§ 30-102. Specific regulations.

As a prerequisite to the grant of written consent to a proponent of any political subdivision or municipal utility district for the creation of a district within the area of the extraterritorial jurisdiction of the city, the proponent shall agree and covenant in writing to adhere to the following specific rules, regulations and standards:

(a)

Bonds, generally: Bonds may be issued by the district only for the purpose of purchasing or constructing or contracting with the City of Pearland or otherwise acquiring waterworks systems, sanitary sewer systems, sewage treatment facilities, storm sewer systems and drainage facilities, or parts of such systems or facilities, and to make any and all necessary purchases, construction, improvements, extensions, additions, and repairs thereto, and to purchase or acquire all necessary lands, right-of-way easements, sites, equipment, buildings, plants, structures and facilities therefor, and to operate and maintain same, and to sell water, sanitary sewer and other services within or without the boundaries of the district. All district bonds shall expressly provide that the district shall reserve the right to redeem said bonds on any interest payment date subsequent to the tenth (10th) anniversary of the date of issuance at a premium not to exceed two and one-half (2½) percent of par value, reducing one-half (½) of one percent of par value each year thereafter to par value. Bonds (other than refunding bonds and bonds sold to a federal or state agency) shall be sold only after the taking of public bids therefor, and no bonds shall be sold for less than ninety-five (95) percent of par, provided the net effective interest rate on bonds so sold, taking into account any discount or premium as well as the interest rate borne by such bonds, shall not exceed two (2) percent above the highest average interest rate reported by the "Daily Bond Buyer" in its weekly "20 Bond Index" during the thirty-day period next preceding the date of sale of the bonds. Bids for the bonds will be received not more than forty-five (45) days after notice of sale of the bonds is given. The order or resolution of the district authorizing the issuance of all refunding bonds of the district shall be approved by the city council of the city. The district's resolution authorizing the issuance of its bonds will contain a provision that the pledge of the revenues from the operation of the district's water and sewer and/or drainage system to the payment of the district's bonds will terminate when and if the City of Pearland, Texas, or some other city annexes the district, takes over the assets of the district and assumes all of the obligations of the district. No land will be added or annexed to the district until the City of Pearland has given its written consent by resolution of the city council to such addition or annexation.

(b)

City recommendations regarding sale of bonds: The City of Pearland will make recommendations to the board of the district and its financial advisor as to the amount of bonds that should be authorized, the installment sale of such authorization, the maturity schedule of each installment, the optional provisions to be contained in such bonds, and the sale and delivery of the district bonds.

(c)

Approval of mayor of sale of bonds: Prior to the sale of any series of district bonds, the district shall secure a letter of the mayor to the effect that the district is in compliance with this article, and a letter of the mayor addressed to the Attorney General of Texas approving or objecting to the issuance of any bonds of the district.

(d)

Bond escrow: The district shall not be permitted to escrow any funds in excess of two (2) years' interest on the bonds which the district issues and shall levy a tax simultaneously with the first installment of such bonds and will continue a tax levy until such bonds are paid in full, unless the revenues of the system are adequate to discharge such bonds.

(e)

Initial board of directors: At least one of the members of the initial board of directors shall be a person selected by the city council.

(f)

Plans and specifications: Before the commencement of any construction within the district, the district, its directors, officers or the developers and landowners shall submit to the city or its designated representative all plans and specifications for the construction of water, sanitary sewer and drainage facilities to serve such district and obtain the approval of such plans and specifications by the city. All water wells, water meters, flush valves, valves, pipes and appurtenances installed or used within the district shall conform exactly to the specifications of the city. All water service lines and sewer service lines, lift stations, sewage treatment facilities and appurtenances thereto, installed or used within the district shall comply with the city's standard plans and specifications. Prior to the construction of such facilities within the district, the district or its engineer shall give written notice to the city stating the date that such construction will be commenced. The construction of the district's water, sanitary sewer and drainage facilities shall be in accordance with the approved plans and specifications and with applicable standards and specifications of the city, and during the progress of the construction and installation of such facilities, the city or an employee or designated agent thereof, may make periodic on-the-ground inspections. As a further definition of the terms used in this paragraph, specific mention of the fact is made that "plans and specifications," "standard plans and specifications," "approved plans and specifications" or "applicable standards and specifications" are defined to mean and to require city approval only of the method of construction and types of materials to be employed therein by the district and are not meant to limit the discretion of the board of directors of the district to determine what facilities may be constructed, paid for and maintained by the district.

(g)

Plat approval: The owner or developer of the land within the district shall covenant and agree that he or they will, prior to the sale of any residential lot, obtain the approval of the planning and zoning commission and the city council, if normally required, of a plat thereof and properly record it in the deed records. The district will not provide water and sewer service to a residential lot unless the plat covering such lot has been approved by the planning and zoning commission and the city council.

(h)

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

(i)

Utility rates: The district will use its best efforts to charge rates for water and sewer service not less than the rates charged by the city to its customers.

(j)

Utility operations: The district will have its water and sewer system operated and maintained by the city, if both the city and the district can agree upon mutually satisfactory terms and conditions.

(k)

Deposit: Within six (6) months after consent to the creation of a district is given by the city or within six (6) months after the district holds a bond election, whichever is the later, the district shall pay twenty thousand dollars ($20,000.00) to reimburse the city for all of its fiscal, legal and engineering fees and expenses relating to:

(1)

Necessity and feasibility of the creation of the district;

(2)

The financial advisory services described in subsection (i) hereof;

(3)

The city's review of plans and specifications of the district's facilities; and

(4)

Supervision of inspection of district's facilities.

The district shall also be obligated to pay additional expenses incurred by the city for the foregoing not to exceed the additional sum of five thousand dollars ($5,000.00). Such sum shall be used by the city for the purpose of paying said costs incurred for that purpose. If any part of the deposit is not needed for the purpose of paying such fees and expenses, it shall be returned forthwith to the district. No interest will be allowed on any deposit. It is understood that the fees and expenses paid will be those actually incurred by the city and the city will make an accounting to the district. The persons requesting the city's consent to the creation of a district shall be obligated to guarantee the payments imposed upon the district as set forth in this section.

(Ord. No. 411, § 4, 12-17-79; Ord. No. 443, § 32, 8-23-82; Ord. No. 411-1, § 1, 10-21-82)