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AGREEMENT CONCERNING CREATION AND OPERATION
OF TRADITION MUNICIPAL UTILITY DISTRICT NO. 2
OF DENTON COUNTY
STATE OF TEXAS §
COUNTY OF DENTON §
This Agreement Concerning Creation and Operation of Tradition Municipal Utility
District No. 2 of Denton County (this "Agreement") is entered into by the City of Fort Worth,
Texas a home-rule municipal corporation situated in Tarrant, Denton, and Wise Counties, Texas,
(the "), acting by and through its duly authorized Assistant City Manager; Aperion
Communities, LLLP, Eladio Properties, LLLP, Drooy Properties, LLLP, Rocksand Investments,
LLLP, Justin Ranch 427, LLLP, and Justin Ranch 123, LLLP, Arizona limited liability limited
partnerships (individually and collectively, "Owner"); and Tradition Municipal Utility District
No. 2 of Denton County, a municipal utility district created pursuant to Article XVI, Section 59,
of the Texas Constitution, Chapters 49 and 54 of the Texas Water Code and the applicable
Special District Local Law and any other district created over the Development by dividing the
District into one or more new Districts pursuant to the District Legislation (the "District"), which
District, after the District Confirmation Date (or, for any later created District, the date the
election dividing a District is held pursuant to § 8189.104 of the District Legislation), will
become a Party to this Agreement.
ARTICLE I
RECITALS
A. Owner has represented to the City that Owner is the owner of approximately
1,922.737 acres in Denton County, Texas, as shown on Exhibit A and described on Exhibit B
attached to this Agreement (the "Development"). The Development lies entirely within the
City's extraterritorial jurisdiction ("ETJ").
B. The Texas legislature approved the creation of Tradition Municipal Utility
District No. 2 of Denton County containing the Development by House Bill 3182, 80th Texas
Legislature, Regular Session, Special District Local Laws Code, Chapter 8189, effective
September 1, 2007 (the "District Legislation"); however, the District Legislation provides that
the election to confirm creation of the District may not be held unless the City adopts a
resolution after September 7, 2007, reconfirming its consent to the creation of the District.
C. Owner has submitted a petition to the City to obtain the City's consent to the
creation of the District(the "Consent Petition") in accordance with the District Legislation.
D. Owner will submit a petition to the City requesting that certain commercial
portions of the Development be annexed into the corporate limits of the City for the limited
Agreement Concerning Creation and Operation
of Tradition MUD No.2 Page l
0�-22-0 0 A 1 "I : 03 IN
Page 1 of 1
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 1/29/2008
DATE: Tuesday, January 29, 2008
LOG NAME: 06-FRADI1-IONCORR REFERENCE NO.: **C-22640
SUBJECT:
Correction of Mayor and Council Communication C-22589, Adopted on December 18, 2007, to Add
Two Limited Partnerships, Justin Ranch 427, LLLP, and Justin Ranch 123, LLLP, as Parties to the
Tradition Municipal Utility District No. 2 Contracts and the Consent Resolution and Authorize the
Execution of the Corrected Consent Resolution and Contracts
RECOMMENDATION:
It is recommended that the City Council approve the correction of Mayor and Council Communication C-
22589, adopted on December 18, 2007, to add two limited partnerships, Justin Ranch 427, LLLP, and
Justin Ranch 123, LLLP, as parties to the Tradition Municipal Utility District No. 2 contracts and the consent
resolution and authorize the execution of the corrected consent resolution and contracts.
DISCUSSION:
On December 18, 2007, (C-22589) the City Council approved the Consent Resolution and authorized the
execution of the the Development Agreement, Buy-Out Option Agreement, Impact Fee Agreement, Utility
Agreement, Wholesale Wastewater Service Agreement, and the Agreement for the Sale of Treated Water
and Approve the Form of the Strategic Partnership Agreement for Tradition Municipal Utility District No. 2 of
Denton County. After City Council approval of C-22589, the developer notified the City that two additional
parties needed to be added to the contract.
Adoption of this correction Mayor and Council Communication will authorize the addition of the two
necessary parties, Justin Ranch 427, LLLP, and Justin Ranch 123, LLLP, to the Consent Resolution and
the contracts.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that this action will have no material affect on City funds.
TO Fund/Account/Centers FROM Fund/Account/Centers
Submitted for City Manager's Office by: Dale Fisseler (6140)
Originating Department Head: Fernando Costa (8042)
Additional Information Contact: Susan Alanis (8180)
http://apps.cfwnet.org/council_packet/Reports/mc_print.asp 5/28/2008
Page 1 of 3
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 12/18/2007 - Res. No. 3568-12-2007
DATE: Tuesday, December 18, 2007
LOG NAME: 06TRADITION2 REFERENCE NO.: C-22589
SUBJECT:
Authorize Execution of the Consent Resolution, Development Agreement, Buy-Out Option
Agreement, Impact Fee Agreement, Utility Agreement, Wholesale Wastewater Service Agreement,
and the Agreement for the Sale of Treated Water and Approve the Form of the Strategic Partnership
Agreement for Tradition Municipal Utility District No. 2 of Denton County
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt a resolution consenting to the creation of Tradition Municipal Utility District No. 2 of Denton County
("District");
2. Authorize the City Manager or a designee to execute the following contingent upon receipt of necessary
executed documents from Aqua Utilities:
a. A Development Agreement between the City and Aperion Communities, LLLP, Eladio Properties,
LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP;
b. A Buy-Out Option Agreement between the City, Aqua Utilities, Aperion Communities, LLLP, Eladio
Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP, and the District;
c. An Impact Fee Agreement between the City, Aqua Utilities, Aperion Communities, LLLP, Eladio
Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP, and the District;
d. A Utility Agreement between the City and Aqua Utilities, Aperion Communities, LLLP, Eladio
Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP, and the District;
e. A Wholesale Wastewater Service Agreement between the City and Aqua Utilities;
f. An Agreement for the Sale of Treated Water between the City and Aqua Utilities; and
3. Authorize the City Manager or a designee to bring forth the Strategic Partnership Agreement for approval
after the formation of the Municipal Utility District.
DISCUSSION:
Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, and Rocksand
Investments, LLLP, (AEDR) are Arizona limited liability partnerships that own and are developing
approximately 2,663 acres in Fort Worth's and Northlake's extraterritorial jurisdiction as a mixed-use
development to be known as "Tradition." The property is in Denton County and is located north of Highway
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114 and west of Highway 156. On December 13, 2005, (M&C C-21198) the City Council authorized the City
Manager to enter into contracts for the first 431 acres of this development known as Tradition Municipal
Utility District No. 1 of Denton County. The district was confirmed by the voters on May 12, 2007.
On September 12, 2006, (M&C G-15392) the City Council granted conditional consent to Tradition
Municipal Utility District No. 2 of Denton County in response to a petition submitted by AEDR. The intent
was to allow the creation of a "master MUD" that would subsequently be subdivided into smaller tracts
consistent with their development phases. During the 2007 legislative session, H.B. 3182 was approved
and authorized the creation of this district consisting of 1,922.737 acres subject to adoption of a consent
resolution by the Fort Worth City Council.
The attached resolution grants formal consent to the formation of the District and specifically grants to the
District the authority to finance road projects. In addition, it grants the City Manager the authority to execute
the "Agreement Concerning Creation and Operation of Tradition Municipal Utility District No. 2 of Denton
County" (the Consent Agreement). This is the contract between the developer, the District, and the City
governing the issuance of bonds, the construction standards for infrastructure, and the terms of future
annexation.
The other documents listed above, which are available for public inspection and copying in the City
Secretary's Office, can be summarized as follows:
The Development Agreement provides for the enforcement of municipal building codes and establishes
land use and development regulations for the Development. In addition, it imposes Special Regulations to
govern design issues such as block lengths and street right-of-way and sidewalk widths. The Development
will generally be in compliance with development standards within the City limits. The Agreement also
identifies enhancements beyond the City's regulations in terms of amenities, entry features and
landscaping.
The remaining five agreements identified as items b through f above relate to the provision of water and
wastewater facilities and service to the Development. Aqua Utilities is the holder of the Water Certificate of
Convenience and Necessity (CCN) in the Development and are therefore party to several of the
agreements.
Aqua Utilities will provide retail water and wastewater service to the Development. The City will provide
wholesale water service through a wholesale contract similar to those with our customer cities. The provider
for wholesale wastewater service is still under negotiation. The goal of the City and the Developer is to
partner with Trinity River Authority (TRA) and install a new interceptor line from the existing TRA
wastewater treatment facility at Denton Creek. If this occurs, the City will provide wholesale wastewater
service to Aqua Utilities through a wholesale contract and a TRA interceptor line agreement will be brought
to City Council for consideration. If the negotiation of TRA interceptor option is unsuccessful, the Developer
intends to build a package treatment plant to be operated by Aqua Utilities.
The Impact Fee Agreement will allow the City to recover the treatment, pumping and other infrastructure
costs associated with providing water and wastewater service to the Development. Under the Buy-Out
Option Agreement the City has the option to purchase the water and wastewater facilities in the
Development from the District for $10 and become the retail water and wastewater service provider. This
can occur at anytime after 17 years of the first connection to retail water or wastewater utility service within
a District, or within 90 days before the date of annexation of a District by the City. Aqua Utilities will agree
not to contest the application of the City for the CCN for the area within that District.
The Strategic Partnership Agreement will authorize the City to annex acreage within the Development
designated for commercial development for the limited purpose of imposing sales and use tax. This
agreement will be presented to the City Council with the appropriate public hearings after the district is
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formally established by election.
This Development will not require the expenditure of City funds or the collection of offsetting revenue for
wholesale services for several years.
FISCAL INFORMATION/CERTIFICATION:
The Finance Director certifies that approval of these Agreements will have no immediate material effect on
City funds. Any effect on expenditures and revenues will be budgeted in future fiscal years.
TO Fund/Account/Centers FROM Fund/Account/Centers
Submitted for City Manager's Office by: Dale Fisseler (6140)
Originating Department Head: Fernando Costa (8042)
Additional Information Contact: Susan Alanis (8180)
http://apps.cfwnet.org/council_packet/Reports/mc_print.asp 5/28/2008
K L G/aT E S Kirkpatrick& Lockhart Preston Gates Ellis LLP301 Commerce
Suite 3000
Fort Worth. TX 76102-4136
T 517.347.5270 www.klgates.com
May 2, 2008
Hand Delivery
Susan Alanis
Deputy Director
Planning and Development Department
City of Fort Worth
1000 Throckmorton Street
Fort Worth, Texas 76102
Re: Tradition 11, Denton County, Texas
Dear Susan:
Enclosed please find counterpart originals of the documents listed below for
execution on behalf of the City of Fort Worth. Except for the Development Agreement, four
originally executed documents are enclosed. Documents 1 through 6 have been signed on
behalf of each owner entity. Documents 4 through 7 have been signed by Aqua Utilities, Inc.
Documents 1 and 7 are fully executed. The remaining documents must be signed by
Tradition Municipal Utility District No. 2 of Denton County after the district is confirmed.
Documents are enclosed as follows:
1. Six copies of Development Agreement. Please return the document marked
"Property of Denton County" to me, together with two other originally executed agreements.
I will return the "Property of Denton County" document to the Denton County Clerk and will
file the Development Agreement in the Denton County real property records in accordance
with Section 10.04.
2. Agreement Concerning Creation and Operation of Tradition Municipal Utility
District No. 2. Note that I have substituted the revised Agreement for Sale of Treated Water
(revised Section 9.02B) and Buy-Out Option Agreement (revised Section 2.03) as exhibits to
the Agreement Regarding Water and Wastewater Utility Service, which is attached as an
exhibit. Please retain one originally executed agreement for your records and return three
originally executed agreements to me. Upon confirmation of the district, we will deliver a
fully executed agreement to you.
3. Agreement Regarding Payment of Impact Fees and Financing of Water and
Wastewater Facilities. Please retain one originally executed agreement for your records and
DALLAS-1097924 v 014940-00010
K&L GATES
Susan Alanis
May 2, 2008
Page 2
return three originally executed agreements to me. Upon confirmation of the district, we will
deliver a fully executed agreement to you.
4. Buy-Out Option Contract. Please retain one originally executed agreement
for your records and return three originally executed agreements to me. Upon confirmation
of the district, we will deliver a fully executed agreement to you.
5. Memorandum of Buy-Out Option Contract. Please retain one originally
executed agreement for your records and return three originally executed agreements to me.
Upon confirmation of the district, we will deliver a fully executed agreement to you.
6. Agreement Regarding Water and Wastewater Utility Service. Please retain
one originally executed agreement for your records and return three originally executed
agreements to me. Upon confirmation of the district, we will deliver a fully executed
agreement to you.
7. Agreement for Sale of Treated Water. Please return two originally executed
agreements to me so that I can make a copy for my records and forward the originals to Chris
Luning, counsel for Aqua Utilities, Inc.
I will also provide copies of the enclosed documents to Mr. Luning, with an original
of Documents 3 through 6 to be provided to Mr. Luning after they are signed by the district.
If you have any questions, please give me a call.
Very truly yours,
Marcella . Olson
Attachments
cc: Sarah Fullenweider w/o attachments
Christa Lopez w/o attachments
Gary Lane w/o attachments
Tim Green w/attachments
Susan Zachos w/attachments
Holly Vandrovec w/attachments
MO/pmk
DALLAS-1097924 v1 014940-00010
Pagel of 2
Tidwell, Allison
From: Gray, Allison IVI.
Sent: Wednesday, August 19, 2009 11:10 AM
To: Gonzales, Ronald; Alanis, Susan
Cc: Fullenwider, Sarah; Burghdoff, Dana; Hendrix, Marty; Cole, Tennie; Madison, Menique; Otis, Sarah; Seidel,
Nicole M.; Tidwell, Allison; Tinker, Marlena; Knight, Beth
Subject: RE: MUD Contracts
Ron,
I have contacted Marcella Olson, the attorney for the Municipal Utility District and she has spoken to the representatives
of the district. The contracts that we received and were partially executed were picked up and returned to the District for
their execution and recording. The contracts required that the documents be executed within 60 days of the confirmation
of the district. Due to the economy and some personnel changes with the property owner the district has not yet been
confirmed. There is not a date certain for that district confirmation.
So Ron, the contracts are in the possession of the Municipal Utility District and have not been fully executed yet. The
property owner believes that someone will purchase the property, confirm the district, execute the contracts and move
forward. Unfortunately, I can't tell you when we will get fully executed contracts returned to us.
If you have any questions or need further information please let me know and I will tell you what I can,
Allison
From: Gonzales, Ronald
Sent: Thursday, August 13, 2009 3:31 PM
To: Alanis, Susan; Gray, Allison M.
Cc: Fullenwider, Sarah; Burghdoff, Dana; Hendrix, Marty; Cole, Tennie; Madison, Menique; Otis, Sarah; Seidel, Nicole M.;
Tidwell, Allison; Tinker, Marlena
Subject: RE: MUD Contracts
If the pra,etice c;1,1111ut be Suspended I hell Nve recomiurnd tNvo col►ios of the co►►travt be hroN ided
For nnn►L►oring, We will 111,61lt"I.ln a cop* here For the officia-1 record aind refill-11one to You For
1`1111 excelition. 'I'llank you slisa.11 a,I)d Mlicon.
Run
From: Alanis, Susan
Sent: Thursday, August 13, 2009 3:08 PM
To: Gonzales, Ronald; Gray, Allison M.
Cc: Fullenwider, Sarah; Burghdoff, Dana
Subject: Re: MUD Contracts
Ron:
I will find out why you haven't received it and resolve that if possible. It will not be possible to suspend this practice
altogether due to the cross-referencing in them. It has always been anticipated that there could be a long gap before final
execution because some cannot be signed until formation of the separate governmental entities. With the slowdown in
development, they may be slowed even further. It makes sense to me for your office to have the official record even
though they are partially executed so they are available for public inquiry.
Allison:
Please see what is going on with these in particular.
8/19/2009
Page 2 of 2
Thanks,
Susan
From: Gonzales, Ronald
To: Gray, Allison M.
Cc: Burghdoff, Dana; Alanis, Susan
Sent: Thu Aug 13 14:59:23 2009
Subject: MUD Contracts
A I 1 i sort,
I lla.ve been informed that our office has assigned 14 conti-m-t m nlbers for NIt1D contracts for
which we have not received the fully executed docurllent, The contract lululbels are as follows:
3(1200, 3fi201, 36202, 364629 364639 36464, 36465, 36466, 36467, 36468, 37136, 37137, 37133, 37139
itlid 37140
In the past, Mart)' had i gived to Issm, contract 1111 lbers for the ARM contrak•ts as we Were
advised that we would receive the executed contract for processing 1,11(1 naaintc'na,ncc upon a,ll
signa,tuars beim; obtained. Since we have not received the executed copies for the above MUD
eonta•aets, Marty leas directed that effective toda;v we are not tKa issue contract nnlubel•s for ally
M U D contract that is not f u l l• executed.
At. your earliest oppol•tamity, please provide the executed copies of the above MUD corltriac•ts for
our records, if available. If they are not available, please ailvise who we ulaY contavt, to obtain
the copies. 'rhaak yoii.
]toll Gonzales
Assistant City Secreta,r�, ('its of Foil, Worth
liona,lll.(�i�>uzalcs n>fort%vortll iov.org
817.1392.6164
"With Our Tmwwork the Dramm Works"
8/19/2009
Pagel of 2
Tidwell, Allison
From: Hendrix, Marty
Sent: Monday, June 02, 2008 8:48 AM
To: Tidwell, Allison
Subject: RE: Contracts Ready for Pick Up
Yes—go ahead and make an exception— but can you put a note in the contract log of this or perhaps even print out this
e-mail and put in the contract folder.
Marty Hendrix, TRMC/MMC
City Secretary
City of Fort Worth
1000 Throckmorton
Fort Worth, TX 76102
Telephone: 817-392-6161
FAX: 817-392-6196
E-mail: marty.hendrix@fortworthgov.org
From: Tidwell, Allison
Sent: Monday, June 02, 2008 8:45 AM
To: Hendrix, Marty
Subject: FW: Contracts Ready for Pick Up
Please see below. There were only two contracts in those boxes of contracts that were
ready to execute. The rest were sent back with an IOC that we needed signatures before
we could fully execute. Do you want me to make an exception for these contracts?
Administrative/Records Technician
City Secretary's Office
Phone: (817) 392-6090
Fax: (817) 392-6196
www.fortworthgov.org/csec
"If your actions inspire others to dream more, learn more, do more and become more, you are a
leader." --John Quincy Adams
From: Gray, Allison M.
Sent: Monday, June 02, 2008 8:37 AM
To: Tidwell, Allison
Subject: RE: Contracts Ready for Pick Up
Allison,
I picked these contracts for Tradition up on Thursday but noticed that the ones that were not fully executed do not have
contract numbers assigned to them. In the past we have assigned contract numbers to the documents as place holders,
so that when all were fully executed they would be together.
6/2/2008
Page 2 of 2
Did we make the choice to not assign placeholders intentionally or do we want to do that before I return them to the
customer?
Thanks,
Allison
From: Tidwell, Allison
Sent: Thursday, May 29, 2008 10:42 AM
To: Gray, Allison M.
Subject: Contracts Ready for Pick Up
Allison,
You have two boxes of contracts in our office that are ready for pick up. Thanksl
�� ✓ia�ir�
Administrative/Records Technician
City Secretary's Office
Phone: (817) 392-6090
Fax: (817) 392-6196
www.fortworthgov.org/csec
"If your actions inspire others to dream more, learn more, do more and become more, you are a
leader." --John Quincy Adams
6/2/2008