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HomeMy WebLinkAboutP.R. 15001: CHEVRON USA, INC.interoffice MEMORANDUM To: Mayor, City Council, and City Manager / From: Mark Sokolow, City Attorney ~~..~ ~L~~'°`~ Date: December 12, 2008 Subject: P. R. No. 15001; Special Council Meeting December 15, 2008 Regular Council Meeting December 16, 2008 Attached i s P . R . No . 15 0 O 1 authorizing the City Manager to execute an Industrial District Agreement with Chevron USA, Iric. We are asking the companies to review the attachments to make certain that we have the latest legal descriptions, drawings and ownership information. Mr. Morisse of Chevron is still reviewing the Industrial District Agreement and the attachments. MTS:ts Attachment Copy to: Director of Finance Mr. Morisse CHEVRON USA z.pr15001 memo P. R. No. 15001 12/12/08 is RESOLUTION N'O. A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN INDUSTRIAL DISTRICT AGREEMENT WITH CHEVRON USA, INC. WHEREAS, the City Council of the City of Port: Arthur deems it in the best interests of the citizens of Port Arthur to enter. into an ~~In Lieu of Tax" Agreement with Chevron USA, Inc. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THl3 CITY OF PORT ARTHUR: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City Council hereby authorizE~s the City Manager to execute an ~~In Lieu of Tax" Agreement with Chevron USA, Inc., in substantially the same form as attached hereto as Exhibit "A". Section 3. That Chevron, USA, Inc. shall. sign and return the Agreement by December 23, 2008, or this Resolution is null and void and the property described herein is annexed, effective December 31, 2008 at 11:59 p.m., as further delineated in P. 0. No. 5925. Section 4. That a copy o.E the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of , A.D., 2008, at a Meeting of the City Council of the City c>f Port z.pr15001 Arthur, by the following vote: AYE:: Mayor Councilmembers NOES: MAYOR ATTEST: TERRI HANKS, ACTING CITY SECRETARY APPROVED AS TO FORM: A CITY ATTORNEY APPROVED FOR ADMINISTRATION: CITY MANAGER _: z.pr15001 EXHIBIT "A" STATE OF TEXAS § COUNTY OF JEFFERSON § INDUSTRIAL DISTRICT AGREEMENT WITH CHEVRON T:f . S .A. , INC . (2009) WHEREAS, in December 200:3, the City of Port Arthur (hereinafter referred to as the "City") and Chevron U.S.A., Inc. entered into an Industrial District Agreement for the Chevron facility providing for the payment to the City of Port Arthur of $150,000 per year from 2004 to 2008; and, WHEREAS, the Industrial District Agreement was approved by Resolution No. 03-354 and expires on December 31, 2008; and, WHEREAS, the assessed value on this facility has grown over the years to the JCAD assessed value of at lE~ast $80,210,640; and WHEREAS, the City Counc_Ll is concerned as to the unemployment rate of Port Arthur residents; and, WHEREAS, the City Council is interested in maximizing job opportunities and contracting opportunities for Port Arthur residents and Port Arthur businesses and contractors. The Council is interested in working with industry and Lamar State College-Port Arthur to obtain sound information on current hiring and procurement z.ida chevron 2009.12.1 1 efforts, including results, and working with industry and the Port Arthur City Council to try to increase employment opportunities for Port Arthur residents and procurement i.or Port Arthur companies; and WHEREAS, the Council also believes improved opportunities for minority and women-owned businesses is important; and WHEREAS, Company hiring and procurement experience and efforts to increase Port Arthur resident hiring and Port Arthur procurement opportunities will be considered by tYie Council in future in-lieu of tax contractual agreements; and WHEREAS, the Company will provide updated written reports at such intervals as :requested by the City during the term of this Agreement; and WHEREAS, the Company owns the property described in Attachment "A"; and WHEREAS, the City and the Company desire to enter into an Industrial District AgreE~ment with respect to the property described in Attachment "A" that is within the extraterritorial jurisdiction of the City; and WHEREAS, the City and the Company agree that there has been full and adequate consideration for tYiis Agreement; and z.ida chevron 2009.12.1 2 WHEREAS, this Agreement is authorized under Sections 42.044 and 212.172 Local Government Code, Vernon's Texas Code Annotated and Article 1, Section 5 of the Cit:y's Charter, and that the parties agree that the follovuing terms are reasonable, appropriate, and not unduly restrictive of business activities; and WHEREAS, all parties fired that this Agreement, as delineated herein, is beneficial to each party. NOW, THEREFORE, in consideration of the promises and the mutual agreements of the parties containE~d herein, the City and the Company agree with each other as follows: Section 1-Pay ments by the Company (a) For the year 2009, the Company shall pay to the City the amounts delineated in this Section so long as this Industrial District Agreement is in full force and eff=ect and all of the property described in Attachment "A" is not annexed by the City. (b) The Company shall pay to the City of Port Arthur amounts equal to seventy-five percent (75%) of the amount of taxes that the Company would have paid to the City with respect to the land, improvements, unit:, equipmesnt, inventory and all other property located on the land, described in Attachment "A", as if they had. been located z.ida chevron 2009.12.1 3 within the corporate limits of the City of Port Arthur. The "In Lieu of Tax" payment shall :be paid by October 15, 2009. (c) The City shall not :refund or credit any monies previously paid by the Company prior to the' date of the execution of this Agreement, either directly Or indirectly, to the City. Except as delineated in Section 15, once monies are paid to the City oi. Port Arthur on October 15, 2009, the City shall not refund or credit any of said monies. Section 2. In working with the City Council, the Company shall also do the following: (a) The Company will notify the City Council and post job openings with the Texas Worki=orce in Port Arthur. The Company will also request that its contractors and subcontractors notify the Task Force and post its job openings with the Texas Workforce in Port Arthur. (b) The Company will notify the following of job openings: • City of Port Arthur • Official newspaper of the City • Texas Work Force Commission • Lamar State College of Port Arthur z.ida chevron 2009.12.1 4 • Port Arthur ISD • Sabine Pass ISD • Port Arthur Labor Unions • Digital Work Force • Associations representing historically underutilized segments of the population in Port Arthur- who seek to be notified of job opportunities The Company will also request that its contractors and subcontractors notify the above nine entities of job openings. (c) The Company will make' reasonable efforts to break up contracts to allow Port Arthur contractors the opportunity to bid on projects. (d) The Company will include a provision in the Company's contracts with its prime' contractors, which requires the prime contractors to read and comply with the terms of this Agreement relating to the use of Port Arthur vendoY•s, suppliers, subcontractors, professionals, and historically underutilized businesses and segments of the population. z.ida chevron 2009.12.1 5 (e) The Company and its contractors will pay at least the prevailing wage, as reasonably set by the City, in accordance with Chapter 2258, Texas Government Code, V.T.C.A. Section 3. If requested orally or .in writing by the Company, the City's Fire Department shall provide back- up Fire Suppression Support as determined by the City's Fire Chief, and the City's Police Department. shall assist in providing an evacuation rouge and traffic ~~ontrol in the case of a fire or a chemical release at the Company's facilities located in the City's extraterritorial jurisdiction. Nevertheless, the Company shall abide by and shall take such precautions as to prevent (1) fires, explosions and chemical releases and (2) the imprudent discharge of storm water that: contribute to flooding on adjacent property. The Company shall also provide an evacuation as is expected in the industry, and as is required by applicable federal and state laws, and the health and safety laws of the City. The Company shall employ or provide sufficient: primary fire suppression response, as well as control and abate chemical releases. The Company shall provide the City's Fire Chief and Police Chief with Emergency Response Plans for any plants, refineries, chemical operations or other hazardous z.ida chevron 2009.12.1 6 operations that take place ~on the land, described in Attachment "A". If there is a fire and the City is requested to provide initial and primary fire suppression services or if a clean up is rE~quired, the Company will pay to the City the costs and expenses incurred by the City and any of its departments or of any of its affiliated providers, i.e. ambulance comp<~nies that are called to the scene. Section 4. The Company shall immediately notify the central dispatch office which serves the City's Fire Chief, Police Chief, and the City's Emergency Management Coordinator of all incident; involving fires, serious injuries, deaths, chemical 7°e leases and flooding that create a health and safety hazard to the community or that exceed OSHA, TNRCC or EPA permissible exposure limits. Section 5. Annexation for Health, Safety and Welfare Reasons. It is specifically stipulated that nothing in this Agreement will in any mariner limit or restrict the authority of the City to annex all or part of said lands and facilities during the period of the Agreement if the City should determine that such annexation is reasonably necessary to promote and protect the general health, safety, and welfare of the persons residing wii~hin or adjacent to the City, provided however, that the City z.ida chevron 2009.12.1 7 agrees that such annexation for the land described in Attachment "A" prior to OctobE~r 1, 2009 wit:L not be made for revenue purposes only. Section 6. Annexation due to Legislative Action. Notwithstanding the provisions of Section 5, the parties agree and consent that the City may annex if a bill is adopted by the State legislature which limit: or restricts the authority of the City to annex all or part of said 7_and and improvements. In the event of annexation, the Company will not be required to make further payments under this Agreement for any calendar year_ commencing after annexation with respect to the property so annexeci, but shall nevertheless be obligated to make full payments for the year during which such annexation becomes eff=ective if the annexation becomes effective after January lst of said year. The Company shall not be requ~_red to pay ad valorem taxes to the City for the same period of time they have already paid an "in lieu of tax" payment, with respect to the property described in Attachment "A" to this .Agreement. If for any reason, the City can n.ot annex the property of the Company and if the parties cannot reach an agreement c>n a new payment schedule or on a new "in lieu of tax" agreement, the Company agrees that it will continue to pay to the City the "in lieu of tax" payments delineated in z.ida chevron 2009.12.1 8 Section 1 until December 31, 2009, and it w_L11 thereafter continue to annually pay the City an "in lieu of tax" payment of seventy five percent (75%) of its taxable value times the City's tax rate f.or so long as it or its assignees and successors or affiliates own the property, as described in Attachment "A". Payments will be due on October 15th of each year. Pursuant to Sections 42.044 and 212.172 Local Government Code, the Company agrees and consents that the City has thE~ option, in tree City's sole discretion, to extend this contract and that the Company will continue to annually pay the City "in lieu of tax" payments at the seventy-five (750) rate, as denoted above, for successive periods not to exceed 15 years each, for a total duration not to exceed, 45 years, or the maximum period allowed by law, whichever is longer. "'Taxable value" is the value as determined by the Jefferson County Appraisal District in appraisal rolls after the completion of all litigation and appeals (if any), of all property, land, industrial realty, improvements, units, equipment, inventory, and all other propE~rty, excluding the value of exempt pollution control devices, owned or leased by the Company and located witriin the extra-territorial jurisdiction of the City, as described in Attachment '"A". The "taxable value" also includes the assessed value of any z.ida chevron 2009.12.1 9 property that is located in a foreign trade zone or in any other type of federal, state, o:r local zone. Section 7. The parties agree that thE~ City has the sole discretion, after October 1, 2009, to annex the property in Attachment "A" or t:o enter into negotiations on the payment by the Company of additional "in lieu of t:ax" payments. Section 8. The present: owners and lessees of the land, improvements, units, equipment, invent=ory, and all other property located on the land in Attachment "A" are described in Attachment "B" . Tree City reserver the right: to annex that tract or parcel with the minimum required adjacent area, as per Chapter 43 Local Government Code, if the owners or the lessees do not pay an "in lieu of tax" payment for its interest in th.e land, improvements, units, equipment, inventory, and all other property :Located on the property, as described in Attachment "A.". Nothing contained herein shall be construed to prohik~it or prevent the Company from paying the oi~her owners' oY- lessees' "in lieu of tax" payment to prevent: annexation by the City. If the City annexes a tract or tracts, the total "in lieu of tax" payment will be reduced by the same percentage as the assessed value of the tracts under the contract are reduced. z.ida chevron 2009.12.1 10 Section 9. If the Company desires to assign this Agreement to any person, the Company shall provide written notice of such assignment anct shall receive the writ;ten consent of the City Council, b~y a duly adopted Resolution, which will not be unreasonably withheld. The Company shall provide the description of the new Company a.nd such other information as is reasonably requested to indicate that the new Company will safely operates the facility, act as a good corporate citizen, and will fully abide by the terms of this agreement. If the assignment is approved by the City Council, the Company shall be relieved of it=s obligations under this Agreement to the extent that an assignee expressly assumes the Company's obligations. Subject to the preceding, this Agreement :hall inure to 'the benefit: of and be binding upon the partif~s hereto and ;its respective successors and assigns. Section 10. It is agrE~ed by the parties to this Agreement that the Company and the City have. the right. to seek equitable relief, including specific ~>erformance of this Agreement. Section 11. The Company shall allow a reasonable number of authorized employees and/or representatives of the City who have been designated and approved by the City Manager, City Council, or Mayor to have access to the z.ida chevron 2009.12.1 11 Company land and/or plants during the t:erm of this Agreement to inspect the p]_ants and any improvements thereto to determine compliance with the terms and conditions of the Agreement. .All inspections will be made at mutually agreeable times anal will only be: conducted. in such manner as to not unreasonably interfere with safety standards and security standards and rules. All inspections will be made with one or more representatives of the Company and in accordance with industry safety standards. Section 12. The Company shall participate in the Port Arthur Industrial Group during the life of this Agreement in order to assist in the establishment of apprenticeship, internship, anal/or education programs and projects for the training of Port Arthur residents for permanent jobs in the Port Arthur area. The Company further hereby agrees to request and encourage its contractors and subcontractors to establish and fund their own apprenticeship, internship, and/or education programs and projects for the training of Port Arthur residents for permanent jobs in the Port Arthur area. Section 13. The City reserves the right to hire or contract for a monitor as to inspect the Company's records and hiring practices in accordance with this Agreement as z.ida chevron 2009.12.1 12 to verify whether the Company has complied and will continue to comply with this Agreement. Section 14. The Company certifies that they have not, and will not, knowing]_y employ an "undocumented worker" which means an individual who, at the time of employment, is not lawfully admitted for permanent residence to the United States or authorized under law to be employed in that manner i_n the United States. The Company acknowledges that it has reviewed Chapter 2264, Texas Government Code, and hereby affirmatively agrees to repay the amount of any incentive with interest at the rate of ten percent (10%) per annum, not later than the 120th day after the date the City notifies the Company of a violation. The Company acknowledges the City may bring a civil action as to recover a.ny amounts owed under this Chapter, and further acknowledges that the City may recover court costs and reasonable attorney's fees incurred in bringing an action under Section 2264.101, Texas Government Code. The Company will also promptly report to the City any "undocumented worker" that is improperly retained by its contractors or subcontractors on its facility. Section 15. Information on property values. The Company shall file, in writing witYl the Director of Finance of the City, an itemized rendition by affidavit, z.ida chevron 2009.12.1 13 in the same form and manner a:: required by State Law, for rendition of property for ad valorem tax purposes, of all its properties (land, improvements, units, equipment, inventory, and all other property) real, personal and mixed. The Company shall provide to the City a copy of all pleadings and discovery filed in any litigation or protest that the Company has with Jefferson County Appraisal District. Pending final determination of any tax protest filed by the Company with they Jefferson County Appraisal Review Board, or appeal thereof, the Company shall pay to City, on October 15, 2009, the amount calculai~ed based upon the value of the property reflected on the most recently adopted appraisal roll prepared by or for Jefferson County Appraisal District. If the final determination of a protest or an appeal reduces the value of the property after Company has tendered payment to the City hereunder, the Company's liability hereunder shall be recalculated based on the final determination of value, and City shall in its discretion, after the final determination of such protest or appeal, either credit toward future "In Lieu of Tax" agreements or refund i~o Company, the difference between the amount actually paid hereunder and the amount for which the Company is determined to be liable, without interest. Under no circumstances, shall there be a refund z.ida chevron 2009.12.1 14 or a credit of more than ten (10%) of any "Iri Lieu of Tax" payment made. Section 16. Electrical Usage. The Company will provide the City with information as to the electrical consumption from Entergy or from any other elect:ric utilities, transmission acid distribution utility, municipally owned utility, electric cooperat=ive, or from any other source, as well as all metering locations that service the area in Attachment "A". Section 17. Notice of Default. Notwithstanding anything herein to the contrary contained, in the event of any breach by the Company of arty of the terms or conditions of this Agreement, the City shaill give the Company not less than five (5) business days' written notice, .specifying the nature of the alleged default=, and manner in which the alleged default may be satisfactorily cured. Thereafter, the Company will be afforded a reasonable time within which to cure the alleged default. Nevertheless, time is of the essence on the payment schedule for the "in lieu of tax" payment on October 15, 2009. If the Company does not pay the "in lieu of tax" payment on October 15, 2009, the City can immediately commence annexation proceedings and sue for all damages. In case of litigation for breach of the Agreement and to encourage timely payments, the City can z.ida chevron 2009.12.1 15 seek 1000 of all monies that t:he City would have received from the Company if it been within the corporate limits, which include 1000 of all taxer, building permits, sales or use taxes, and all franchise fees on electrical usage, interest and penalty thereon, attorney's fees, and court costs. Also, if the Company intentionally discriminates against Port Arthur companies, the City can seek the direct and indirect damages that the City would have accrued, if the discrimination did not occur. Section 18. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the Projects descrik>ed herein and .supersedes any and all prior understandings or oral or written agreements between the parties respecting such subject matter, except as otherwise provided in the instruments referenced herein. This Agreement may be amended only by writt:en instrument signed by all of the parties hereto. Section 19. Severability. If any term or provision in this Agreement, or the application thereof to any person or circumstance, shall to any extent be held to be invalid or unenforceable by a court of competent jurisdiction, such invalidity or unenforceability shall not affect any other provision of this Agreement or the application thereof, which can be given effect without the invalid or z.ida chevron 2009.12.1 16 unenforceable provision or a~>plication, and. the parties agree that the provisions of this Agreement are and shall be severable. Payment of the "in lieu of tax" payment is an essential part of this Agreement. Section 20. Remedies Cumulative. Except as otheY~- wise expressly provided herein, all rights, privileges, and remedies afforded the parties by this Agreement shall be deemed cumulative and not exclusive, and the exercise of any or more of such remedies shall not be deemed to be a waiver of any other right, remedy, or privilege provided for herein or available at law or in equity. Section 21. Governing Law. This Agreement shall be governed by and construed iri accordance with the laws of the State of Texas. This AgrE~ement is to be performed in Jefferson County, Texas. Section 22. Counterparts. This Agreement may be executed in counterparts, each of which shall. be deemed an original, and all of which taken together, shall constitute but one and the same instrument, which may be sufficiently evidenced by one counterpart. Section 23. Authority By acceptance of this Agreement and/or benefits conferred hereundeY~, the Company represents and warrants that its undersigned agents have complete and unrestricted authority to enter into this z.ida chevron 2009.12.1 17 Agreement and to obligate and bind the Company to all of the terms, covenants and conditions contained herein. Section 24. Notice Any notice provided for in this contract shall be given in writing to the parties hereto by certified mail, return receipt requested, addressed as follows: TO CITY: City Manager CITY OF PORT ARTHUR 444 4th St . Port Arthur, TX 77640 WITH A COPY TO: City Attorney CITY OF PORT ARTHUR 444 4th St . Port Arthur, TX 77640 Section 25. TO THE COMPANY: Representative Property Tax CHEVRON U.S.A., INC. P. O. Box 285 Houston, TX 77001 This agreement is effective the 1st day of January, 2009, and shall expire on the 31St day of December, 2009, unless extended by the City of Port Arthur, as delineated in Section 6. z.ida chevron 2009.12.1 18 SIGNED AND AGREED to on the _ day of 2008. CHEVRON U.S.A., INC. BY: STATE OF TEXP,S § COUNTY OF JEFFERSON § BEFORE ME, the undersigned Notary Public, on this day personally appeared , known to me to be the person whose name is ascribed to the foregoing instrument, and acknowledged to me that he executed the same as the act and deed of Chevron U.S.A., Inc., for the purposes and considerations therein expressed, and the capacities therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, THIS THE day of A.D., 2008. NOTARY PUBLIC, STATE OF TEXAS z.ida_the Company_coex expansion Project_8-07-08-1 19 SIGNED AND AGREED to on tree _ day of _ , 2008. CITY OF PORT ARTHUR, TEXAS BY: Stephen Fitzgibbons City Manager ACKNOWLEDGMENT STATE OF TEXAS § COUNTY OF JEFFERSON § BEFORE ME, the undersigned Notary Public, on this day personally appeared Stephen Fitzgibbons, City Manager of the City of Port Arthur, known to me to be the person whose name is ascribed to the foregoing instrument, and acknowledged to me that he executed the same as the act and deed of the City of Port Arthur, for the purposes and considerations therein expressed, and tree capacities therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, THIS THE day of A.D., 2008. NOTARY PUBLIC, STATE OF TEXAS z.ida chevron 2009.12.1 20 LIST OF ATTACFIMENTS • "A" Area of land owned by the Company • "B" Description of owners of property z.ida chevron 2009.12.1 21 ATTACHMENT ~~A" WILL BE PRESENTED AT OR BEFORE THE COUNCIL MEETING ATTACHMENT ~~B" WILL BE PRESENTED AT OR BEFORE THE COUNCIL MEETING