Covenants, dated as of December 30, 2024 (the "Regulatory Agreement"), between Corpus Christi Housing Authority and TX Azure Apartments 1, LLC (as executed by such entity's Managing Member) and certifies the following as of the date of this certificate: Development Units Total occupied Units in Development Total Vacant Units Total Units Qualifying Tenants with Adjusted Gross Incomes at or below 80%AM Units occupied by such Qualifying Tenants Units Held Vacant for such Qualifying Tenants Qualifying Tenants with Adiusted Gross Incomes at or below 50%AMI Units occupied by such Qualifying Tenants Units Held Vacant for such Qualifying Tenants Total (At least 50%of Total Units) The terms Qua Iifying Tenants,Adjusted.Gross Incomes..and AM have` he meanings give n.to them in th.e Regulatory.Agreement. Certified By: Printed Name and Title Authori?ed Representative Signature Date. EXHIBIT I SAMPLE CCHA OPERATING AGREEMENT Execution Version AMENDED AND RESTATED OPERATING AGREEMENT OF TX AZURE APARTMENTS 1, LLC TABLE OF CONTENTS ARTICLE I CONTINUATION; NAME, PURPOSE AND TERM........................................2 1.1. Continuation; Name.................................................................................................2 1.2. Purposes of the Company. .......................................................................................2 1.3. Powers of the Company...........................................................................................2 1.4. Registered Agent and Office; Principal Office........................................................3 1.5. Term.........................................................................................................................4 1.6. Entity Characterization. ...........................................................................................4 1.7. Definitions and Schedules Incorporated..................................................................4 1.8. Representations and Warranties...............................................................................4 1.9. Real Estate Matters. .................................................................................................7 1.10. Ground Lease...........................................................................................................7 ARTICLE II CAPITAL CONTRIBUTIONS AND THE LIABILITY OF MEMBERS.......8 2.1. Company Capital. ....................................................................................................8 2.2. Capital Contributions...............................................................................................8 2.3. Funding Deficits.......................................................................................................8 2.4. Withdrawal of Capital..............................................................................................9 2.5. Liability of Members. ..............................................................................................9 2.6. No Restoration of Deficit Capital Account..............................................................9 2.7. Loan Guaranty. ........................................................................................................9 2.8. Replacement Reserve...............................................................................................9 ARTICLE III MANAGEMENT; RIGHTS, POWERS; DUTIES; DEFAULTS AND REMOVAL OF THE MEMBERS.....................................................................10 3.1. Management of the Company................................................................................10 3.2. Major Decisions; Property Management; Affiliated Contracts. ............................14 3.3. Special Limited Member Right to Compel Sale....................................................16 3.4. Exculpation; Indemnification.................................................................................17 3.5. Outside Activities of Members. .............................................................................17 3.6. [Reserved]..............................................................................................................18 3.7. Removal of the Managing Member.......................................................................18 3.8. Fees........................................................................................................................19 3.9. Information and Meetings......................................................................................20 3.10. Duties to Others. ....................................................................................................20 3.11. Event of Default as to the Managing Member.......................................................21 3.12. Event of Default as to the Special Limited Member..............................................21 3.13. General Construction. ............................................................................................21 ARTICLE IV DISTRIBUTIONS................................................................................................22 4.1. Net Cash Flow Distributions..................................................................................22 4.2. Distributions from Interim Capital Transactions. ..................................................22 4.3. Distribution Upon Dissolution...............................................................................23 4.4. General...................................................................................................................24 4.5. Tax Withholding. ...................................................................................................24 ARTICLE V PROFITSAND LOSSES ....................................................................................25 5.1. Allocation of Profits and Losses from Other Than a Terminating Capital Transaction.............................................................................................................25 5.2. Allocation of Profits and Losses from a Terminating Capital Transaction. ..........25 ARTICLE VI FISCALMATTERS............................................................................................27 6.1. Books and Records. ...............................................................................................27 6.2. Bank Accounts.......................................................................................................27 6.3. Accounting and Fiscal Year...................................................................................28 6.4. Tax Filings; Partnership Representative................................................................28 ARTICLE VII BUDGETS; REPORTS.......................................................................................29 7.1. Budgets. .................................................................................................................29 7.2. Annual Reports. .....................................................................................................30 7.3. Other Reports.........................................................................................................30 7.4. General Requirements............................................................................................31 ARTICLE VIII TRANSFERS........................................................................................................31 8.1. Restrictions on Transfer of Membership Interests.................................................31 8.2. Restrictions Applicable to the Investor Member and the Special Limited Member. ................................................................................................................................32 8.3. General Restrictions on All Transfers....................................................................32 8.4. Substitute Members. ..............................................................................................34 ARTICLE IX PURCHASE AND SALE RIGHTS BETWEEN MEMBERS.........................34 9.1. Intentionally omitted..............................................................................................34 9.2. Purchase of the Managing Member's Interest Upon Default. ...............................34 ARTICLE X DISSOLUTION AND TERMINATION OF THE COMPANY......................37 10.1. Events Causing Dissolution...................................................................................37 10.2. Procedures on Dissolution. ....................................................................................38 10.3. Disposition of Documents and Records.................................................................38 ARTICLE XI GENERALPROVISIONS..................................................................................38 11.1. Notices; Calculation of Days. ................................................................................38 11.2. Word Meanings......................................................................................................39 11.3. Binding Provisions.................................................................................................39 11.4. Applicable Law; Venue; No Jury Trial..................................................................40 11.5. Counterparts; Electronic Copy...............................................................................40 11.6. Separability of Provisions......................................................................................40 11.7. Captions. ................................................................................................................41 11.8. Entire Agreement; Amendments; Further Assurances. .........................................41 11.9. No Third Party Beneficiaries. ................................................................................41 11.10. Waiver of Partition, Etc. ........................................................................................41 11.11. Remedies; Waivers; Attorney's Fees.....................................................................42 11.12. Survival of Certain Provisions...............................................................................42 11.13. Members' Limited Liability...................................................................................42 11.14. Dispute Resolution.................................................................................................43 ARTICLE XII SINGLE PURPOSE ENTITY..........................................................................45 12.1. Single Purpose Entity Requirements. ....................................................................45 12.2. Contributions..........................................................................................................48 12.3. Member Loans .......................................................................................................48 12.4. Conflict..................................................................................................................48 12.5. Termination of Provisions......................................................................................49 EXHIBIT A DEFINITIONS SCHEDULE I Percentage Interest and Required Capital Contributions of Each Member SCHEDULE II Real Property Description SCHEDULE III Major Decisions SCHEDULE IV Tax Allocation and other Tax Provisions AMENDED AND RESTATED OPERATING AGREEMENT OF TX AZURE APARTMENTS 1, LLC THIS AMENDED AND RESTATED OPERATING AGREEMENT (this "Agreement") of TX Azure Apartments 1, LLC, a Delaware limited liability company (the "Company"), dated as of December 30, 2024, is made by and among Azure Apartments-CCHA, LLC, a Delaware limited liability company(the"Managing Member"), Sundance Bay Income and Growth OP,LP, a Delaware limited partnership (the"Investor Member") and TX Azure Apartments SLM, LLC, a Utah limited liability company (the "Special Limited Member"). This Agreement amends and restates in its entirety all prior operating agreements of the Company, including that certain Operating Agreement of the Company dated June 1, 2022 (the "Original Agreement"). RECITALS A. On May 20, 2022 (the "Formation Date"), the Company was formed pursuant to the Delaware Limited Liability Company Act (as from time to time amended and including any successor statute of similar import, the "DLLCA") by the filing of the Certificate of Formation (the "Certificate") with the Secretary of State of the State of Delaware in accordance with the DLLCA. B. AZ Sora on Rose, LLC, an Arizona limited liability company (the "Initial Member"), entered into the Original Agreement as the sole member of the Company. C. On December 30, 2024, the Initial Member dissolved and all of its Membership Interest in the Company were distributed to Investor Member, the sole member of the Initial Member. D. The Managing Member was formed on November 12, 2024, for the purpose of financing, acquiring, operating, and managing affordable housing for low and moderate income individuals and families in Corpus Christi, Texas, in support of the mission of its sole member, Corpus Christi Housing Authority, a Texas public nonprofit housing authority ("CCHA"), organized pursuant to the Texas Housing Finance Corporations Act, Chapter 392, Texas Local Government Code, as amended(the"Act"). E. The Company was formed to acquire, maintain, and operate an approximately 220- unit multifamily housing community and associated improvements in that certain rental housing community known as Azure Apartments,which such development is located at 7221 S Staples St, Corpus Christi, Texas 78413. F. The Members now desire to enter into this Agreement in order to(i)to memorialize the admission of new Members to the Company, (ii) establish the manner in which the business and affairs of the Company shall be managed, and (iii) set forth the respective rights, duties and obligations of the Members with respect to the Company and each other from and after the date hereof. NOW, THEREFORE, in consideration of the foregoing, of mutual promises, covenants and conditions of the parties hereto herein contained and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the Members hereby agree as follows: ARTICLE I Continuation, Name, Purpose and Term 1.1. Continuation,Name. (a) The Company was formed upon the filing of the Certificate. The Members hereby agree to operate the Company as a limited liability company under the DLLCA. (b) The Special Limited Member shall file such amendments and restatements to the Certificate as may be required by the DLLCA,and any other certificates, applications or other documents and do or cause to be done all such filing, recording, publishing, or other acts as may be necessary or appropriate to comply with the requirements of law for the formation and/or operation of a limited liability company in accordance with the laws of the State of Delaware and in all other jurisdictions, if any, in which the Company shall conduct business. The Special Limited Member shall deliver to the Members a copy of the Certificate, any changes thereto, and any other document or instrument required to be filed, recorded or published under this Article I. (c) The name of the Company shall be TX Azure Apartments 1, LLC. The name of the Company shall not be changed without the consent of the Investor Member. All of the business and other activities of the Company shall be carried out in the name of, and all assets shall be held in the name of, the Company, unless the Special Limited Member reasonably determines that using a different name is necessary or desirable. 1.2. Purposes of the Company. The Company was formed, and its sole purpose is, to lease, operate, and otherwise deal with the Project. The Company may acquire, own, rehabilitate, renovate, improve, maintain, finance, refinance, manage, operate, lease, convey, assign, mortgage, pledge, encumber, and sell and otherwise deal with the Project, or any of it and in any real and/or personal property (tangible, intangible or otherwise) now or hereafter appurtenant thereto or a part thereof, or hereafter acquired in connection therewith. 1.3. Powers of the Company. In furtherance of its purposes, but without limiting in any way the powers conferred upon the Company under the DLLCA, and in any event subject to all the other provisions of this Agreement,the Company is hereby authorized to, and shall have full power to do the following: OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 2 (a) own, rehabilitate, renovate, operate, manage, maintain, finance, refinance, improve, assign,mortgage,pledge, encumber, lease and sell, convey or otherwise transfer, the Project and any other real or any personal property and any other assets of the Company convenient or incidental to the accomplishment of the purposes of the Company; (b) enter into agreements or other arrangements with any federal, state or other governmental authorities as to the rental of the Project, including, without limitation, restrictions thereon for the purpose of promoting affordable housing; (c) borrow money (including from Members or their Affiliates as and to the extent permitted by the other provisions of this Agreement) and issue evidences of indebtedness in furtherance of any or all of the purposes of the Company, and to secure the same by mortgages, pledges, or other liens on the Project or any other assets of the Company; (d) prepay or repay, in whole or in part, refinance, recast, increase, modify, or extend any mortgages or other liens or encumbrances affecting the Project or any portion thereof and in connection therewith to execute any extensions, renewals or modifications of any mortgages,pledges or other liens or encumbrances securing such indebtedness; (e) enter into, execute, modify, amend, perform and carry out contracts of any kind, (including contracts with Affiliated Persons of any Member permitted by the other provisions of this Agreement)necessary or convenient to, in connection with, or incidental to the accomplishment of the purposes of the Company; (f) create nominee trusts, subsidiaries and otherwise to own interests in business trusts or realty trusts or limited liability companies and liquidate, merge, consolidate or otherwise reorganize with any such Entities, or enter into joint ventures, partnerships, (general or limited) or other arrangements with third parties, for purposes consistent with the purposes of the Company set forth in this Agreement and permitted under the DLLCA, provided that the Company shall not hold any interests, debt or equity or of any other nature whatsoever, in any Entity that is not either treated under the Code as a disregarded Entity or taxed as a partnership, except with Consent of the Special Limited Member; and (g) enter into, carry on, or otherwise engage in any kind of activity necessary to,in connection with or incidental to the accomplishment of the purposes of the Company, and have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to, and take any other action permitted under,the DLLCA. 1.4. Registered Agent and Office, Principal Office. (a) The registered agent and office of the Company required under the DLLCA shall be as designated in the Certificate, and may be changed by the Managing Member in accordance with the DLLCA,upon Consent of the Special Limited Member. The principal OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 3 business office of the Company shall be located at such address as shall be designated by the Managing Member, upon Consent of the Special Limited Member. (b) Upon Consent of the Special Limited Member, the Managing Member may establish additional places of business of the Company within and without the State of Texas as and when required by the business of the Company and may appoint agents for service of process in any jurisdiction in which the Company shall conduct business. 1.5. Term. The Company commenced as of the Formation Date, and shall continue in perpetuity, unless sooner terminated in accordance with the provisions hereof or pursuant to the DLLCA. 1.6. Entity Characterization. It is the intention of the Members that the Company constitute a partnership for federal, state and local income tax purposes. The Managing Member agrees that it: (a) will not cause or permit the Company to elect, without the Consent of the Special Limited Member, (i) to be excluded from the provisions of Subchapter K of the Code, or(ii)to be treated as a corporation for federal, state and local income tax purposes; and(b)will cause the Company to make any election and otherwise take such acts as are reasonably necessary or appropriate in order to ensure the treatment of the Company as a partnership for federal income tax purposes. 1.7. Definitions and Schedules Incorporated. Capitalized terms used in this Agreement shall have the meanings ascribed to them in the definitions attached hereto as Exhibit A or as they appear elsewhere in this Agreement. All accounting terms used in this Agreement shall have the meanings assigned to them in accordance with the accrual accounting method. The Definitions and Schedules attached hereto are incorporated herein and made a part hereof. 1.8. Representations and Warranties. (a) Each Member(including,without limitation, each permitted transferee as a condition to becoming a Member), for itself only, represents and warrants (provided, however,that in the case of any representations of the Managing Member(other than those representations with respect to Managing Member's due authorization, existence and ability to enter into related transaction documents), such representations are based solely on such Managing Member's actual knowledge as of the date hereof with no duty to inquire) to the Company and to each other Member and acknowledges that as of the date hereof: (i) It is duly organized,validly existing and in good standing under the laws of its jurisdiction of formation with all requisite power and authority to enter into this Agreement and to conduct the business of the Company. (ii) It has all requisite power, authority and financial capacity to enter into and to perform its obligations under this Agreement. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 4 (iii) The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the performance of all obligations and all transactions contemplated by this Agreement to be performed by it have been duly authorized by all necessary limited liability company, corporate or partnership action on the part of the Member and any other organizational and any other necessary actions. (iv) This Agreement and the performance by such Member of its covenants and obligations under this Agreement will not result in a breach or violation of, or a default under, its partnership or operating agreement, trust agreement, charter or by-laws, as the case may be, any material agreement by which such Member or any of such Member's property, is or are bound, or any statute, regulation, order or other law to which such Member or its principals is subject. (v) No consents or approvals are required from any other governmental authority or other Person or Entity for the Member to enter into this Agreement. (vi) It has acquired its Membership Interest, solely for its own account,with the intention of holding the Membership Interest for the following purposes: (i) in the case of the Managing Member, fulfilling of CCHA's statutory nonprofit mission to provide affordable and low-income housing, and(ii)in the case of other Members, investment only. Each Member has acquired its Membership Interest not for the purpose of, or with a view toward, the resale, fractionalization, division or distribution of all or any part thereof, nor with a view toward selling or otherwise distributing such Membership Interest or any part thereof at any particular time or under any predetermined circumstances. (vii) It is a sophisticated investor, able and accustomed to handling sophisticated financial matters for itself, and it does not anticipate a need for the funds that it has invested in the Company in what it understands to be a highly speculative and illiquid investment. (viii) Its Membership Interest is a speculative security for which there is no established market and that no such market is likely to exist, and without any portion of its Membership Interest being in violation of the Securities Act or any applicable state securities law. (ix) It acknowledges that (x) it is aware that its Membership Interest has not been registered under the Securities Act in reliance upon exemptions contained in the Securities Act and that its Membership Interest has not been registered under the securities law of any state in reliance upon the exemptions contained in such state securities law, (y)that the Company will not and has no obligation to register any Member's Membership Interest under the Securities Act or any state securities law, and (z) the Company has no obligation to recognize any Transfer of a Member's Membership Interest to any Person other than as permitted pursuant to the other provisions of this Agreement. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 5 (x) It has consulted and been advised by its legal counsel and tax advisor in connection with the potential profit, tax consequences of any sort (including, without limitation, the tax consequences resulting from forming the Company, executing this Agreement, making or failing to make a Capital Contribution to,and being admitted as a Member of,the Company, or being allocated profits, losses and items of each thereof), cash flows or yield, if any, in respect of the Company. (xi) It is neither a"foreign person"within the meaning of Code Section 1445(f) nor a"foreign partner"within the meaning of Code Section 1446(e). (xii) It has not retained any Person or otherwise agreed to any brokerage or commission or other similar compensation due or payable on an absolute or contingent basis to any Person with respect to or on account of the execution of this Agreement. (xiii) Intentionally omitted. (xiv) It is in compliance with and at all times will comply with all laws relating to anti-money laundering, anti-terrorism, trade embargoes and economic sanctions now or hereafter in effect, including, without limitation, Executive Order 13224, "Blocking Property Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism," 66 Fed. Reg. 49079 (Sept. 23, 2001) and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (the "Patriot Act"), or any enabling legislation or executive order relating hereto (collectively, the "AT/AML Laws"). (xv) It is in compliance with all applicable anti-money laundering and anti- terrorist laws, regulations, rules, executive orders and government guidance, including the reporting, record keeping and compliance requirements of the Bank Secrecy Act, as amended by The International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001, Title III of the Patriot Act and other authorizing statutes, executive orders and regulations administered by OFAC, and related Securities and Exchange Commission, SRO or other agency rules and regulations, and has policies, procedures, internal controls and systems that are reasonably designed to ensure such compliance. (xvi) It is the Company's policy to cooperate fully with law enforcement agencies. Each Member hereby represents that: (x) it is, and shall continue to be, in compliance with all AT/AML Laws; (y) it is not directly or indirectly owned or controlled, in whole or in part, by a Blocked Person; and (z) it has not, does not, and will not, conduct any business with a Blocked Person or otherwise engage in any transaction relating to any property, or interests in property, blocked by any AT/AML Law. (xvii) There are no actions, suits,proceedings or investigations pending, or,to the knowledge of such Member or any of its Affiliates, threatened against or affecting OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 6 such Member or any of its Affiliates or any of their properties, assets or businesses in any court or before or by any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to any action, suit or proceeding which if adversely determined could) reasonably be expected to materially impair such Member's ability to perform its obligations under this Agreement or to have a material adverse effect on the financial condition of such Member. Such Member or any of its Affiliates has not received any currently effective notice of any default, and neither such Member nor any of its Affiliates is in default, under any applicable order, writ, injunction, decree, permit, determination or award of any court, any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair such Member's (or any of its Affiliate's) ability to perform its obligations under this Agreement or to have a material adverse effect on the financial condition of such Member. (xviii) No broker, agent or other person acting as such on behalf of such Member was instrumental in consummating the acquisition of the Real Property or this transaction and no conversations or prior negotiations were had by such parry with any broker, agent or other such person concerning the transaction that is the subject of this Agreement and there are no brokerage commissions or finders' fees due in connection with entering into this Agreement. Notwithstanding the foregoing, the Members acknowledge and agree that the Managing Member will not be looked upon by the Special Limited Member or Investor Member to conduct Project related diligence, and any such diligence conducted by CCHA is solely for its own benefit. (b) The Managing Member hereby represents and warrants that 100% of the membership interests in the Managing Member are legally and beneficially owned by CCHA, which are free and clear of all liens, encumbrances, security interests and charges of any kind. 1.9. Real Estate Matters. Concurrently with the execution of this Agreement, an Affiliate of the Company will (i) deed the land described on Schedule II into CCHA or an Affiliate thereof, and (ii) convey the improvements on such land to the Company,and the Company will thereafter enter into the Ground Lease. 1.10. Ground Lease. The Members acknowledge that the Ground Lease is necessary in order for the Company to receive the Real Estate Tax Exemption, and that the Members would not undertake to acquire the Project without such Real Estate Tax Exemption. Therefore, the Members hereby authorize the execution of the Ground Lease. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 7 ARTICLE II Capital Contributions and the Liability of Members 2.1. Company Capital. The capital of the Company shall be the aggregate of the amount of each Member's Capital Account. No interest or preferred return shall accrue or be paid on any Capital Account or Capital Contribution except as otherwise specifically provided in this Agreement. No loan made to the Company by a Member (or any Affiliated Person of a Member) or by any other Person shall constitute a Capital Contribution to the Company for any purpose, nor affect any such Member's share of the profits, losses, credits and distributions under this Agreement. 2.2. Capital Contributions. The names, addresses and respective Percentage Interests of the Members are as set forth in Schedule I attached hereto. If not previously paid, upon five (5) Business Days' notice from the Special Limited Member, each Member shall contribute to the Company, the respective amounts set forth in Schedule I. 2.3. Funding Deficits. (a) In the event the Company requires funds (in addition to the Capital Contributions made by all Members on or prior to the date of this Agreement) to conduct the business of the Company or to meet its obligations, the additional amount needed (the "Deficit") shall be obtained as follows, subject to the provisions of the Loan Documents: (y)the Company may borrow funds from third-party lender(s) or from any Member or any Affiliated Person of any Member, except for the Managing Member or their Affiliates, on such terms and conditions as are approved by the Special Limited Member (provided if such third-party lender is a non-government sponsored entity (e.g., Fannie Mae or Freddie Mac) or the subject loan will have a loan-to-value ratio in excess of 85%,then the Consent of the Managing Member will also be required), or(z)the Special Limited Member or the Investor Member may make a Capital Contribution to eliminate such Deficit(a"Preferred Capital Contribution"). If Investor Member wishes to contribute to the Deficit, each Member shall have the right to contribute a proportionate share, based on their Percentage Interests. (i) In addition to the above, the Investor Member may at any time make a Preferred Capital Contribution for the amount of any Non-Discretionary Expenditures which are in excess of the amount of cash which the Investor Member in good faith reasonably believes is available for the payment of such amounts(such excess also being herein referred to as a Deficit). (b) Except as set forth in Sections 2.2 and 2.3(a)2, as to the initial Capital Contributions of the Members and amounts for any Preferred Capital Contributions, no Member shall be obligated to make any Capital Contribution or loans to the Company, and no Capital Contributions or loans may be made by any Member except as specifically provided in this Agreement or with the Consent of the Special Limited Member. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 8 2.4. Withdrawal of Capital. Although pursuant to this Agreement the Company may make distributions to the Members during the term of the Company in return of their Capital Contributions,no Member shall have the right to Withdraw from the Company, except as permitted herein, or to demand a return of all or any part of its Capital Contribution or its Capital Account or to receive property of the Company in exchange therefor, except upon the dissolution of the Company, and then only in the manner specifically provided in this Agreement. Any return of any Member's Capital Contributions or a Member's Capital Account shall be made solely from the assets of the Company and only in accordance with the terms of this Agreement, and,no Member shall have personal liability for the return of any other Member's capital. To the extent any monies which any Member is entitled to receive pursuant to Article IV hereof or any other provision of this Agreement would constitute a return of capital, each of the Members consents to the return of such capital. 2.5. Liability of Members. No Member shall be personally liable for any debts, liabilities or obligations of the Company. No Member shall be required to lend or contribute any sums to the Company on account of the liabilities or the obligations of the Company, or otherwise, other than its initial Capital Contribution pursuant to Section 2.2 or as required under the DLLCA. 2.6. No Restoration of Deficit Capital Account. Notwithstanding anything in this Agreement to the contrary, no Member which has a deficit balance in its Capital Account following the completion of all adjustments to the Members' Capital Accounts upon the liquidation of the Company shall be obligated to make a Capital Contribution or otherwise restore any deficit balance in its Capital Account. 2.7. Loan Guaranty. In connection with securing financing and refinancing for the Project, Affiliates of the Special Limited Member shall be responsible to provide a customary Nonrecourse Carve Out Guaranty and/or indemnitees to the extent required by a lender. The Managing Member and its Affiliates shall not be required to provide any guarantees or indemnitees. No Member shall have any personal or recourse liability pursuant to a Company financing unless it agrees in writing with respect thereto. 2.8. Replacement Reserve. The Replacement Reserve shall be maintained by the Company in the Replacement Reserve Account. The Replacement Reserve shall be controlled by the Special Limited Member and shall be utilized in the Special Limited Member's reasonable discretion, subject to the requirements of the Loan Documents,to pay capital expenditures and repairs and replacements (i) required from time to time or that are (ii) immediately necessary to cover expenditures to protect the life and safety of the tenants or the mechanical or structural integrity of the Project in the event of an emergency. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 9 ARTICLE III Management, Rights, Powers, Duties, Defaults and Removal of the Members. 3.1. Management of the Company (a) Subject to Sections 3.1 and 3_2, and any other provision of this Agreement limiting or restricting the Managing Member's authority and/or requiring the Consent of the Special Limited Member or the consent of the Investor Member (collectively, the "Managing Member Restrictions"), the Managing Member shall have the right, power and duty to implement the Major Decisions and otherwise to manage the Company's affairs and to make recommendations as to all other matters involving the Company (other than those to be made by the Special Limited Member under Section 3.2), and in so implementing the Major Decisions and any other decisions of the Company (including without limitation,those to be made by the Special Limited Member under Section 3.2),to do all things reasonably necessary or appropriate to carry on the business and purposes of the Company and, consistent with the above, to exercise all rights and powers reasonably necessary to effectuate the purposes of the Company. The Managing Member shall have the power and authority to execute, acknowledge and deliver any and all instruments necessary or desirable in effectuating the foregoing. Subject in all events to the Managing Member Restrictions and any approvals or consents or any reserved rights, restrictions or limitations with respect thereto that are imposed pursuant to the granting of any such approvals, consents or other rights, and further subject to the limitations set forth in the Approved Budget, and any allowable variations therefrom permitted pursuant to the provisions of Section 7.1, and any other applicable provisions of this Agreement, the Managing Member's rights, powers and duties shall include the use of all reasonable and necessary acts and efforts to: (i) Do any and all acts and things necessary,proper,convenient or advisable to effectuate the purposes of the Company, and to direct the Company in accordance with the terms of this Agreement, and devote such time as is necessary to perform the foregoing,and perform any other duties or obligations of the Managing Member pursuant to this Agreement or any other duties or obligations of the Company as it is in a competent and professional manner, in the best interests of the Company, and in all events in compliance with and subject to the Managing Member Restrictions; (ii) Within the limitations set forth in the Approved Budget, and any allowable variations therefrom permitted pursuant to the provisions of Section 7.1, and subject to any other applicable provisions of this Agreement, pay as and when due all debts,obligations,costs and expenses incurred as to the Project,or the Company, and create and maintain all required reserves, all out of the Company funds, and take all reasonable steps to insure that such amounts are timely paid or provision for payment thereof is timely undertaken from such funds; (iii) Within the limitations set forth in the Approved Budget, and allowable variations therefrom permitted pursuant to the provisions of Section 7.1, and subject to any other applicable requirements under this Agreement, negotiate and OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 10 cause the Company to execute and deliver appropriate contracts and other agreements, and cause, or the Company to comply with and perform under all contracts and other agreements of the Company or to which they or any of their respective property is subject; (iv) Operate,maintain,improve and otherwise manage and deal with the Project and the interests in the Company in an efficient manner and otherwise in accordance with the limitations set forth in the Approved Budget, and any allowable variations therefrom permitted pursuant to the provisions of Section 7.11 (v) Oversee and supervise the Property Manager, and inform the Investor Member, for determination by the Investor Member, of any actions to be taken by the Company in connection with any default under, or the exercise of any rights or options of the Company under, the Property Management Agreement; (vi) Implement all Major Decisions once made pursuant to Section 3.2, and all other decisions made under this Agreement as to the Company and/or the Project, subject to the limitations set forth in the Approved Budget, and any allowable variations therefrom permitted pursuant to the provisions of Section 7.1, and also subject to any other limitations, qualifications or other requirements imposed as part of approving any such Major Decision or any other decisions of the Company; (vii) Keep all books of account and other records of the Company and, as appropriate, record, file or deliver all certificates, returns, budgets, plans, reports and other information in the manner and at the times provided for in Section 6.4, Article VII, or as required by any other provision of this Agreement or pursuant to any agreement binding on the Company or to which they or any of their respective properties are subject; (viii) Comply and cause the Company to comply with the Housing Agreements and all other Housing Requirements and with all Loan Documents and with the terms and provisions of any other agreement executed by the Company or to which either the Project or any other property of either is subject; (ix) Cause the Company to obtain and maintain insurance fulfilling such requirements as the Company or any of its property may be subject or as the Investor Member may require, provided any such requirement by the Investor Member shall be consistent with the insurance carried on other properties owned by the Investor Member or in which the Investor Member holds an interest, subject to any geographical or other special issues (such as,without limitation, earthquake, flood, environmental, etc.); (x) Cause each Company to comply with all present and future applicable laws, ordinances, orders, rules, regulations and requirements of all federal, state and municipal governments, courts, departments, commissions, and boards, including, without limitation, all Hazardous Materials Laws, and any national or local Board of Fire Underwriters or any other body exercising functions similar to those of any OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 11 of the foregoing, all as may be applicable to the Project or the operation and management thereof(collectively "Laws"), and, subject to any limitations set forth elsewhere in this Agreement, take action to contest the validity or application of any such Laws; and (xi) Provide copies to the Members of all notices received or sent with respect to any mortgages, security agreements, contracts or other agreements of the Company and all reports, notices and any other writings relating to Hazardous Materials and Hazardous Materials Laws. (b) The Managing Member shall devote, and shall cause its partners, members, officers, directors and employees, if any,to devote such time to the affairs of the Company as the Managing Member, in its reasonable discretion, exercised in good faith, as it determines is necessary for performance by the Managing Member of its duties under this Agreement. It is understood that no single Person serving as a managing member shall be required to devote full time to the business and affairs of the Company. (c) The Special Limited Member shall cause the Property Manager to maintain a fidelity bond in an amount of not less than one million dollars ($1,000,000) for all employees, officers or other agents of the Property Manager or any of its Affiliates that handles funds of the Company or otherwise holds a position of trust with the Company. (d) The rights of the Managing Member shall not be assignable, whether voluntarily, by operation of law or otherwise. The duties of the Managing Member shall not be delegated,voluntarily, by operation of law or otherwise, except in accordance with Section 3.1(g) and 3.1 h below. (e) The Company shall have no employees and the Managing Member shall have no authority to hire any employees for the Company. The Managing Member shall employ, or shall have access to employees of Affiliates, and shall cause the Property Manager to employ, as the case may be, a sufficient number of capable employees to carry out its or their respective duties under, as applicable,this Agreement or under the Property Management Agreement, each at its own expense (without limiting any reimbursement rights as to such employees under the Property Management Agreement). (f) Subject to the Managing Member Restrictions, the Managing Member is authorized to execute, sign, seal and deliver in the name and on behalf of the Company, any and all agreements, certificates, instruments, or other documents requisite to carrying out its duties under this Agreement. Subject to evidence of compliance with the Managing Member Restrictions when required, every agreement, instrument, certificate or other document executed by the Managing Member, on behalf of the Company, on the Company's own behalf, shall be conclusive evidence in favor of every Person relying thereon or claiming thereunder that, at the time of the delivery thereof: (i)the Company is in existence, (ii) this Agreement had not been terminated or canceled or amended in any manner so as to restrict such authority (except as shown in certificates or other instruments duly filed in accordance with the DLLCA), and (iii) the execution and delivery of such instruments were duly authorized under this Agreement. Any Person dealing with the OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 12 Company may rely on the power and authority of the Managing Member as set forth in this Agreement, except where any such Person has actual notice or actual knowledge of the applicability of a Managing Member Restriction. (g) The Managing Member acknowledges and agrees that the Investor Member and its respective principals, successors and assigns will have extensive liabilities and exposure in connection with the financing of the Company and the Project(the "Investor Obligations"). Therefore, so long as any Investor Obligations are outstanding, the Managing Member shall and does hereby delegate its rights, powers, and responsibilities under this Section 3.13.1 to the Special Limited Member, subject to the Managing Member's right to revoke such delegation as set forth below. The Special Limited Member accepts such delegation of the Managing Member's rights,powers, and responsibilities and agrees to act on such rights and powers and perform such responsibilities in accordance with this Agreement. It is expressly acknowledged and agreed that the delegation to the Special Limited Member herein is intended to facilitate financing for the benefit of the Project. Such delegation is granted with the understanding that the Special Limited Member will exercise such rights, powers, and authority and undertake actions in furtherance thereof in a manner consistent with the purposes of the Company set forth in Section 1.2 of this Agreement, including the fulfillment of the public purpose of CCHA. To the extent the Managing Member reasonably determines that the Special Limited Member's exercise of its rights, powers, and authority would violate the foregoing purposes, the Managing Member shall provide the Special Limited Member with notice regarding such violation. The Special Limited Member shall then have a period of thirty (30) days to cure such violation, and if not so cured within such timeframe, the Managing Member shall be entitled to revoke the delegation and exercise its rights, powers and authority as the Managing Member of the Company and take such action as it deems reasonably necessary to cure such violation, subject to the Consent of the Special Limited Member if required under this Agreement. So long as the delegation by the Managing Member to the Special Limited Member is in effect, (i) the Managing Member shall reasonably cooperate with the Special Limited Member to assist the Special Limited Member in carrying out the delegation set forth in this Section, and(ii)the Special Limited Member shall indemnify the Managing Member and any of its Affiliates against Damages arising from any and all Claims brought by any party against the Managing Member in connection with the ownership and operation of the Project, excluding Claims arising from the fraud or willful misconduct of the Managing Member or its Affiliates, and provided that such indemnification shall be required only to the extent indemnification is not already provided to the Managing Member under the provisions of Section 3.4(b). For the purpose of the foregoing indemnification "Claim" or "Claims" shall refer to claims, causes of action, litigation, threat of litigation or other such matters, from whomsoever brought, including without limitation third parties or Affiliates of the Investor Member, and "Damages"shall mean any and all costs, damages, expenses and charges that relate thereto or may accrue in connection with a "Claim". The Special Limited Member shall provide to the Managing Member upon request copies of any documents executed in accordance with this Section 3.1(g). (h) Subject to any and all limitations on the Special Limited Member's rights to act or make decisions hereunder, including subject to the revocation of such rights under OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 13 Section 3.1(g)above,the Members acknowledge and agree that the signature of the Special Limited Member shall be sufficient to: (1)bind the Company; (2)exercise and enforce the rights of the Company to the extent that such rights affect the Investor Member's economic interest in the Company or have been delegated to the Special Limited Member pursuant to this Section 3.1; and (3) approve, amend, modify or replace the Loan Documents, provided that the Special Limited Member shall deliver to the Managing Member advance copies of any documents evidencing such amendment, modification or replacement of the Loan Documents prior to their execution. Furthermore, and for the avoidance of doubt, the signature of the Managing Member is hereby not required in order to effectuate any of the actions described in this Paragraph (h). (i) Subject to any and all limitations on the Special Limited Member's rights to act or make decisions hereunder, including subject to the revocation of such rights under Section 3.1(g) above, and notwithstanding anything in this Agreement to the contrary, the Members acknowledge and agree that the Special Limited Member shall have the sole authority to (i) subject to the provisions of Section 3.1(i)(a), pursue and consummate any refinance of the Project, and accept or decline,in its sole and absolute discretion, any offer to refinance the Project, provided that the Special Limited Member complies with any document delivery requirements set forth in Section 3.1(h)(3); (ii)pursue and complete any capital improvements to the Project, and approve or reject any planned capital improvements to the Project; (iii) operate the Project on a day-to-day basis including, without limitation, executing and enforcing any management agreement, laundry leases and any other agreements relating to the operating of the Project, subject to any and all limitations on the Special Limited Member's rights to act or make decisions under this Section 3.1; and (iv)pursue and consummate a sale of the Project, subject to the terms of the Ground Lease. (a) Notwithstanding the foregoing, Consent of the Managing Member shall be required for any refinancing of the Project,which consent shall not be unreasonably withheld, conditioned or delayed, so long as: (a) neither CCHA nor any of its Affiliates is required to serve as a guarantor, key member or key person, (b) CCHA and the Managing Member are not subject to springing member provisions, (c)the loan-to-value is not greater than ninety percent (90%), (d) the debt service coverage ratio is not less than 1.15x and (e) the refinancing documents do not impose any new material obligations on CCHA or the Managing Member. (j) Notwithstanding anything to the contrary herein, no provision in this Agreement shall be interpreted as requiring the Managing Member to undertake actions or obligations that the Special Member is required to undertake under this Agreement. 3.2. Major Decisions, Property Management, Affiliated Contracts. (a) Except as otherwise expressly set forth in this Agreement, all Major Decisions shall be made and implemented only with the Consent of the Members. Major Decisions shall mean all those matters set forth in Schedule III attached hereto. For all Major Decision, each of the Special Limited Member, the Investor Member, and the OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 14 Managing Member shall be entitled to propose the Company undertake a Major Decision by giving written notice of such proposal including reasonable details of the proposed Major Decision to the other Members. The Members shall be given twenty-one (21) days from the date of receipt of such written notice to review and grant or decline such consent. If any of the Special Limited Member,the Investor Member,and/or the Managing Member does not grant or decline such consent by the end of the twenty-one(21)day period,consent shall be deemed given by such Member. (b) It is the intent of the Members that the Project will be operated under the applicable Housing Agreements and in accordance with all other Housing Requirements (including any cure period provided therein), so long as such is in effect. The Company shall not seek to terminate the Housing Agreements or otherwise withdraw therefrom without the Consent of the Members. (c) If at any time the Property Management Agreement is with an Affiliate of the Managing Member, all decisions as to any amendment, modification, enforcement, extension, termination of, or the exercise or waiver by the Company of any rights, options or consent or approval rights (other than as to operational matters as to the Project, but subject to any approval and consent rights as to any such matters pursuant to the other provisions of this Agreement) the Company may have under the Property Management Agreement shall be made by the Special Limited Member. Furthermore, and for the avoidance of doubt, the signature of the Special Limited Member shall be sufficient in order to effectuate any of the actions described in this Paragraph (c) and the signature of the Managing Member shall not be required. The Property Management Agreement shall be the form previously approved by the Special Limited Member. (d) The Special Limited Member shall ensure that no tenant or potential tenant is discriminated against based on source of income. For the purpose of this paragraph (d), "source of income" means lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant, or paid to a housing owner or landlord on behalf of a tenant, including federal, state, or local public assistance and federal, state, or local housing subsidies, including,but not limited to, federal housing assistance vouchers under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f). The Special Limited Member shall cause any Property Management Agreement to include language requiring the Property Manager to ensure that no tenant or potential tenant is discriminated against based on source of income. (e) All decisions as to any entering into, and the form and substance of, any amendment, modification, enforcement, extension, termination of, or the exercise or waiver by the Company of any rights or options it may have under the Ground Lease shall be made exclusively by the Special Limited Member on behalf of the Company. All decisions as to entering into, and the form and substance of, any amendment,modification, enforcement, extension, termination of, or the exercise or waiver by the Company of any rights or options it may have under, any other Affiliated Contract, and all of the aforesaid decisions as to any such Affiliated Contract, shall be made by the Special Limited Member on behalf of the Company, except that the Managing Member will make all such decisions with respect to any contract with an Affiliate of the Special Limited Member. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 15 In the event of any default by the Property Manager under the Property Management Agreement or by the Special Limited Member or any Affiliate of the Special Limited Member under any other Affiliated Contract, the Special Limited Member shall promptly notify the Managing Member and shall use all reasonable efforts to cause the other party to any such Affiliated Contract to cure any such default. In addition,the Special Limited Member shall have the right to remove or replace the Property Manager(whether or not such is an Affiliate of the Managing Member and/or the Special Limited Member) if at any time there has been a default under the Property Management Agreement that has or could have a material adverse impact on the Company. The Property Manager may engage the Special Limited Member or its Affiliate to provide certain supportive services that it reasonably believes beneficial or necessary for the residents of the Project,provided that as a pre-condition to providing such services, the Company and the Special Limited Member (or its Affiliate) shall enter into an agreement governing the provision of such services (a "Supportive Services Agreement"). Any Supportive Services Agreement entered into between the Company and the Special Limited Member(or its Affiliate) shall include, without limitation, provisions setting forth (i) the scope of the services, duration and intended beneficiaries of the services to be provided, (ii)that any costs associated with providing such services shall be paid by the Special Limited Member, and (iii) that the Company shall have the right, in its reasonable discretion, to terminate the Supportive Services Agreement upon thirty (30) days' prior written notice to the Property Manager and the Special Limited Member. Upon the making of any decision by the Special Limited Member as to any Property Management Agreement or as to any Affiliated Contract,the Company shall promptly take any and all actions, and shall execute and deliver all agreements and other documents as may be necessary or appropriate to implement any such decisions. Upon request from time to time by the Managing Member, the Special Limited Member shall deliver a status report to the Managing Member on the Affiliated Contracts confirming, after appropriate investigation, whether the parties thereto are in compliance therewith, detailing any defaults thereunder, and including such other information as may be requested by the Managing Member from time to time. 3.3. Special Limited Member Right to Compel Sale. Subject to the Investor Member's written approval, which approval shall not be unreasonably withheld, conditioned or delayed, and notwithstanding any approval right of the Managing Member thereof as a Major Decision,the Special Limited Member shall have the right, but not the obligation, to require the Managing Member to sell or refinance the Project. In the event that Special Limited Member desires to sell or refinance the Project(any such sale may take the form of a sale of a majority interest in both the managing member and the other members and/or a sale of the fee interest in the land), CCHA and the Managing Member shall cooperate with the Special Limited Member in connection with such efforts. In the event that either CCHA or the Managing Member do not cooperate, the Special Limited Member shall have the right to require or compel such cooperation through all available relief and remedies that me be available at law or in equity. Nothing in this Section 3.3 shall affect, limit, or impair any purchase option or right of first refusal that either CCHA or the Managing Member may be entitled to exercise OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 16 hereunder or pursuant to the terms of the Ground Lease.Notwithstanding the foregoing,no transfer of the property shall be permitted to another governmental entity or its affiliate, other than the CCHA or any of its Affiliates, so long as the Real Estate Tax Exemption has not been lost by either inaction or action by the CCHA. 3.4. Exculpation, Indemnification. (a) No Member shall have any liability to the Company or to any other Member for any loss suffered by the Company which arises out of any action or inaction of such Member if such Member acted in good faith, in the best interests of the Company, unless such course of conduct constituted gross negligence, misfeasance, malfeasance, fraud or willful misconduct of such Member or, as to the Managing Member, was not within the scope of the Managing Member's authority or was in violation of any of the Managing Member Restrictions. (b) To the fullest extent permitted by law, the Company shall indemnify and hold each Member, and their respective equity owners, officers, directors, employees and agents harmless from and against any and all costs and expenses (including reasonable attorneys' fees and expenses), imposed upon any such Person by reason of(i) any action or omission or alleged act or omission performed or omitted to be performed on behalf of the Company, any Partner or any Affiliate of the foregoing in connection with the business or the Company or (ii) such Person being or acting in connection with the business of the Company as a partner,Affiliate,manager,director, officer or agent of the Company or that such Person is or was serving at the request of the Company as a member, manager, director, officer, or agent of any person including the Company, unless and to the extent any such loss, cost or expense was the result of the gross negligence, misfeasance, malfeasance, fraud or willful misconduct on the part of the Member or such other Person or, as to actions by the Member or Persons acting by, through, under or on behalf of the Member, was not within the scope of such Person's authority or was in violation of any of the Managing Member Restrictions. The indemnity under this Section 3.4(bl shall be provided out of and only to the extent of the assets of the Company, and no Member shall have any personal liability on account thereof. Further, the Company's indemnity obligation under this Section 3.4(b) shall be subordinate to its obligations under the Loan. (c) To the fullest extent permitted by law, the Special Limited Member shall indemnify the Managing Member and CCHA for any actual damages and/or actual liabilities in connection with or arising out of any default or material breach by the Special Limited Member or any of its or their respective Affiliates thereof under this Agreement, except for liabilities incurred as a result of the direct acts, actions, or omissions of Managing Member/CCHA and/or as a result of Managing Member or CCHA's gross negligence or willful misconduct and in no event shall such indemnification be contingent upon a ruling of a court of law. Further,the indemnity obligation under this Section 3.4(c) shall be subject and subordinate to Special Member's obligations under the Loan. 3.5. Outside Activities of Members. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 17 Any Member, and any partner, member, shareholder, equity holder, officer, director, employee, agent, trustee, or Affiliate of any Member shall be entitled to and may have and own real property and other business interests and engage in business activities in addition to those relating to the Company, including real property, developing, operating or managing residential housing, and other business interests and activities that are contiguous, adjacent to or near the Project and/or in direct competition with the Project, and/or the Company or that are directly enhanced by the Project and/or activities of the Company. Neither the Company,nor any Member nor any Affiliate of any Member nor any other Person shall have any rights by virtue of this Agreement or the Company relationship established hereby in any such or any other business ventures of any other Member, or any of their Affiliates. No Member or such other Person shall have any obligation pursuant to this Agreement to offer any interest in any such business ventures to the Company,or any Member or any such other Person,even if such opportunity is of a character which, if presented to the Company, any Member or such other Person, could be undertaken by such Person. 3.6. [Reserved]. 3.7. Removal of the Managing Member. (a) Except as provided in this Section 3.7, any change in the Member performing the duties of the Managing Member shall require the Consent of the Members. (b) If there shall occur an Event of Default as to the Managing Member that remains uncured following all applicable cure periods then, so long as any such event is continuing, the Special Limited Member may remove the Managing Member as a managing member of the Company upon written notice to the Managing Member, and subject to any requirements in the Loan Documents. In the event of any matter described above,the Special Limited Member will provide the Managing Member with written notice of its intention to replace the Managing Member together with a detailed description of the specific respects in which the Managing Member's performance has not met the relevant requirements of the immediately preceding sentence. (c) If the Managing Member is so removed as the Managing Member, the Special Limited Member shall designate a new managing member (the "Replacement Managing Member"),which may be the Special Limited Member or any other Person. In the event the Special Limited Member has the right to remove the Managing Member as a managing member (and whether or not it does so remove the Managing Member), the Special Limited Member shall have the right to cause the Managing Member or the Replacement Managing Member, as the case may be, on behalf of the Company, to terminate any Affiliated Contract, all without any penalty,fee or other cost to the Company as a result of any such termination (and each such Affiliated Contract shall in all events contain such a termination provision), and replace the contracting party to any Affiliated Contract so terminated with a third party selected by the Special Limited Member. (d) Notwithstanding any litigation or other proceeding challenging any removal of the Managing Member as a managing member, the Managing Member and the Special Limited Member hereby agree that, unless and until either otherwise agreed by them or OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 18 finally adjudicated by a court of competent jurisdiction, the Replacement Managing Member alone shall have full power and authority to act as the Managing Member under this Agreement, and that after any removal made by the Special Limited Member under this Section 3.7, the Managing Member shall have no power to act as a managing member of the Company in any respect under this Agreement or otherwise. (e) The Members agree that notwithstanding any provision of federal, state or other applicable law allowing a longer period, any proceeding challenging the removal of the Managing Member under this Section 3.7 shall be initiated within thirty (30) days after such removal occurs, the Members agreeing that if there is any challenge to the removal, the necessities of managing and operating the Company, of making decisions as to the Company, and otherwise as to the relationship of the Members would be materially and adversely affected if any challenge to removal were not promptly initiated and resolved. The Members hereby waive any longer period otherwise permitted by applicable law for the initiation of any such proceeding. (f) The Special Limited Member shall have no liability beyond actual damages incurred by the Managing Member for the improper removal of the Managing Member unless it acted in bad faith or without any reasonable basis for believing that it had a right to remove the Managing Member. (g) In the event the Managing Member is removed and is thereafter reinstated pursuant to a final unappealable court proceeding, and during the time of its removal any distribution is made under Article IV which, but for such removal,would have been made to the Managing Member,then all distributions shall be recalculated to take into account a redetermination of the appropriate distributions that should have been made as if there had been no such removal, and any Member which received greater distributions than it should have based on such re-determination shall return such over-distribution and such returned amounts shall then be distributed to the Managing Member. (h) If Managing Member is removed for any reason, including, but not limited to, any of the reasons described in Sections 9.2(a), 9.2(b), or 3.11 herein, and following such removal no affiliate of CCHA remains as a member of the Company, and if CCHA has not exercised its right to compel title to the Project into itself in accordance with the Ground Lease, then CCHA shall cooperate with the Company to promptly terminate the Ground Lease and surrender the Premises to the Company. 3.8. Fees. (a) CCHA shall be entitled to an initial lease payment in the amount of one hundred thirty two thousand five hundred dollars ($132,500)to be paid at closing. CCHA shall also be entitled to an annual lease payment in an amount equal to 10% of the ad valorem property tax savings for the Project based on the final, non-appealable resolution of any contest of the ad valorem tax values for the Project for 2024, such tax values to be increased annually by 3%, as a Ground Lease payment ("Ground Lease Fee"). Such Ground Lease Fee shall be paid from Net Cash Flow in accordance with this Agreement. The initial installment of the Ground Lease Fee shall be due and payable on or prior to the OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 19 first day of the second Lease Year(as such term is defined in the Ground Lease), but shall be refunded, along with the initial lease payment,to the Company upon a denial of the Real Estate Tax Exemption based on the initial application therefor. The Ground Lease Fee shall be due and payable for each Lease Year in advance on the first day of each applicable Lease Year in lawful currency of the United States of America, to CCHA by delivering or mailing it to CCHA's address, or such other address or in such other manner as CCHA from time to time specifics by prior written notice to the Company; provided, however, that the Ground Lease Fee shall be prorated for any partial Lease Year based on the number of days in the year that the Ground Lease is in effect. Payment of the Ground Lease Fee is subordinate to the payment of the Loan,while the Loan remains outstanding. (b) The Managing Member is entitled to receive an annual asset management fee (the"Asset Management Fee")in the amount of$10,000.00,to be increased annually by 3% and to be paid out of available Net Cash Flow in accordance with Section 4.L To the extent the Asset Management Fee is not timely paid in any one year, it shall accrue and be paid in a following year out of available Net Cash Flow in accordance with Section 4.1. The Asset Management Fee shall be paid for the year ending December 31,2024, and shall be prorated based on the number of days in the year this Agreement is in effect. (c) In the event of a sale or disposition of the Project, the Managing Member shall be paid a Disposition Fee prior to the distribution of the proceeds therefrom. (d) At closing,counsel for CCHA,Anderson, Lehrman, Barre&Maraist, LLP, shall be paid a fee of five thousand dollars ($5,000). (e) At closing, CCHA shall be reimbursed for all reasonable costs incurred by CCHA in connection with the execution of the memorandum of understanding dated September 3, 2024, by and among CCHA and TX Azure Apartments 1, LLC, a Delaware limited liability company. Such costs shall not exceed fifteen thousand dollars ($15,000). 3.9. Information and Meetings. The Special Limited Member shall keep the Members informed of all facts, information, projections, litigation, or other matters which could be expected to have a meaningful impact upon the operations or maintenance or the condition of the Project or on the economic interests of the Members. A meeting of the Members may be called by any Member. Meetings of the Members may be held in such place mutually agreed upon by the Members. Meetings may be held via teleconference or in person.A meeting agenda of all material matters to be covered in any meeting shall be provided to all Members prior to the meeting, and, promptly after such meeting, minutes of such meeting shall be prepared and circulated to all Members. The Special Limited Member shall further provide all information relating to the Company which the Members reasonably propose to be so provided. 3.10. Duties to Others. The Managing Member understands and acknowledges that the Special Limited Member may have contractual and statutory fiduciary and other duties to various direct and/or indirect members or partners in Special Limited Member, and further acknowledges and agrees that the duties, if any,which Special Limited Member has to the Managing Member and to OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 20 the Company are expressly subject and subordinate to Special Limited Member's duties to others as described above. 3.11. Event of Default as to the Managing Member. Upon the occurrence of, and during the continuance of, an Event of Default as to the Managing Member in its capacity as a Member, the Managing Member shall be a Defaulting Member, shall be removed as the Managing Member in accordance with Section 3.7 and shall also lose any authority it has to act for or any right to vote on or consent to any matters on which it may otherwise act under this Agreement or under the DLLCA (including, without limitation, all rights to participate, directly or indirectly,in the management of the business of the Company) other than where, under the DLLCA, such rights may not be waived. 3.12. Event of Default as to the Special Limited Member. Upon the occurrence of,and during the continuance of an Event of Default as to the Special Limited Member, it shall be a Defaulting Member, and any delegation of the Managing Member's rights to the Special Limited Member under Section 3.1W, 11(111 or 11W shall be revoked but the Special Limited Member shall retain all of its other rights under this Agreement, including without limitation,the right to approve Major Decisions of the Managing Member. Any revocation under this Section 3.12 be subject to the Managing Member first obtaining a release, as of the date of such revocation, of the Special Limited Member and its Affiliates, principals and direct and indirect members or owners from all liability, direct or contingent, by all holders of any Company debt, obligations or claims (including without limitation the Loan or the Loan Documents) with respect to matters arising after the date of revocation. 3.13. General Construction. It is the intent of the Members that as to all matters as to the Company and the Project (including, without limitation, all financial and reporting matters, the calculation of all amounts under Article IV and Article V. and the making of all decisions), it shall be as if the Company directly owned the Project, and all receipts, expenditures and other items as to the Company and the Project shall be commingled together for all purposes under this Agreement. 3.14 Repurchase OptionDeadlock. In the event that the Managing Member and the Special Limited Member disagree on how to proceed on any matter concerning the management or governance of the Company or any matters affecting the Company, the Special Limited Member may provide the Managing Member with written notice including reasonable details of such disagreement and thereafter the Managing Member and the Special Limited Member shall make good faith efforts to engage in discussions and attempt to determine a mutually satisfactory resolution to such matter. If the parties are unable to resolve such disagreement within the thirty (30) day period immediately following the date on which the Special Limited Member give such written notice thereof to the Managing Member, a deadlock shall be deemed to exist for the purposes of this Section 3.14 (a "Deadlock"). The Managing Member hereby agrees that, in the event of a Deadlock, the Special Limited Member is hereby granted an exclusive option (the "Deadlock Repurchase Option")to acquire any and all of the Managing Member's membership interest in the Company (the "Ownership Interest") at any time prior to such Deadlock being OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 21 resolves to the satisfaction of the Special Limited Member by delivering written notice to the Managing Member that the Special Limited Member is exercising its Deadlock Repurchase Option pursuant to this Section 3.14. The purchase price for the membership interest upon exercise of the Deadlock Repurchase Option by the Special Limited Member shall be $100.00, subject to the Managing Member being relieved of all liabilities regarding the Company and CCHA being indemnified by the Special Limited Member for any claims and liabilities caused after the transfer of the Ownership Interest. The Special Limited Member shall be responsible for obtaining all approvals and all costs and expense arising out of the purchase of CCHA's Ownership Interest. The Special Limited Member shall consummate the purchase and sale pursuant to on a date set by the Special Limited Member upon at least five (5) days prior written notice to the Managing Member, as follows: (i) the Special Limited Member shall pay to the Managing Member the purchase price by wire transfer; and (ii) the Managing Member shall assign to the Repurchaser or its nominee the Managing Member's Membership Interest, free and clear of liens and encumbrances, by an assignment in form and substance reasonably satisfactory to the Special Limited Member. ARTICLE IV Distributions 4.1. Net Cash Flow Distributions. The Special Limited Member shall cause the Company to make distributions of Net Cash Flow to the Members at the end of each calendar quarter; or on such other periodic basis as the Special Limited Member may determine. All Net Cash Flow shall be distributed and applied in the following priority within ten (10) Business Days of the end of each calendar year: (i) First,to CCHA to pay any accrued and unpaid Ground Lease Fee,provided that if in any calendar year insufficient Net Cash Flow is available to pay the Ground Lease Fee during any year, the unpaid portion of the Ground Lease Fee shall be deferred and payable from subsequent distributions of Net Cash Flow; (ii) Second, to the Managing Member to pay any accrued Asset Management Fee provided that if in any calendar year insufficient Net Cash Flow is available to pay the Asset Management Fee during any year, the unpaid portion of the Asset Management Fee shall be deferred and payable from subsequent distributions of Net Cash Flow; and (iii) Third, 100%to the Investor Member. 4.2. Distributions from Interim Capital Transactions. The Capital Transaction Proceeds from any Interim Capital Transaction shall be distributed within ten (10)Business Days after an Interim Capital Transaction 100%to the Investor Member. Notwithstanding the foregoing, upon the closing of a refinancing of the Loan, the Capital Transaction Proceeds from the refinancing of the Loan shall be distributed as follows: 4.2.1 First, to fund reserves for liabilities not then due and owing and for contingent liabilities to the extent deemed reasonable by the Special Limited Member, provided that, upon OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 22 the expiration of such period of time as the Special Limited Member shall deem advisable, the balance of such reserves remaining after payment of such contingencies shall be distributed in the manner hereinafter set forth in this Section 4.2; 4.2.2 Second, to the payment of all matured debts and liabilities of the Company (including amounts due pursuant to any loan); 4.2.3 Third, to fund and/or replenish any reserves as necessary in the Special Limited Member's reasonable discretion; 4.2.4 Fourth,to pay all expenses of the Company incident to the refinancing of the Loan; 4.2.5 Fifth, to the Managing Member to pay any accrued and unpaid Asset Management Fee from prior calendar years; 4.2.6 Sixth, to the Investor Member in proportion to its respective Preferred Capital Contributions, if any, until Investor Member has received a full return of its Preferred Capital Contribution; and 4.2.7 Seventh, 100%to the Investor Member. 4.3. Distribution Upon Dissolution. Upon dissolution, and/or upon the occurrence of a Terminating Capital Transaction, and after payment of, or adequate provision for, the debts and obligations of the Company, the remaining assets,if any, of the Company shall be sold and the proceeds of such sale and the gross proceeds from a Terminating Capital Transaction shall be distributed and applied in the following priority within ten (10) Business Days after a Terminating Capital Transaction: (i) First, to fund reserves for liabilities not then due and owing and for contingent liabilities to the extent deemed reasonable by the Special Limited Member, provided that, upon the expiration of such period of time as the Special Limited Member shall deem advisable,the balance of such reserves remaining after payment of such contingencies shall be distributed in the manner hereinafter set forth in this Section 4.3; (ii) Second, to the payment of all matured debts and liabilities of the Company (including amounts due pursuant to any loan, including the Loan); (iii) Third, to CCHA to pay an accrued and unpaid Ground Lease Fee; (iv) Fourth, to fund and/or replenish any reserves as necessary in the Special Limited Member's reasonable discretion; (v) Fifth, to pay all expenses of the Company incident to the dissolution and/or Terminating Capital Transaction; OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 23 (vi) Sixth, to the Managing Member to pay any accrued and unpaid Asset Management Fee; and (vii) Seventh, 100% to the Investor Member. 4.4. General. (a) No Member shall have the right to require any distribution of assets of the Company in kind. If any assets of the Company are to be distributed in kind, such assets shall be distributed on the basis of the fair market value thereof and any Member entitled to any interest in such assets shall receive such interest therein as a tenant-in-common with all other Members so entitled. The fair market value of such assets shall be determined by the Investor Member, acting reasonably or, if any Member so desires, such fair market value shall be determined by a disinterested independent appraiser selected by the Investor Member with the Consent of the Special Limited Member. (b) Wherever in this Article IV reference is made to distributions "to the Members" and/or "pro rata", such references shall mean distributions to such of the Members who have, and only such Members who have, balances of the type referred to, and as among the Members having such balances, in proportion to the respective balances of each such Member of the relevant and defined item, and not with regard to respective Membership Interests. 4.5. Tax Withholding. If the Company incurs a withholding tax obligation with respect to the share of income allocated to any Member, (a) any amount which is (i) actually withheld from a distribution that would otherwise have been made to such Member and (ii) paid over to the Internal Revenue Service in satisfaction of such withholding tax obligation shall be treated for all purposes under this Agreement as if such amount had been distributed to such Member,and(b) any amount which is paid over to the Internal Revenue Service or state or local taxing authority by the Company in satisfaction of such withholding obligation, but which exceeds the amount, if any, actually withheld from a distribution which would otherwise have been made to such Member, shall be treated as an interest-free advance to such Member. Amounts treated as advanced to any Member pursuant to this Section 4.5 shall be repaid by such Member to the Company within thirty (30) days after the Special Limited Member gives notice to such Member making demand therefor. Any amounts so advanced and not timely paid shall bear interest, commencing on the expiration of said thirty(30)day period, at the Lending Rate. The Company shall collect any unpaid amounts from any Company distributions that would otherwise be made to such Member. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 24 ARTICLE V Profits and Losses 5.1. Allocation of Profits and Losses from Other Than a Terminating Capital Transaction. Subject to the special allocations in Schedule IV, the following allocations shall be made: (a) Net Profits or Net Losses of the Company for each taxable year or the applicable period, for all such taxable years or applicable period commencing from and after the date of this Agreement, other than Net Profits or Net Losses arising from a Terminating Capital Transaction, shall be allocated between the Members in such manner as will reduce, proportionately, the difference between each Member's Partially Adjusted Capital Account so as to make the Partially Adjusted Capital Account of each Member equal to such Member's Target Balance, to the extent possible. In the event the amount of Net Profits or Net Losses allocable to the Members pursuant to this Section 5.1(a) is insufficient to allow the Partially Adjusted Capital Account of each Member to equal each such Member's Target Balance, the Net Profits or Net Losses allocable pursuant to this Section 5.1(a) shall be allocated between the Members first so as to achieve a proportion in the respective differences between (y) each Member's Target Balance and (z) such Member's Partially Adjusted Capital Account balance immediately prior to the allocation of Net Profits or Net Losses pursuant to this Section 5.1(a) which is the same as the proportion of their Percentage Interests, and then in proportion to the remaining respective differences. No Net Profits for any applicable period shall be allocated to a Member whose Target Balance is less than or equal to its Partially Adjusted Capital Account for such period,nor shall any Net Losses be allocated to a Member whose Target Balance is greater than or equal to its Partially Adjusted Capital Account for such period. (b) At no time shall any allocation of Net Losses or of any item of loss or deduction be made if and to the extent such allocation would cause any Member to have a deficit in, or would increase the deficit in, the Adjusted Capital Account of such Member at the end of any taxable year if and to the extent any other Member has a positive Adjusted Capital Account. Any Net Losses or any item of loss or deduction not allocated to a Member pursuant to this Section 5.1(b) shall be allocated pro-rata among the other Members; provided, however, that no such other Member shall be allocated Net Losses or items of loss or deduction pursuant to this sentence in an amount that would cause a violation of the immediately preceding sentence. 5.2. Allocation of Profits and Losses from a Terminating Capital Transaction. Subject to the special allocations in Schedule IV,the following allocations shall be made: (a) Net Profits or Net Losses recognized in connection with a Terminating Capital Transaction shall be allocated (and credited or borne, as the case may be) as follows: (i) Net Profits from a Terminating Capital Transaction shall be allocated as follows: OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 25 First, after all special allocations are made,to eliminate the negative balance in any Member's Capital Account, initially by establishing the same ratio among the negative balances of the Members' Capital Accounts as the ratio among their respective Percentage Interests and thereafter allocated in accordance with the respective Percentage Interests of the Members until the negative balances in the Capital Accounts of each Member has been eliminated; Second, the amount of Net Profits remaining from a Terminating Capital Transaction after the allocation under Clause First above shall be added to the aggregate positive balances of all the Members, if any, with positive Capital Accounts (as determined prior to any distribution of cash or other assets as part of the Terminating Capital Transaction,and without reduction for the negative Capital Accounts of any Members), and such sum shall be treated as if it were the hypothetical amount of net proceeds to be distributed pursuant to Section 4.3. Net Profits shall then be allocated to each Member so as to make the positive balance in each Member's Capital Account equal to the aggregate amounts that would be distributed to each such Member pursuant to Section 4.3 if the aforesaid hypothetical sum were the amount to be distributed pursuant to said Section 4.3. (ii) Net Losses from a Terminating Capital Transaction shall be allocated as follows: First, there shall be allocated to each of the Members such amount of Net Losses as is necessary to make the Capital Account of each Member equal to the amounts that would be distributed to each such Member pursuant to Section 4.3 if the net proceeds, if any, of such Terminating Capital Transaction were to be distributed pursuant to said Section 4.3. Second, if such Net Losses exceed the aggregate positive balances in the Capital Accounts of the Members immediately prior to the allocation of Net Losses under this clause (ii), then any Net Losses remaining after the allocation under Clause First of this clause (ii) shall be allocated to any such Member, or if more than one, between the Members in the proportion that their respective Percentage Interests bear to each other. (b) The allocation of Net Profits or Net Losses arising from Terminating Capital Transaction shall be made prior to adjusting the Capital Account balances of the Members to reflect the distribution of the proceeds from such sale or other disposition or liquidation but after adjusting each Member's Capital Account for all distributions made or to be made for all periods ending immediately prior to the Terminating Capital Transaction event and for all allocations to be made pursuant to Schedule IV, including those to be made in connection with the Terminating Capital Transaction. (c) In the event all Net Profits or Net Losses from a Terminating Capital Transaction are not recognized for any reason at the time of the occurrence of a Terminating Capital Transaction and the recognition of such Net Profits or Net Losses is deferred, calculations of the allocations of Net Profits pursuant to Section 5.2(a)(i) or Net OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 26 Losses pursuant to Section 5.2(a)(ii) shall be first made as if all such Net Profits or Net Losses were recognized without deferral, and any deferred Net Profits or Net Losses which are to be recognized later shall be allocated among the Members in the same proportion as the proceeds of such Terminating Capital Transaction which are to be received by the Company at such later date would be distributed to each Member, and the amount of Net Profits or Net Losses to be recognized in a later Fiscal Year by each Member shall be deducted from the amount of Net Profits or Net Losses to be allocated pursuant to the earlier provisions of this paragraph in determining the aggregate Net Profits or Net Losses to be allocated to each Member for the Fiscal Year in which the Terminating Capital Transaction occurs. ARTICLE VI Fiscal Matters 6.1. Books and Records. In addition to any documents and information required to be furnished to the Members under the DLLCA,the Special Limited Member shall maintain, or cause to be maintained, for the Company, in a manner customary and consistent with the accrual accounting method, practices and procedures, a comprehensive system of office records, books and accounts in which shall be entered, as applicable, the financial transactions of each of the Company. All of the aforesaid records,books, accounts, documents and other information shall be and remain the property of the Company. Such books and records of account shall be prepared and maintained by the Special Limited Member at the principal place of business of the Company, or such other place or places as may from time to time be determined by the Managing Member with the Consent of the Special Limited Member. Each Member or its duly authorized representative shall have the right to inspect, examine and copy any and all such books and records of account at the applicable office during reasonable business hours. 6.2. Bank Accounts. (a) Unless otherwise required under the Loan Documents,the bank accounts of the Company shall be maintained in commercial banks or trust companies organized and existing under the laws of the United States of America or of any State which is one of the 100 largest banks in the United States and whose deposits are insured by the Federal Deposit Insurance Corporation, as selected by the Special Limited Member, and withdrawals shall be made only in the regular course of business on such signature or signatures as shall be determined by the Special Limited Member. Upon the reasonable request of the Investor Member, the Special Limited Member shall change the depository institution in which the bank accounts of the Company are maintained. (b) The Company shall from time to time invest funds not required for the operation of the Project or the maintenance of the existence of the Company in (i) marketable direct obligations of the United States of America or any of its agencies, (ii) marketable obligations fully guaranteed by the United States of America or any of its agencies, (iii)time certificates of deposit issued by commercial banks and fully insured by the Federal Deposit Insurance Corporation, (iv) so-called "repos", and (v) in such other OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 27 instruments as the Special Limited Member may from time to time determine is appropriate. (c) The funds of the Company shall not be commingled with the funds of any other Person, and neither the Special Limited Member nor any other Member, shall use, or permit any other Persons to use, such funds in any manner except for the benefit of the Company. 6.3. Accounting and Fiscal Year. The books of the Company shall be kept on the accrual basis in accordance with the accrual accounting method,and the Company shall report its operations for federal, state,and local income tax purposes on the accrual method. The fiscal year of the Company shall end on December 31 of each year(the "Fiscal Year"), and the taxable year of the Company shall end on December 31 of each year unless a different taxable year shall be required by the Code. Any change in any of the above provisions of this Section 6.3 shall require the Consent of the Special Limited Member. 6.4. Tax Filings, Partnership Representative. (a) The Special Limited Member shall cause to be prepared and timely filed all federal, state and local tax returns of the Company (the "Returns") for each taxable year for which such Returns are required to be filed, but in all events the Special Limited Member shall provide to the Members copies of all of the aforesaid, for review and comment by the Members, by no later than March 31st, with K-1's and comparable information for any federal, state and local income tax requirements that the Company is required to provide to the Managing Member. No such returns shall be filed until the Investor Member has either commented thereon or approved any such return. The Special Limited Member shall determine, the accounting methods and conventions to be used in the preparation of the Returns and whether to make any applicable election, claim any available credit or adopt any other method or procedure relating to the preparation of the Returns. (b) Intentionally omitted. (c) The Special Limited Member shall be the partnership representative of the Company as defined under Section 6223 of the Code (the"Partnership Representative") and shall represent the Company in any disputes, controversies or proceedings with the Internal Revenue Service or with any state, local, or non-U.S. taxing authority. The Partnership Representative shall keep the Members apprised of the status of any tax audit or any other notices or other materials received by it. The Partnership Representative shall not bind the Company or the Members to a closing, compromise or settlement agreement, or extend the statute of limitations for any federal, state, local, or foreign tax purposes, without Consent of Members, if such action would have an adverse impact on the Members. The Partnership Representative shall not have any right to settle, extend the statute of limitations, make election under Sections 6221(b), 6225(c)(2), or Section 6226 of the Code without the Consent of Members,if such action would have an adverse impact on the Members. The Members agree to cooperate in good faith to timely provide OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 28 information reasonably requested by the Partnership Representative. To the extent that the Company is assessed amounts under Section 6221(a) of the Code, the current or former Member(s)to which this assessment relates shall pay to the Company,as may be applicable such Member's share of the assessed amounts, including such Member's share of any additional accrued interest assessed against the Company relating to such Member's share of the assessment, upon thirty (30) days of written notice from the Partnership Representative requesting the payment. For purposes of the preceding sentence, each Member's share of the imputed underpayment(and associated penalties and interest) shall be determined by taking into account (i) such Member's share of the Net Profits, Net Losses, and credits to which such adjustment and imputed underpayment relate, as determined by the Company's Accountants, (ii) such Member's obligation, if any, to indemnify, defend, or hold harmless the Company or any other Member for such imputed underpayment (and any associated penalties and interest) under this Agreement, and (iii) any taxes or other amounts paid by such Member which result in a modification of an imputed underpayment of the Company under Section 6225(c) of the Code. At the discretion of the Partnership Representative, the Company shall make an election under Section 6226(a) of the Code, and the Members shall reasonably cooperate and provide the Company with any information necessary for this purpose, including but not limited to making any payments required under Section 6226(b) of the Code. At the election of the Investor Member, the Investor Member may replace the Partnership Representative, and the Company shall file and take any action necessary to effectuate this election. (d) At the request of the Special Limited Member, on the (first)federal income tax return of the Company for the taxable period that commences on the date of this Agreement, the Managing Member shall elect to adjust the basis of the Company's Property for federal income tax purposes in accordance with Code Section 754. Each Member agrees to provide, and to require any transferee to provide, information as is necessary to comply with any basis adjustment under Section 734 or 743 of the Code. ARTICLE VII Budgets, Reports 7.1. Budgets. (a) The Special Limited Member, Managing Member, and Investor Member have agreed upon an Approved Budget for the first twelve (12) months following the date of this Agreement. On or before December 1st of each Fiscal Year, the Special Limited Member shall send to the Members (i) an annual capital budget (an "Annual Capital Budget") for the following Fiscal Year, setting forth estimates, reasonably itemized, of all capital expenditures and receipts from Capital Transactions of the Company relating to the Project, and any other activities of the Company, and (ii) an annual operating budget (an "Annual Operating Budget") for such Fiscal Year setting forth estimates, reasonably itemized, of all income and expenses of the Company for such Fiscal Year,and establishing reserves and working capital for the Company. The Annual Operating Budget and/or the leasing plan shall include occupancy projections. If Managing Member does not approve any of the above budgets and plans submitted to it by the Special Limited Member, the Managing Member shall specify its objections in writing by December 31, and any portion OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 29 of the proposed budget and plans not so specified as objected to shall be deemed approved and, as to such approved items, shall be an Approved Budget. All of the above, as, when and to the extent approved by the Members is herein referred to as the "Approved Budget". (b) Unless and until such budgets and plans for each Fiscal Year commencing after the initial Approved Budget are approved, the Special Limited Member may cause the Company only to expend amounts which are for the payment of normal and customary operating expenses of the Company and in amounts for each such operating expense separately which are within the amounts set forth therefore in the Approved Budget for the immediately preceding Fiscal Year, but as to all other expenditures of the Company, the Special Limited Member shall be authorized to cause the Company to incur obligations only up to an amount equal to the amount set forth in the prior Fiscal Year's Approved Budget for any operating expenses, but not for any capital expenditures, as if such prior year's Approved Budget amount for any such operating expenses were the then current year's Approved Budget, unless and until an Approved Budget is adopted pursuant to the preceding provisions of this Article VII. In the aforesaid circumstances, the Special Limited Member shall not make any capital expenditures other than as required pursuant to any agreement with a third party for capital expenditures which were previously approved as Major Decisions. Notwithstanding anything to the contrary contained in this paragraph, the Special Limited Member shall be entitled to make expenditures incurred as a result of an emergency posing imminent danger to persons or property or an emergency requiring an immediate response under applicable law (and in the event of any such emergency expenditure,the Special Limited Member shall reasonably promptly notify the Managing Member and the Investor Member of the same) regardless of whether the same is provided for in the Approved Budget. 7.2. Annual Reports. (a) The Special Limited Member shall provide to each Member with a copy of any annual financial report that is provided to the Company's lenders. (b) In addition to the above, as part of the annual statements provided by the Special Limited Member pursuant to the above,the Special Limited Member shall provide a report to each Member as to compliance with the requirements of the Housing Requirements or, if applicable, Section 3.2(b), to the extent such information is obtainable in compliance with applicable law. 7.3. Other Reports. The Special Limited Member shall provide each Member with a copy of any periodic financial or operating report that is provided to the Company's lenders or is otherwise reasonably requested by the Investor Member. In addition to all of the above,the Managing Member and/or Special Limited Member shall also provide to each Member copies of all reports and all other material information that the Housing Agreements, the Housing Requirements, the Loan Documents or which otherwise relate OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 30 to the status of the Project, which are provided to any lender, any party to or beneficiary of the Housing Agreements or any of the other Housing Requirements, or to any other third party. 7.4. General Requirements. The Special Limited Member will provide all necessary certifications as required by the Accountants with respect to the Financial Statements of the Company. The Special Limited Member shall report such financial information and provide such reasonable certifications as the Investor Member may request so as to provide such information as to the Company, as back up information, so as to enable the Investor Member, as well as its respective members, officers and directors, as applicable, to provide such certifications as may be required by the independent certified public accountants of the Investor Member and/or its Special Limited Member. The Investor Member shall have the right to have the Company obtain any reports or information which, as applicable, the Company has the right to request be provided by any of the service providers under the Property Management Agreement or under any other agreement to which the Company is a parry,such right to be exercised at any time by written notice to the Special Limited Member, and upon receipt of any such request, the Special Limited Member shall take reasonably promptly all actions necessary so as to have such requested reports or information provided to the Company and then to all the Members. So long as the Company and the Project are subject to the Real Estate Tax Exemption, the Company shall promptly provide the Nueces Central Appraisal District with all records or documents reasonably requested. ARTICLE VIII Transfers 8.1. Restrictions on Transfer of Membership Interests. (a) Except as provided in Section 8.1(d) and Section 8.2, no Member may Transfer all or any part of its Membership Interest or otherwise Withdraw from the Company without the Consent of the Members. (b) Notwithstanding anything to the contrary in this Agreement, except as otherwise provided in Section 8.4, substitute Members (including assignees of existing Members)may be admitted only with the Consent of the Members. (c) There shall be no Transfer of Managing Member's Membership Interest or any direct or indirect ownership interest in Managing Member to an entity which is not a wholly owned Affiliate of Managing Member without the Consent of the Special Limited Member,which consent may be withheld in the Special Limited Member's sole discretion. The Managing Member may Transfer its Membership Interest and/or any direct or indirect ownership interest in Managing Member to another wholly owned Affiliate without the consent of any other Member,provided,however,that such Transfer will be contingent on confirmation that the Real Estate Tax Exemption will continue to be in effect following the Transfer. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 31 (d) Nothing in this Agreement, including without limitation, the phrase "Transfer", shall prohibit in any way any Transfers of any direct or indirect ownership interests in the Investor Member,the Investor Member's members or any other Transfer of any direct or indirect equity interests in or by the Investor Member or the Special Limited Member, including, without limitation, any Transfer of ownership interests in the Investor Member or the Special Limited Member between existing members, managers, partners, shareholders or owners thereof. Notwithstanding the foregoing, no transferee under this clause (d) shall be to any Blocked Person. For the avoidance of doubt, no Transfer under this clause (d) shall be subject to the consent of the Managing Member provided the requirements of this clause (d) are satisfied and no Transfer under this clause (d) shall be subject to the terms of the Ground Lease. 8.2. Restrictions Applicable to the Investor Member and the Special Limited Member. The Investor Member and the Special Limited Member shall each have the perpetual right to market its Membership Interest in the Company, subject to the terms of the Ground Lease, provided, however, that neither the Investor Member nor the Special Limited Member may Transfer any part of its Membership Interest to any Blocked Person. If the Investor Member and/or the Special Limited Member identifies a third party purchaser for its Membership Interest and CCHA does not exercise its rights under the terms of the Ground Lease,the Consent of the Managing Member shall be required for the Investor Member and/or the Special Limited Member to Transfer its Membership Interest to the third party purchaser,which consent shall not be unreasonably withheld, conditioned or delayed. For the avoidance of doubt, nothing in this Agreement or in any other agreement to which the Company, the Managing Member or any of its or their Affiliates are a party (including, without limitation, the Ground Lease), shall prohibit or restrict the ability of any member of the Investor Member from conveying its direct or indirect ownership interests in the Company (including, without limitation, its respective membership interests in the Investor Member) to an entity under common control with such member without the Consent of the Managing Member. 8.3. General Restrictions on All Transfers. (a) Every Transfer by a Member of a Membership Interest permitted by Section 8.1 a with the Consent of the Members or Section 8.2, shall nevertheless be subject to the following: (i) No Transfer of any Membership Interest may be made if such Transfer would cause or result in a breach of any agreement binding upon the Company or the Project or of then applicable rules and regulations of any governmental authority having jurisdiction over such Transfer. Any Transfer must be made in accordance with the requirements of the Loan Documents. (ii) Any non-transferring Member may require as a condition of Transfer of any Membership Interest that (x) the transferor and/or transferee assume all costs incurred by the Company and any Member in connection therewith, including, without limitation, any sales tax, real estate transfer tax or other taxes (excluding OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 32 income taxes) that arise as a result of such Transfer, and (y) the Company be furnished with an opinion of counsel,reasonably satisfactory to the Company,both as to counsel and opinion, that the proposed Transfer complies with all applicable federal and state securities laws; (iii) No Member shall have the right to Transfer its Membership Interest if, by reason of such Transfer, the classification of the Company as a partnership for federal income tax purposes would be adversely affected or jeopardized; and (iv) In the event of a Transfer of a Membership Interest (x) there shall be filed with the Company a duly executed and acknowledged counterpart of the instrument effecting such Transfer or conversion, together with any and all necessary certificates or other documents required in accordance with the laws of the States of Texas and Delaware and any other states in which the Company is then doing business, (y) the transferee shall enter into a valid and binding agreement with the Company and each of its Members the effect of which will be that the Membership Interest so Transferred shall continue to remain subject to the provisions of this Agreement with the same force and effect as if such transferee had originally been a party hereto as to the Membership Interest so Transferred, and(z) each transferee shall execute such additional certificates and other instruments as may be reasonably required by the non-transferring Members. The Company need not recognize any Transfer for any purpose unless and until the foregoing provisions of this clause (iv)have been fully satisfied. (b) Each transferee, whether or not it becomes a substituted Member, shall by its acceptance of an assignment to it of a Membership Interest, be deemed to be bound by all of the terms and conditions of this Agreement,including,without limitation,this Article VIII, and to have assumed its proportionate share of the obligations of the Member which is making such Transfer, provided further that no such Transfer shall release the transferor Member from its liabilities and obligations as to the Membership Interest so Transferred, which have accrued prior to the date of such Transfer. (c) Upon the admission or Withdrawal of a Member (whether by reason of a Transfer or otherwise, this Agreement (including without limitation Schedule I hereto)) and the Certificate, to the extent required under the DLLCA, shall be amended appropriately to reflect the then existing names and addresses of the Members and their respective Percentage Interests in the Company. (d) Any Transfer in contravention of any of the provisions of this Agreement shall be null and void and ineffective to Transfer any Membership Interest, and shall not bind, or be recognized by, or on the books of, the Company. (e) A Member seeking to Transfer all or any part of its Membership Interest shall pay all of the Company's legal and other expenses reasonably incurred in connection with affecting the Transfer of the transferor's Membership Interest. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 33 (f) Any Member who shall Transfer all of its Membership Interest in the Company shall cease to be a Member of the Company, and shall no longer have any rights or privileges of a Member;provided, however, that, unless and until the transferee of such Member is admitted to the Company as a substituted Member in accordance with Section 8.4, such transferor Member shall retain the statutory obligations of an assignor or Member under the DLLCA. (g) Any Membership Interest of the Managing Member that is Transferred shall remain subject to the provisions of Article IX applicable to the Managing Member with respect to such Membership Interest. Any Membership Interest of the Investor Member that is Transferred shall remain subject to the provisions of Article IX applicable to the Investor Member with respect to such Membership Interest. 8.4. Substitute Members. Except as to Transfers described in Section 8.2 (a transferee under said provision being entitled to be admitted as a substitute Member), or a Transfer made with the Consent of the Members pursuant to Section 8.l(a),no transferee (by conveyance, operation of law or otherwise) of the whole or any portion of any Membership Interest shall have the right to become a substitute Member, as that term is defined in the DLLCA,unless and until each other Member has given its consent thereto. An assignee of a Member's Membership Interest shall be entitled only to the rights conferred by the DLLCA on a transferee who does not become a substitute or additional Member, and in any event, such assignee shall not have the right(i)to act on any matters on which a Member may act under this Agreement, or(ii) otherwise to participate in the management of the business of, or as to any other matters as to, the Company unless, and to the extent, required by the DLLCA notwithstanding this provision. ARTICLE IX Purchase and Sale Rights Between Members 9.1. Intentionally omitted. 9.2. Purchase of the Managing Member's Interest Upon Default. (a) Subject to all applicable rights to cure, if (i) CCHA or the Managing Member takes any action or omits to take an action within its sole and exclusive control and such action or inaction results in an event of default under any of the Project Documents,Project obligations,or this Agreement; or(ii)CCHA or the Managing Member takes any action or omits to take an action within its sole and exclusive control and such action or inaction causes the Special Limited Member,the Company,the Investor Member or any guarantors to incur any quantifiable liability which such party actually pays ((i) and (ii) are referred to as "Repurchase Events") then the Special Limited Member, the Investor Member, each of the guarantors, and their respective successors and assigns or designees, shall have the sole and exclusive option, with the consent of the Investor Member, to purchase from CCHA its ownership interest in the Managing Member or from the Managing Member its managing member interest in the Company for the sum of one hundred dollars ($100.00) plus all unpaid fees and unreimbursed expenses earned by OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 34 CCHA and the Managing Member to the date of the Repurchase Event under (i) and (ii) above, which shall be exercisable by any such party upon fifteen (15) Business Days written notice to CCHA and the Managing Member (the "Default Repurchase Option"). It shall not be a Repurchase Event and this Default Repurchase Option will not apply if the event of default or the cause of guarantor's liability or the repayment of the debt or equity is caused in whole or part by a matter or item over which guarantors or an affiliate has full control or is otherwise responsible for. For purposes of this paragraph, the term "caused" shall only include matters within the full or partial control of the applicable Person. In the event that the Default Repurchase Option is exercised,the fee estate shall be transferred to the Company for a nominal cost. (b) If the Real Estate Tax Exemption is lost for any reason other than (i) the action or inaction of the Special Limited Member or the Investment Member or (ii) a legislative change or adverse court ruling related to the Real Estate Tax Exemption, the Managing Member or an affiliate of the Managing Member will have a period of one (1) year after the date on which it received notice of the loss of the Real Estate Tax Exemption (the "Exemption Correction Period") to correct the loss or disqualification of the Real Estate Tax Exemption. CCHA and the Managing Member will at all times act in good faith to preserve,maintain, and/or reinstate the Real Estate Tax Exemption. If within such Exemption Correction Period, the Real Estate Tax Exemption is reinstated or restored, the Managing Member will not forfeit its interest in the Company and the Property will remain deeded to the CCHA. If within such Exemption Correction Period, the Real Estate Tax Exemption is not reinstated or restored,the fee estate in the Real Property shall (at Special Member's option) be conveyed to the Company for one hundred dollars ($100.00), the Ground Lease shall be terminated to allow the Company to establish an exempt structure in the future,and the Special Limited Member shall have the right to purchase from CCHA, CCHA's ownership interest in Company for the sum of one hundred dollars($100.00)plus all unpaid fees and unreimbursed expenses earned by CCHA, and such purchase conveyance and purchase shall constitute a Repurchase Event and an exercise of the Default Repurchase Option, as applicable, for all purposes herein. In the event the Managing Member is replaced pursuant to the foregoing, the CCHA (or the Managing Member, as applicable) shall forfeit its right to receive (i) any future fees it would have otherwise been entitled to receive pursuant to this Agreement, the Ground Lease or any other project document and (ii) any cash flow, residual value, and/or proceeds from the Company or the Project. If no replacement can be identified, the property taxes owed annually on the Project shall be a Company expense paid out of net cash flow and the CCHA (or the Managing Member, as applicable) shall forfeit its right to receive (i) any future fees it is entitled to pursuant to this Agreement, the Ground Lease or any other Project Document, and (ii) any cash flow, residual value, and/or proceeds from the Company or the Project. Notwithstanding the foregoing, in the event that the Real Estate Tax Exemption is lost,but reinstatement of the Real Estate Tax Exemption is reasonably anticipated after the Exemption Correction Period,so long as the CCHA continues to pursue such reinstatement diligently and in good faith and for so long as the reinstatement of the Real Estate Tax Exemption can continue to be reasonably anticipated, the CCHA shall be afforded such additional extensions as may be necessary to accomplish the reinstatement of the Real OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 35 Estate Tax Exemption, subject to the Consent of the Special Limited Member, which consent shall not be unreasonably withheld,conditioned,or delayed.Any advance payment of the Ground Lease Fee in a year in which the Real Estate Tax Exemption is lost and ad valorem property taxes are payable by the Company shall be repaid to the Company prorated to the date of loss of the Real Estate Tax Exemption. (c) Closing Procedures. (d) The Repurchaser shall consummate the purchase and sale pursuant to Section 9.2 on a date set by the Repurchaser upon at least five (5) days prior written notice to the Managing Member,such date to be no later than the time provided for in Section 9.2, in the following manner: (i) The Repurchaser shall pay to the Managing Member the purchase price as described in Section 9.2 by wire transfer; and (ii) The Managing Member shall assign to the Repurchaser or its nominee the Managing Member's Membership Interest, free and clear of liens and encumbrances, by an assignment in form and substance reasonably satisfactory to the Repurchaser. Notwithstanding anything in this Article IX to the contrary, after taking into account all adjustments,prorations and any other items to be included in the calculation of the purchase price for the Managing Member's Membership Interest under Section 9.2,the net amount to be paid to the Managing Member shall not be less than zero dollars ($0.00), and in no event shall the Managing Member be required to make any payment to the Repurchaser in a transaction governed by this Article IX. (e) After the procedures of Section 9.2 are commenced, no Member may Transfer its Membership Interest or any part thereof or take any other actions which would impair the rights of the Investor Member under Article III or under this Article IX. (f) The Investor Member shall have the right, without needing to obtain the consent or approval of any other Member, to assign all or any part of its rights under this Article IX to purchase the Managing Member's Membership Interest to a designee(s) (provided the designee(s) shall assume the Investor Member's obligations under this Article IX). No such assignment shall relieve the Investor Member of liability in connection with the purchase of the Managing Member's Membership Interest as herein contemplated. (g) As a condition to the sale of its Membership Interest pursuant to this Article IX,the Managing Member shall obtain such consents as may be required from third parties, if any, or waivers thereof. If there is any outstanding guarantee, letter of credit or other collateral security provided by the Managing Member on behalf of the Company which cannot be released without unreasonable loss or cost to the Company, then the Investor Member (and, if appropriate, its principals) shall provide an appropriate indemnification agreement and reasonable security to the Managing Member. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 36 (h) Each Member shall pay its own legal fees, except that the Company shall pay the reasonable, actual outside counsel legal fees of the Managing Member. Recording, transfer or similar taxes arising in connection with the sale of the Membership Interests shall be paid by the Special Limited Member. All other costs involved in the transaction shall be prorated between the Investor Member and the Special Limited Member in the same manner as such costs would be shared or paid as between a buyer and a seller of real estate in the locality where the Project is located, and if such costs would not ordinarily be part of such a purchase and sale,then such costs shall be shared equally. (i) The time periods applicable to the sale of the Membership Interest of the Managing Member pursuant to this Article IX shall be automatically extended to the extent necessary for the procurement of any material and necessary lender, applicable CCHA, regulatory and other third-party approvals to the transaction,but not more than one hundred and eighty (180) days, subject to the rights of the Investor Member to extend such closing time for an additional ninety (90) days if any existing lender, applicable CCHA,regulatory or other required third-party approvals have not been obtained within the aforesaid time periods.The Managing Member agrees to cooperate with the Investor Member in obtaining any such required approvals, subject to reimbursement by the Investor Member for any reasonable third party out-of-pocket costs incurred by the Managing Member which have been approved by the Investor Member, acting reasonably, including, without limitation, any approvals any applicable to CCHA, and shall provide such information, and shall execute any documents or other instruments, which may reasonably be required in connection with any of the above. 0) In the event of the failure of the Managing Member to sell its Membership Interest as required under any of this Article IX, the Investor Member shall have all rights against the Managing Member at law or in equity, and the Members consent to the granting of equitable relief, including specific performance. ARTICLE X Dissolution and Termination of the Company 10.1. Events Causing Dissolution. The Company shall be dissolved and its affairs wound up upon: (a) The sale or other disposition of all or substantially all of the assets of the Company, provided, however, that if such assets are sold on the installment basis, the Special Limited Member,with the Consent of the Managing Member,shall have the option of delaying distribution until the proceeds relating to such sale have been paid in full or the Special Limited Member reasonably determines that no further payments will be received or are legally obtainable; (b) The election to dissolve the Company, made by the Special Limited Member with the Consent of the Managing Member; or (c) The dissolution of the Company pursuant to a judicial order therefore under the DLLCA. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 37 (d) Notwithstanding any other provision of this Agreement, the bankruptcy of a Member shall not cause such Member to cease to be a member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution. 10.2. Procedures on Dissolution. (a) Dissolution of the Company shall be effective on the day on which the event occurs giving rise to the dissolution, unless the Company is reconstituted or continued as otherwise provided in this Agreement, but the Company shall not terminate until the Company's Certificate shall have been canceled. Notwithstanding the dissolution of the Company, prior to the termination of the Company, as aforesaid, the business and the affairs of the Company shall, except as provided below in this Section 10.2, be conducted so as to maintain the continuous operation of the Company pursuant to the terms of this Agreement. Upon dissolution of the Company, the Special Limited Member, or a liquidator selected by the Special Limited Member, shall liquidate the assets of the Company, apply and distribute the proceeds thereof as otherwise provided for in this Agreement, and cause the cancellation of the Company's Certificate and any other certificate or registration in any jurisdiction where the Company has qualified or registered to do business. (b) A reasonable time shall be allowed for the winding up of the affairs of the Company in order to minimize any losses otherwise attendant upon such a winding up, provided that the liquidator(s) shall use their best efforts to carry out the liquidation in conformity with the timing requirements of Treasury Regulations Section 1.704- 1(b)(2)(ii)(g). (c) If any assets of the Company are to be distributed in kind, such property shall be transferred and conveyed to the Members or their assignees so as to vest in each of them as a tenant-in-common an undivided interest in the whole of said property equal to the amount each Member would have received had there been a distribution of proceeds of a Terminating Capital Transaction made in accordance with Section 4.3, based upon a fair market value determination of the assets so to be distributed as determined by the liquidator. 10.3. Disposition of Documents and Records. All documents and records of the Company, including all financial records, tax returns, vouchers, canceled checks and bank statements shall be delivered to the Special Limited Member upon termination of the Company. The Special Limited Member shall retain such documents and records for a period of not less than seven (7) years and shall make such documents and records available during normal business hours to the Managing Member for inspection and copying. ARTICLE XI General Provisions 11.1. Notices, Calculation of Dam OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 38 (a) Any and all notices, consents, demands, requests, approvals, proposals, offers, elections and other communications required or permitted under this Agreement shall be adequately given only if in writing and sent to such Member's address set forth in Schedule I and either: (i)personally delivered, (ii) sent prepaid by a recognized national overnight courier service; or(iii) sent by electronic mail with an electronic delivery receipt requested; and in the event of sending under clause (iii) hereof the simultaneous sending thereof by one of the previous two methods. Such notice or other communication shall be deemed received upon the earlier of (x) if personally delivered, the date of delivery or tender for delivery during regular business hours on a Business Day where received by or tendered for receipt to a Person apparently authorized to receive mail and/or packages, (y) if sent via courier service, on the day delivered or tendered for receipt by such service, or (z)if transmitted by electronic mail, on the day when received at the receiving transcribing device,unless the receipt thereof is sooner acknowledged on a Business Day during normal business hours, in which event the time of acknowledgment shall be the time when notice has been given. (b) By giving to the other Members at least ten (10) days' prior notice thereof, a Member shall have the right from time to time and at any time during the term of this Agreement to change its address to any other address within the United States of America. (c) In computing any period of time under this Agreement, the day of the act, event or default from which the designated period of time begins to run shall not be included. If the last day of the period so designated is not a Business Day,the period shall run until the end of the next Business Day, whether or not Business Days are otherwise referred to. 11.2. Word Meanings. The words such as "herein," "hereinafter," "hereof," and "hereunder" refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. The singular shall include the plural and the masculine gender shall include the feminine and neuter,and vice versa,unless the context otherwise requires. References to a paragraph shall only be to the grammatical paragraph referred to unless there is a specific paragraph and/or Section designated. The use herein of the word"including,"when following any general statement,term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters,whether or not nonlimiting language(such as"without limitation,"or"but not limited to," or words of similar import)is used with reference thereto,but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter. 11.3. Binding Provisions. The covenants and agreements contained herein shall be binding upon, and shall inure to the benefit of, the parties hereto and, their respective permitted successors and assigns. Each and every successor to any Member, whether such successor acquires such Membership Interest by OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 39 way of gift, purchase, foreclosure or by any other method, shall hold such Membership Interest subject to all of the terms and provisions of this Agreement. 11.4. Applicable Law, Venue, No Jury Trial. This Agreement shall be construed and enforced in accordance with the DLLCA as interpreted by the courts of the State of Texas,notwithstanding any rules regarding choice of law to the contrary. The rights and liabilities of the Members in the Company and as between them as to the Company shall be determined pursuant to the DLLCA and this Agreement. To the extent the rights or obligations of any Member are different by reason of any provision of this Agreement than they would otherwise be under the DLLCA in the absence of any such provision, or even if this Agreement is inconsistent with the DLLCA,this Agreement shall control, except to the extent the DLLCA prohibits any particular provision of the DLLCA to be waived or modified by the Members, in which event any contrary provisions hereof shall be valid to the extent permitted under the DLLCA. Notwithstanding the foregoing, subject to Section 11.14(c) below, any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with this Agreement, or the transactions contemplated hereby or thereby shall be brought in any federal or state court in Nueces County, Texas and each Member hereby consents to the exclusive jurisdiction such federal or state courts in Nueces County, Texas (and of the appropriate appellate courts therefrom) in any suit, action or proceeding, and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any court. Without limiting the foregoing, each party agrees that service of process on such party by written notice pursuant to Section 11.1 will be deemed effective service of process on such party. EVERY PARTY TO THIS AGREEMENT AND ANY OTHER PERSON WHO BECOMES A MEMBER OR HAS RIGHTS AS AN ASSIGNEE OF ANY PORTION OF ANY MEMBER'S MEMBERSHIP INTEREST HEREBY WAIVES ANY RIGHT TO A JURY TRIAL AS TO ANY MATTER UNDER THIS AGREEMENT OR IN ANY OTHER WAY RELATING TO THE COMPANY OR THE RELATIONS UNDER THIS AGREEMENT OR OTHERWISE AS TO THE COMPANY AS BETWEEN OR AMONG ANY SAID PERSONS. 11.5. Counterparts; Electronic Copy. This Agreement may be executed in several counterparts and all so executed shall constitute one agreement binding on all parties hereto, notwithstanding that all of the parties have not signed the original or the same counterpart. An electronic copy of a signed version of this Agreement shall have the same effect as an original. 11.6. Separability of Provisions. Each provision of this Agreement shall be considered separable. If for any reason any provision or provisions of this Agreement are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those portions of this OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 40 Agreement which are valid, and if for any reason any provision or provisions herein would cause a Member to be bound by the obligations of the Company, such provision or provisions shall be deemed void and of no effect. 11.7. Captions. Article, Section and paragraph titles and captions are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forth in the text. 11.8. Entire Agreement, Amendments, Further Assurances. (a) This Agreement (including all Schedules attached hereto) constitutes the full and complete agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, undertakings, and representations of the parties in connection herewith. (b) This Agreement may be amended or modified only by an instrument in writing executed by all the then Members and any amendment shall be subject to Article XII herein. The Members hereby covenant, for themselves and their respective permitted successors and assigns, that they will cooperate with each other and will execute, acknowledge, verify, deliver, record, or cause to be delivered or recorded, with affidavit, as applicable, all such other instruments, and will take all such other actions, as the other Member may reasonably request from time to time, to effectuate, implement, and/or accomplish the provisions and purposes hereof. 11.9. No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto, and their permitted successors and assigns, and nothing herein shall be deemed to confer upon any creditor of the Company or any other Person other than the parties to this Agreement any right to insist upon or to enforce the performance or observance of any of the rights and obligations contained herein, any and all of which may be freely waived by the parties hereto. 11.10. Waiver of Partition, Etc. Each Member agrees that irreparable damage would be done to the Company if any Member brought an action in court to dissolve or liquidate the Company. Accordingly, unless otherwise expressly authorized in this Agreement, each Member agrees that it shall not, either directly or indirectly, take any action to require partition or appraisement of the Company or of any of the assets or properties of the Company, or any action which might otherwise be available to such Member outside the terms and provisions of this Agreement for the purpose of severing its relationship with the Company or with any of the Members of the Company as set forth in this Agreement. Notwithstanding any provisions of this Agreement to the contrary, each Member(and its successors and assigns) accepts the provisions of this Agreement as its sole entitlement on termination, dissolution, and/or liquidation of the Company and hereby irrevocably waives any and all right to maintain any action for partition or to compel any sale or other liquidation with respect to its interest, in or with respect to, any assets or properties of the Company; and each OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 41 Member agrees that it will not petition a court for the dissolution,termination, or liquidation of the Company. 11.11. Remedies, Waivers, Attorney's Fees. Except as otherwise expressly provided in this Agreement, each Member, in addition to all other rights provided herein or as may be provided by law, shall be entitled to all equitable remedies, including, without limitation, those of specific performance and injunction, to enforce such Member's rights hereunder. Except as otherwise provided herein, each right, power, and remedy provided for herein or now or hereafter existing at law or in equity, and shall be in addition to every other right, power or remedy provided for herein or now or hereafter existing at law or in equity, by statute or otherwise, and the exercise, the commencement of the exercise, or the forbearance of the exercise by any Member of any one or more of such rights,powers, or remedies shall not preclude the simultaneous or later exercise by such Member of any or all of such other rights, powers, or remedies. No consent or waiver, express or implied, by a Member to or of any breach or default by any other Member in the performance by such other Member of such other Member's obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other Member hereunder. Failure on the part of a Member to complain of any act or failure to act of any other Member or to declare any other Member in default, irrespective of how long such failure continues, shall not constitute a waiver by such non- complaining or non-declaring Member of the latter's rights hereunder. Each Member shall pay its own legal fees and costs associated with any dispute between or among themselves related to the Company or this Agreement, except that if the Company, whether by derivative action or otherwise, or any Member obtains a judgment against any Member by reason of the breach of this Agreement or the failure to comply with the terms hereof or otherwise in connection with the interpretation or enforcement of any term or provision of this Agreement, attorneys' fees and costs,as approved by the court,shall be included in such judgment. 11.12. Survival of Certain Provisions. The Members acknowledge and agree that in addition to creating the Company hereby created and providing for all the terms and conditions and covenants as among the Members as to the Company, this Agreement contains certain terms and conditions which are intended to survive the dissolution and termination of the Company, including, but without limitation, the provisions of Sections 2.6 and 3_3. The Members agree that such provisions of this Agreement which by their terms require,given their context,that they survive the dissolution and termination of the Company so as to effectuate the intended purposes and agreements of the Members shall survive notwithstanding that such provisions had not been specifically identified as surviving and notwithstanding the dissolution and termination of the Company or the execution of any document terminating this Agreement, unless such termination document specifically provides for nonsurvival by reference to this Section 11.12 and by reference therein as to any identified or as to all such surviving provisions hereof. 11.13. Members' Limited Liability. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 42 Except for fraud, embezzlement and misappropriation, the liability of each Member under this Agreement shall be limited to the Membership Interest of such Member in the Company, and neither the Company nor the other Members shall seek to enforce any judgment or other remedy against any other assets of a Member. No Member nor any of their authorized representatives shall have any fiduciary duty to each other or to the Company and each Member hereby waives any such duty of the other Member. No Member, nor any other investment or asset of any Member, nor any Member or member of, or other participant in or beneficiary of, a Member,nor any trustee, beneficiary, employee, Member, officer, director, legal heir, estate, successor or assign of any of them, whether disclosed or undisclosed, shall have any personal liability with respect to the payment and performance by a Member of its obligations under this Agreement, and each of the other Members agrees that it will not seek to obtain any deficiency or any other money judgment against any Person herein named or referred to as being exculpated from personal liability. The Members acknowledge and agree that the Managing Member has been adequately capitalized to fulfill its obligations under the documents governing the Company. The obligations and liabilities of the Managing Member under this Agreement are solely the obligations and liabilities of the Managing Member and not of CCHA as the owner of the Managing Member, which shall have no liability under this Agreement. The clawback of payments made to the Managing Member prior to the time a liability of the Managing Member accrues shall be prohibited. The liability of the Managing Member under this Agreement shall be limited to the positive balance of its Capital Account, provided, however, that in all events, the full amount of the insurance policy maintained by Company on the Managing Member's behalf shall apply and be accessible and subrogated as necessary to cover the liability of the Managing Member, to the extent such liability is covered by the applicable policy. 11.14. Dispute Resolution. Except as otherwise agreed by the Managing Member in writing, any controversy or claim arising out of or relating to this Agreement, including without limitation any dispute concerning the construction, validity, interpretation, enforceability or breach of this Agreement, shall be resolved exclusively as follows: (a) Good Faith Negotiations. The Members will attempt in good faith to resolve through negotiation any dispute, claim or controversy arising out of or relating to this Agreement. Any Member may initiate negotiations by providing written notice to the other Members, setting forth the subject of the dispute. The recipient of such notice will respond in writing within thirty (30) days with a statement of its position on and recommended solution to the dispute. If the dispute is not resolved by this exchange of correspondence, then representatives of each party with full settlement authority will meet at a mutually agreeable time and place within thirty(30)days of the date of the initial notice in order to exchange relevant information and perspectives, and to attempt to resolve the dispute. If the dispute is not resolved by these negotiations, the matter will be submitted to mediation pursuant to Section 11.14(b)below. (b) Mediation. The Members agree that any and all disputes, claims, or controversies arising out of or relating to this Agreement shall be submitted to Judicial Arbitration and Mediation Services, Inc. ("JAMS"), or its successor, for mediation, if the OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 43 matter is not first resolved pursuant to Section 11.14(aj above, and if the matter is not resolved through mediation, then it shall be submitted to JAMS, or its successor, for final and binding arbitration pursuant to Section 11.14(cj below. If the matter is not first resolved pursuant to Section 11.14(a) above, any Member may commence mediation by providing to JAMS and the other Members a written request for mediation, setting forth the subject of the dispute and the relief requested. The Members will cooperate with JAMS and with one another in selecting a mediator from JAMS' panel of mediators having experience in the subject matter of such dispute, and in scheduling the mediation proceedings which shall be held in the State of Texas or in another location mutually acceptable to the parties. The Members covenant that they will participate in the mediation in good faith, and that fees and costs associated with the mediation will be split equally by each Member. All offers,promises,conduct and statements,whether oral or written,made in the course of the mediation by any of the parties, their agents, employees, experts and attorneys, and by the mediator or any JAMS employees, are confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation. Any Member may initiate arbitration with respect to the matters submitted to mediation by filing a written demand for arbitration at any time following the initial mediation session or ninety (90) days after the date of filing the written request for mediation, whichever occurs first. The mediation may continue after the commencement of arbitration if the parties so desire. Unless otherwise agreed to by the Members, the mediator shall be disqualified from serving as arbitrator in the case. The provisions of this Section 11.14(b) may be enforced by any court of competent jurisdiction, and the party seeking enforcement shall be entitled to an award of all costs,fees and expenses,including attorney's fees, to be paid by the party against whom enforcement is ordered. (c) Arbitration. If the matter is not first resolved pursuant to Section 11.14(a) and Section 11.14(b) above, any dispute, claim or controversy arising out of or relating to this Agreement or breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this Agreement to arbitrate, shall be determined by arbitration in Corpus Christi, Texas, before a sole arbitrator, in accordance with the laws of the State of Texas for agreements made in and to be performed in that State. The arbitration shall be administered by JAMS pursuant to its Streamlined Arbitration Rules and Procedures. Judgment on the award may be entered in any court having jurisdiction. The arbitrator will be authorized to apportion its fees and expenses and the reasonable attorney's fees and expenses of the parties, as the arbitrator deems appropriate. In the absence of such apportionment, the fees and expenses of the arbitrator will be split equally by each Member. The Members agree that this clause has been included to rapidly and inexpensively resolve any disputes between them with respect to this Agreement, and that this clause shall be grounds for dismissal of any court action commenced with respect to this Agreement, other than post-arbitration actions seeking to enforce an arbitration award and actions seeking equitable, injunctive or other similar relief. THE MEMBERS EXPRESSLY ACKNOWLEDGE THAT THEY ARE WAIVING THEIR RIGHT TO A JURY TRIAL WITH REGARD TO ALL MATTERS FOR WHICH ARBITRATION IS REQUIRED. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 44 (d) Notwithstanding any provision of this Agreement to the contrary, this Section 11.14 shall be construed to the maximum extent possible to comply with and be binding according to the rules of the American Arbitration Association ("AAA"). If, nevertheless, it shall be determined by a court of competent jurisdiction that any provision or wording of this Section 11.14, including any rules of the AAA and/or JAMS, shall be invalid or unenforceable under the Federal Arbitration Act, 9 U.S.C., 1, et seq, or other applicable law, such invalidity shall not invalidate all of this Section 11.14. In that case, this Section 11.14 shall be construed so as to limit any term or provision so as to make it valid or enforceable within the requirements of the AAA or other applicable law, and, in the event such term or provision cannot be so limited,this Section 11.14 shall be construed to omit such invalid or unenforceable provision. ARTICLE XII Single Purpose Entity 12.1. SinglePurpose Entity Requirements. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings assigned to them in the Loan Agreement. Until the Loan is paid in full, the Company will remain a "Single Purpose Entity," which means at all times it will satisfy each of the following conditions: (a) It will not engage in any business or activity, other than the ownership, operation and maintenance of the Mortgaged Property and activities incidental thereto. (b) It will not acquire, own,hold, lease, operate, manage, maintain, develop or improve any assets other than the Mortgaged Property and such Personalty as may be necessary for the operation of the Mortgaged Property and will conduct and operate its business as presently conducted and operated. (c) It will preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its formation or organization and will do all things necessary to observe organizational formalities. (d) It will not merge or consolidate with any other Person. (e) It will not take any action to dissolve, divide or create divisions, wind-up, terminate or liquidate in whole or in part; to sell, transfer or otherwise dispose of all or substantially all of its assets; to change its legal structure; transfer or permit the direct or indirect transfer of any partnership, membership or other equity interests, as applicable, other than transfers permitted under the Loan Agreement; issue additional partnership, membership or other equity interests, as applicable, or seek to accomplish any of the foregoing. (f) It will not, without the prior unanimous written consent of all of the Members of the Company, including the Special Member, take any of the following actions: (i) File any insolvency, or reorganization case or proceeding, to institute proceedings to have the Company be adjudicated bankrupt or insolvent. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 45 (ii) Institute proceedings under any applicable insolvency law. (iii) Seek any relief under any law relating to relief from debts or the protection of debtors. (iv) Consent to the filing or institution of a Bankruptcy against the Company. (v) File a petition seeking, or consent to, reorganization or relief with respect to the Company under any applicable federal or state law relating to a Bankruptcy. (vi) Seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official for the Company or a substantial part of its property. (vii) Make any assignment for the benefit of creditors of the Company. (viii) Admit in writing the Company's inability to pay its debts generally as they become due. (ix) Take action in furtherance of any of the foregoing. (g) It will not amend or restate its organizational documents if such change would cause the provisions set forth in those organizational documents not to comply with the requirements set forth in this Article XH. (h) It will not own any subsidiary or make any investment in, any other Person. (i) It will not commingle its assets with the assets of any other Person and will hold all of its assets in its own name. 0) It will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the following: (i) The Indebtedness and any further indebtedness as described in Section 11.11 of the Loan Agreement with regard to Supplemental Instruments. (ii) Customary unsecured trade payables incurred in the ordinary course of owning and operating the Mortgaged Property, provided such trade payables meet the following conditions: (a) They are not evidenced by a promissory note. (b) They are payable by their terms within sixty (60) days of the date incurred, and, provided the cash flow from the OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 46 Mortgaged Property is sufficient, are paid within that sixty (60) day time period. (c) In the aggregate, they do not exceed at any time the Trade Payables Maximum. (k) It will maintain its records, books of account, bank accounts, Financial Statements, accounting records and other entity documents separate and apart from those of any other Person and will not list its assets as assets on the financial statement of any other Person; provided, however, that the Company's assets may be included in a consolidated financial statement of its Affiliate provided that(A) appropriate notation will be made on such consolidated financial statements to indicate the separateness of the Company from such Affiliate and to indicate that the Company's assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person, and (B) such assets will also be listed on the Company's own separate balance sheet. (1) Except for Capital Contributions or capital distributions permitted under the terms and conditions of its organizational documents, it will only enter into any contract or agreement with any member, principal or Affiliate of the Company or any Guarantor, or any member, principal or Affiliate thereof, upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm's-length basis with third parties. (m) It will not maintain its assets in such a manner that will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person. (n) It will not assume or guaranty (excluding any guaranty that has been executed and delivered in connection with the Note) the debts or obligations of any other Person,hold itself out to be responsible for the debts of another Person,pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person. (o) It will not make or permit to remain outstanding any loans or advances to any other Person except for those investments permitted under the Loan Documents and will not buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities). (p) It will file its own tax returns separate from those of any other Person,unless the Company (A) is treated as a "disregarded entity" for tax purposes and is not required to file tax returns under applicable law or (B) is required by applicable law to file consolidated tax returns, and will pay any taxes required to be paid under applicable law. (q) It will hold itself out to the public as a legal entity separate and distinct from any other Person and conduct its business solely in its own name (provided,however, that in the conduct of its business the Company shall be permitted to act in association with Affiliates and other related parties solely for marketing and management purposes,but not for the purpose of obtaining credit),will correct any known misunderstanding regarding its OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 47 separate identity and will not identify itself or any of its Affiliates as a division or department of any other Person. (r) Provided the cash flow from the Mortgaged Property is sufficient, it will intend to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and, provided the cash flow from the Mortgaged Property is sufficient, will pay its debts and liabilities from its own assets as the same become due. (s) It will allocate fairly and reasonably shared expenses with Affiliates (including shared office space, if any) and use separate stationery (or that of an Affiliate and other related parties solely for marketing and management purposes, but not for the purpose of obtaining credit), invoices and checks bearing its own name, to the extent Borrower uses the same. (t) It will not acquire obligations or securities of its members or Affiliates, as applicable. (u) Except as contemplated or permitted by the property management agreement with respect to the Property Manager, it will not permit any Affiliate or constituent party independent access to its bank accounts. (v) Provided the cash flow from the Mortgaged Property is sufficient, it will maintain a sufficient number of employees (if any) in light of its contemplated business operations and pay the salaries of its own employees, if any, only from its own funds. (w) Provided the cash flow from the Mortgaged Property is sufficient, it will pay (or cause the Property Manager to pay on behalf of Borrower from Borrower's funds) its own liabilities (including salaries of its own employees) from its own funds. (x) It will have a member that complies with the provisions of Section 6.13(b) of the Loan Agreement. ; provided, however, that nothing in this Section 12.1 will require any Member to make any equity contribution to Borrower. 12.2. Contributions.Nothing in this Article XII will require any Member of the Company or any Borrower Principal to make any equity contribution to the Company. 12.3. Member Loans. No Member of the Company shall make any loan or advance to the Company while the Loan remains outstanding. 12.4. Conflict. So long as the Loan remains outstanding, in the event of a conflict between the terms and conditions of this Agreement and Article XII of this Agreement, the parties agree that Article XII shall control interpretation of any inconsistency. However,the documents shall,to the extent possible, be construed to be consistent. OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 48 12.5. Termination of Provisions.At such time that all obligations set forth in the Loan Agreement and the promissory note executed by the Company to evidence the Loan have been paid and/or satisfied in full,this Article XII shall automatically terminate and be of no further force and effect. [SIGNATURES ON FOLLOWING PAGE] OPERATING AGREEMENT-TX AZURE APARTMENTS 1,LLC 49 f\I NArITNESS ""HEREOF, the parties hereto have executed this Operating Agreement of TX Azure Apartments 1, LLC effective as of the day and year first above written. MANAGING MEMBER: AZURE APARTMENTS-CCHA, LLC, a Delaware limited liability company By: Corpus Christi Housing Authority, a Texas public housing authority, its sole member By: Gary R. Allsup, Chief Executive Officer [Signatures continued on the following page.] OPERATING AGRCEMENT-TX AZURE APARTMENTS 1,LLC SIGNATURE PAGE INVESTOR MEMBER: SUNDANCE BAY INCOME AND GROWTH OP,LP, a Delaware Iimited partnership By: Sundance Bay Income and Growth Fund GP, LLC, a Delaware limited liability company, General Partner By: /0/3�� — Ryan Baughman, Manager [Signatures continued on the following }gage.] OPERAT[NG AGREEMENT-TX Az RE APARTMENTS 1,LLC SIGNATURE PAGE SPECIAL LIMITED MEMBER: TX AZURE APARTMENTS SLM,LLC, a Utah limited liability company By: Sundance Bay Income and Growth OP, LP a Delaware limited partnership, Member Manager By: Sundance Bay Income and Growth Fund GP, LLC a Delaware limited liability company, General Partner By: Ryan Baughman, Manager OPERATING AGREEMENT-TX AZURE APARTNEEENTS 1,LLC SIGNATURE PAGE EXHIBIT A DEFINITIONS The following defined terms used in this Agreement shall have the meanings specified below: ,,AAA" shall have the meaning provided in Section 11.14(d). "Accountants" means the independent certified public accountants for the Company selected from time to time by the Investor Member. "Act" shall have the meaning provided in Recital B. "Adjusted Capital Account" means, with respect to any Member, the balance in such Member's Capital Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments: (i) credit to such Capital Account any amounts which such Member is obligated to restore pursuant to any provision of this Agreement or is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulation §§1.704-2(g)(1) and 1.704 2(i)(5);and(ii)debit to such Capital Account the items described in Treasury Regulations §§1.704- 1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulation §1.704-1(b)(2) and shall be interpreted consistently therewith. "Affiliated Contract(s)"means any contract, agreement or other arrangement between the Company and any Members or the Managing Member or any of their respective Affiliates, now existing or hereafter entered into. "Affiliated Person"or"Affiliate"means,with respect to any Member, any (i)Person who owns directly or indirectly twenty percent (20%) or more of the beneficial ownership in any Member; (ii)the Immediate Family of, or the legal representative or trustee of, or trust principally for the benefit of, any such Person or any Person referred to in the preceding clause (i); (iii) any Entity in which the Member and/or one or more of the Persons referred to in the preceding clauses (i) and (ii) own directly or indirectly fifty percent (50%) or more of the beneficial ownership of such Entity, and (iv) any Entity which, for purposes of making day to day decisions controls, is controlled by or is in common control with the Member and/or one or more of the Persons referred to in the preceding clauses (i) and(ii). "Agreement" means this Operating Agreement, as it may be further amended from time to time. ,,Annual Capital Budget" shall have the meaning provided in Section 7.1. "Annual Operating Budget" shall have the meaning provided in Section 7.1. "Approved Budget" shall have the meaning provided in Section 7.1. OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A "AT/AML Laws" shall have the meaning provided in Section 1.8(a)(xiv). "Blocked Person" means (i) any Person listed on the OFAC's Specially Designated Nationals and Blocked Persons List; (ii) any Person (including a principal of an Entity) from January 1, 2011 or thereafter that has been (A) suspended or terminated from receipt of payments under any HUD assistance contract due to the Person's fault or negligence; (B) convicted of a felony or is the subject of a pending complaint or indictment charging a felony with a "felony" defined as any offense punishable by imprisonment for a term exceeding one year, but does not include any offense classified as a misdemeanor under the laws of a State and punishable by imprisonment of two years or less; (C) suspended, debarred, issued a limited denial of participation,or otherwise restricted or precluded by any department or agency of the United States or any state government or agency thereof (the "Governmental Agency") from doing business with a Governmental Agency;and/or(iii)any Person who is prohibited or limited by law,including a local policy of CCHA, from contracting with CCHA, including Members of Congress of the United States of America, a current member of CCHA's Board or a close relative of a member of CCHA's Board, and a current employee of CCHA (collectively, a"Blocked Person"). "Book Value"means,with respect to any asset of the Company,such asset's adjusted basis for federal income tax purposes, except that: (i) The initial Book Value for any asset contributed by a Member to the Company shall be the gross fair market value of such asset (not reduced for any liabilities to which it is subject or which the Company assumes), as such value is determined and for which credit is given (subject to adjustment for the aforesaid liabilities)to the contributing Member under this Agreement; (ii) The Book Values of all Property of the Company shall be adjusted to equal their respective gross fair market values at and as of the following times: (a) the acquisition of an additional or new interest in the Company by a new or existing Member in exchange for other than a deminimis Capital Contribution by such Member; (b) the distribution by the Company to a Member of other than a deminimis amount of any Property of the Company (other than money) as consideration for an interest in the Company, unless all the Members receive simultaneous distributions of undivided interests in any such distributed Property in proportion to their respective Percentage Interests in the Company; (c) the liquidation of the Company within the meaning of Treasury Regulation §1.704-1(b)(2)(ii)(g); (d) at such other times as the Special Limited Member shall determine in accordance with Treasury Regulations Sections 1.704-1(b) and 1.704-2; OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A provided, however, that adjustments pursuant to clauses (a) and (b) above shall be made only if the Special Limited Member reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members and with the Consent of the Managing Member; and (iii) The Book Value of the Company Property shall be increased(or decreased) to reflect any adjustment to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b),but only to the extent such adjustments are taken into account in determining Capital Accounts pursuant to Treasury Regulation §1.704-1(b)(2)(iv)(m) and Section I(f) of Schedule IV; provided, however, that Book Value shall not be adjusted pursuant to this clause (iii) if an adjustment pursuant to clause (ii) above is necessary or appropriate in connection with the transaction that would otherwise result in an adjustment pursuant to this clause (iii). If the Book Value of an asset has been determined or adjusted pursuant to the preceding clauses (i), (ii) or(iii), such Book Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Profit and Net Loss. "Business Day"means any day excluding Saturday, Sunday and any day which shall be in the State of Texas a legal holiday or a day on which banking institutions in the State are authorized by law or executive action to close. "Capital Account" means the capital account established and maintained for each Member. The Capital Account of each Member shall be (i) credited with all payments made to the Company by such Member on account of Capital Contributions (other than a deemed Capital Contribution under Section 2.3(a) (Funding Deficits) that was not contributed in cash or property by such Member), and as to any property other than cash or a promissory note of the contributing Member which may have been a Capital Contribution by a Member, the agreed fair market value of such property, net of liabilities assumed by the Company and any liabilities to which such contributed property is taken subject to, and by such Member's allocable share of income and gain (including income and gain exempt from Federal income tax) of the Company, and (ii) charged with the amount of any distributions to such Member, and as to any distributions of property other than cash or a promissory note of a Member or the Company to a Member, by the agreed fair market value of such property, net of liabilities assumed by such Member and liabilities to which such distributed property is subject,and by such Member's allocable share of losses and deductions and expenditures of the Company not deductible in computing taxable income and not properly chargeable to the capital account of the Company, as described in Code Section 705(a)(2)(B), or any successor provisions thereof, and all other expenditures of the Company described in Treasury Regulation §1.704-1(b)(2)(iv)(i) allocable to such Member, (iii) adjusted appropriately for a Member's respective share of any upward or downward tax basis adjustment pursuant to Code Section 48(q)(6), and (iv) otherwise appropriately adjusted to reflect transactions of the Company and the Members. The Capital Accounts and adjustments thereto (including, without limitation, the determination of the amounts, character and timing thereof) shall be maintained and adjusted in accordance with applicable tax accounting principles, except that adjustments in respect of contributed or distributed property shall reflect its fair market value, and shall otherwise be treated OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A as provided in the Treasury Regulations under Code Section 704(b) and any successor provisions thereof. For the purposes of this definition, a substitute Member shall be deemed to have made the Capital Contributions to the Company which were made by the Member whom such substitute Member succeeds, and to have received from the Company the credits, allocations and charges received from the Company by such former Member, such that the Capital Account of any such substitute Member will be the same as the Capital Account of such Member's assignor. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with such Treasury Regulations and shall be interpreted and applied in a manner consistent with such Treasury Regulations. The Members also shall make any appropriate modifications if unanticipated events might otherwise cause this Agreement not to comply with such Treasury Regulations. "Capital Contributions" means the Capital Contribution made by the Members as described in Article 11 and Schedule I plus the amount of cash and the agreed value of any other property contributed to the Company by a Member in accordance with the provisions of this Agreement. Any reference in this Agreement to Capital Contribution shall include the Capital Contributions or, as the case may be, the appropriate portion thereof, previously made by a Member's transferor. "Capital Transaction" means any of the following: (i) a sale, exchange, transfer, assignment or other disposition of all or any portion the Project or other assets of the Company (but not including occasional sales in the ordinary course of business of inventory, operating equipment or furniture, fixtures and equipment); (ii) any financing or refinancing of indebtedness of the Company; (iii) any condemnation or deed in lieu of condemnation of all or a portion of any Property of the Company; (iv) any collection in respect of property, hazard or casualty insurance (but not rental or business interruption insurance); or (v) any other transaction the proceeds of which, in accordance with generally accepted accounting principles, are considered to be capital in nature. The receipt by the Company of Capital Contributions from the Members shall not constitute a Capital Transaction. "Capital Transaction Proceeds" means the net cash proceeds of a Capital Transaction, after deducting all expenses incurred in connection therewith and after application of any proceeds as required by any obligations binding on the Company to which the Company is subject, and otherwise as determined by the Members pursuant to Section 5.1 toward the payment of any indebtedness of the Company secured by the property that is the subject of a Capital Transaction or of any other indebtedness of the Company,and after the establishment of reserves for contingent or unforeseen liabilities deemed necessary or appropriate by the Members pursuant to Section 5.1. "CCHA" shall have the meaning provided in Recital B. "Certificate" shall have the meaning provided in Recital A. "Code" means the Internal Revenue Code of 1986, as amended to the date hereof and as hereafter amended, and any successor provisions of federal law. OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A "Consent of the Managing Member"means the prior written consent or approval of the Managing Member or any permitted successor(s) to it as a Member. "Consent of the Members"means the prior written consent of the Managing Member,the Special Limited Member, and the Investor Member. "Consent of the Special Limited Member" means the prior written consent or approval of the Special Limited Member or any permitted successor(s) to it as a Member, which shall not be unreasonably withheld, delayed or conditioned. "Defaulting Member" shall have the meaning provided in Section 3.11. "Defaulting Repurchase Option" shall have the meaning provided in Section 9.2(a). "Deficit" shall have the meaning provided in Section 2.3. "Depreciation" means, for each Fiscal Year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable for federal income tax purposes with respect to an asset for such Fiscal Year or other period,except that if the Book Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such Fiscal Year or other period, Depreciation shall be an amount that bears the same relationship to the Book Value of such asset as the depreciation, amortization, or other cost recovery deduction computed for tax purposes with respect to such asset for such period bears to the adjusted tax basis for such asset, or if such asset has a zero adjusted tax basis, Depreciation shall be determined with reference to the initial Book Value of such asset using any reasonable method selected by the Special Limited Member,but not less than depreciation allowable for tax purposes for such Fiscal Year. ,,Disposition Fee" means one point five percent (1.5%) of the gross sales price in connection with a sale of disposition of the Project. "DLLCA" shall have the meaning provided in Recital A. "Entity" means any general partnership, limited partnership, corporation, trust, business trust, cooperative, limited liability company, limited liability partnership, cooperative, or association or any other form of incorporated or unincorporated business association which is a legal Entity under applicable law. For the avoidance of doubt, the term "Entity" shall include any housing authority under Chapter 392 of the Texas Local Government Code ("Chapter 392") and any legal Entity under applicable law sponsored or ultimately controlled by a housing authority established pursuant to Chapter 392. "Event of Bankruptcy" means, with respect to any Person any of the following: (i) if such Person shall file a voluntary petition in bankruptcy or shall file any petition or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief for himself under the present or any future federal bankruptcy act or any other present or future applicable federal, state, or other statute or law relating to bankruptcy, insolvency, or other relief for debtors, or shall seek or consent to or acquiesce in the appointment of any trustee, receiver, conservator, or liquidator of itself or of all or any substantial part of its properties or its OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A interest in the Company (the term "acquiesce" as used herein includes but is not limited to the failure to file a petition or motion to vacate or discharge any order, judgment, or decree within thirty (30) days after such order,judgment or decree); or (ii) if a court of competent jurisdiction shall enter in an order,judgment or decree approving a petition filed against such Person seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under the present or any future federal bankruptcy act or any other present or future applicable federal, state, or other statutes or law relating to bankruptcy, insolvency, or other relief for debtors and such Person shall acquiesce in the entry of such order,judgment, or decree, or if such Person shall suffer the entry of any order for relief under Title 11 of the United States Code and such order,judgment, or decree shall remain unvacated and unstayed for an aggregate of sixty (60) days (whether or not consecutive) from the date of entry thereof, or if any trustee, receiver, conservator, or liquidator of such Person or of all or any substantial part of its properties or its interest in the Company shall be appointed without the consent or acquiesce of said Person and such appointment shall remain unvacated and unstayed for an aggregate of sixty (60) days (whether or not consecutive); or (iii) if such Person shall make an assignment for the benefit of creditors or take any other similar action for the protection or benefit of creditors. "Event of Default"means, as to any Member, the occurrence of any of the following: (i) An Event of Bankruptcy shall occur as to such Member; (ii) Such Member gives notice to any governmental body or court of insolvency or pending insolvency or suspension of operations; (iii) A breach of Article VIII by such Member or any Person holding a direct or indirect interest in such Member; (iv) An act of fraud, misappropriation or embezzlement by such Member in respect of the Company or any of the funds of either Entity or of the Project or other property of either Entity; (v) An act of dishonesty, willful misconduct or gross negligence by such Member in the performance of its duties under this Agreement or by any Affiliate of such Member under any Affiliate Contract; (vi) Any breach or default by such Member in the performance of its duties or obligations under this Agreement not specified above or below in this definition, and such breach or default is not cured to the reasonable approval of the non- defaulting party within any cure period set forth herein or, if no cure period is otherwise provided herein, such breach or default is not cured within thirty (30) days after notice from the non-defaulting Member of such breach or default or such longer period as may be reasonably required given the nature of such breach or default, but not to exceed ninety (90) days, provided that in any such event the breaching or defaulting Member commences to cure any such breach or default as soon as reasonably possible and thereafter diligently pursues such cure to completion, but the extended cure period will only continue as long as neither the Company, the Project nor the non-defaulting Member's Membership Interest is in OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A imminent danger or jeopardy of loss of a material governmental permit,imposition of a lien in excess of$50,000, a material physical loss, notice from any lender to the Company or from any party under any Housing Agreement or any other Housing Requirements or any other material agreement of the Company of a default by the Company under its agreement(s) with such third party if such default is due to or arises out of the relevant breach or default by such Member hereunder, loss of tenants as a result of such breach or default, material damage or destruction, or material civil liability or violation of criminal law as a result of such breach, and the Company has not been made whole by the breaching Member within said cure period for any losses suffered by the Company as a result of such breach or default; (vii) A material uncured default occurs and is continuing by the Company under any mortgage encumbering any of the Project, and any such default is the result of an act or omission of such Member of its duties or responsibilities under this Agreement; (viii) The failure of such Member or Affiliate to timely file or to timely provide to the other Members any tax return or financial information to be filed and/or provided as required by Section 6.4 or Article VII(unless such failure is caused by such other Member); or (ix) A default by such Member or any of its Affiliates under the Property Management Agreement or under any Affiliated Contract beyond applicable notice and grace periods thereunder, if any. "Financial Statements" means the financial statements of the Company prepared in accordance with the requirements of Article VII, as audited and/or reviewed by the Accountants. "Fiscal Year" shall have the meaning provided in Section 6.3. "Formation Date" shall have the meaning provided in Recital A. "Ground Lease"means the Ground Lease dated or to be dated on or about the date of this Agreement, between the Company and CCHA. "Hazardous Materials" means any or all of the following: explosives, radioactive materials, petroleum, asbestos, asbestos containing materials, PCBs, hazardous wastes, toxic substances or related materials, including, without limitation, any substances defined as or included in the definition of"hazardous substances," "hazardous wastes," "hazardous materials," or"toxic substances"under any applicable federal or state law or regulation. "Hazardous Materials Law" means all applicable federal, state or local laws, ordinance, regulation or common law relating to any Hazardous Materials. "Housing Agreements"means, collectively,the Ground Lease, and any governmental use agreement covering the Project. OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A "Housing Requirements" means all restrictions and all other requirements under any Housing Agreements, and the covenants, agreements and other obligations of the Company under Section 4.3 of the Ground Lease for the Project acquired or to be acquired by the Company, and any requirements to maintain the Real Estate Tax Exemption. "HUD"means the United States Department of Housing and Urban Development. "Immediate Family" means, with respect to any individual, his or her parents, spouse, descendants, or spouse of a descendant, and any trusts principally for the benefit of any of the foregoing; with respect to any trust, any beneficiary of such trust or any member, as described above, of the Immediate Family of any such beneficiary; and any Entity or Entities all of the beneficial owners of which are any one or more of such individuals and trusts described immediately above. "Improvements" means all improvements to the Real Property for the 240-unit multi- family housing project located on the Real Property, as the same may be further rehabilitated, together with all fixtures, tenant improvements and appurtenances now or later to be located on the Real Property and/or in such improvements. "Interim Capital Transaction" means any Capital Transaction other than a Terminating Capital Transaction. "Investor Member" shall have the meaning provided in the Preamble. "Investor Obligations" shall have the meaning provided in Section 3.1(g). "JAMS" shall have the meaning provided in Section 11.14(b). "Laws" shall have the meaning provided in Section 3.1(a)(x). "Lender"means an individual or financial institution that provides Loans to the Company from time to time, their successors and/or assigns. "Lending Rate"shall mean the rate provided in the Loan Agreement but in no event higher than the highest rate permitted by applicable law. "Loan" means those certain loans made by the Lender to the Company from time to time, which are secured by, among other things, a deed of trust on the Real Property. "Loan Agreement" means the those certain agreements made from time to time by and between Company and Lender. "Loan Documents" means any note, mortgage, deed of trust and any other document executed by the Company,now or in the future, evidencing or securing the Loan or any other loan to the Company or to which any of the Real Property or any of any such Entity's other Property is bound. ,,Major Decisions" shall have the meaning provided in Section 3.2. OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A "Managing Member"means the Person named as a Managing Member in the Preamble of this Agreement and to any other Person who becomes an additional, substitute or replacement Managing Member as permitted by this Agreement. "Managing Members" shall refer collectively to the Person named as the Managing Member in this Agreement and to any other Persons who become additional, substitute or replacement Managing Members as permitted by this Agreement. "Managing Member Restrictions" shall have the meaning provided in Section 3.1. "Member" means each of the Managing Member, the Special Limited Member and the Investor Member, and each of their respective permitted successors and assigns, and"Members" shall refer collectively to the Special Limited Member and the Investor Member and each of their respective permitted successors and assigns. "Membership Interests"means the interest of a Member in the Company,including legal and beneficial interests and the rights, duties and obligations of a Member. "Member Minimum Gain"means an amount,with respect to each Member Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Treasury Regulation §1.704-2(i)(3). "Member Nonrecourse Debt" means any Company indebtedness that would be a Nonrecourse Liability if such debt were not attributed to a loan made or guaranteed by a Member within the meaning of Treasury Regulation §1.704-2(b)(4), or by a Person related to a Member, within the meaning of Treasury Regulation §1.752-4(b). "Member Nonrecourse Deductions" has the meaning set forth in Treasury Regulation §1.704-2(i)(2). The amount of Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt for a Company taxable year equals the excess, if any, of the net increase,if any, in the amount of Member Minimum Gain attributable to such Member Nonrecourse Debt during that fiscal year over the aggregate amount of any distributions during that taxable year to the Member that bears the economic risk of loss for such Member Nonrecourse Debt to the extent such distributions are from the proceeds of such Member Nonrecourse Debt and are allocable to an increase in Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulation §1.704-2(i)(2). "Net Cash Flow" of the Company, with respect to any relevant period, means the amount by which (a) the gross cash receipts of the Company during such period from all sources whatsoever, including, without limitation, rents of every kind and nature whatsoever, operating expense, tax and similar periodic tenant reimbursements, contributions and charges (but not including any tenant reimbursements or other payments which are not for the actual occupancy of an apartment or other premises or items used therein, thus excluding, without limitation, any payments for damages, any form of deposits or security and any other special reimbursements or payments), and all other revenues derived from or received on account of the operation of the Project, and any amounts released from the reserves described in clause (v) below, but excluding all of the following: security deposits (unless and until applied to rental obligations of tenants OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A under leases, but not if applied to damages or other losses caused by tenants), Capital Contributions, the proceeds of a Capital Transaction (other than proceeds of any other third party debt used to pay operating expenses of the Project), insurance proceeds and condemnation awards (other than rental or business interruption insurance proceeds), exceed (b) the aggregate of(i) all cash expenditures for operating costs and expenses and capital expenditures of the Company (including the Asset Management Fee and Ground Lease Fee accrued for the applicable year but excluding charges for depreciation, amortization and other expenses not paid in cash, and any expenditures from the reserve described in clause(v)below or from any other reserves established by the Company), (ii) all costs and expenses during such period in connection with the recovery of insurance proceeds or condemnation awards (except to the extent deducted in determining capital proceeds), (iii) all management and leasing fees as described in or otherwise permitted by this Agreement, including but not limited to the Property Management Fee, (iv) all debt service, including principal, interest, and other amounts paid, deposited or payable during such period on all indebtedness of the Company, and(v) any reserves required to be established or maintained for the relevant measuring period pursuant to any Loan Documents or other agreements binding on the Company or by which any of them or the Project is bound for real estate taxes, operating expenses, repairs, replacements, capital improvements, restoration and renovation, and any other reserves contained in the Approved Budget,all to the extent actually so set aside during such Fiscal Year, to the extent funded from receipts which are included in the definition of Net Cash Flow. "Net Profit"and"Net Loss"means,for each taxable year or other period, an amount equal to the Company's taxable income or loss for such taxable year or period,determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments: (i) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Profit or Net Loss pursuant to this definition shall be added to such taxable income or loss; (ii) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures under Treasury Regulation §1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing Net Profit or Net Loss pursuant to this definition shall be subtracted from such taxable income or loss; (iii) Gain or loss resulting from any disposition of any Company Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Book Value of such property rather than its adjusted tax basis; (iv) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation; (v) In the event the Book Value of any Company asset is adjusted as provided in Schedule IV,the amount of such adjustment shall be taken into account as gain OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A or loss from the disposition of such asset for purpose of computing Net Profit and Net Loss; and (vi) Notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Paragraphs 1 and 2 of Schedule IV hereof shall not be taken into account in computing Net Profit or Net Loss for purposes of allocations under Sections 5.1, and 5_2 and if otherwise included in the calculation pursuant to the above, shall be appropriately added to or deducted from, as the case may be, such amounts so as to not be included in the calculations of Net Profits and Net Losses. If the Company's Net Profit or Loss for any Fiscal Year, as determined in the manner provided above, is a positive amount, such amount shall be the Company's Net Profit for such Fiscal Year, and, if negative, such amount shall be the Company's Net Loss for such Fiscal Year. "Net Profits and Net Losses from a Capital Transaction" means the Net Profit or Net Loss from any such Capital Transaction, and in determining such Net Profit or Net Loss,the cost and expenses of such Capital Transaction shall be deducted. "Net Profits and Net Losses from Operations" means Net Profits or Net Losses determined as provided in the definition of Net Profits and Net Losses above except that Net Profit and Net Loss from Capital Transactions shall not be taken into account. "Non-Discretionary Expenditures" means funds needed to meet any or all of the following obligations of the Company which funds are not available from receipts or reserves of the Company or from borrowings of the Company, and which funds the Special Limited Member is not obligated to expend for other identified obligations of the Company and which are not already specifically committed or reserved for other commitments of the Company,it being agreed that funds of the Company shall first be used for the following obligations(without priority among them)to the exclusion of other obligations of the Company: (i) Property Management Fee; (ii) real estate taxes and assessments on any Property of the Company; (iii) payments required to be made pursuant to any mortgage on, or any ground lease of, the Real Property or to make payments on any other indebtedness of the Company, as well as the expense of curing any default under any such mortgage or ground lease or other indebtedness; (iv) insurance premiums; (v) any alteration, repair or replacement required by any present or future law, ordinance, order, rule, regulation or requirement of any federal, state or municipal government, department, commission, board or officer, or any order, rule or regulation of the National Board of Fire Underwriters or any other body exercising similar functions; OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A (vi) any amount required to be paid pursuant to any final order, judgment, or decree of any court or governmental body having jurisdiction; and (vii) any amount required to fulfill any contractual obligations of the Company with any Entity which is not a Member or an Affiliate of a Member, including without limitation, any obligations under the Housing Agreements. "Nonrecourse Deductions" has the meaning set forth in Treasury Regulation §1.704 2(b)(1) and 1.704-2(c). The amount of Nonrecourse Deduction for a taxable year equals the net increase, if any, in the amount of Partnership Minimum Gain during that taxable year over the aggregate amount of any distributions during that taxable year of proceeds of a Nonrecourse Liability that are allocable to an increase in Partnership Minimum Gain, determined according to the provisions of Treasury Regulation §1.704-2(c). "Nonrecourse Liability"has the meaning set forth in Treasury Regulation §1.752-1(a)(2). "OFAC" means the U.S. Department of the Treasury's Office of Foreign Assets Control. "Partially Adjusted Capital Account" means, as to each Member as of the end of the applicable period for which the calculation is to be made,the Capital Account of such Member as of the beginning of the applicable period,adjusted as provided for elsewhere in this Agreement for all contributions and all distributions made as to the period ending on the last day of the applicable period and for any allocations to be made for the applicable period pursuant to Schedule IV, but before making any allocations pursuant to Section 5.1(a). "Partnership Minimum Gain"has the meaning set forth in Treasury Regulation §§1.704- 2(b) (2) and 1.704-2(d). "Partnership Representative" shall have the meaning provided in Section 6.4(c). "Patriot Act" shall have the meaning provided in Section 1.8. "Percentage Interest" shall be the percentage interest of each Member in the Company set forth in Schedule I, as such shall be amended from time to time to reflect the withdrawal or admission of Members, and any change in the Percentage Interest of any Member for any other reason. "Person" means any natural person or any Entity and, where the context so admits, the heirs, executors, administrators, legal representatives, successors and/or assigns of any such Person. ,,Preferred Capital Contribution" shall have the meaning provided in Section 2.3(a). "Premises" shall have the meaning given it in the Ground Lease. "Prime Rate" means a floating daily variable rate of interest published from time to time by the Wall Street Journal (or a similar agreed upon publication if unavailable), as its prime rate for the United States of America without reference to prime interest rates of any other publications OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A or of any financial institutions. Any change in the Prime Rate for purposes of this Agreement shall take effect on the day of the publication by the Wall Street Journal of its updated Prime Rate. "Project" means the Real Property and the Improvements and all furnishings, equipment and personal property used in connection with the operation thereof. "Project Documents" means any and all documents (including, without limitation, the Loan Documents) relating to the financing, development, use or operation of the Project, as any such documents may be amended from time to time. "Property" shall mean all of the assets owned or held by the Company from time to time. "Property Management Agreement"means,individually and collectively (as the context may require), the property management agreements in effect as to the Project, subject to the prior approval of the Special Limited Member. The Special Limited Member shall cause any Property Management Agreement to include language requiring the Property Manager to ensure that no tenant or potential tenant is discriminated against based on source of income. "Property Management Fee" means the aggregate fee paid by Company to the Property Manager equal to no more than 5% of the gross revenues from the Project, as set forth in the Property Management Agreement. "Property Manager" means, individually and collectively (as the context may require), each and every Person which at any time and from time to time is the property manager under a Property Management Agreement. "Real Estate Tax Exemption" shall mean that certain exemption from ad valorem taxes pursuant to Section 11.11 of the Texas Tax and Texas Local Government Code Section 392. "Real Property"means the direct or indirect interest or interests, from time to time, of the Company in that certain real property described in Schedule II attached hereto, referred to herein as "Azure Apartments", all appurtenances thereof, and all personal property used in connection with the ownership and operation thereof, and any other property contiguous thereto in which the Company now has or hereafter acquires an interest. "Replacement Managing Member" shall have the meaning provided in Section 3.7. "Replacement Reserve" means an amount required by the Lender under the terms of the Loan Documents. "Replacement Reserve Account"means a segregated Company bank account established at a bank selected and controlled by the Special Limited Member to hold the Replacement Reserve, unless required to be held by the Lender. "Returns" shall have the meaning provided in Section 6.4(a). "Securities Act" means the U.S. Securities Act of 1933, as amended (together with the rules and regulations promulgated thereunder). OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A "SRO"means a self-regulatory organization. "Supportive Services Agreement"has the meaning provided in 3.2(e). "Target Balance" means, as to each Member, as of the end of the applicable period for which the calculation is to be made, a balance in such Member's Capital Account equal to the amount such Member would receive in liquidation of the Company if all the assets of the Company were sold (on the last day of the applicable period) for their respective Book Values and the proceeds of such sale, including any cash on hand, were applied pursuant to Section 4.3 (herein referred to as a"Hypothetical Liquidation Event"), said balance then reduced by the amount of income, loss and gain, or items thereof, that would be allocated to such Member pursuant to Schedule IV upon the occurrence of a Hypothetical Liquidation Event. In addition, in calculating upon a Hypothetical Liquidation Event the effect of satisfaction of any liabilities of the Company which are either Nonrecourse Liabilities or Member Nonrecourse Debt, such liability satisfaction shall be limited to the Book Value of the assets securing each such liability. "Terminating Capital Transaction" means a sale, exchange, condemnation, eminent domain taking, casualty or other disposition of all or substantially all of the assets of the Company and shall include the receipt and collection of notes, if any, and payments thereon or any other consideration received or to be received by the Company upon a sale,exchange or other disposition of all or substantially all of the assets of the Company, and all activities reasonably related to any of the above including activities which were included in the dissolution,termination and winding- up of the affairs of the Company (but not in any event including therein the operation and the winding-up of the Company affairs). "Transfer" or "Transferred" or any other capitalized grammatical variation thereof, means the sale, exchange, issuance, assignment, distribution, encumbrance, hypothecation, gift, pledge, retirement, resignation, or other Withdrawal, transfer or other disposition or alienation, whether absolute, contingent or collateral,in any way of all or any part of any Membership Interest in the Company or, as the context may require, an interest in any Entity which holds a Membership Interest in the Company. Transfer shall specifically, without limitation of the above, include assignments and distributions resulting from death, incompetency, bankruptcy, liquidation and dissolution. "Treasury Regulation(s)" means any proposed, temporary and/or final Federal income tax regulations promulgated by the United States Department of the Treasury, as such may have been or may hereafter be amended from time to time, and/or any corresponding provisions of any succeeding law and/or regulation, and all relevant and applicable revenue rulings, revenue procedures, notices and other official promulgations. "Withdrawal" (including the terms "Withdraw," "Withdrawn" and "Withdrawing") means, as to a Member, the occurrence of such Member's death,the adjudication of insanity such Member's or incompetence, the occurrence with respect to such Member of an Event of Bankruptcy, dissolution or liquidation, or the voluntary or involuntary withdrawal or retirement of such Member from the Company for any reason,including Managing Member's and/or the Special Limited Member's inability to continue serving as a Managing Member or the Special Limited Member due to any provision of applicable law or this Agreement. OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A The definitions set forth in the DLLCA shall be applicable, to the extent not inconsistent herewith, to define terms not defined herein and to supplement definitions contained herein. (End of Schedule) OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Exhibit A SCHEDULEI OPERATING AGREEMENT OF TX Azure Apartments 1, LLC Percentage Member Interest Manauins!Member .005% Azure Apartments-CCHA, LLC c/o Corpus Christi Housing Authority 3701 Ayers Street Corpus Christi, Texas 78415 Attention: Chief Executive Officer With a copy to: Anderson, Lehrman, Barre& Maraist, LLP 1001 Third Street, Suite 1 Corpus Christi, Texas 78404 Attention: R. Bryan Stone, Esq. Investor Member: 99.495% Sundance Bay Income and Growth OP, LP 1240 E 2100 S STE 300 Salt Lake City,UT 84106 With a copy to: Holland& Knight LLP 1180 West Peachtree Street,NW, Suite 1800 Atlanta, Georgia 30309 Attention: Allison Dyer Email: allison.dyer@hklaw.com Special Limited Member: TX Azure Apartments SLM, LLC .50% 1240 E 2100 S STE 300 Salt Lake City,UT 84106 With a copy to: Holland& Knight LLP 1180 West Peachtree Street,NW, Suite 1800 Atlanta, Georgia 30309 Attention: Allison Dyer Email: allison.dyer@hklaw.com (End of Schedule) OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Schedule I SCHEDULE II OPERATING AGREEMENT OF TX Azure Apartments 1, LLC Real Property Description Lot One (1), Block One (1), SAN MARIN, a subdivision situated in the City of Corpus Christi, Nueces County, Texas, commonly known as San Marin Apartments, as shown by the map or plat thereof,recorded in Volume 57, Page 193, Map Records of Nueces County, Texas and being more particularly described by metes and bounds as follows,to-wit: All that certain tract,piece or parcel of land containing 9.5316 acres (415,196 sq. ft.) of land, more or less, and being portion of that certain 90.043 acre tract deeded to Tristar Development, Inc.,recorded in Volume 1919, Page 216, Deed Records of Nueces County, Texas: BEGINNING at a found 5/8th inch iron rod being the most Easterly corner of Lot 1,Block 1, of said San Marin, same being a point in the Northwest line of South Staples Street(F.M. 2444) (100 feet wide); THENCE South 28 degrees 56 minutes 00 seconds West, along said Northwest line of South Staples Street, a distance of 150.00 feet to a found 5/8th inch iron rod for corner of the herein described tract, said corner also being the most Easterly corner of Lot 2,Block 1, of said San Marin; THENCE North 61 degrees 04 minutes 00 seconds West, departing said line along the Northeasterly line of said Lot 2, a distance of 150.00 feet to a found 5/8th inch iron rod for corner of the herein described tract; THENCE South 28 degrees 56 minutes 00 seconds West, along the Northwesterly line of said Lot 2, a distance of 200.00 feet to a set 5/8th inch iron rod for corner of the herein described tract; THENCE South 61 degrees 04 minutes 00 seconds East, along the Southwesterly line of said Lot 2, a distance of 150.00 feet to a found 5/8th inch iron rod returning to said Northwest line of South Staples Street for corner of the herein described tract, said corner also being the most southerly corner of said Lot 2; THENCE South 28 degrees 56 minutes 00 seconds West, along said Northwest line of South Staples Street, a distance of 433.23 feet to a set 5/8th inch iron rod for corner, a point of curvature of a curve to the right; THENCE in a Southwesterly direction, around a curve to the right whose radius equals 15.00 feet, having a central angle of 89 degrees 58 minutes 35 seconds, an arc length of 23.56 feet, a chord bearing South 73 degrees 56 minutes 43 seconds West, 21.21 feet to a set 5/8th inch iron rod for corner in the Northeast line of Henderson Street(60 feet wide), the most Southerly corner of the herein described tract; OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Schedule II THENCE North 61 degrees 02 minutes 35 seconds West, along the Northeast line of said Henderson Street, a distance of 627.27 feet to a set 5/8th inch iron rod for corner, a point of curvature of a curve to the right; THENCE in a Northwesterly direction, around a curve to the right whose radius equals 10.00 feet, having a central angle of 90 degrees 00 minutes 15 seconds, an arc length of 15.71 feet, a chord bearing North 16 degrees 02 minutes 42 seconds West, 14.14 feet to a set 5/8th inch iron rod for corner, the most Westerly corner of the herein described tracts; THENCE North 28 degrees 57 minutes 10 seconds East, along the Northwest line of said San Marin, a distance of 557.29 feet to a found 5/8th inch iron rod for corner of the herein described tract, same being a point in the Southwesterly line of said Stonehenge Unit 1 Subdivision; THENCE South 61 degrees 02 minutes 50 seconds East, along said Southwesterly line, a distance of 326.00 feet to a found 5/8th inch iron rod for corner of the herein described tract; THENCE North 28 degrees 57 minutes 10 seconds East, along said Southwesterly line, a distance of 230.89 feet to a found 5/8th inch iron rod for corner of the herein described tract; THENCE South 61 degrees 02 minutes 50 seconds East, along a Southwesterly line, a distance of 326.00 feet returning the POINT OF BEGINNING of the herein described tract containing 9.5316 acres (415,196 sq. ft.) of land, more or less. OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Schedule II SCHEDULE III OPERATING AGREEMENT OF TX Azure Apartments 1, LLC Major Decisions The following are Major Decisions requiring the Consent of the Members: 1. As to the Company, the adoption of, and any amendment or other change in, the Approved Budget or making, authorizing or otherwise incurring any expenditures not within the Approved Budget; provided, however, the Special Limited Member shall be entitled to make the following expenditures relating to the Project regardless of whether the same is provided for in the Approved Budget: expenditures incurred as a result of an emergency posing imminent danger to persons or property or an emergency requiring an immediate response under applicable law (and in the event of any such emergency expenditure, the Special Limited Member shall reasonably promptly notify the Investor Member). 2. As to the Company, the approval or entry into (a) any property management agreement, and (b) any operating or vendor contracts which do not contain any unrestricted cancellation right, without cause and, without penalty or fee, on not more than one month's prior written notice, and, without limitation of clause 12 below, any contract or other agreement requiring payments in excess of $100,000 in a twelve (12) month period, and any material amendment or other modification to, or termination of, any such property management agreement or other contract or agreement. 3. The creation of and any additions to reserves of the Company, except as provided in the Approved Budget or as required under any Loan Documents or by any agreement which the Company is a parry to or by which it or the Project is bound. 4. Changing or permitting to be changed in any substantial way the accounting process and procedures employed in keeping the books of account or preparing financial statements with respect to the operation or management of the Company or the Project. 5. Hiring or terminating the Accountants, any attorneys, consultants, or other third party professionals except as permitted by the Approved Budget, and, even if within the Approved Budget, the approval of the Person retained where the estimated cost of such retention in any instance exceeds $100,000. 6. Subject to the provisions of Section 3.2(b), Section 3.2(c), and Section 3.2(d) any change in the current use or income mix of the Project and any increases or decreases in the scheduled rent charged for any apartments in the Project; subject, however, to the provisions of Section 3.2(b), Section 3.2(c), and Section 3.2(d). 7. Approval of the standard form of occupancy lease and any material changes thereto, the entering into any lease for the Project, other than a lease of a residential apartment to an OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Schedule III occupant, or a lease for laundry facilities on the Project, subject to any other applicable limitations or restrictions under any other provisions of this Agreement. 8. The borrowing of, or agreeing to borrow, any money or otherwise incurring or agreeing to incur any indebtedness on behalf of the Company, whether on a secured or unsecured basis,or encumbering,hypothecating or otherwise incurring a mortgage, deed of trust or other lien upon the Project or any other property of the Company, all material documents in connection with any of the above,the material modification of the terms of any borrowing or indebtedness, and the retention or termination of any mortgage broker, finder or similar agent by or on behalf of the Company in connection with any of the above. 9. Any decision regarding the disposition, repair, rebuilding, restoration, or redevelopment of the Project following a casualty or taking or eminent domain proceeding, or the use of the proceeds of any such casualty,taking or proceeding, and the settlement of, and the taking of all actions as to the recovery of, or any claim related to, the payment or potential payment of any insurance proceeds or the payment of any awards or damages arising out of the exercise of eminent domain or any other proceedings involving any governmental authority, and all decisions as to the use or other disposition of any such proceeds, but only to the extent that any of the foregoing involves one or a series of amounts or payments that exceed $100,000 in the aggregate over any twelve (12) month period. 10. The approval of (i) any and all additions, rebuilding, restoration, renovation or remodeling of the Project or any portion thereof("Capital Projects"), and any material additions, amendments, change orders and modifications to any of the foregoing, but only to the extent that the foregoing involves one or a series of payments that exceed$100,000 in the aggregate over any twelve (12) month period; and (ii) all construction, architectural and other contracts and agreements for, and all plans and specifications and drawings for, any such Capital Projects. 11. As to the Company, lending funds or extending credit to, or guarantying the obligation of, any Person. 12. As to the Company, commencing, making a counterclaim, and all material decisions as to the defense of, compromising, agreeing or consenting to, settling, discontinuing, releasing, or taking, or determining not to take, any other material action in any civil litigation, arbitration, mediation or other legal or quasi-legal proceedings or counterclaims (other than mandatory counterclaims) or any other dispute, and retaining or terminating counsel and other professionals and consultants in connection therewith, other than litigation, arbitration and other legal or quasi-legal proceedings (i) with tenants, subtenants, or other occupants of the Project in the ordinary course involving otherwise approved lease terminations, etc., where it is not anticipated that the proceedings will involve counter-claims or other material controversies, (ii) with service providers or others not involving claims or counterclaims in excess of$100,000, and (iii)as to any matter which is fully covered by insurance,without regard to any deductible amounts applicable, unless such deductible amount exceeds $100,000 or where the total amount in controversy is greater than $500,000, regardless of the amount of the Company's uninsured exposure. OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Schedule III 13. The acquisition, sale, transfer, conveyance, mortgage, pledge or other assignment, absolute or collateral, or other disposition, or the granting of any options, rights of offer or refusal of any nature whatsoever, of any or all or substantially all of, or any portion of, any of the Project or of any other assets of the Company, in connection with the liquidation of the Company's assets, after dissolution, or the determination to defer the sale of any of the assets of the Company after dissolution of the Company. 14. Entering into, amending, modifying, or terminating any contract or agreement between the Company and the Special Limited Member and/or Managing Member or any of its Affiliates, and then only if: (i)the compensation paid by the Company for such goods or services is paid only for goods and services actually provided to the Company and only after such goods or services have been provided, (ii) the goods or services to be furnished shall be reasonably necessary to the Company and otherwise would have been obtained from an unaffiliated Person, (iii) the terms for the furnishing of such goods or services shall be at least as favorable to the Company as would be obtainable in an arms-length transaction with an affiliated Person, and(iv) all arrangements for the provisions of such goods or services to the Company by the Special Limited Member and/or the Managing Member or any of its Affiliates has been fully disclosed to and received Consent of the Investor Member and the Special Limited Member or the Managing Member, as applicable, with the knowledge of the Investor Member that such arrangement is with the Special Limited Member and/or the Managing Member or an Affiliate of the Special Limited Member and/or the Managing Member. 15. Entering into,amending, or terminating any easement,restrictive covenant,or other instrument or agreement affecting title to the Project other than routine utility easements. 16. The making of any material tax elections or the making of a tax election or adoption of any tax accounting method that disproportionally affects the Investor Member as compared to the other Members and the settlement of any claimed deficiency in connection with any tax return of the Company. 17. The admission of an additional Member, except as part of a Transfer permitted by Article VIII,the sale or issuance of any equity interest in the Company(including options,warrants and other convertible interests). 18. The merger or consolidation of the Company or the business of the Company. 19. Changing the purposes of the Company, or engaging in any other business or activity not included within the purposes of the Company, or taking any action which, or failing to take any action where the failure to take such action, would materially adversely affect the ability of the Company to carry its ordinary business. 20. Dissolving the Company or the taking of any actions in contemplation thereof,other than as provided in Article X, or the taking of any actions or entering into any transaction which would have the effect of dissolving the Company or adopting a plan of liquidation pursuant to Article X with respect to the Project. 21. Performing any act in contravention of this Agreement or taking, or failing to take any act the result of which would be to cause a breach of this Agreement. OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Schedule III 22. Filing or responding to any filing of a petition by or against the Company for a proceeding under any bankruptcy, insolvency, reorganization or similar act, or the filing of any consent to any such proceeding against the Company, or any decision not to contest the filing of any such proceeding against the Company, or taking any action under applicable bankruptcy, insolvency or similar laws with respect to the Company, including, without limitation, making a general assignment for the benefit of creditors or appointing or acquiescing in the appointment of a custodian, receiver or trustee for all or any part of the assets of the Company. 23. Any matter in any way relating to the Company which is not either a matter which is part of the day-to-day operation of the Project or the day-to-day maintenance of the existence of the Company. 24. Any amendment, modification, enforcement, extension, or termination of, or waiver under, or the exercise by the Company, of any of its rights, options or consent or approval rights under the Ground Lease. 25. Entering into, and enforcing the Company's rights and remedies under, all leases, agreements and applicable deeds, easements, conditions, covenants and restrictions, loan documents, insurance policies, management agreements and service contracts (including, without limitation, any utility agreements, laundry leases, and all other agreements relating to the day-to- day operation of the Project), and instituting as necessary, and defending, any claims, demands or legal proceedings involving the Company through legal counsel engaged in accordance with the other terms of this Agreement; (End of Schedule) OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Schedule III SCHEDULE IV OPERATING AGREEMENT OF TX Azure Apartments 1, LLC Tax Allocation and other Tax Provisions 1. Special Allocations. The following special allocations shall be made in the following order: (a) Nonrecourse Deductions. Nonrecourse Deductions for any taxable year or other period shall be allocated among the Members in proportion to each Member's Percentage Interest in the Company. Solely for purposes of determining each Member's proportionate share of the "excess nonrecourse liabilities" of the Company within the meaning of Treasury Regulation §1.752-3(a)(3),each Members' interest in Company profits shall be equal to its Percentage Interest in the Company. (b) Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations §1.704-2(f), notwithstanding any other provision of Article V or this Schedule IV,if there is a net decrease in Partnership Minimum Gain during any taxable year, each Member shall be specially allocated items of Company income and gain for such taxable year(and,if necessary, subsequent taxable years) in an amount equal to each such Member's share of the net decrease in Partnership Minimum Gain, as such share is determined in accordance with Treasury Regulation §1.704-2(g). The items of Company income and gain to be so allocated shall be determined in accordance with Treasury Regulation §§1.704-2(f)(6) and §1.704-20)(2). This Paragraph l(b) is intended to comply with the minimum gain chargeback requirement of Treasury Regulation §1.704-2(f) and shall be interpreted consistently therewith, including the exceptions to the minimum gain chargeback requirements set forth in Treasury Regulations §§1.704-2(f)(2)and(3). (c) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions, as defined in and determined under Treasury Regulation §1.704-2(i)(2), for any taxable year or other period shall be allocated to the Member or Members which bear the economic risk of loss with respect to Member Nonrecourse Debt, to which such Member Nonrecourse Deductions are attributable, in accordance with Treasury Regulation §1.704-2(i)(1). (d) Member Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulation §1.704-2(i)(4), notwithstanding any other provision of Article V or this Schedule IV (other than Paragraph 1(b) of this Schedule IV), if there is a net decrease in Member Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal Year, each Member who has a share of the Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Treasury Regulation §1.704-2(i)(5), shall be specially allocated items of Company income and gain for such Fiscal Year(and, if necessary, subsequent Fiscal Years) in an amount equal to each such Member's share of the net decrease in Member Minimum Gain attributable to such Member Nonrecourse Debt, said aggregate net decrease determined in accordance with Treasury Regulation §1.704-2(i)(4). The items of Company income and gain to be so allocated shall be determined in accordance with Treasury Regulation §1.704-2(i)(4) and OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Schedule IV 1.704-20)(2)(ii). This Paragraph l(d) is intended to comply with the Member Minimum Gain chargeback requirement in Treasury Regulation §1.704-2(i)(4) and shall be interpreted consistently therewith, including the exceptions set forth in Treasury Regulation §1.704(f)(2) and (3)to the extent applicable. (e) Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulation §§1-704- l(b)(2)(ii)(d)(4), (5) or (6), respectively, items of Company income and gain shall be specially allocated to each such Member in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations, the Adjusted Capital Account deficit of such Member as quickly as possible, provided that an allocation pursuant to this Paragraph l(e) shall be made only if and to the extent that such Member would have an Adjusted Capital Account deficit after all other allocations provided for in Article V and this Schedule IV have been tentatively made as if this Paragraph 1(e)were not in this Agreement. (f) Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Treasury Regulation §1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to said Section of the Regulations. 2. Regulatory Compliance, Curative Allocations. The allocations set forth in Paragraphs l(a) through (f) of this Schedule IV (the "Regulatory Allocations") are intended to comply with certain requirements of Treasury Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted in a manner consistent with such Treasury Regulations. The Regulatory Allocations may not be consistent with the manner in which the Members intend to divide Company distributions, as reflected by Article IV. Accordingly, the Special Limited Member, is authorized to further allocate Profits, Losses, items of each thereof and other items among the Members in a reasonable manner so as to prevent the Regulatory Allocations from distorting the manner in which Company distributions would be divided among the Members under Article IV but for application of the Regulatory Allocations. In general, such reallocation will be accomplished by specially allocating other Profits, Losses and items of income, gain, loss and deduction, to the extent they exist, among the Members so that the net amount of the Regulatory Allocations and the special allocations made under this Paragraph 2 to each Member is zero. This may be accomplished in any reasonable manner that is consistent with Code Section 704 and the related Treasury Regulations. 3. Tax Allocations. (a) In accordance with Code Section 704(c) and the Regulations thereunder, depreciation, amortization, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial Book Value, such allocation to be made in any manner OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Schedule IV which is permissible under said Code Section 704(c) and the Regulations thereunder and under Code Section 704(b) as determined between the Managing Member, with the Consent of the Special Limited Member, and the contributing Member. (b) In the event the Book Value of any Company asset is adjusted pursuant to the definition thereof, subsequent allocations of income,gain,loss, and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Book Value in the same manner as under Code Section 704(c) and the Regulations thereunder. (c) Except as otherwise provided in Paragraphs 3(a) and (b) above, for federal income tax purposes, each item of income,gain, loss and deduction shall be allocated among the Members in the same manner as its correlative item of "book" income, gain, loss or deduction has been allocated pursuant to the other provisions of Article V and this Schedule IV. (d) Any elections or other decisions relating to such allocations shall be made in a manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to Paragraphs 3(a), (b) and (c) above are solely for purposes of federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Member's Capital Account or share of Net Profit,Net Loss or items of either thereof,or distributions pursuant to any provision of this Agreement. 4. Other Allocation Rules. (a) For purposes of determining the Net Profit,Net Loss, or any other items allocable to any period, Net Profit, Net Loss, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the Special Limited Member using any permissible method under Code Section 706 and the Regulations thereunder. (b) Except as otherwise provided in this Agreement, all items of Company income, gain, loss, deduction and any other allocations not otherwise provided for shall be divided among the Members and in the same proportions as they share Net Profit or Net Loss, as the case may be, for the taxable year. (c) The Members are aware of the income tax consequences of the allocations made by Article V and this Schedule IV and hereby agree to be bound by the provisions of Article V and this Schedule IV in reporting their shares of Company income and loss for income tax purposes. (End of Schedule) OPERATING AGREEMENT—TX AZURE APARTMENTS 1,LLC Schedule IV EXHIBIT J CCHA 392.055 POLICY ��`gtl KOUSI�y�9 y 1 CORPUS CHRISTI HOUSING A UTHOR17Y EXECUTIVE e 9�l PARTNERS �1 H�11511�10s May 14, 2025 Daniel De Leon 1201 Leopard Corpus Christi,TX 78374 Dear Mr. De Leon, This letter is in response to your recent public information request. Please provide the most recent"policy guidelines"adopted by the Corpus Christi Housing Authority as referenced in Texas Local Government Code Sec. 392.055. In response to 392.055(a)An authority may rent or lease housing only to persons of low income. The Corpus Christi Housing Authority(CCHA) provides rental assistance through the Section 8 Project- Based Voucher(PBV)and the Housing Choice Voucher Tenant-Based Voucher(TBV) programs.The PBV program includes the Public Housing program that was converted under the Rental Assistance Demonstration (RAD) program.The TBV program allows eligible families to rent units in the open rental market. Both of these are federal programs with federal regulations governing these programs regarding income and rent requirements. Income limits are described under the Code of Federal Regulations 24 CFR 982.201 and Chapter 4-III. C. describes the CCHA selection process.The following summarizes income guidelines. To be income-eligible,the applicant must be a family in any of the following categories: • A"very low income family. • A"low-income"family that is"continuously assisted"under the 1937 Housing Act_ • A low-income or moderate-income family that is displaced as a result of the prepayment of the mortgage or voluntary termination of an insurance contract on eligible low-income housing. (A family admitted in this category are not counted for income targeting purposes. HUD requires extremely low-income(ELI)families make up at least 75 percent of the families admitted to the HCV program during the CCHA's fiscal year. ELI families are those with annual incomes at or below the federal poverty level or 30 percent of the area median income,whichever number is higher. The 2025 Income Limits for the Corpus Christi Metropolitan Area are provided for your reference. In response to 392.055(a)An authority may rent or lease housing only to persons of low income and only at rentals that persons of low income can afford. Under the PBV and TBV programs, on average,families pay between 30-40 percent of their adjusted income towards rent. 3701 .Ay=_r;Street Corpus Chrlso Texas 73-415 1361) 339-3300 wNvw.hacc.or, ,, In response to 392.055(b)An authority may not rent or lease housing to a tenant that consists of a greater number of rooms than the number the authority considers necessary to provide safe and sanitary housing to the proposed occupants without overcrowding. Chapter 5.1I.B of the CCHA Administrative Plan describes the policy for determining the unit(voucher)size. For each family,the CCHA determines the appropriate number of bedrooms under the CCHA subsidy standards and enters the family unit size on the voucher that is issued to the family.The family unit size does not dictate the size of unit the family must actually lease, nor does it determine who within a household will share a bedroom/steeping room. The following requirements apply when the CCHA determines family unit size: The subsidy standards must provide for the smallest number of bedrooms needed to house a family without overcrowding. * The subsidy standards must be consistent with space requirements underthe housing quality standards. * The subsidy standards must be applied consistently for all families of like size and composition. * A child who is temporarily away from the home because of placement in foster care is considered a member of the family in determining the family unit size. ■ A family that consists of a pregnant woman (with no other persons)must be treated as a two-person family. * Any live-in aide (approved by the CCHA to reside in the unit to care for a family member who is disabled or is at least 50 years of age) must be counted in determining the family unit size. * Unless a live-in-aide resides with a family,the family unit size for any famity consisting of a single person must be either a zero-or one-bedroom unit,as determined under the CCHA subsidy standards. The CCHA wilt assign one bedroom for each two persons within the household,except in the following circumstances: 1. Head of Household is entitled to their own bedroom. 2. Persons of the opposite sex(other than spouses)will be allocated separate bedrooms. Live- in aides will be allocated a separate bedroom. 3. Single person families wit[be allocated one bedroom. The CCHA will reference the following chart in determining the appropriate voucher size for a family: Voucher Size-Persons in Household (Minimum—Maximum) 1 Bedroom 1-2 2 Bedrooms 2-4 3 Bedrooms 3-6 4 Bedrooms 4-8 5 Bedrooms 6-10 Please feel free to reach out to me with any questions. Best regards, Z4�1' Gary A[lsup President and CEO 4/8/25,3:07 PM FY 2025 Income Limits Documentation System—Summary for Nueces County.Texas 1"Ll FY 2025 INCOME LIMITS DOCUMENTATION SYSTEM HUD USER HUD.gov HUD User Home Data Sets Fair Market Rents Section 8 Income Limits MTSP Income Limits HUD LIHTC Database FY 2025 Income Limits Summary FY 2025 Median Family Income FY 2025 Income Limit Persons in Family Income Category Limit 1 2 3 4 5 6 7 8 Area Very Low (50%) Income Limits ($) 28,950 33,100 37,250 41,350 44,700 48,000 51,300 54,600 Corpus Christi, TX Extremely Low Income HUD $82,700 Limits ($)* 17,400 21,150 26,650 32,150 37,650 43,150 48,650 54,150 Metro FMR Area Low (80%) Income Limits ($) 46,350 52,950 59,550 66,150 71,450 76,750 82,050 87,350 NOTE: Nueces County is part of the Corpus Christi,TX HUD Metro FMR Area, so all information presented here applies to all of the Corpus Christi, TX HUD Metro FMR Area. HUD generally uses the Office of Management and Budget (OMB) area definitions in the calculation of income limit program parameters, However, to ensure that program parameters do not vary significantly due to area definition changes, HUD has used custom geographic definitions for the Corpus Christi, TX HUD Metro FMR Area. https ltwww.huduser.gov/portal/datasets/il/il2O25/2025su m ma ry.odn?STATES=48.0&IN PUTNAME=M ETRD 18580M 18580*483559999912BNueces+County&statelist=&stname=Texas&wherefrom=&sta t_. 112 EXHIBIT K SAMPLE CCHA DELAWARE LLC State of Delaware Secretan of State Ditlsioo of Corporations Delhrered 11:05A.lf1IA2I2024 CERTIFICATE OF FORMATION FUD 11:05 Ah11111212024 SR 20244182268 - File?+:umber 10003329 OF Azure Apartments-CCHA, LLC FIRST: The name of the limited liability company is: Azure Apartments-CCHA, LLC SECOND: Its registered office in the State of Delaware is located at 15192 Coastal Highway, Lewes, Delaware 19958, County of Sussex. The registered agent in charge thereof is Harvard Business Services, Inc. IN WITNESS WHEREOF, the undersigned, being fully authorized to execute and file this document have signed below and executed this Certificate of Formation on this November 12, 2024. Bryan Stone, uthorized Person • City of Corpus Christi City Secretary's Office Council Action Request TO: Rebecca Huerta, City Secretary FROM: Council Member Eric Cantu RECEIVED Council Member Carolyn Vaughn JUN 2 0 2025 Council Member Gil Hernandez CITY SECRETARY'S OFFICE COPIES TO: Mayor&Council Peter Zanoni, City Manager Miles Risley, City Attorney SUBJECT: Discussion and possible action for Oak View Group 360 contract ACTION REQUEST: Per Council Policy 16.d., we are requesting that the following item be placed on the next available City Council agenda, which is June 24, 2025, for discussion and possible action: Discussion and possible action regarding Oak View Group 360's performance and financial reporting as operator of the Convention Center Complex, including possible termination of contract, returning naming rights authority to the City Council, and directing staff to initiate a new bidding process for arena management services. Council Member Eric,Cantu �WLR" Council Membeil Carolyn Vaughn Council ember Gil Herna,dez CITY OF CORPUS CHRISTI CITY SECRETARY'S OFFICE COUNCIL ACTION REQUEST TO: Rebecca Huerta, City Secretary FROM: Council Member Carolyn Vaughn, At-Large RECEIVED Council Member Eric Cantu,Dist. 3 Ju 2 0 202� Council Member Gil Hernandez,Dist. 5 CITY SECRETARY'S OFFICE COPIES TO: Mayor&Council --- -— Peter Zanoni,City Manager Miles Risley,City Attorney SUBJECT: Resolution to rescind Corpus Christi Council Resolution 033396 ACTION REOU)EST: Ste►,� 2 N Per Council Policy 16A., we are requesting that the following item be placed on the ftb?MT -N$ 2025, City Council agenda for discussion and possible action: Resolution to rescind Corpus Christi Council Resolution 033396 authorizing the City Manager or designee to execute contracts and amendments for design services or construction materials for the Inner Harbor Seawater Desalination Treatment Plant Project and acquisition of property. Council Member Eric Cantu _-Q wu" r-�QU� Council Mernbd Carolyn Vaughn Council Member Gil H rnandez Resolution to rescind Corpus Christi Council Resolution 033396 authorizing the City Manager or designee to execute contracts and amendments for design services or construction materials for the Inner Harbor Seawater Desalination Treatment Plant Project and acquisition of property; WHEREAS,the City Council gave authorization under Corpus Christi Council Resolution 033396 dated June 25,2024 to the city manager authorizing the execution of a contract and amendments for design services for the Inner Harbor Seawater Desalination Treatment Plant Project with the top scoring design-build firm following the RFP phase of procurement in the estimated amount of $68,000,000.00, authorizing execution of contract amendments and early work packages in the estimated amount of$69,250,000.00, and authorizing acquisition of property in the estimated amount of$750,000.00,for a total amount not to exceed $138,000,000.00 without council oversight; WHEREAS,the City has entered into a design-build (progressive)contract with Kiewit Infrastructure South Co., and projected cost estimates have continued to increase; BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI,TEXAS: SECTION 1.The Council rescinds Resolution 033396 authorizing the City Manager or designee to execute contracts and amendments for design services or construction materials for the Inner Harbor Seawater Desalination Treatment Plant Project and acquisition of property. SECTION 2.The City Manager is instructed to follow normal procurement procedures for all current and future purchases, contracts, and amendments for the Inner Harbor Seawater Desalination Treatment Plant Project. SECTION 3.The City Manager shall provide accurate accounting to Council of all funding spent and encumbered for the Inner Harbor Seawater Desalination Treatment Plant Project and acquired property. i i Resolution authorizing the execution of a contract and amendments for design services for the Inner Harbor Seawater Desalination Treatment Plant Project with the top scoring design-build firm following the RFP phase of procurement in the estimated amount of $68,000,000.00, authorizing execution of contract amendments and early work packages in the estimated amount of $69,260,000.00, and authorizing acquisition of property in the estimated amount of $760,000.00, for a total amount not to exceed $138,000,000.00; and determining all costs attributable to Raw Water; with funding available from the State Water Implementation Fund for Texas (SWIFT). WHEREAS, in accordance with Chapter 2269 of the Texas Government Code, the City is procuring a design-build contractor for the Inner Harbor Seawater Desalination Treatment Plant; WHEREAS, the City has evaluated the Statement of Qualifications submitted in response to the Request for Qualifications and will request a Proposal from the following design-build firms: Corpus Christi Desal Partners, a Joint Venture of Acciona Agua Corporation and MasTec Industrial; Corpus Christi Desalination Team, a Joint Venture of CDM Constructors, Inc. and PLW Waterworks, LLC; Kiewit Infrastructure South Co. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: SECTION 1. The City Manager or designee is authorized to execute a contract for the Inner Harbor Seawater Desalination Treatment Plant Project with the top ranked proposer in response to the Request for Proposal and a professional services agreement with the lead designer, Design-Build contract amendments and contracts to acquire property in a total amount not to exceed $138,000,000.00. SECTION 2. If a contract is unable to be negotiated with the top scoring firm, the City Manager or designee is authorized to negotiate with the remaining firms until a design- build firm is selected and a contract is executed. SECTION 3. The Inner Harbor Seawater Desalination Treatment Plant will provide a new water source for the City of Corpus Christi and all of its customers, including both treated water customers and raw water customers. Accordingly, all costs for the Inner Harbor Seawater Desalination Treatment Plant are chargeable and attributable to raw water. 033396 SCANNED PASSED and APPROVED on the-d, ,) day of JUG , 2024. ATTEST: Paulette Guajardo, Mayor Rebecca Huerta, City Secretary UJ53go • City of Corpus Christi City Secretary's Office Council Action Request TO: Rebecca Huerta, City Secretary FROM: Council Member Carolyn Vaughn,At Large RECEIVED Council Member Eric Cantu, District 3 JUN 2 0 2025 Council Member Gil Hernandez, District 5 CITY SECRETARY'S OFFICE COPIES TO: Mayor& Council Peter Zanoni, City Manager Miles Risley, City Attorney SUBJECT: South Texas Water Authority ACTION REQUEST: Per Council Policy 16.d., we are requesting that the following item be placed on the next available City Council agenda,which is June 24, 2025,for discussion and possible action regarding a Memorandum of Understanding (MOU) between the City of Corpus Christi and the South Texas Water Authority. N QQ44 --� &,�I-ed Council Member Carolyn Vaugh Council Member Eric Cantu Y1 r Counci ember Gil Hernandez MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding entered into this the day of June, 2025,by and between the City of Corpus Christi ("City"), a Texas home-rule municipal corporation, whose address is P.O. Box 9277, Corpus Christi, Texas 78469-9277, acting through its duly authorized City Manager, or the City Manager's designee ("City Manager"), which owns a regional water supply system that provides untreated raw water and treated water to municipal and industrial customers, having been issued Texas Commission on Environmental Quality ("TCEQ") Certificate of Convenience and Necessity ("CCN") No. 10554 and South Texas Water Authority ("STWA"), a conservation and reclamation district and political subdivision of the State of Texas,whose address is 2302 East Sage Road, Kingsville, Texas 78363, which owns a water supply distribution system serving water users within the area described in its Certificate of Convenience and Necessity No. 1370035, acting by and through its duly authorized Representative ("District Representative"). WHEREAS, City is a wholesale provider of untreated raw water and treated water to its municipal and industrial customers in the area described in its CCN; and, WHEREAS, the STWA is a wholesale provider of treated water to its municipal and industrial customers in the area described in its CCN; and, WHEREAS, STWA is in the process of developing a source of treated water from a brackish water desalination plant; and, WHEREAS, STWA has entered into a Water Supply Agreement with Seven Seas Water(STWA) USA,LLC(Seven Seas) for Seven Seas to design,permit,construct, finance,and operate a facility for the production and treatment of water to sell up to 3,000,000 million gallons of water per day to STWA; and, WHEREAS, the area served by the City is experiencing significant draught conditions and as a result City is looking to develop additional sources of water to supplement its existing sources of water; and, WHEREAS, City is desirous of providing an additional source of water to its municipal and industrial customers by purchasing treated water from STWA; and, WHEREAS, City and STWA are desirous of entering into a Water Supply Agreement wherein STWA will sell to City, and City will purchase 28,000,000 gallons per day of treated water. In consideration of the above recitals and the mutual promises, covenants, and agreements in the Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follows: 1. The City and STWA will negotiate a Water Supply Agreement ("Agreement") wherein STWA will expand the brackish water desalination plant to be constructed by Seven Seas such that it can sell to City, and City can purchase for resale 28,000,000 gallons of treated water per day. 2. The City and the STWA will negotiate the terms and conditions to be included in the Agreement to include, but not be limited to the following: a. The term of the Agreement. b. The use and quantity of water. c. The location of the point of delivery between the water delivery system of the City and the water supply delivery system of STWA. d. The measurement of the treated water. e. The price of the treated water. f. How STWA will bill the City. g. The City's right to sell to residential and industrial customers. h. The effect, if any, on the Treated Water Contract currently existing between the City and STWA. i. Remedies in the event of default. j. Required regulatory agency approvals. 3. The City and STWA will approve this Memorandum of Understanding on or before June 20, 2025, and will have a Water Supply Agreement approved by the City Council for the City and the Board of Directors of the District on or before August 24, 2025, or this Memorandum of Understanding will no longer be in force and effect. ACCEPTED and APPROVED on the date set forth above. CITY OF CORPUS CHRISTI By Peter Zanoni City Manager Approved as to form: Lisa Aquilar Assistant City Attorney SOUTH TEXAS WATER AUTHORITY By John Marez Executive Director Approved as to form: Charles W. Zahn, Jr. Attorney for South Texas Water Authority Se GO � O� A H /NCOOPOR AGENDA MEMORANDUM 1852 City Council Meeting of June 24, 2025 DATE: June 10, 2025 TO: Peter Zanoni, City Manager FROM: Arturo Marquez, Director of Economic Development arturom3(a cctexasxom 361-826-3885 Briefing on City Proposed Tax Increment Reinvestment Zone #7 London Area STAFF PRESENTER(S): Name Title/Position Department 1. Arturo Marquez Director Economic Development BACKGROUND: The City of Corpus Christi is proposing the creation of Tax Increment Reinvestment Zone (TIRZ) #7 to support the future development of the London area, encompassing approximately 5,200 acres of predominantly undeveloped land. The Zone is intended to enable targeted investment in public infrastructure—such as roads, utilities, stormwater management, parks, trails, and public amenities—to catalyze residential and commercial growth in one of the city's growth corridors. The City proposes to contribute 50% of their tax increment for the full 25-year term. The city has been in discussion with Del Mar and Nueces County on their participation. LIST OF SUPPORTING DOCUMENTS: PowerPoint— London TIRZ OF F I C E OF • ECONOMIC DEVELOPMENT Proposed London Tax Increment Reinvestment Zone City Council June 2025 Vision of TIRZ #7 Master planning of the area that will promote smart growth to include diverse housing options and commercial services (retail and entertainment) Enhanced parks, trails, and public spaces to improve quality of life Targeted infrastructure investments to catalyze and support sustainable growth Process for Creation of TIRZ 1. Prepare Preliminary Project &Financing Plan 2. City Council Approves the TIRZ at Public Hearing 3. TIRZ Board of Directors Appointed by City Council 4. TIRZ Board prepares & approves final Project &Financing Plan 5. City Council approves Project &Financing Plan 6. Projects may apply for financing in the TIRZ a Time Boundary 'in5a nc sidE b A ry 9 ❑ � C t f aryryl1asel I" C Ohr i,Teeas f � n5hl tky B 5� _ � I f � s o a nd ce.� r� Highway 286 EaN,,�RFa�p i, �„- � Staples St au aes Proposed TIRZ #7 Boundary Proposed T-IRAZ #77111-11 e , 7 Yy� Future�and Use 'C ; .e AeZsIMn4�lllM ResiOen •,// l ,Ydu ,ry' �cwue'Res�eemnl �, GC PLnire90evelopmen[ , A�IaFule/Rw.�i EIXBIp11`.g — xryllq�thtal .� q I emusw • L l.`t Tra Nwt 7 5 oa Aamw� mnaeM dpm SWce %/, Cmsen�lgn - U I - 5 Proposed TIRZ #7 London Area • Maximum 25 years (2026 - 2051), 2025-base year • 50% participation for 25 years • 4,608 Acres • Estimated New Taxable Value = between $2-3 Billion • Estimated Increment Revenue over 25 years = $140 M • Possible participation from Nueces County is being discussed • Possible participation from Del Mar College is being discussed Potential TIRZ #7 Sub-Zones The Proper(A)—located London Land Planned Development N northwest of the intersection of Webb Street and Highway 286, this subzone encompasses approximately 441.06 acres. %J. = ,_,, ('°to • Chapman Commercial(8)— located east of Highway 286, this subzone covers an B estimated 30.5 acres. • Mirabella(C)—Situated Sao 4 northeast of the intersection of Highway 286 and County Road ®s_ C 20A, this subzone includes C approximately 395.21 acres TIRZ #7 Financing Plan Infrastructure • Water,wastewater, storm water • Traffic and street improvements • Public parks and public areas Administration of the TIRZ s TIRZ Board Composition • The TIRZ Board members are appointed by City Council • Total Board Membership may not exceed 15 • Recommended Board Composition: • 9 City Council Appointees • 2 Appointment reserved for Nueces County, should they choose to participate • 2 Appointment reserved for Del Mar, should they choose to participate NEFAWANO Proposed Timeline June 17t" City Council briefing and introduction to TI RZ#7 July 151" Public Hearing and 1 st reading of TIRZ Ordinance July 22nd (contingent upon finalized 2nd reading of TIRZ Ordinance and interlocal agreement with another approval of interlocal agreement with taxing entity) Nueces County and/or Del Mar Next Steps After Creation August 12t" New TIRZ Board approves Final Project and Financing Plan August 26t" First reading of ordinance to approve Final Project and Financing Plan September 2nd Second reading of ordinance to approve Project and Financing Plan QUESTIONS? se GO � O� A H /NCOOPOR AGENDA MEMORANDUM 1852 City Council Meeting of June 24, 2025 DATE: June 20, 2025 TO: Peter Zanoni, City Manager FROM: Brett Van Hazel P.E., Inner Harbor Program Management Office Director brettvh@cctexas.com 361-826-3273 Briefing on the Inner Harbor Water Treatment Campus STAFF PRESENTER(S): Name Title/Position Department 1. Brett Van Hazel Director Inner Harbor Program Management Office BACKGROUND: The Inner Harbor Water Treatment Campus briefing will provide an overview of the project. This briefing will occur twice per month at City Council through the end of calendar year 2025. The briefing topics will vary each council session and will include updates such as project schedule, cost, milestones, upcoming events, and other key information. The topics for the June 24, 2025 briefing will include: • Current Project Status Update and Timeline • Near and Far Field Modeling • Demonstration Plant • Future Project Topics LIST OF SUPPORTING DOCUMENTS: PowerPoint— Inner Harbor Water Treatment Campus Briefing 6/24/25 Update on Inner Harbor Water Treatment Campus Project City Council Meeting CCW I �u� June 24, 2025 Presentation Overview • Current Project Status Update Project Timeline 1 . ® Near and Far Field Modelingjr C Demonstration Plant ■ Future Project Topics Current Treatment Campus Layout 2 Current Project Status Update Project Overview: ft"14 R I A ON V Inner Harbor Ship Channel Proposed Discharge Location Inner Harbor Ship Channel . Phase 1 A — Planning, Pilot • , Proposed Intake Location t Protocol, and Basis of Design Phase 1 B — Design, Early Works, Inner Harbor Water and Guaranteed Maximum Price A - Treatment campus Site Phase 2 — Final Design and j g h Construction " Phase 3 — Operating and ' ,. ' Maintenance Services ;,, ► ; 3 Current Project Status Update Current Status: Phase 1A — Substantially Complete Phase 16 — Start Date: April 15,2025 Contract amendments issued to date: 3 Total IN PROGRESS 4 Project Timeline Current Status* W""` J I F I M I A I M I J I J I A I S N Q • BODR and Cost Model Drafts PRASE under review PHASE 1A MPLETE • Near/Far Field Model is DESIGN AND GMP DEVELOPEMENT complete, and different scenarios are being simulated • .A, SE 1B O N ❑ 1 F I M I k M I J J A 1 S 1 O N J D 1 I F I M A M 1 J A S O N D 1 F M A M J J A 5 O N D J F M A M 1 1 p PHASE 1B COMPLETE FINAL ACCEPTANCE NTP PHASE 1A C MPLETE DEVELOPMENTDESIGN AND GMP 5 Near and Far Field Modeling : Inner Harbor Ship Channel Key Dates: • Model Created: May 2025 • Council Presentation Date: July 15, 2025 IN PROGRESS 6 Demonstration Plant Update Pilot Plant Intent: r The pilot plant study"is proposed for an approximate .m� M� 90-day period and will be used to optimize the pilot T�Co.�moN dune 36.�ePs equipment, operate the pilot equipment and collectmmgopma,emph sufficient data to support the minimum pilot study he aryogC�zsfr_p„.gm„¢„�pdi wm smav emmewfm sawanr waab¢anan a[�r��epaanmAema3awa�manppn 3ameefarapnbbeaFaar requirements of the approved Pilot Study Protocol ash 33g�ry��wbpe333g,g outlined in your submittal and as amended by this "arch aL,2025,the Teas Commisam on Emnonmmtal Oualiry ITCgO)zezaad Iuur at.amaae.avatar ar.a�ant and zemexm denelmevon fax she ary�of c[mm�zs ebruv fury)pnblicwaar sysam(PWsI-The Letter.,, re �mae,00f�eT n aa.°eaer3arA�)§=o�P. ow [w r�anaaa antnap¢nn m sum.m.na.af.awam a awmm same.m prndnee amnb�waaea fr hen of arannawmm,anrraca wear,aaa aMm m+mmy anmceaanaM io-rAe§zso.al m avbwrcal,we are �omwm e�eeaa�an PAP[mavmr Ma an.[ m.aiaa en®g�'ow revues[tormareepn�allow seawater aaawa[er wince for she asyh future m desabvatlov pla¢[cantlng<vs w vs Mat demwsrtmea eomptieme wish aMewwd water qualhT requh®evtnfar pa[abla�watar as Msaa`aimshu laser andm cmrdma wiM ih iAC j Chapter 290 Subchapter P. e tlry'is dnslopmgpWna foe a 3o m 33 miltian galbns pm tlay(3Cnl seavaty desalmavon ara eaM�2esnl�tt wacec from s®tlro zed desalaanon f:at[vall be xrear m drivkingw c wil xa rero(mm szbe n,....�Nevniaetl espemmbusaryof CoriueCMstl BaS'M the NveremMa G title Coaecal Ba"n m Hvaea CouaT.iexaa(Inver[imboz Chamd).To meet she PaoPaud dr]nbvg warm 4uahty goals,Me Proposetl[aa®m[Pmress wM mehde asehred Aa Flotari®f0AF1 sv zemavefree adl algae,bulk mspended satitla and sttcleable mhds Rom Me seavaaar;vusrofilvatlanpf�m vinahlnatlo¢(LR)¢embzavez m mat oau�O)for tlesalmnaov;re ® um h1Pa e mosal/wetnauoe of�vvwes tied MCMmwmumr"pw`xdo�m 7 Future Project Topics Upcoming Briefings and Meeting: • City Council Briefings • Twice per month through 2025 • Next briefing July 15, 2025 Upcoming Topics: • Demonstration Plant Construction Status Update • Near and Far Field Modeling Results Update • Cost Model Results Update 8 ... . .... . . • • •• • •• •• • ••• •i • •• .ii no f• • • 0 ■■ `` !••. . . ..•.."..• f. f•••. •••f • f •••' s•••".•.•' f ..• •.. .i••.. .. ••. ..• ..... ..• • ••••••• i• f• • E 0 R 00 4% • f• •• •i •i• 00 f * :064 • ** 00 • • • • i• •. •i . • 0 f•• •• f 000•• •!• ••i•i • •••ff . •• f • • •f • •• ••• • • • • •: f f 0 0 HARbun 0000000: 0000 00 • •• WATER TREATMENT CAMPUS . .. f• . . ....... . . ... .. .. . ••. 0 9