04.05.2011 Town Council Special Meeting PacketPRU
1. Call to Order /Roll Call.
AGENDA
Special Meeting of the Prosper Town Council
170 N Preston Road, Suite 50, Prosper, Texas
Tuesday, April 5, 2011 at 6*00 p.m.
2. Receive a presentation from Joe Drysdale concerning the Athlos project and the resolution of support
for the creation of Prosper Municipal Management District #2.
3. Consider and act on resolution supporting the creation of Prosper Municipal Management District
#2.
EXECUTIVE SESSION
4. Recess into Closed Session in compliance with Section 551.001 et. seq. Texas Government Code, to
wit; Section 551.072.
a. To deliberate the purchase, exchange, lease or value of real property totaling 18 acres and
located south and west of the intersection of Cook Lane and Prosper Trail.
5. Reconvene into Regular Session and take any action necessary as a result of the Closed Session.
6. Adjourn.
CERTIFICATION
I, the undersigned authority, do hereby certify that this Notice of Meeting was posted on the inside window at the Town Hall of the Town of Prosper,
Texas, a place convenient and readily accessible to the general public at all times, and said Notice was posted by the following date and time: Friday,
April 1, 2011 at 5:00 p.m. and remained so posted at least 72 hours before said meeting was convened.
Karen S. Gill, SPHR
Interim Town Secretary
Date Noticed Removed
In addition to any specifically identified Executive Sessions, Council may convene into Executive Session under Section 551 of the Texas
Government Code at any point during the open meeting to discuss any item posted on this agenda. The Open Meetings Act provides specific
exceptions that require that a meeting be open. Should Council elect to convene into Executive Session, those exceptions will be specifically
identified and announced. Any subsequent action, as a result of this Executive Session, will be taken and recorded in open session.
NOTICE OF ASSISTANCE AT PUBLIC MEETINGS: The Prosper Town Council Meetings are wheelchair accessible. Persons with disabilities
who plan to attend this meeting and who may need auxiliary aids or services such as Interpreters for persons who are deaf or hearing impaired,
readers, or large print, are requested to contact the Town Secretary's Office at (972) 346-2640 or by FAX (972) 347-2111. BRAILLE IS NOT
AVAILABLE.
Page 1
ADMINISTRATION
Agenda Item No. 3
To: Mayor and Town Council
From: Mike Land, Town Manager
Re: Town Council Meeting —Tuesday April 5, 2011
Date: March 31, 2011
Agenda Item:
Consider and act upon a resolution of support for the development of property as a mixed -use
retail and multipurpose sports project through the creation of Prosper Municipal Management
District No. 2. on approximately 74 acres generally located east of Legacy Drive, South of First
Street, North of Hwy 380 and west of the Dallas North Tollway.
Description of Agenda Item.
Athlos Prosper LP is proposing to develop a mixed -use retail and multi -purpose sports project
on a 74 acres site due west of the DNT, north of Hwy 380 and south of First St. The property is
zoned PD. The office, retail and other commercial uses are currently permitted within the
existing PD. The private sports and athletic facilities being proposed are not and will require the
PD to be amended.
As part of their financing package they have applied for funds from the USDA and received a
preliminary letter stating that funding may be available to them contingent on several items, one
of them being the Town's formation of Prosper MMD #2. They will use the District as a way of
assessing a separate tax on the property and improvements and use said tax levy as a way
along with the creation of a Tax Increment Reinvestment Zone (TIRZ) to pay for the cost of the
public improvements. The intent is upon creation of the MMD, the District would issue bonds
purchased by the USDA through their commitment. These bonds would be secured solely by
the tax assessment on the property.
Basically, Athlos is requesting through this resolution that the Town let Representative Paxton
know that at this point in the process the Town is supportive of the concept and the legislation
being introduced.
The Town's ultimate support is subject to the Town being in agreement with the terms
and conditions of the USDA commitment, compliance with MMD statutes, the Town
approving the terms and conditions upon which the USDA would purchase the MMD
bonds, the Town's approval of the use of the bond proceeds and the eventual
acceptance by the Town of the public improvements.
The resolution is not binding on the Town and is being provided to Athlos at this time
only in support of their pending legislation.
Background
On September 28, 2010 the Town Council approved a non -binding resolution of support
(copied attached) for Athlos's application to the USDA for project financing. On March
15, 2011 Athlos received from the USDA their initial letter of support for funding the
Agenda Item No. 3- Page 1 of 3
project contingent on multiple factors. (USDA letter attached). When the Town passed
its resolution last September financing for the project was expected to be through a
different financing method, known as a Public Improvement District, another type of
special district. The difference being that in a PID, assessments are used where as in a
MMD a separate tax levy will be assessed.
MMD Legislation
The highlights of the proposed MMD#2 legislation being proposed are as follows:
1. There will need to be a Development Agreement between the Town and the
District regarding the District's development plans, rules for the development,
operation of the District and financing of the improvements.
2. The District anticipates that the Town will create and the District will operate
within the boundaries of a Tax Increment Reinvestment Zone still to be created.
3. The District may not impose an impact fee, assessment, tax or other requirement
for payment for construction of improvements on single-family, duplexes,
triplexes or quadraplex properties.
4. The Board of Directors of the District is comprised of five (5) members, three (3)
of which will be representatives of the Town consisting of the Mayor, the Town
Manager and the Town's Finance Director, and two (2) positions representing
other appointments by the Town who are owners of the land.
5. If the legislation is approved the owner(s) of the land must first petition the Town
Council to consider actual creation of the District. If a petition is not submitted or
the Town does not appoint Directors within 180 days of the effective date of the
Act (September 1, 2011) then the District shall expire and be dissolved by
operation of law.
6. A list of the types of improvements that the District could undertake is under
Section 38.102 (c).
7. The District will actually own the public improvements (water, sewer for example)
and may contract with the Town for the operations and maintenance of the
systems.
Budget Impact:
NA
Legal Obligations and Review:
Per Council's previous instruction, the TOwn's Attorney has not be requested to review the
proposed legislation. The language within the legislation has been developed by Ike Shupe,
Athlos's attorney.
Attached Documents:
1. Resolution of support for the development of property as a mixed -use retail and
multipurpose sports project as a proposed Prosper Municipal Management
District No. 2 located on approximately 74 acres generally located east of Legacy
Drive, South of First Street, North of Hwy 380 and west of the Dallas North
Tollway
2. Copy of March 15, 2011 USDA letter outlining conditions of potential financing of
Athlos project.
Agenda Item No. 3= Page 2 of 3
3. Copy of September 28, 2011 Town Council non -binding Resolution in support of
Athlos project in their pursuit of USDA funding.
4. Copy of a proposed bill creating Prosper Municipal Management District No. 2.
Town Staff Recommendation:
Town staff recommends that the Town Council consider the resolution of support for
the development of property as a mixed -use retail and multipurpose sports project as
a proposed Prosper Municipal Management District No. 2 located on approximately
74 acres generally located east of Legacy Drive, South of First Street, North of Hwy
380 and west of the Dallas North Tollway.
Agenda Item No. 3- Page 3 of 3
TOWN OF PROSPER, TEXAS
RESOLUTION NO. 11-
A RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF
PROSPER, TEXAS; SUPPORTING THE CREATION OF A MUNICIPAL
MANAGEMENT DISTRICT KNOWN AS PROSPER MUNICIPAL
MANAGEMENT DISTRICT NO. 2; WHICH LIES WITHIN THE
CORPORATE LIMITS OF THE TOWN OF PROSPER.
WHEREAS, the Town Council of the Town of Prosper, Texas ("Town Council") has
received a request from the owner of the majority of the vahie of property described in the
attached Exhibit "A" (the "Land") requesting that the Town Council support the creation of a
municipal management district encompassing the Land (the "Petition") to be known as Prosper
Municipal Management District No. 2 (the "District"); and
WHEREAS, the District is being considered to be created pursuant to an Act of the 82nd
Texas Legislature, Regular Session 2011 under the ter7rls and provisions of Article III, Sections
52 and 52a and Article XVI, Section 59 of the Constitution of Texas (the "Act); and
WHEREAS, the Town desires to support the creation of the District upon the terms and
conditions set forth in this Resolution.
NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OF THE
TOWN OF PROSPER, TEXAS:
correct.
Section 1.
ection 2.
S
All of th
e matters and facts set out in the preamble hereof are true and
The Town Council hereby supports the creation of Prosper Municipal
Management District No. 2, encompassing the property described in the attached Exhibit "A", all
of which property is located within the corporate limits of the Town.
Section 3. This Resolution is not binding on the Town. This Resolution does not
obligate the Town to take any action with respect to the matters for which the Town has
expressed its support.
Resolution 11- Supporting Creation of MMD #2 558037-1 1
Section 4. That this Resolution shall take effect immediately from and after its
passage and is accordingly so resolved.
DULY RESOLVED by the Town Council of the Town of Prosper, Texas on the ®day
of April, 201 t .
Ray Smith, Mayor
ATTEST:
Karen Gill
Town Secretary
Resolution 11- Supporting Creation of MMD #2 558037-1 2
EXHIBIT "A"
PROPERTY DESCRIPTION
The Prosper Management District No. 2 initially includes all the territory contained in the following area:
BEING a parcel of land located in the City of Prosper, Collin County, Texas, and being a part of the Collin County
School Land Survey, Abstract No. 147, and being a part of a called 188.635 acre tract of land described in a
Trustee's Deed and Bill of Sale to M.A.H.G. Partnership as recorded in Document No. 20100601000545080 of the
Official Public Records of Collin County, Texas, and being further described as follows:
COMMENCING at a one-half inch iron rod found at the southeast corner of said 188.635 acre tract of land, said
point being the intersection of the north right-of-way line of State Highway No. 380 (a variable width right-of-way)
with the west right -of --way line of the Dallas North Tollway (a variable width right -of --way);
THENCE along the west right -of --way line of the Dallas North Tollway as follows:
North 00 degrees 25 minutes 34 seconds West, 523.30 feet to a one-half inch iron rod found for corner;
Northeasterly, 250.65 feet along a curve to the right which has a central angle of 02 degrees 30 minutes 00
seconds, a radius of 5,744.58 feet, a tangent of 125.34 feet, and whose chord bears North 00 degrees 49 minutes 26
seconds East, 250.63 feet to a one-half inch iron rod found for corner;
North 02 degrees 04 minutes 26 seconds East, 587.13 feet to a one-half inch iron rod found for corner;
Northeasterly, 233.77 feet along a curve to the right which has a central angle of 01 degrees 09 minutes 03
seconds, a radius of 11,639.16 feet, a tangent of 116.89 feet, and whose chord bears North 02 degrees 38 minutes 57
seconds East, 233.77 feet to the POINT OF BEGINNING of this tract of land;
THENCE South 89 degrees 43 minutes 30 seconds West, 2,369.30 feet to a one -iron pipe found for corner in the
west line of said 188.635 acre tract of land;
THENCE along the west line of said 188.635 acre tract of land as follows:
North 00 degrees 24 minutes 51 seconds East, 974.29 feet to a one-half inch iron rod found for corner;
North 89 degrees 28 minutes 46 seconds West, 38.28 feet to a one-half inch iron rod found for corner;
North 00 degrees 00 minutes 43 seconds West, 650.33 feet to a point for corner;
THENCE North 89 degrees 22 minutes 23 seconds East, 1,352.75 feet to a point for corner;
THENCE South 00 degrees 34 minutes 52 seconds East, 6.73 feet to a one-half inch iron rod found for corner;
THENCE South 00 degrees 31 minutes 42 seconds East, 651.92 feet to a one-half inch iron rod found for corner;
THENCE North 89 degrees 39 minutes 24 seconds East, 1,117.44 feet to a one-half inch iron rod found for corner in
the west right -of --way line of the Dallas North Tollway;
THENCE along the west right -of --way line of the North Dallas Tollway as follows:
South 04 degrees 37 minutes 34 seconds West, 705,31 feet to a point for corner;
Southwesterly, 274.07 feet along a curve to the left which has a central angle of 01 degrees 20 minutes 57
seconds, a radius of 11,639.16 feet, a tangent of 137.04 feet and whose chord bears South 03 degrees 54 minutes 00
seconds West, 274.07 feet to the POINT OF BEGINNING and containing 3,229,435 square feet or 74.138 acres of
land.
"This document was prepared under 22 TAC 663.23, does not reflect the results of an on the ground survey, and is
not to be used to convey or establish interests in real property except those rights and interests implied or
established by the creation or reconfiguration of the boundary of the political subdivision for which it was
prepared."
Resolution 11- Supporting Creation of MMD #2 558037-1 3
YEA
United States Department of Agriculture
Rural Development
McKinney Area Office
March 15, 2011
Joe Drysdale
Athlos Prosper LP
16301 Quorum Dr Ste 200B
Addison, Texas 75001
SUBJECT: Athlos Prosper LP
Prosper Municipal Management District
Athlos Community Lifestyle Complex Infrastructure Project
Dear Mr. Drysdale:
We have conducted a cursory review of the information provided with the subject's pre -
application and offer the following comments:
1. The applicant is proposing to form, in cooperation with the town of Prosper, a
Municipal Management District (MMD) for the purpose of constructing/installing
essential infrastructure to a development with the Town of Prosper and the
boundaries of the MMD. The infrastructure would consist of water and
wastewater services to the site, The improvements would allow for mixed -use
development comprised of commercial, retail, residential, office, medical and
recreational ventures. These ventures would foster growth that would in time,
contribute to the economic development of the area. Once complete, the
improvements would be repaid from tax assessments collected from the entities
located at the site. A Management and Operations Agreement with the Town of
Prosper would be developed to allow for the operations and maintenance of the
project as part of the Town's existing utility system.
2. The Agency will be able to consider the subject project for financial assistance in
accordance with RD Instruction 1942-A, Guide 26, Part I, "Project Selection
Priorities," and the availability of funds. This consideration is given subject to the
approval of the formation of the MMD by the Texas State Legislature.
3. Preliminary cost estimates reveal that the total estimated cost for the project will
be $19,362,977 in Federal funds. The project must be modest in size, design
and cost; therefore, consideration must be taken to design and construct the
1404 North McDonald Suite 300# McKinney, Texas 75071
Phone: (972) 542-0081 Ext 4 Fax: (972) 542-4028 TDD: (254) 742-9712 0 Web: h>tH://www.rurdev.usda.00v
Committed to the future of rural communities.
"USDA is an equal opportunity provider, employer and lender "
To file a complaint of discrimination write USDA, Director, Office of Civil Rights. Room 326-W, Whitten Building. 14"' and
Independence Avenue, SW, Washington, DC 20250-9410 or call (202) 720-5964 (voice or TDD).
improvements in phases, or seek additional funding sources to complete the
project.
4. The security for any loan will be a tax -back bond.
5. Attached is Form AD-622, "Notice of Pre -application Review Action." Please see
Attachment I to this form for additional requirements.
If you have specific questions, please feel free to contact either myself or Hilberto (Beto)
Sauceda at 972-542-0081 x 4.
Sincere
ALLEN M. i�
Area Director
cc: State Director, Attention Community Programs
Attachments
1. Form AD 622, Notice of Pre -application Review Action
2. Form RD 1940-20, "Request for Environmental Action"
3. Guide 5, RD Instruction 1942-A
4, Form 442-7, "Operating Budget"
A RESOLUTION IN SUPPORT OF: THE DEVELOPMENT OF PROPERTY AS
A MIXED -USE RETAIL AND MULTI -PURPOSE SPORTS PROJECT; A USDA
COMMITMENT TO FUND PUBLIC INFRASTRUCTURE TO SERVE THE
PROJECT; THE CREATION OF A PUBLIC IMPROVEMENT DISTRICT AND
THE LEVY OF ASSESSMENTS TO PAY FOR PUBLIC INFRASTRUCTURE;
THE ISSUANCE OF PID BONDS SECURED BY THE ASSESSMENTS, THE
SALE OF PID BONDS TO USDA; AND THE USE OF PID BONG PROCEEDS
TO ACQUIRE, CONSTRUCT, AND DEVELOP PU13LIC INFRASTRUCTURE
UNDER THE SUPERVISION OF USDA AND THE TOWN,
RECITALS
WHEREAS, A#hlos Prosper, LP (" thlos"} propases to devefap a mixed -use
retail and multi -purpose spurts project, including associated public infrastructure, within
the Town of Prosper, Texas, as generally depicted on the site plan attached hereto as
Exhibit A (the "Project"); and
WHEREAS, the Project will include approximately 31Q acres {the "Prope�t ")
awned by Athlos and other owners; and
WHEREAS, the Project will promote economic development and stimulate
business and commercial activity; and
WI-iEREAS, Athlos has submitted an application to the United States Department
of Agriculture ("USDA"} requesting a commitment from USDA (the "USDA
Commitment"} to fund the acquisition, construction, and development of the public
infrastructure required to develop the Project (the "Public Infrastructure") at no cost to
the Town and in compliance with all requirements of the Town; and
WHEREAS, the Public Infrastructure will confer a special benefit upon the
Property; and
WHEREAS, Athlos has entered into negotiations with the other owners of the
Properly {Athlos and the other owners are collectivE:ly referred to as, the "Owners") to
develop the Project: and
Resolution -Page 1
11621D 1011 Sft77 �
WHEREAS, if USDA provides the USDA Commitment, the Owners propose to
petition the Town requesting the creation of a Public: Improvement District (the "PID"j
covering the Property
y pursuant to Chapter 372, Texas Local Government Code, as
amended (the ",A V'); and
WHEREAS, after creation of the PID, the Owners propose that the Town will levy
special assessments ("Assessments") against the Property in amounts sufficient to pay
the total cost of the Public Infrastructure; and
WHEREAS, after creation of the PID and the levy %J the Assessments, the
Owners propose that the Town will issue, and the USSDA will purchase pursuant to the
USDA Commitment, revenue bonds issued by the Town and secured solely by the
Assessments (the "PID Bonds"); and
WHEREAS, the Tawn shall have no liability for payment of the PID Bonds from
any revenue other than Assessments; and
WHEREAS, upon the sale and purchase of the PID Bands pursuant to the USDA
Commitment, the owners propose that the proceeds from such safe and purchase will
be used pursuant to the applicable bond trust indenture to pay for the acquisition,
construction, and development of the Public Infrastructure under the supervision of the
USDA, the Town, and the Owners; and
WHEREAS, upon completion of the Public infrastructure and the inspection and
acceptance thereof by the Town, the Owners propose that the Public Infrastructure will
be conveyed or dedicated to the Town, lien free, to be owned and maintained by the
Town as part of its public roadway and public utility systems; and
WHEREAS, Athlos, on behalf of the Owners, h��s requested the Town to indicate
its support, in principal, to the foregoing matters; and
WHEREAS, without the creation of the PlD, the levy of fihe Assessments, and the
issuance and sale of the PID Bonds to the USDA, the Project will not be timely
developed.
Resolution � Page 2 1162t010115877.2
NOW THEREFORE BE IT RESOLVED BY THE TOWN COUNCIL OF THE
TOWN OF PROSPER, TEXAS, THAT;
SECTION 11
The Recitals set forth in this Resolution are true and correct and are fully
incorporated as part of this Resolution.
SEC
The Town supports, in principal, the development of the Project and the
app(icatian by Athios to USDA to obtain the I.�SDA Commitment to facilitate
development of the Project and funding of the Public Infrastructure as described in the
Recitals.
SECTION 3
The Town supports, in principal: (i) fiMe creation of the P!D covering the Property;
(ii} the levy of Assessments against the Property in <lmounts sufficient to pay the total
cost of the Public Infrastructure; (iii) the issuance by the Town of PID Bonds secured
solely by the Assessments; (iv) the sale to and purchase by the USDA of the PID Bonds
pursuant to the USDA Commitment; and (v) the use of the proceeds from the sale and
purchase of the PID Bonds to pay for the acquisition, construction, and development of
the Public Infrastructure pursuant to the applicable trust indenture and the USDA
Commitment and otherwise under the supervision of the USDA, the Town, and the
Owners.
SECTION 4
The support of the Town expressed in this Resolution is subject to: (i) the
approval by the Town of the #arms and condition; of the USDA Camrni#ment; (ii)
compliance by the Owners and the Town with the provisions of the Act; (iii) the exercise .
by the Town Council of Its legislative discretion in creating the PID, levying the
Assessments, and issuing the PID Bonds, (iv) the approval by the Town of the terms
Resolution -Page 3 1 ib210lO1t38?7.2
r,
and conditions upon which the USDA is willing to purchase the PID Bonds; (v) the
approval of the PID Bonds by the Attorney General of Texas; (vi) the approval by the
Town of the method by which the proceeds from the sale of the PID Bonds will be used
to acquire, construct, and develop the Public Infrastructure; (vii) the approval by the
Town of the method by which, upon completion, inNspection, and acceptance by the
Town, the Public Infrastructure will be dedicated or conveyed to the Town to become
part of the Town's public roadway and public utility systems; and (viii) any other
Conditions and/or requirements of the Town Council which it deems to be in the best
interest of the Town and its citizens and related to the project.
SECTION b
This Resolution is not binding on the Town. This Resolution does not obligate
the Town to take any action with respect to the matters for which the Town has
expressed its support.
SEC-- TIN 6
The Town Council finds and declares #hat written notice of the date, hour, place
and subject of the meeting at which this Resolution was adopted was posted and that
such meeting was open to the public as required by law. This Resolution shall take
effect immediately upon its passage and approval.
PASSER AND APPROVED this 28kn day of Sept�,mber, 2p10.
Resolution -Page 4
M;�yor
i t62�ninu;n�� o
By: _ B. No.
A BILL TO BE ENTITLED
AN ACT
relatina to the creation of the Prosper Municipal Management
District No. 2 and enacting related matters.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 4, Special District Local Laws
Code, is amended by adding Chapter 38 to read as follows:
CHAPTER 38 PROSPER MUNICIPAL MANAGEMENT DISTRICT NO. 2
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 38 .001. DEFINITIONS. In this chapter:
(1)
"board" means the board of directors of the
district.
(2) "county" means Collin County, Texas
(3) "development agreement" means an interlocal project
development agreement to be entered into between the district and
the town regarding the district's development plans and rules for
the development and operation of the district and the financing of
improvement proiects.
(4) "director" means a member of the board.
(5) "district" means the Prosper Municipal Management
District No. 2
Revised Marclt 20, 2011
1162\O10\18035.7
(6) "town" means the Town of Prosper, Texas.
Sec. 38 .002, CREATION AND NATURE OF DISTRICT. The district
is a special district created under Sections 52 and 52-a, Article
III, and Section 59, Article XVI, Texas Constitution.
Sec. 38 .003. PURPOSE; LEGISLATIVE FINDINGS. (a) The
creation of the district is essential to accomplish the purposes of
Sections 52 and 52-a, Article III, and Section 59, Article XVI,
Texas Constitution, and other public purposes stated in this
chapter. By creating the district and authorizing the town and
other political subdivisions to contract with the district, the
legislature has established a program to accomplish the public
ses set out in SectionArticle III, Texas Constitution.
(b) The creation of the district is necessary to promote,
develop, encourage, and maintain employment, commerce,
transportation, housing, tourism, recreation, the arts,
entertainment, economic development, safety, and the public welfare
in the district.
(c) This chapter and the creation of the district may not be
interpreted to relieve the town or the county from providinq the
level of services provided, as of the effective date of the Act
enactina this chapter, to the area in the district. The district
is created to supplement and not to supplant the town or count
services provided in the area in the district.
1162\O10\18035.7
Sec. 38 .UU4. FINDINGS OF PUBLIC PURPOSE AND BENEFIT. (a
The district is created to serve a public purpose and benefit.
(b) All land and other property included in the district
will benefit from the improvements and services to be provided by
the district under powers conferred by Sections 52 and 52-a,
Article III, and Section 59, Article XVI, Texas Constitution, and
other powers Granted under this chapter.
(c) The district is created to accomplish the purposes of a
municipal management district as provided by general law and
Sections 52 and 52-a, Article III, and Section 59, Article XVI
Texas Constitution.
d) The creation of the district is in the public interest
and is essential to:
(1) further the public purposes of developing and
diversifying the economy of the state;
(2) eliminate unemployment and underemployment; and
(3) develop or expand transportation and commerce.
(e) The district will.
1) promote the health, safety, and general welfare of
residents, employers, employees, potential employees, visitors, and
consumers in the district and of the public;
(2) provide needed funding for the district to
reserve, maintain, and enhance the economic health and vitality of
1162\O10\18035.7
the district territory as a community and business center; and
(3) promote the health, safety, welfare, and enjoyment
DI the public by providing pedestrian ways and by landscaping and
developing certain areas in the district which are necessary for
the restoration, preservation, or enhancement of scenic beauty.
(f) Pedestrian ways along or across a street, whether at
rade or above or below the surface, and street lightinq, street
landscaping, parking, and street art objects are parts of and
necessary c
or road imp
(q)
nents of a street and are considered to be a street
rovement
The
instrumentalit
district will not act as the agent or
of anv private interest even though the district
will benefit many private interests as well as the public.
Sec. 38 .005. DISTRICT TERRITORY. (a) The district is
composed of the territory described by Section 2 of the Act
enacting this chapter, as modified under applicable law.
(b) The boundaries and field notes contained in Section 2 of
the Act enactinq this chapter form a closure. A mistake made in
the field notes or in copying the field notes in the legislative
rocess does not affect the district's:
(1) organization, existence
(2) right to contract;
3) authority to borrow mone
or
validity;
or issue bonds or other
1162\010\18035.7
obligations described in Section 38 .201 of this chapter or to pa
the principal of and interest on such bonds or other obligations;
4) right to impose and collect taxes, assessments, or
other revenues; or
(5) legality or operation.
Sec. 38 .006. ELIGIBILITY FOR INCLUSION IN SPECIAL ZONES.
a) All or any part of the area of the district is eligible to be
included in a tax increment reinvestment zone created by the town
under Chapter 311, Tax Code.
(b) If the town creates a tax increment reinvestment zone
under Subsection (a), the town and the board of directors of the
zone, by contract with the district, may qrant money deposited in
the tax increment fund to the district to be used by the district
for any district purpose, including the right to pledge money from
the tax increment fund as security for bonds or other obligations
issued by the district under Section 38 .201 of this chapter
(c) If the town creates a tax increment reinvestment zone
under Subchapter (a), the zone is not subject to the limitations
rovided by Section 311.006, Tax Code.
Sec. 38 .007. NO RESIDENTIAL. The Board may not impose an
impact fee, assessment, tax, or other requirement for payment,
construction, alteration, or dedication under this chapter on
1162\O10\18035.7
single-family residential property, duplexes, triplexes, and
quadLaplexes.
Sec. 38 .008. APPLICABILITY OF MUNICIPAL MANAGEMENT DISTRICT
LAW. Except as provided in this chapter, Chapter 375, Local
Government Code. applies to the district.
Sec. 38 .009. CONSTRUCTION OF CHAPTER. This chapter shall
be liberally construed in conformitv with the findings and purposes
stated in this chapter
[Sections 38 .010 - 38 .050 reserved for expansion
SUBCHAPTER B. BOARD OF DIRECTORS
Sec. 38 .051. GOVERNING BODY. (a) The district is governed
by a board of five directors composed of:
(1) Position 1: the mayor of the town,
Town; and
town.
(2) Position 2: the city manager of the town;
(3) Position 3: the chief financial officer of the town;
(4) Position 4: appointed by the governing body of the
(5) Position 5: appointed by the governing body of the
inted directors for Position 4 and Position 5 serve
staggered four-year terms, with the initial term of the Position 4
director expiring June 1, 2014, and the initial term of the
1162\010\18035.7
Position 5 director expiring June 1, 2016.
(c) Appointed directors may serve successive terms.
d) If any provision of Subsection (a), (b), or (c) is found
to be invalid, the Texas Commission on Environmental Quality shall
appoint the board from persons recommended by the governing body of
the town that meet the qualification requirements of Section
375.063, Local Government Code.
el A director is not entitled to compensation for service on
the board but is entitled to be reimbursed for necessary expenses
incurred in carrying out the duties and responsibilities of a
director.
Sec. 38 .052.
a) For a person to be
ALIFICATIONS OF APPOINTED DIRECTORS.
alified to serve as a Position 4 or
Position 5 director appointed by the aoverninq body of the town
for so long as Athlos Prosper Fund I, LP (or anv of its affiliates
owns anv land within the district, the person must be nominated
Athlos Prosper Fund I, LP (or its affiliate); and after Athlos
Prosper Fund I, LP (and its affiliates) no longer own any land
within the district, the person must meet the qualification
requirements of Section 375.063, Local Government Code.
(b) To be qualified to serve as the Position 1 director, the
rson must hold the office of the mayor of the town, and to be
1162\O10\18035.7
lified to serve as either the Position 2 or Position 3 director
the person must be employed by the town.
c) Section 49.052, Water Code, does not apply to the
district.
Sec. 38 .053. DIRECTOR'S OATH AND AFFIRMATION. A director's
oath and affirmation of office shall be filed with the district
and the district shall retain the oath and affirmation in the
district records.
Sec. 38 .054. OFFICERS. The board shall elect from amon
the directors a chair, a vice chair, and a secretary.
Sec. 38 .055. INITIAL DIRECTORS. (a) On or after the
effective date of the Act creating the district, the aovernina bod
of the town shall appoint directors to fill Position 1, Position 2
and Position 3.
(b) On or after the effective date of the Act creating the
district, the owners of all the property in the district (as shown
o n the appraisal district records on the date of the petition) and
the lienholders of record (as shown in the deed records of the
county on the date of the petition) that have a deed -of -trust lien
on anv property in the district shall submit a petition to the
overnina body of the town reauestina that the aovernina bod
appoint as additional initial directors of Positions 4 and Position
1162\O10\18035.7
5 the two persons named in the petition.
(c) If the qove
boUV of the town fails to appoint
directors to fill Position 1, Position 2, and Position 3 within 180
daIs after the effective date of the Act creating the district, the
Act creatina the district shall
dissolved by operation of law.
ire and the district shall be
(d) If a petition signed by the owners and lienholders as
described by Subsection (b) is not submitted to the governing bod
of the town within 180 days after the effective date of the Act
creatina the district, the Act creatina the district shall expire
and the district shall be dissolved by operation of law.
(e) This section expires September 1, 2015.
[Sections 38 .056 - 38 .100 reserved for expansion]
SUBCHAPTER C. POWERS AND DUTIES
Sec. 38 .101. GENERAL POWERS AND DUTIES. (a) The district
has the powers and duties necessary to accomplish the purposes for
which the district is created including the powers and duties
rovided by this chapter and the powers and duties provided bv:
(1) Chapter 375, Local Government Code;
(2) Chapter 372, Local Government Code;
(3) the general laws relating to conservation and
reclamation districts created under Article XVI, Section 59, Texas
1162\010\18035.7
Constitution, including Chapters 49 and 54, Water Code, and
(4) the general laws relating to road districts and road
utility districts under Article III Sections 52 and 52(a), Texas
Constitution, including Chapters 365 and 441, Transportation Code.
(b) The district has the authority to carry out its powers
and duties authorized by this chapter using any funds available to
the district to accomplish the purposes for which the district is
created, including the authority to contract with governmental or
rivate entities (on terms determined by the board) to car
such powers and duties and accomplish such purposes.
Sec. 38 .102. IMPROVEMENT PROJECTS AND SERVICES. (a
district may provide, design, construct, acquire
out
rove
relocate, operate, maintain, and finance using any funds available
to the district, or contract with a governmental or private entity
to provide, design, construct, acquire, improve, relocate, operate,
maintain, and finance anv improvement or service authorized under
thIs chapter or Chapter 375, Local Government Code, includi
improvements and services located within or outside the district.
(b) Contracts to design, construct, acquire, improve,
relocate, operate, maintain, and finance improvement projects shall
be considered contracts for Goods or services pursuant to Section
271.151, et.sea., Local Government Code.
(c) The district may provide, or it may enter into contracts
Page -10 -
1162\010\18035.7
with a aovernmental or private entity to provide, the followin
types of improvement projects activities in support of or
incidental to those projects:
(1) the planning, design, construction, improvement, and
maintenance of:
beautification and
landscaping;
hiahwav right-of-wa
rovement
or transit corridor
(C) lighting, banners, and signs;
D) a street or sidewalk;
(E) a hiking and cycling path or trail;
(F) a pedestrian walkway, skywalk, crosswalk, or
tunnel;
(G) a park, lake, Garden, recreational facility,
sports facility, open space, scenic area, or related exhibit or
preserve;
(H) a fountain, plaza, or pedestrian mall; or
(I) drainage and storm -water detention
improvements;
(2) protection and improvement of the quality of storm
water that flows through the district;
(3) the planning and acquisition of:
A) public art and sculpture and related exhibits
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1162\O10\18035.7
and facilities; or
B) an educational and cultural exhibit or
facility;
(4) the planning, design, construction, acquisition,
lease, rental, improvement, maintenance, installation, and
management of and provision of furnishings for a facility for:
(A) a conference, convention, or exhibition;
B) a manufacturer, consumer, or trade show;
(C) a civic, community, or institutional event; or
(D) an exhibit, display, attraction, special event,
or seasonal or cultural celebration or holiday;
(5) the removal, razing, demolition, or clearing of land
or improvements in connection with improvement projects;
(6) the acquisition and improvement of land or other
roperty for the mitigation of the environmental effects of an
improvement project;
(7) the acquisition of property or an interest in
roperty in connection with an authorized improvement project;
8) a special or supplemental service for the
rovement and promotion of the district or an area adjacent to
the district or for the protection of public health and safety in
or adjacent to the district, including:
(A) advertising;
Page -12 -
1162\O10\18035.7
B) promotion;
C) tourism;
D) health and sanitation
(E) public safety;
(F) security;
(G) fire protection or emer
H) business recruitment;
cy medical services;
(I) development;
(J) elimination of traffic congestion; and
K) recreational, educational, or cultural
rovements, enhancements, and services; or
(9) any similar public improvement, facility, or
service.
d) The district may not undertake or provide an improvement
ro�ect unless:
(1) the board determines the project to be necessary to
accomplish a public purpose of the district; and
(2) the project complies with the development agreement
and anv applicable town requirements, including codes and
ordinances and anv planned devel
to land in the district.
nt zoning ordinance applicable
d) The district may not provide, conduct, or authorize an
improvement project on town streets, highways, rights -of -way or
Page -13 -
1162\O10\18035.7
easements without the consent of the aovernina bodv of the town.
e) Subject to an aareement between the district and the
townI the town mav:
(1) by ordinance, order, or resolution require that
title to all or any portion of an improvement project vest in the
town; or
2) by ordinance, order, resolution, or other directive
authorize the district to own, encumber, maintain, and operate an
improvement project, subject to the right of the town to order a
convevance of the improvement project to the town on a date
determined by the town, provided, however, that if an improvement
ro�ect is conveyed to the town, the improvement project will
continue to be used to serve land in the district.
(f) The district shall immediately comply with any town
ordinance, order, or resolution adopted under Subsection (e).
(g) For the purposes of this section, planning, design,
construction, improvement, and maintenance of a lake includes work
done for drainage, reclamation, or recreation.
Sec. 38 .103. AGREEMENTS; GRANTS. (a) As provided in
Chapter 375, Local Government Code, the district mav make an
aareement with or accept a gift, grant, or loan from an
Page -14 -
erson.
1162\O10\18035.7
(b) The implementation of a project is a governmental
function or service for the purposes of Chapter 791, Government
Sec. 38 .104. NO EMINENT DOMAIN. The district may not
exercise the power of eminent domain.
Sec. 38 .105. NO TOLL ROADS. The district may not establish
or maintain any rates, fares, tolls, charges, rents, fees, or other
compensation for the use by the traveling public of any roads
acquired, constructed, developed, owned, operated, or maintained by
the district pursuant to this chapter
Sec. 38 .106. PARKING FACILITIES. (a) The district ma
acauire, lease as lessor or lessee, construct, develop, own
operate, and maintain parking facilities or a system of parking
facilities, includinq lots, garages, parking terminals, or other
structures or accommodations for
streets and related appurtenances.
b) The district's par
rkina motor vehicles off the
facilities serve the public
purposes of the district and are owned, used, and held for a public
purpose even if leased or operated by a private entity for a term
of vears.
c1 The district's parking facilities are necessar
components of a street and are considered to be a street or road
rovement. The development and operation of the district's
Page -15 -
1162\O10\18035.7
parking facilities may be considered an economic development
program.
Sec. 38 .107. ADDING TERRITORY. The board may add territory
under Subchapter J. Chapter 49, Water Code, and Section 54.016,
Water Code, except that:
(a) the addition of territory must be approved by:
1) the governing body of the town; and
2) the owners of the territory being added;
b) a reference to a tax in Subchapter J, Chapter 49, Water
Code, or Section 54.016, Water Code, means an ad valorem tax.
Sec. 38 .108. EXCLUDING TERRITORY. At any time during which
the district does not have outstanding bonds, the board on its own
motion may call a hearing and exclude anv land from the district as
rovided by Section 375.044, Local Government Code.
Sec. 38 .109. GENERAL POWERS REGARDING CONTRACTS. (a) The
district may:
(1) contract with anv person to accomplish anv district
purpose, including a contract for:
(A) the payment, repayment, or reimbursement of
costs incurred by that person on behalf of the district, includinq
all or part of the costs of an
interest on the reimbursed cost; or
Page -16 -
rovement project, ncludin
1162\O10\18035.7
(B) the use, occupancy, lease, rental, operation,
maintenance, or management of all or part of a proposed or existing
improvement project; and
(2) apply for and contract with any person to receive
administer, and perform a duty or obligation of the district under
a federal, state, local, or private gift, grant, loan, conveyance
transfer, bequest, or other financial assistance arrangement
relating to the investigation, planning, analysis, study, design,
acquisition, construction, improvement, completion, implementation,
or operation by the district or others of a proposed or existing
I
mprovement project.
(b) A contract the district enters into to carry out a
purpose of this chapter may be on any terms and for any period the
board determines, including a negotiable or nonnegotiable note or
warrant payable to the town, the county, or any other person.
(c) Any person may contract with the district to carry out
the purposes of this chapter without further statutory or other
authorization.
(d) The governing body of the town must approve a contract
able from ad valorem taxes for a period longer than one year.
Sec. 38 .110. RULES; ENFORCEMENT. (a) The district ma
adopt rules:
1) to administer or operate the district;
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1162\O10\18035.7
(2) for the use, enjoyment, availability, protection,
security, and maintenance of the district's property and
facilities; or
(3) to provide for public safetv and security in the
district.
(b) The district may enforce its rules by injunctive relief.
(c) To the extent a district rule conflicts with a town rule,
order, or regulation, the town rule, order, or regulation controls.
Sec. 3886.111. NAME CHANGE. The board by resolution may
change the district's name. The board shall give written notice of
the chance to the town
[Sections 38 .112 - 38 .150 reserved for expansion]
SUBCHAPTER D. GENERAL FINANCIAL PROVISIONS
Sec. 38 .151. ELECTIONS REGARDING TAXES OR BONDS. (a) The
dI
strict may issue or enter into, without an election, the bonds
and obligations described in Section 38 .201(a) secured by or
payable from any monies, funds, or revenues available to the
district from any source other than ad valorem taxes.
(b) The district must hold an election within the district in
the manner provided by Chapters 49 and 54, Water Code, to obtain
voter approval before the district may impose an ad valorem tax or
Page -18 -
1162\O10\18035.7
issue or enter into the bonds and obligations described in Section
38 .201(a) secured by or payable from ad valorem taxes.
(c) The district may not issue or enter into the bonds and
obliaations described in Section 38 .201(a) secured by or payable
from ad valorem taxes to finance a road project unless the bonds or
obliaations are approved by a vote of a two-thirds majority of the
voters within the district votin
purpose.
at an election held for that
Sec. 38 .152. OPERATION AND MAINTENANCE TAX. (a) If
authorized at an election held within the district under Section
38 .151, the district may impose an operation and maintenance tax
on taxable property in the district in accordance with Section
49.107, Water Code.
b) Except as provided by Subsection (c), the district ma
impose the tax for operation and maintenance purposes, including
for:
(1) planning, constructing, acquiring, maintaining,
repairing, and operating all improvement projects, including land,
plants, works, facilities, improvements, appliances, and equipment
of the district; and
(2) paying costs of services, engineering and legal
fees, and organization and administrative e
(c) The district may not impose an
Page -19 -
enses.
ration and maintenance
1162\010\18035.7
tax unless the maximum rate of the tax is approved by the governing
body of the town and a majority of the voters of the district
votina at an election held within the district for that purpose. If
the maximum tax rate is approved, the board may impose the tax at
anv rate that does not exceed the approved rate.
d) An operation and maintenance tax election may be held at
the same time and in conjunction with any other election within the
district. The election may be called by a separate election order
or as part of any other election order.
Sec. 38 .153. CONTRACT TAXES. (a) In accordance with
Section 49.108, Water Code, the district may make payments under a
contract from taxes other than operation and maintenance taxes
after the provisions of the contract have been approved by a
majority of the voters voting at an election held within the
district for that purpose.
(b) A contract approved. by the district voters may contain a
rovision stating that the contract may be modified or amended b
the board without further voter approval.
Sec. 38 .153. LIMITATION ON DISTRICT AUTHORITY. The
district shall not have the authority to levy ad valorem taxes
assessments, or any other fees or charges on any property owned by
the town, the county, the Prosper Independent School District, or
anv other political subdivision.
Page -20 -
1162\O10\18035.7
Sections 38 .155-388b.200 reserved for expansion
SUBCHAPTER E. BONDS AND OTHER OBLIGATIONS
Sec. 38 .201. AUTHORITY TO BORROW MONEY. (a) The district
may borrow monev for anv district purpose authorized by this
chapter by issuing bonds, notes, temporary notes, time warrants, or
other obligations of any kind found by the board to be necessary or
appropriate for a district purpose, or by entering into installment
sales contracts, reimbursement agreements, or other contracts or
agreements, secured by or payable from assessments, ad valorem
taxes, impact fees, contract payments, grants, sales and use taxes,
revenue from a tax increment reinvestment zone created under
Chapter 311 or 312, Tax Code, Chapter 2303, Government Code, or any
other district funds or revenues, or any combination of such
sources. Obligations of the district do not give rise to a charge
aaainst the aeneral credit or taxing powers of the Town and are not
able except as authorized by this Chapter.
b) If the district issues or enters into or pays an
obligations described in Subsection (a) from assessments imposed on
property in the district, such assessments may be levied in
accordance with the provisions of Chapter 375, Local Government
Code, the provisions of Chapter 372, Local Government Code, or an
combination of such provisions.
Page -21 -
1162\O10\18035.7
c) The obligations described in Subsection (a):
1) must be authorized by the development agreement or
otherwise approved by the Governing body of the town;
(2) must mature not more than 40 years from the date
they are issued or entered into;
(3) may bear interest at any rate or rates determined by
the board notwithstandinq any provisions to the contrary contained
in Section 372.023, Local Government Code;
(4) if secured by or paid from special assessments or
annual installments thereof, are not subject to the jurisdiction or
supervision of the Texas Commission on Environmental Quality under
Chapters 49 or 54, Water Code, Section 375.208, Local Government
Code, or any other law; and
5) may include such other terms and conditions as the
board may determine.
Sec. 38 .202. BONDS FOR ROAD PROJECTS. At the time of
issuance, the total principal amount of bonds or other obligations
issued or incurred to finance road projects may not exceed one-
fourth of the assessed value of the real property in the district.
Sec. 38 .203. TAXES FOR BONDS. (a) At the time the district
issues bonds pavable wholly or partly from ad valorem taxes, the
board shall provide for the annual imposition of an ad valorem tax
without limit as to rate or amount, as required by Section 54.601
Page -22 -
1162\010\18035.7
Water Code.
(b) The board shall annually impose the tax while all or part
of the bonds are outstanding. Sections 54.601 and 54.602, Water
Code, govern the amount and rate of the tax.
(c) The district annually shall impose the tax on all taxable
roperty in the district in an amount sufficient to:
1) pav the interest on the bonds or other obligations
as the interest becomes due;
2) create a sinking fund for the payment of the
rincipal of the bonds or other obligations when due or the
redemption price at any earlier required redemption date; and
(3) pay the expenses of imposing the tax.
(d) The district may not issue bonds or other obligations
that are secured by and payable from ad valorem taxes unless the
bonds and the imposition of taxes are approved by:
(1) a majority of the district voters voting at an
election for that purpose; and
(2) the governing body of the town.
e) The district shall hold an election required by this
section in the manner provided by Chapter 54, Water Code.
Sections 38 .204 - 38 .250 reserved for expansion]
SUBCHAPTER F. DISSOLUTION
Page -23 -
1162\010\18035.7
Sec. 38 .251. DISSOLUTION ni TOWN ORDINANCE. (a) Except as
rov'ded by Subsection (b), the town by ordinance may dissolve the
district.
(b) If the district has outstanding indebtedness or other
contractual obligations, the town may not dissolve the district
until the district's outstanding indebtedness and contractual
obligations have been repaid, discharged, or fully performed or
have been assumed by the town.
Sec. 38 .252. COLLECTION OF ASSESSMENTS AND OTHER REVENUE.
If the town dissolves the district and assumes the outstandin
indebtedness and contractual obligations of the district:
(1) the town shall succeed to the rights and obligations
of the district regarding enforcement and collection of the
assessments and other revenue;
(2) the town shall exercise all district powers to
enforce and collect the assessments and other revenue; and
(3) the board shall transfer ownership of all district
roperty to the town whereupon the town shall be responsible for
operation and maintenance of such property.
SECTION 2. The Prosper Municipal Management District No. 2
initially includes all the territory contained in the following
area: [LEGAL DESCRIPTION OF 73+ ACRES].
Page -24 -
1162\O10\18035.7
SECTION 3. (a) The legal notice of the intention Co
introduce this Act, setting forth the general substance of this
Act, has been published as provided by law, and the notice and a
copy of this Act have been furnished to all persons, agencies,
officials, or entities to which they are required to be furnished
under Section 59, Article XVI, Texas Constitution, and Chapter 313,
Government Code.
(b) The governor, one of the required recipients, has
submitted the notice and Act to the Texas Commission on
Environmental Quality.
(c) The Texas Commission on Environmental Quality has filed
its recommendations relating to this Act with the governor, the
lI
eutenant governor, and the speaker of the house of
representatI
ves within the required time.
(d) All requirements of the constitution and laws of this
state and the rules and procedures of the legislature with respect
to the notice, introduction, and passage of this Act are fulfilled
and accomplished.
SECTION 4. This Act takes effect September 1, 2011.
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1162\O10\18035.7