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Home My WebLink About01-27-2026 Executive Session & Regular Meeting Packet - CANCELED AGENDA City Council Executive Session Tuesday, January 27, 2026 @ 5:30 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna will meet in an Executive Session on Tuesday, January 27, 2026, at 5:30 PM, in the Anna Municipal Complex – Council Chambers, located at 120 W. 7th Street, to consider the following items. 1. Call to Order, Roll Call, and Establishment of Quorum. 2. Executive Session (Exceptions). Under Tex. Gov't Code Chapter 551, the City Council may enter into Executive Session to discuss any items listed or referenced on this Agenda under the following exceptions: a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). Policies and Procedures b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). City Manager The Council further reserves the right to enter into Closed Session at any time throughout any duly noticed meeting under any applicable exception to the Open Meetings Act. 3. Consider/Discuss/Action on any items listed on any agenda - executive session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. 4. Adjourn. This is to certify that I, Carrie L. Land, City Secretary, posted this Agenda on the City’s Website (www.annatexas.gov) and at the Anna Municipal Complex bulletin board at or before 5:00 p.m. on 01/21/2026. Carrie L. Land, City Secretary 1. The Council may vote and/or act upon each of the items listed on this Agenda. 2. The Council reserves the right to retire into executive session concerning any of the items listed on this Agenda, whenever it is considered necessary and legally justified under the Open Meetings Act. 3. In accordance with the Americans with Disabilities Act, it is the policy of the City of Anna to offer its public programs, services, and meetings in a manner that is readily accessible to everyone, including individuals with disabilities. If you are a person with a disability and require information or materials in an appropriate alternative format, or if you require any other accommodation, please contact the ADA Coordinator at least 48 working hours in advance of the event by emailing adacompliance@annatexas.gov. Advance notification within this guideline will enable the City to make reasonable arrangements to ensure accessibility. AGENDA City Council Meeting Tuesday, January 27, 2026 @ 6:00 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna will meet on Tuesday, January 27, 2026, at 6:00 PM, in the Anna Municipal Complex – Council Chambers, located at 120 W. 7th Street, to consider the following items. Welcome to the City Council meeting. If you wish to speak on an Open Session agenda item, please fill out the Opinion/Speaker Registration Form and turn it in to the City Secretary before the meeting starts. 1. Call to Order, Roll Call, and Establishment of Quorum. 2. Invocation and Pledge of Allegiance. American Pledge: I pledge allegiance to the flag of the United States of America, and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Texas Pledge: Honor the Texas flag; I pledge allegiance to thee, Texas, one state under God, one and indivisible. 3. Neighbor Comments. At this time, any person may address the City Council regarding an item on this meeting Agenda that is not scheduled for public hearing. Also, at this time, any person may address the City Council regarding an item that is not on this meeting Agenda. Each person will be allowed up to three (3) minutes to speak. No discussion or action may be taken at this meeting on items not listed on this Agenda, other than to make statements of specific information in response to a citizen's inquiry or to recite existing policy in response to the inquiry. 4. Reports. Receive reports from Staff or the City Council about items of community interest. Items of community interest include: expression of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen (but not including a change in status of a person's public office or public employment); a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; and announcements involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the Agenda. a. Housing Data. (Director of Development Services Kaleb Kentner) 5. Consent Items. These items consist of non-controversial or "housekeeping" items required by law. Items may be considered individually by any Council Member making such request prior to a motion and vote on the Consent Items. a. Approve City Council Minutes for January 13, 2026. (City Secretary Carrie Land) b. Review Minutes of the December 1, 2025, Planning & Zoning Commission Meeting. (Director of Development Services Kaleb Kentner) c. Review Minutes of the December 11, 2025, Joint Community Development Corporation and Economic Development Corporation Board Meeting. (Interim Director of Economic Development Natasha Roach) d. Review Monthly Financial Report for the Month Ending December 31, 2025. (Director of Finance Terri Doby) e. Approve a Resolution amending the City of Anna Personnel Policy Manual. (Director of Human Resources Stephanie Beitelschies) f. Approve a Resolution authorizing the Anna Director of Economic Development to enter into purchase and sale agreements and other real estate related transactions to buy or sell property on behalf of the CDC. (Interim Director of Economic Development Natasha Roach) g. Approve a Resolution authorizing the Anna Director of Economic Development to enter into purchase and sale agreements and other real estate related transactions to buy or sell property on behalf of the EDC. (Interim Director of Economic Development Natasha Roach) h. Take action to Adopt a Resolution setting a Public Hearing under Section 372.009 of the Texas Local Government Code to be held on February 24, 2026 on the advisability of the creation of a public improvement district and improvements within the City of Anna, Texas, to be known as Liberty Hills Public Improvement District No. 1 and authorizing the issuance of notice by the City Secretary of Anna, Texas, regarding the Public Hearing. (Director of Public Works Joseph Cotton) i. Take action to adopt a Resolution of the City of Anna, Texas determining the costs of certain Authorized Improvements to be financed by the Sherley Farms Public Improvement District for Improvement Area #1 thereof; Approving a Preliminary Service Plan and Assessment Plan, Including the proposed Assessment Roll for Improvement Area #1; Calling a Regular Meeting and Noticing a Public Hearing for February 24, 2026, to Consider an Ordinance Levying Assessments on property located within Improvement Area #1 of said District; Directing the Filing of the proposed Assessment Roll with the City Secretary to make available for public inspection; Directing City Staff to publish and mail notice of said Public Hearing; and Resolving other matters incident and related thereto. (Director of Public Works Joseph Cotton) 6. Items For Individual Consideration and Public Hearings. At the time and place of any public hearing held during this meeting, all persons who desire will have an opportunity to be heard in opposition to or in favor of the ordinance, application, or other proposed item. a. First Reading of a Resolution approving an Economic Development Incentive Agreement between the Anna Community Development Corporation and the Seitz Group, Inc. (Interim Director of Economic Development Natasha Roach) b. Second Reading of a Resolution approving an Economic Development Incentive Agreement between the Anna Community Development Corporation and the Seitz Group, Inc. (Interim Director of Economic Development Natasha Roach) c. Consider/Discuss/Action on a Resolution approving an Economic Development Incentive Agreement between the Anna Community Development Corporation and the Seitz Group, Inc. (Interim Director of Economic Development Natasha Roach) d. Consider/Discuss/Action on a Development Agreement for Thompson Grove. (Development Services Director Kaleb Kentner) 7. Closed Session (Exceptions). Under Tex. Gov't Code Chapter 551, the City Council may enter into Closed Session to discuss any items listed or referenced on this Agenda under the following exceptions: a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). Policies and Procedures b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). City Manager The Council further reserves the right to enter into Closed Session at any time throughout any duly noticed meeting under any applicable exception to the Open Meetings Act. 8. Consider/Discuss/Action on any items listed on any agenda - executive session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. 9. Adjourn. This is to certify that I, Carrie L Land, City Secretary, posted this Agenda on the City’s website (www.annatexas.gov) and at the Anna Municipal Complex bulletin board at or before 5:00 p.m. on 01/21/2026. Carrie L. Land, City Secretary 1. The Council may vote and/or act upon each of the items listed in this Agenda. Notwithstanding the foregoing or any other statement in this Agenda, the Council shall not take action on any item until after providing an opportunity for public testimony under the "Neighbor Comments" item or after any public hearing held under applicable law. 2. The Council reserves the right to retire into closed executive session concerning any of the items listed on this agenda, whenever it is considered necessary and legally justified under the Open Meeting Act. 3. In accordance with the Americans with Disabilities Act, it is the policy of the City of Anna to offer its public programs, services, and meetings in a manner that is readily accessible to everyone, including individuals with disabilities. If you are a person with a disability and require information or materials in an appropriate alternative format, or if you require any other accommodation, please contact the ADA Coordinator at least 48 working hours in advance of the event by emailing adacompliance@annatexas.gov. Advance notification within this guideline will enable the City to make reasonable arrangements to ensure accessibility. Item No. 5.a. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: AGENDA ITEM: Approve City Council Minutes for January 13, 2026. (City Secretary Carrie Land) SUMMARY: FINANCIAL IMPACT: BACKGROUND: STRATEGIC CONNECTIONS: ATTACHMENTS: 1. 2026-01-13 Executive Session Minutes 2. 2026-01-13 Regular Meeting Minutes (2) City Council Executive Session Meeting Minutes Tuesday, January 13, 2026 @ 5:30 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna met in an Executive Session on Tuesday, January 13, 2026, at 5:30 PM, in the Anna Municipal Complex – Council Chambers, located at 120 W. 7th Street, to consider the following items. 1. Call to Order, Roll Call, and Establishment of Quorum. Mayor Cain called the meeting to order at 5:30 PM. Members Present: Mayor Pete Cain Mayor Pro Tem Kevin Toten Deputy Mayor Pro Tem Stan Carver II Council Member Nathan Bryan Council Member Kelly Herndon Council Member Elden Baker Council Member Manny Singh Members Absent: None 2. Executive Session (Exceptions). a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). Potential regulations regarding city apparel, Council communications policies and platform, and/or public meeting attendance; state law compliance; service contract; employment contract; policies on improvement districts. b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). City Manager. City Council. MOTION: Council Member Baker moved to enter closed session. Mayor Pro Tem Toten seconded. Motion carried 7-0. Mayor Cain recessed the meeting at 5:31 PM. Mayor Cain reconvened the meeting at 6:06 PM. 3. Consider/Discuss/Action on any items listed on any agenda - executive session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. No action taken. 4. Adjourn. Mayor Cain adjourned the meeting at 6:06 PM. APPROVED this 27th day of January 2026. ____________________________________ Mayor Pete Cain ATTEST: _______________________________ City Secretary Carrie L. Land Regular City Council Meeting Minutes Tuesday, January 13, 2026 @ 6:00 PM Anna Municipal Complex - Council Chambers 120 W. 7th Street, Anna, Texas 75409 The City Council of the City of Anna met on Tuesday, January 13, 2026, at 6:00 PM, in the Anna Municipal Complex – Council Chambers, located at 120 W. 7th Street, to consider the following items. 1. Call to Order, Roll Call, and Establishment of Quorum. Mayor Cain called the meeting to order at 6:07 PM. Members Present: Mayor Pete Cain Mayor Pro Tem Kevin Toten Deputy Mayor Pro Tem Stan Carver II Council Member Nathan Bryan Council Member Kelly Herndon Council Member Elden Baker Council Member Manny Singh Members Absent: None 2. Invocation and Pledge of Allegiance. Deputy Mayor Pro Tem Carver led the Invocation and Pledge of Allegiance. 3. Neighbor Comments. Tana Brown spoke about the balconies built on the apartments at Finley and Sharp, and the wooden perimeter fences around neighborhoods. 4. Reports. Chief Isom announced the promotion of Galen Davis to Fire Marshal and introduced Kurt Hall as the new Emergency Management Coordinator. 5. Work Session. a. Presentation from Hilltop Securities Inc. regarding Sherley Farms Public Improvement District Improvement Area #1 Project. (Director of Public Works Joseph Cotton) Andre Ayala made a presentation on the Sherley Farms PID Improvement area #1. The Hearing will be rescheduled for the January 27th meeting. 6. Consent Items. MOTION: Council Member Baker moved to approve Consent Items 6a - 6d. Council Member Herndon seconded. Motion carried 7–0. a. Approve City Council Meeting Minutes for December 9, 2025, December 16, 2025, and January 5, 2026. (City Secretary Carrie Land) b. Review Minutes of the November 13, 2025, Joint Community Development Corporation and Economic Development Corporation Board Meeting with City Council. (Assistant Director of Economic Development Natasha Roach) c. Review Minutes of the November 3, 2025, Planning & Zoning Commission Meeting. (Director of Development Services Kaleb Kentner) d. Approve a Resolution authorizing the Anna Police Department to apply for the Active Attack Response Equipment Grant. (Assistant Police Chief Terry Eoff) A RESOLUTION OF THE CITY OF ANNA, TEXAS, APPROVING AN APPLICATION FOR THE ACTIVE ATTACK RESPONSE EQUIPMENT GRANT PROGRAM AND AUTHORIZING CITY STAFF TO EXECUTE SAME. 7. Items For Individual Consideration and Public Hearings. a. Conduct a Public Hearing/Consider/Discuss/Action on an Ordinance regarding the disannexation of six acres for the Hurricane Creek Country Club. (ANX 25- 0008) (Planning Manager Lauren Mecke) Disannexation of 6.0± acres of land in accordance with a development agreement (Res. No. 2025-10-1849) between the City of Anna and Grayson- Collin Recreational Association, Inc. Located on the north and south sides of Fairway Lane, 1,000± feet northwest of County Road 368 (future N. Standridge Blvd). Mayor Cain opened the public hearing at 6:27 PM. Matt Martin submitted his support for this item. Mayor Cain closed the public hearing at 6:27 PM. MOTION: Deputy Mayor Pro Tem Carver moved to approve. Council Member Baker seconded. Motion carried 7–0. AN ORDINANCE DISANNEXING THE HEREINAFTER DESCRIBED TERRITORY FROM THE CITY OF ANNA, COLLIN COUNTY, TEXAS, AND REVISING THE BOUNDARY LIMITS OF SAID MUNICIPALITY SO AS TO EXCLUDE SAID HEREINAFTER DESCRIBED PROPERTY FROM SAID MUNICIPAL CORPORATE LIMITS. b. Discuss, Consider and Take Appropriate Action to adopt a Resolution of the City of Anna, Texas determining the costs of certain Authorized Improvements to be financed by the Sherley Farms Public Improvement District for Improvement Area #1 thereof; Approving a Preliminary Service Plan and Assessment Plan, Including the proposed Assessment Roll for Improvement Area #1; Calling a Regular Meeting and Noticing a Public Hearing for February 10, 2026, to Consider an Ordinance Levying Assessments on property located within Improvement Area #1 of said District; Directing the Filing of the proposed Assessment Roll with the City Secretary to make available for public inspection; Directing City Staff to publish and mail notice of said Public Hearing; and Resolving other matters incident and related thereto. (Director of Public Works Joseph Cotton) MOTION: Council Member Herndon moved to table this item to the January 27th meeting. Council Member Bryan seconded. Motion carried 7–0. c. Consider/Discuss/Action on a Resolution entering into a Municipal Services Agreement regarding 2.4± acres located on the west side of Leonard Avenue, 189± feet south of Gardendale Hollow. (ANX 25-0007) (Director of Development Services Kaleb Kentner) Catherine McMinimy has submitted a petition to annex her property and to develop it for commercial use. A Municipal Services Agreement is required by state law prior to approval of annexation. MOTION: Council Member Baker moved to approve. Council Member Herndon seconded. Motion carried 7–0. A RESOLUTION ADOPTING A CONDITIONAL AGREEMENT REGARDING SERVICES RELATED TO ANNEXATION OF A 2.4± ACRE TRACT OF LAND. d. Conduct a Public Hearing/Consider/Discuss/Action on an Ordinance for annexation of 2.4± acres located on the west side of Leonard Avenue, 189± feet south of Gardendale Hollow. (ANX 25-0007) (Director of Development Services Kaleb Kentner) Catherine McMinimy has submitted a petition to annex 2.4± acres of land. HBC Interests is seeking to develop the property in accordance with the companion zoning request. Mayor Cain opened the public hearing at 6:33 PM. No comments were given. Mayor Cain closed the public hearing at 6:33 PM. MOTION: Deputy Mayor Pro Tem Carver moved to approve. Council Member Herndon seconded. Motion carried 7–0. AN ORDINANCE ANNEXING THE HEREINAFTER DESCRIBED TERRITORY TO THE CITY OF ANNA, TEXAS, AND EXTENDING THE BOUNDARY LIMITS OF SAID MUNICIPALITY SO AS TO INCLUDE SAID HEREINAFTER DESCRIBED PROPERTY WITHIN SAID MUNICIPAL CORPORATE LIMITS AND GRANTING TO ALL THE INHABITANTS OF SAID PROPERTY ALL THE RIGHTS AND PRIVILEGES OF OTHER CITIZENS AND BINDING SAID INHABITANTS BY ALL OF THE ACTS, ORDINANCES, RESOLUTIONS, AND REGULATIONS OF SAID CITY AS SET FORTH HEREIN; PROVIDING A REPEALER CLAUSE; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. e. Conduct a Public Hearing/Consider/Discuss/Action on an Ordinance establishing zoning of 2.4± acres located on the west side of Leonard Avenue, 189± feet south of Gardendale Hollow to Local Commercial (C-1) District. (ZONE 25-0004) (Director of Development Services Kaleb Kentner) Request to annex and zone 2.4± acres on the west side of Leonard Avenue, 350± feet south of Gardendale Hollow Lane to Local Commercial (C-1) District. Staff mailed public hearing notices to surrounding property owners in accordance with state law. To date, staff have not received any responses. Direction Land Use Zoning Comprehensive Plan North School Single-Family Residential - Large Lot (SF-E) School East Single-Family Residential Single-Family Residential - 6.0 (SF-6.0) Suburban Living South Multifamily ETJ Suburban Living West School Single-Family Residential - Large Lot (SF-E) School COMPATIBILITY CONSIDERATIONS Future Land Use Plan (FLUP): Suburban Living Suburban Living neighborhoods consist predominantly of single-family housing on detached lots. Home sites are in platted subdivisions with connections to public utilities, residential streets and sidewalks, open space, parks, and amenities. This PlaceType is found near neighborhood commercial and commercial centers. Suburban living provides the population necessary to support the nearby commercial and professional office uses within the surrounding corridors. Residential uses are typically self-contained with a buffer from non-residential developments through transitional uses and landscaped areas. Lot sizes in Suburban Living are typically less than 1 acre. Master Thoroughfare Plan: Leonard Avenue is identified as a Major Arterial (120') right-of-way. The City acquired the necessary land from this tract in 2023. The adjacent development constructed the two lanes of Leonard Avenue with its development. CONCLUSION The request to zone the property to Local Commercial (C-1) District is in conformance with the Comprehensive Plan. Mayor Cain opened the public hearing at 6:37PM. No comments were made. Mayor Cain closed the public hearing at 6:37PM. MOTION: Council Member Singh moved to approve. Mr. Castillo, the representative for the developer, and Ms. McMinimy, the property owner, spoke about the plans for the sale and development of the property. Council Member Singh withdrew his motion. MOTION: Council Member Herndon moved to table until the second meeting in February. Council Member Singh seconded. Motion carried 6–1. Mayor Pro Tem Toten opposed. 8. Closed Session (Exceptions). a. Consult with legal counsel regarding pending or contemplated litigation and/or on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Government Code (Tex. Gov’t Code §551.071). Potential regulations regarding city apparel, Council communications policies and platform, and/or public meeting attendance; state law compliance; service contract; employment contract; policies on improvement districts. b. Discuss or deliberate the purchase, exchange, lease, or value of real property (Tex. Gov’t Code §551.072). c. Discuss or deliberate Economic Development Negotiations: (1) To discuss or deliberate regarding commercial or financial information that the City has received from a business prospect that the City seeks to have locate, stay, or expand in or near the territory of the City of Anna and with which the City is conducting economic development negotiations; or (2) To deliberate the offer of a financial or other incentive to a business prospect described by subdivision (1). (Tex. Gov’t Code §551.087). d. Discuss or deliberate personnel matters (Tex. Gov’t Code §551.074). City Manager. City Council. MOTION: Council Member Herndon moved to enter closed session. Council Member Bryan seconded. Motion carried 6-1. Mayor Pro Tem Toten opposed. Mayor Cain recessed the meeting at 6:54 PM. Mayor Pro Tem Toten left the meeting at 6:54 PM. Mayor Cain left the meeting at 8:00 PM. Deputy Mayor Pro Tem Carver reconvened the meeting at 8:39 PM. 9. Consider/Discuss/Action on any items listed on any agenda - executive session, regular meeting, or closed session - that is duly posted by the City of Anna for any City Council meeting occurring on the same date as the meeting noticed in this agenda. No action taken. 10. Adjourn. Deputy Mayor Pro Tem Carver adjourned the meeting at 8:39 PM. APPROVED this 27th day of January 2026. ____________________________________ Mayor Pete Cain ATTEST: _______________________________ City Secretary Carrie L. Land Item No. 5.b. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Lauren Mecke AGENDA ITEM: Review Minutes of the December 1, 2025, Planning & Zoning Commission Meeting. (Director of Development Services Kaleb Kentner) SUMMARY: The item is for Council to review meeting minutes from the December 1, 2025, P&Z Meeting. FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: The Planning & Zoning Commission (P&Z) held their regularly scheduled meeting on December 1, 2025. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Unique. ATTACHMENTS: 1. 2025-12-01 Minutes Signed Item No. 5.c. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Natasha Roach AGENDA ITEM: Review Minutes of the December 11, 2025, Joint Community Development Corporation and Economic Development Corporation Board Meeting. (Interim Director of Economic Development Natasha Roach) SUMMARY: The item is for Council to review meeting minutes from the December 11, 2025, CDC/EDC Joint Board Meeting. FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: The CDC/EDC Board met on December 11, 2025, for their monthly Joint Board Meeting. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Excellent. ATTACHMENTS: 1. December 11_2025 CDC EDC Joint Meeting Minutes (Signed) Item No. 5.d. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Terri Doby AGENDA ITEM: Review Monthly Financial Report for the Month Ending December 31, 2025. (Director of Finance Terri Doby) SUMMARY: This report covers the financial performance for Fiscal Year 2026 through December 31, 2025. FINANCIAL IMPACT: Information only. BACKGROUND: The City of Anna's financial policies require the publication of a monthly financial report. Enclosed in the report is an executive dashboard that provides a high-level look at major funds along with detailed reporting of sales tax collections. The financial condition of the City remains strong and the reported funds adhere to fund balance requirements. The FY2026 Budget was adopted on September 9, 2025. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Excellent. ATTACHMENTS: 1. FY2026 City Council Monthly Financial Report December Positive Positive variance compared to historical trends Warning Negative variance of 3%-5% compared to historical trends Negative Negative variance of >5% compared to historical trends FY2026 FY2026 % Budget TD REVENUES General Fund Property Taxes 14,606,393$ 661,555$ 5%Property taxes are collected in Dec. & Jan. Sales Tax 6,030,000 1,047,534 17%Reflects two months of remittances. Franchise and Local Taxes 1,250,000 4,491 0%Franchise fees are collected quarterly. Charges for Services 1,384,086 420,542 30% Permits, Licenses and Fees 5,396,000 1,037,425 19% Intergovernmental - 28,600 100% Fines 400,000 99,632 25% Investment Income 800,000 86,083 11% Other Revenues - 654,692 100% Revenue Total 29,866,479$ 4,040,554$ 14%With 25% of the year expired, revenues recorded in the General Ledger are at 14% of budget but within historical norms. EXPENDITURES General Fund Expense Total 29,858,950$ 7,817,670$ 26%With 25% of the year expired, expenses are 26% of budget. Utility Fund REVENUES Water Sales 14,112,700$ 3,741,877$ 27% Sewer Charges 10,700,000 2,835,213 26% Sanitation Revenue 3,744,000 1,058,249 28% Other Charges for Services 890,000 145,016 16%Lower than expected tap fees and meter install fees. Permits, Licenses and Fees 900,000 934,745 104% Investment Income 702,000 309,773 44% Other Revenues - 75,619 100% Utility Fund Total 31,048,700$ 9,100,492$ 29%With 25% of the year expired, revenues recorded in the General Ledger are at 28% of budget. EXPENDITURES Administration 1,127,420$ 531,923$ 47% Includes one-time expense for property and liability insurance. Water 9,593,543 2,292,787 24% Sewer 14,466,136 566,290 4% Sanitation 3,738,000 113,890 3% Utility Billing 1,653,539 292,478 18% Engineering 1,111,373 171,829 15% Utility Fund Total 31,690,011$ 3,969,197$ 13%With 25% of the year expired, expenses are 13% of budget. CITY OF ANN GENERAL & UTILITY FUNDS DASHBOARD Through December 31, 2025 Favorable / Unfavorable % Change 2024-26 Collections from 2024-25 Collections Monthly Prior Year Monthly October 820,089$ 5% 780,090$ November 855,966 14% 753,401 December 995,930 January 682,766 February 675,214 March 1,873,725 April 779,340 May 780,970 June 867,435 July 817,173 August 761,329 September 844,898 1,676,055$ 10,612,271$ Budget: 9,650,000 17% 8,220,000 CITY OF ANNA Schedule of Sales Tax Collections November 30, 2025 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 $2,000,000 Monthly Sales Tax Collections: 3 Year Comparison FY2023-24 FY2024-25 FY2025-26 Item No. 5.e. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Stephanie Beitelschies AGENDA ITEM: Approve a Resolution amending the City of Anna Personnel Policy Manual. (Director of Human Resources Stephanie Beitelschies) SUMMARY: Staff recommends amending the City of Anna Personnel Policy Manual to transition Anna Fire Rescue shift personnel to a 14-day work period in support of the implementation of a 48/96 work schedule. This change aligns the City with neighboring fire service scheduling, where alternative schedules beyond the traditional 24/48 have become common and supports ongoing recruitment and retention efforts within the Fire Department. Other sections of the proposed policy are being updated for clarity and to support staff’s day-to-day operations in alignment with current practices. The proposed revisions are listed below: 1. Update the 28-day cycle to a 14-day work period for policy consistency. 2. Recommended 14-day work period for fire personnel. 3. Update the vacation leave language for policy consistency. 4. Update the number of hours for bereavement per occurrence for fire shift personnel. 5. Update the separation process to reflect our current direct deposit process versus paper check. 6. Removal of the Travel Policy to distribute as a future Administrative Directive signed by the City Manager. 7. Added Section 4.10 as “RESERVED” to maintain original section numbering and align with Ethics Code references. 8. Updated public and media communications language to reference the Communications Team. FINANCIAL IMPACT: Funding for recommended changes is appropriated in the FY2026 budget. BACKGROUND: Staff is requesting approval to amend the City of Anna Personnel Policy Manual to transition eligible non-exempt Fire Department personnel to a 14-day work period. This policy change is to support the Anna Fire Department’s implementation of the 48/96 work schedule, which took effect on Jan. 19. The shift to a 48/96 schedule was implemented in response to recruitment and retention challenges. While the schedule change has already occurred operationally, the Personnel Policy Manual requires amendment to support a 14-day work period. This work period adoption is pursuant to section 207(k) of the Fair Labor Standards Act (FLSA). Transitioning eligible non-exempt Fire Department personnel to a 14-day work period does not change total annual hours worked, hourly rates of pay, or Fair Labor Standards Act (FLSA) requirements. Approval of this policy amendment will formally align the Personnel Policy Manual with current Fire Department operations, support continued recruitment and retention efforts and ensure administrative consistency between adopted operational practices and the City’s personnel policies. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Excellent. ATTACHMENTS: 1. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, COLLIN COUNTY, TEXAS, APPROVING AMENDMENTS TO THE CITY OF ANNA PERSONNEL POLICY MANUAL 1.27.2026 2. City of Anna Personnel Policy 1.27.2026 C03029D20260116CR1 redline mc CITY OF ANNA, TEXAS on March 11, 2014, the City Council of the City of Anna, Texas ("City Council") approved a Personnel Policy Manual that includes personnel guidelines for use in certain operations of the City's departments/personnel and in matters related to human resources; and, said Personnel Policy Manual was amended on September 22, 2015, January 26, 2016, July 11, 2017, October 26, 2021, December 14, 2021, September 13, 2022, October 11, 2022, September 26, 2023, December 12, 2023 and on January 27, 2026. the City Manager has recommended approval of certain amendments to the Personnel Policy Manual, and the City Council finds that its approval of the amendments to the Personnel Policy Manual is not intended to and does not: (1) create any type of contract of employment between the City and any employee; or (2) have the force or effect of law or ordinance The recitals set forth above are incorporated herein for all purposes as if set forth in full The City Council of the City of Anna, Texas hereby approves the amendments to the City of Anna Personnel Policy Manual for use by the City Manager and City departments in relation to certain organizational operations and matters related to personnel and human resources. th DAY OF JANUARY 2026. ATTEST: APPROVED ______________________ _________________________ City Secretary, Carrie Land Mayor, Pete Cain City of Anna Personnel Policy Manual Approved: March 11, 2014 Amended: September 22, 2015, Res. No. 2015-09-24 January 26, 2016, Res. No. 2016-01-140 July 11, 2017, Res. No. 2017-07-334 October 26, 2021, Res. No.2021-10-1028 December 14, 2021, Res. No. 2021-12-1074 September 13, 2022, Res. No. 2022-09-1252 October 11, 2022, Res. No. 2022-10-1265 September 26, 2023, Res. No. 2023-09-1550 December 12, 2023, Res. No. 2023-12-1572 2 | P a g e Preamble This Personnel Policy Manual (this “Manual”) is prepared for informational and guideline purposes only and does not constitute a contract in any respect between the City of Anna (the “City”) and its employees. Except as expressly set forth in this Manual or in a written contract approved by the City Council, employment with the City is at will, and either the employee or the City may terminate the relationship at any time for any legal reason or for no reason. The City Manager may remove, with or without cause, any City employee or volunteer who is not required to be appointed by the City Council. The City reserves the right to release an employee at any time and for any reason, with or without cause, unless expressly prohibited by law. The at-will status of an employee may only be modified by written contract between the City and an individual employee that is duly adopted by the City Council, signed by a duly authorized representative of the City, and contains express, clear and unambiguous language that identifies the employee and modifies the at-will status of that employee (“Employment Contract”). The at- will status in such case shall only be modified as to that individual employee and only to the extent modified by such contract. All statements in this Manual regarding the at-will status of City employees or any benefits provided herein shall control over any contradictory statements by any other person, whether oral or written, with the sole exception of an Employment Contract. Similarly, with the sole exception of benefits guaranteed in an Employment Contract, the City’s policies and practices with respect to any matter or any benefits now offered may be terminated at any time to full extent permitted under applicable law and same are not to be considered as creating any contractual obligation on the City’s part. Statements of specific grounds for termination set forth in this Manual or in any other City documents are examples only, are not all-inclusive lists, and are not intended to restrict the City’s right to terminate at will. It is the responsibility of each employee of the City to comply with all policies in this Manual and with other rules and regulations implemented in accordance with this Manual. If there are questions about any policies, procedures, rules or regulations, they should be discussed with the immediate supervisor, department head or City Manager, as appropriate. Every employee in City service should understand that he/she is working for the public. It is the goal of the City to constantly develop more effective and efficient means to serve its citizens. Therefore, all employees should thoroughly understand their jobs duties and should possess respect for their work. Employees are expected to have knowledge of the relation of their jobs to those of other employees and to the entire City organization. Individual departments may establish additional policies that are consistent with this Manual. Such departmental policies must be submitted to and approved by the City Manager. To the extent that such policies conflict with this Manual, this Manual shall control. Amendments to this Manual must be prepared by the City Manager and presented to the City Council for approval. Upon amendment, the modifications shall be distributed to all City employees and all City employees shall sign an acknowledgement that they have received, reviewed and understand the modifications (refer to Appendix A-1). Notwithstanding any other provision of these policies, rules and regulations, the City Council may exempt individual City employees that the City Council appoints pursuant to its power under the CITY OF ANNA – Personnel Policy Manual 3 | P a g e City’s Home-Rule Charter from the application of certain policies, rules and regulations and may do so by duly adopted ordinance, resolution or written agreement. However, the City Council may not grant any exemption that would result in a violation of state or federal law. Completion of an introductory or probationary period or “regular status” does not change an employee’s status as an employee-at-will or in any way restrict the City’s right to terminate such an employee or change the terms or conditions of employment. 4 | P a g e CITY OF ANNA PERSONNEL POLICY MANUAL Table of Contents Preamble ....................................................................................................................................................2 Table of Contents ..........................................................................................................................................4 Section 100. Introduction .............................................................................................................................9 100.1 Objectives ....................................................................................................................................9 100.1.1 Definitions ..............................................................................................................................10 100.2 Administrative Authority .............................................................................................................13 100.3 Applicability and Scope ..............................................................................................................14 100.4 Dissemination of Manual ............................................................................................................15 100.5 Amendments to Manual .............................................................................................................15 100.6 Equal Opportunity Policy ............................................................................................................15 100.7 Policy Directives, Departmental Policies ....................................................................................15 100.8 Employment at Will ....................................................................................................................16 Section 101. Employee Hiring and Appointment .................................................................................1617 101.1 Vacancies ..............................................................................................................................1617 101.2 Announcement of Vacancies .................................................................................................1617 101.3 Employment Applications .......................................................................................................1617 101.4 Employment Evaluation/Disqualification .....................................................................................18 101.5 Americans with Disabilities Act ...................................................................................................19 101.6 Applicant Referral, Interview and Selection Process ..................................................................20 101.7 Authority for Employment Hire ....................................................................................................28 101.8 Employment Status ....................................................................................................................28 101.9 Exempt or Non-Exempt Status ...................................................................................................28 101.10 Nepotism ....................................................................................................................................29 101.10.1 Dating/Fraternization Policy ....................................................................................................32 101.11 Residency Requirements ...........................................................................................................33 101.12 Pre-Employment Screenings and Examinations ........................................................................33 101.13 Emergency Temporary Appointments ........................................................................................34 101.14 Promotions and Temporary Promotions .....................................................................................34 101.15 Lateral Transfers ........................................................................................................................35 101.16 Demotions ..................................................................................................................................36 101.16.1 Reduction in Pay for Disciplinary Reasons .............................................................................36 101.17 Re-Hire Eligibility ........................................................................................................................36 101.18 Employee Orientation .................................................................................................................36 5 | P a g e 101.19 Employee Personal Information .................................................................................................37 101.20 Internships .................................................................................................................................37 Section 102. Reference Checks and Recommendations ........................................................................38 102.1 Reference Checks .....................................................................................................................38 102.2 Recommendations .....................................................................................................................38 Section 103. Probation ...............................................................................................................................39 103.1 Probation Period ........................................................................................................................39 103.2 Completion of Probation .............................................................................................................39 103.3 Appeal of Failure of Probation ....................................................................................................40 Section 104. Code of Conduct ...............................................................................................................4041 104.1 Attendance/Standard Work Hours/Time Sheets .....................................................................4041 104.2 Work Standards .....................................................................................................................4041 104.3 Political Activities .......................................................................................................................43 104.3.1 Requests for Public Information ..............................................................................................44 104.3.2 Communications with the Public and the News Media ............................................................45 104.3.3 Communications with City Council Members ..........................................................................45 104.4 Solicitation .................................................................................................................................46 104.5 Outside Employment ..................................................................................................................46 104.6 Health and Fitness .....................................................................................................................47 104.6.1 Tobacco Free Workplace .......................................................................................................48 104.7 Financial Obligations ..................................................................................................................49 104.8 Conflict of Interest/Gifts ..............................................................................................................49 104.9 Professional Decorum ................................................................................................................51 104.10 Harassment and Sexual Harassment Prevention and Disciplinary Policy ...................................51 104.11 Indictments Against Employee ...................................................................................................54 104.12 Violence in the Workplace ..........................................................................................................55 104.13 Workplace Bullying ....................................................................................................................55 104.14 City Logo Use ............................................................................................................................56 Section 105. Compensation & Performance Evaluations .......................................................................57 105.1 Compensation Plan and Philosophy ...........................................................................................57 105.2 New Hires ..................................................................................................................................57 105.3 Employee Pay Schedule ............................................................................................................58 105.03.1 Deductions .............................................................................................................................58 105.4 Overtime and Compensatory Time .............................................................................................58 105.5 Call-Out ......................................................................................................................................61 105.6 Standby (On-Call Time) ..............................................................................................................61 6 | P a g e 105.7 Travel Time ................................................................................................................................62 105.8 Meetings and Training Time .......................................................................................................62 105.9 Employee Performance Evaluation ............................................................................................63 105.10 Training and Development .........................................................................................................63 105.11 Salary Increases ........................................................................................................................68 105.12 Longevity Pay ............................................................................................................................68 105.13 Separation Pay ..........................................................................................................................68 105.14 Retirement .................................................................................................................................69 105.15 Recovery of Pay and/or Benefits ................................................................................................70 105.16 Additional Pay ............................................................................................................................70 Section 106. Holidays, Absences & Leaves .............................................................................................72 106.1 Holidays .....................................................................................................................................72 106.2 Vacation .................................................................................................................................7574 106.3 Sick Leave .............................................................................................................................7776 106.4 Military Leave .........................................................................................................................8079 106.5 Bereavement Leave ...............................................................................................................8685 106.6 Jury/Court Duty ......................................................................................................................8786 106.7 Administrative Leave with Pay ................................................................................................8786 106.8 Authorized Leave without Pay ................................................................................................8887 106.9 Absence without Leave ..............................................................................................................83 106.10 Catastrophic Leave ....................................................................................................................84 106.11 Mental Health Leave for Peace Officers .....................................................................................75 106.12 Public Safety Paid Quarantine Leave ........................................................................................77 Section 107. Family Medical Leave .......................................................................................................8079 107.1 Definitions ..............................................................................................................................8080 107.2 Eligibility .................................................................................................................................8181 107.3 Continuation of Medical Benefits ............................................................................................8383 107.4 Notification .............................................................................................................................8484 107.5 Medical Certification ...............................................................................................................8484 107.6 Reduced Work Schedule .......................................................................................................8585 107.7 Use of Paid Leave ..................................................................................................................8585 107.8 Parties’ Responsibilities .........................................................................................................8585 107.9 Coordination with Workers’ Compensation Benefits ...............................................................8686 107.10 Temporary Replacements ......................................................................................................8787 107.11 Incapacity to Work .................................................................................................................8787 Section 108. Employee Communications Policy .................................................................................8888 108.1 Open Communication/Open Door ..........................................................................................8888 7 | P a g e 108.2 Privacy Expectations ..............................................................................................................8888 108.3 Telephone Usage ...................................................................................................................8989 108.3.1 Personal Use of City Provided Cell Phones ........................................................................8989 108.3.2 Cell Phone Issuance ..........................................................................................................8989 108.3.3 Use of Personal Cell Phones ..............................................................................................9090 108.4 Electronic Communications Policy 1 .......................................................................................9090 108.4.1 Social Media Policy ............................................................................................................9494 108.5 Whistleblower Policy ..................................................................................................................97 Section 109. At-Will, Discipline, Appeals and Grievances ......................................................................97 109.1 Disciplinary Action ......................................................................................................................97 109.2 Grievances ...............................................................................................................................104 Section 110. Voluntary and Involuntary Separations ............................................................................106 110.1 Resignation ..............................................................................................................................106 110.2 Reduction in Force ...................................................................................................................106 110.3 Incapacity .................................................................................................................................106 110.4 Retirement ...............................................................................................................................107 110.5 Military Separation ...................................................................................................................107 110.05.1 Death ...................................................................................................................................107 110.6 Separation Process ..................................................................................................................107 Section 111. Personnel Records .............................................................................................................108 111.1 Personnel Files and Records ...................................................................................................108 111.2 Change in Personnel Status: New Hires ...................................................................................109 111.3 Personnel Records and Reports ..............................................................................................109 111.4 Employment Verification ..........................................................................................................109 Section 112. Employee Benefits .............................................................................................................110 112.1 Workers’ Compensation Insurance ..........................................................................................110 112.2 Modified or Light Duty ..............................................................................................................112 112.3 Social Security .........................................................................................................................114 112.4 Unemployment Insurance ........................................................................................................114 112.5 Health Related Benefits ...........................................................................................................114 112.6 Continuation of Group Insurance (COBRA) ..............................................................................114 112.7 Miscellaneous Benefits ............................................................................................................115 Error! Hyperlink reference not valid.Section 113. Travel Policy .........................................................116116 Error! Hyperlink reference not valid.113.1 .........................................................Applicability of Travel Policy 116116 Error! Hyperlink reference not valid.113.2 .................................................................Authorization Required 8 | P a g e 116117 Error! Hyperlink reference not valid.113.3 ......................................................................Allowable Expenses 116117 Error! Hyperlink reference not valid.113.4 ............................................................................Travel Advances 116119 Error! Hyperlink reference not valid.113.5 ............................................Travel Expense Report Procedures 116119 Error! Hyperlink reference not valid.113.6 ........................................................................General Provisions 116120 Section 114. Equipment/Vehicle Policy ............................................................................................117121 114.1 Purpose of Equipment/Vehicle Policy .................................................................................117121 114.2 Applicability ........................................................................................................................117121 114.3 Use of City Vehicles ...........................................................................................................117121 114.4 City Driving Qualifications ..................................................................................................117121 114.5 Operation and Ridership ....................................................................................................120124 114.6 Privately Owned Vehicles on City Business .......................................................................121125 114.7 Safety, Maintenance, and Care ..........................................................................................121125 114.8 Vehicle Logs ......................................................................................................................124128 114.9 Take Home Vehicle Policy .................................................................................................124128 114.10 Traffic Citations and Accidents ...........................................................................................125129 114.11 Authority of City Manager to Control Use ...........................................................................126130 Section 115. Substance Abuse Policy ..............................................................................................127131 115.1 Purpose .............................................................................................................................127131 115.2 General Policy ...................................................................................................................127131 115.3 Violations ...........................................................................................................................127131 115.4 Surveillance, Searches, and Testing ..................................................................................127131 115.5 Preventive Acts ..................................................................................................................130134 115.6 Work Related Accident .......................................................................................................130134 Section 116. Reservation of Rights ..................................................................................................131135 116.1 Reservation of Rights .........................................................................................................131135 116.2 Other Laws and Regulations ..............................................................................................131135 9 | P a g e 100.1 Objectives Objectives. The Preamble to this Manual is incorporated here as if set forth in full. Although most major areas of the City’s personnel policies are defined in this Manual, situations may arise that are not specifically addressed in this Manual. In these instances, the City Manager may establish an appropriate policy or address such matters on a case-by-case basis as appropriate. All personnel policies apply to all City employees, except as expressly stated otherwise. The general purpose of the policies and procedures set forth in this Manual is to bring into the service of the City a high degree of understanding, cooperation, efficiency, and unity, which comes through appropriate application of sound procedures in personnel administration, and to provide a uniform policy for all employees, with all of the benefits such a program insures. The human resource management system objectives, which include this Manual, are as follows: (1) Promote and increase efficiency, responsiveness to the public, and economy in the service of the City; (2) Provide opportunity for qualified persons to enter and progress in City service based on merit and ability to perform the essential functions of the job with or without reasonable accommodations; (3) Maintain recruitment, advancement, and tenure practices enhancing the attractiveness of a City career and encouraging all employees to give their best effort to the City and the public; (4) Maintain consistent, up-to-date position classification and compensation plans based on the relative duties and responsibilities of jobs in City service; and (5) Promote high morale among City employees by fostering positive working relationships and providing uniform human resources policies, opportunities for advancement, and consideration of employee needs and desires. This Manual is not intended to fully describe or explain all of an employee’s potential rights or duties. The provisions of this policy shall apply in addition to, and shall be subordinated to, any requirements imposed by applicable federal, state, or local laws, regulations or judicial decisions. Employees who desire further information should independently investigate the governing law and contact an attorney to evaluate their position. Unenforceable provisions of this policy shall be deemed to be deleted without invalidating any other parts of this Manual. City of Anna Personnel Policy Manual Section 100. Introduction Section 100. Introduction Page | 10 100.1.1 Definitions The words and terms used in this Manual shall have the meaning indicated as follows (unless the context in which the word is used clearly indicates otherwise): Address means the street and number, city, state and zip code of a residence and/or the post office box mailing address, if applicable. Administrative leave means an authorized absence with pay. Anniversary date means the month and date at which one year or additional years of employment with the City are attained by a regular full-time or part-time employee. If an employee changes from part-time to full-time status, then the anniversary date is changed to reflect the date the employee begins full-time status. Charter or City Charter means the City of Anna, Texas Home-Rule Charter as amended. City means the City of Anna, Texas. City’s personnel policies mean this Manual and all ordinances, directives, regulations and other requirements relating to City personnel matters, as amended. City Council means the governing body of the City of Anna, Texas. Confidential Information means: (1) all information held by the City that is not available to the public under the Public Information Act (Chapter 552, Local Government Code, or as amended, “the Act”), and any information from a meeting closed to the public pursuant to the Texas Open Meetings Act (Chapter 551, Local Government Code, or as amended), regardless of whether disclosure violates the Act and/or the Texas Open Meetings Act: and (2) information, whether or not subject to disclosure under the Act, that has not been made publicly available and that an employee has access to only because of the employee’s status as a City employee or the employee’s presence at City events or facilities that are not expressly open to the public. Demotion means an assignment of an employee from a position in one classification to a position in another classification having a lower pay grade. Department means a major functional unit of City administration, none of which are independent, jural entities. Department head means any person, appointed by the City Manager, who is responsible for the administration of a department. Director of Human Resources, Human Resources Department, or Human Resources means the individual(s) to whom various human resource functions have been delegated by the City Manager, regardless of whether there is a specific department designated as the Human Resources Department. These terms may also refer to the City Manager, to the extent that the City Manager has not delegated any such human resource functions. The City Manager retains authority over all human resources functions that have been delegated and may modify, reverse or direct any action or decision by the Director of Human Resources or Human Resources Department. Page | 11 Employee means any person employed and paid a salary or wages by the City, and includes a person employed on a temporary or part-time basis, but does not include an independent contractor, the Municipal Court Judge(s), the City Attorney, a member of an appointed Board or Commission, or a member of the City Council. Exempt employee means any employee paid on a salary basis who occupies an executive, administrative or professional position, or is a computer employee, as defined by the Fair Labor Standards Act, 29 U.S.C. § 213(a)(17)(as amended). Exempt employees, whether full-time or part-time, are eligible for all benefits offered by the City to its employees. Fiscal year means the City’s fiscal year, starting October 1 and ending September 30. Full-time employee means any employee scheduled to work forty (40) hours or more per work week. Full-time employees are eligible for all benefits offered by the City to its employees. Grade means a division of a salary and classification schedule with specified rates and/or ranges of pay into which a job or position is classified, according to such factors as level of difficulty, responsibility and other criteria. Horseplay is rough or rowdy play or pranks that occur at the workplace or are work-related and can include activities that are potential hazardous such as joking that includes physical contact, playing around, racing, grabbing, foolish vehicle operation, social pressure to participate in unsafe acts, harassment, and unauthorized contests. Job means a collection of tasks, duties and responsibilities regularly assigned to and performed by an individual. Lateral transfer or transfer means any change of an employee from one position to another position in a classification having the same pay grade. Leave without pay means an authorized temporary absence without pay. If non-disciplinary, an employee on leave without pay may be permitted to expend accrued vacation benefits, accrued compensatory time, or accrued sick time while on leave. Management, when used as noun, means the City Manager, department heads, or Supervisors with administrative management authority. Manual means this Personnel Policy Manual, as amended, also referenced from time to time herein as Personnel Policies and Procedures. Mayor means the Mayor of the City of Anna, Texas. Merit means character or conduct deserving reward, honor, or esteem. Military leave means any authorized absence of an employee for active or reserve duty, or training in the United States armed forces. Month means one calendar month. Motor vehicle accident means an incident involving a motor vehicle in which there is either a fatality, an injury treated immediately and/or away from the scene, any potential property damage, any unintended contact between a vehicle and another vehicle, or a vehicle is required to be Page | 12 towed from the scene due to disabling damage. Non-exempt employee means any City employee not falling under the definition of Exempt Employee. Outside employment means any business, trade, occupation, or profession performed for any entity other than the City, including self-employment. Part-time employee means any employee who is scheduled to work less than forty (40) hours per week and who is not a temporary/seasonal employee. Personnel policies mean this Manual and all ordinances, directives, regulations, and other requirements relating to City personnel matters, as amended. Physician or licensed physician means any physician licensed by the Texas State Board of Medical Examiners. Probationary Employee means any newly hired employee during the time of the employee’s probationary status as further described in this Manual. Promotion means an assignment of an employee from a position of one classification to any vacant position in another classification having a higher pay grade. Reclassification means an assignment of an employee to a new position and/or grade profile to an existing position. Reduction in force means a separation from City service because of a shortage of funds or materials, elimination of a position, or other reasons beyond the control of an employee and not reflecting discredit upon him/her. Regular employee means an employee who is full-time, and is non-seasonal and non-temporary. Regulations mean these Personnel Policies and Procedures. Residence means the domicile of an employee. Retirement date means the first day an eligible employee becomes entitled to receive retirement benefits. Separation means a voluntary or involuntary cessation of employment with the City. Supervisor means an employee’s direct report. Suspension means an involuntary and unpaid discontinuance of City work for a specified period of time. Temporary/Seasonal Employee means any employee appointed to any of the following: • An assignment or job scheduled to last less than six (6) months; • A position funded under a federal employment and training program, under which the employee meets federal eligibility requirements, but not including administrative or staff Page | 13 positions; • A cooperative work-study program with an educational institution; • A seasonal position, even though the assignment may last more than six (6) months; • Any assignment of less than a full calendar year, which is repeated from year to year, even though the assignment may last more than six (6) months; • A position which, by City policy and practice, is intended to give introductory work experience to a person preparing for entry into the work force; or • A part time position expected to work less than twenty (20) hours per week, or less than one thousand (1,000) hours per fiscal year. Temporary/seasonal employees are not eligible for any City benefits, other than workers’ compensation benefits. Termination means a disciplinary cessation of employment with the City. Transfer or lateral transfer means any change of an employee from one position to another position in a classification having the same pay grade. Volunteer means any person who freely offers to take part in any effort or undertake a task for the City and is not compensated as a regular employee. However, stipends may be provided for some tasks, as determined necessary by the City Manager and department head, and within budgetary constraints, and in accordance with a written policy governing the terms of the stipend. Volunteer includes, without limitation, the following positions: • Reserve Officers; • Volunteer Firefighters; • Persons working toward completion of community service requirements; and • Any other non-compensated position performed by a person freely offering their work or services. Volunteers are not eligible for any City benefits, other than workers’ compensation benefits as applicable to volunteers. Workday or Working Day means any one shift during which a department is open for business, or on which an employee is scheduled to work. 100.2 Administrative Authority The City Manager may revise or amend this Manual within the law, and with City Council approval, to the extent deemed necessary by the City Manager in order to more effectively and efficiently promote the interest of the City and its employees. The City Manager shall develop and implement necessary procedures for the efficient administration of the City’s personnel policies. Page | 14 The general and final authority for human resources management rests with the City Manager, who may delegate it as necessary and proper, except for matters expressly reserved to the City Council under the City Charter or other applicable law. The Director of Human Resources shall advise and support management in all areas, including employee- management relations; training and career development; classification; compensation; benefits; retirement; and employee health, safety and morale. When appropriate and necessary, the City Manager and/or Director of Human Resources or their designees shall consult with the City Attorney for additional advice and/or assistance regarding this Manual and the City’s personnel policies in general. Department heads are responsible for enforcing the City’s personnel policies as set forth in this Manual and as otherwise set forth in directives, memorandums, and other forms of instruction by the City Manager. Department heads shall cooperate with the Director of Human Resources and/or his/her designee(s) on all matters pertinent to their organization units. All employees have a responsibility and role in the implementation of the City’s personnel policies. The City reserves the authority to modify, revoke, interpret, or terminate any or all of the rules and regulations specified in these Personnel Policies and Procedures, in whole or in part, at any time, with or without notice. The issuance of these Personnel Policies and Procedures does not constitute an express or implied contract between the City and its employees. City supervisory personnel shall not make any representation to employees or applicants concerning the terms or conditions of employment with the City, which are not consistent with these Personnel Policies and Procedures. 100.3 Applicability and Scope The City’s personnel policies as set forth in this Manual and elsewhere shall apply to all employees except: (1) when superseded by the state or federal constitutions, state or federal legislation; (2) where expressly stated otherwise in this Manual; (3) when specific appointment and removal power of an employee is vested in the City Council by ordinance, or other law, and only to the extent that the City Council has made an express finding in an ordinance or resolution that one, or more, of the policies or procedures in this Manual do not apply to such employee; or (4) to the extent that this Manual conflicts with an employment contract duly adopted by the City Council that has been duly executed by the City Council’s duly authorized representative. Failure to comply with these policies may result in appropriate disciplinary action. All City employees are charged with the responsibility of being thoroughly familiar with all provisions of these Personnel Policies and Procedures. Elected officials, the City Attorney, the Judge(s) of the Municipal Court, members of appointed boards and commissions, persons employed under contract, and personnel appointed to serve without pay shall not be considered City employees for purposes of these policies. The City Attorney, City Secretary, and Judge(s) of the Municipal Court shall be evaluated by the City Council as set forth in the City’s Charter. Page | 15 100.4 Dissemination of Manual All City employees shall be provided with a copy of this Manual and each department head shall keep an updated copy available for reference by employees. Whenever feasible, a newly hired employee should be provided with this Manual prior to reporting for duty on their first day. All employees must sign a statement that they have been furnished a copy of this Manual, and that the employee has read and understands it. It shall be the employee’s responsibility to become thoroughly familiar with this Manual and any changes made to these this Manual. Employees shall not start work and shall not earn any wages, compensation, or benefits until the signed acknowledgement form has been returned to the Director of Human Resources (refer to Appendix A-1). 100.5 Amendments to Manual Amendments to this Manual must be prepared by the City Manager and presented to the City Council, who may adopt them, with or without amendment. Upon any amendment to this Manual, each employee will be notified in writing of the amendment and directed to sign for having received amendment, and shall sign a statement that they have been furnished a copy of the amended policy or policies and have read and understand same as soon as is practicable thereafter. 100.6 Equal Opportunity Policy It is the policy of the City to afford equal opportunity in all aspects of the employment relationship to all individuals. Equal Employment Opportunity is the law of the land, and the City will not discriminate because of race, color, religion, gender, age, national origin, political affiliation, disability, veteran’s status, or other non-merit factors. This Equal Employment Opportunity policy applies to all aspects of the employment relationship including but not limited to recruiting, interviewing, testing, ranking, selection, compensation, promotion, transfer, performance appraisal, training, discipline, layoff, and discharge. The City will take necessary action to assure that its personnel policies and procedures support equal opportunities in employment. However, the City shall evaluate each individual based on merit and bona fide abilities and qualifications to perform the essential functions of the job. 100.7 Policy Directives, Departmental Policies The City Manager may issue personnel policy directives which shall be in the form of written memorandums, the contents of which may not directly conflict with the policies and procedures in this Manual. Such directives shall be distributed to all affected employees and shall apply with the same force as if the policies and procedures were set forth in full in this Manual. Individual departments may establish additional policies that are consistent with this Manual. Before being implemented, such departmental policies must be submitted to and approved by the City Manager. The City Manager may modify such department policies by issuing a policy directive in the manner set forth above. To the extent that such policies conflict with this Manual, this Manual shall control. Page | 16 100.8 Employment at Will Employment with the City is at the mutual consent of the City and the employee. Either party may cease the employment relationship at any time, with or without cause, and with or without advance notice. However, an employee who leaves employment without providing the notice set forth in the City’s personnel policy may lose eligibility for certain accrued benefits. Page | 17 101.1 Vacancies Department heads shall notify the City Manager of any anticipated vacancies in their respective departments as far in advance as is reasonably possible to permit sufficient time for the selection of qualified candidates. Department heads shall notify the City Manager of any unexpected vacancies as soon as practicable after the vacancy occurs. At the City’s discretion, vacancies may be filled through public announcement, promotions, transfers, demotions or reinstatement. 101.2 Announcement of Vacancies Job vacancies may but are not required to be posted on the City website, on bulletin boards located at City Hall or various other websites and publications. If so posted, each job announcement insofar as practicable, shall specify the title, salary or salary range, and nature of the job; the required qualifications; whether competition is open to the general public, City employees or both; and the application deadline. Each announcement shall also contain a statement affirming the City’s commitment to a policy of equal employment opportunity. 101.3 Employment Applications Applications for employment or reinstatement shall be submitted on an Application for Employment Form (Appendix A-2), for each vacant position. In addition to the Application for Employment Form, the City may require an applicant to submit additional forms and documents, depending on the position for which the applicant is applying. The City may reject incomplete applications and applications not submitted in the prescribed manner. All information submitted in connection with applying for City positions is subject to verification. No one shall be employed in any position with the City until a completed application of employment is provided to the Human Resources Department. All applications for employment that have not resulted in employment will be retained active for not more than 30 days after application submittal or the application deadline, whichever expires sooner; provided, however, that the City may hire applicants whose application has expired when in the City’s best interest and when in conformance with equal opportunity employment. After the expiration of an active application, the City may require that a new application and/or resume must be submitted in order to be considered for any new openings. Applications that have resulted in employment shall be included in the employee’s City employment records and continue to be subject to verification of the facts stated therein. The City relies upon the accuracy of information contained in the employment application, as well as the accuracy of other data presented throughout the hiring process and employment. Any misrepresentations, falsifications or material omissions in any of this information or data may result in the exclusion of the individual from further consideration for employment or, if the person has been hired, termination of employment. City of Anna Personnel Policy Manual Section 101. Employee Hiring and Appointment Page | 18 Employees shall be responsible for notifying the department head and Human Resources Department of any change in address, marital status, current telephone number or any other information required by the Human Resources Department. 101.4 Employment Evaluation/Disqualification Employment with the City shall be based on merit, ability, and fitness to perform the essential functions of a job, with or without reasonable accommodations. The primary goal of the City is to fill vacancies with highly qualified applicants that are the best suited for the position. The City Manager, department head, or their respective designee(s) shall determine the most appropriate means of evaluating applicants against job requirements and organizational mission to identify the qualified persons suited for the job. Depending on the job positions and its essential functions, the City may, as deemed appropriate, use reference checks, interviews, medical and psychological examinations, drug tests, physical agility tests, criminal history checks, verification of citizenship or employment eligibility, skills tests, written tests, driver’s license checks, credit checks, and/or other screening procedures as deemed appropriate and in all cases use of same shall be consistent with applicable employment laws and regulations and the City’s personnel policies. Applicants may be required to provide any information regarding work experience and qualifications necessary to demonstrate compliance with prescribed qualification requirements or proficiency. At a minimum, to be eligible for employment with the City, or for a change in present personnel status, an individual must: (1) be at least sixteen (16) years of age, depending upon the requirements of each position; (2) have a social security number; (3) agree to be fingerprinted, if requested; (4) agree to a polygraph examination related specifically to job performance for positions designated by the City Manager, if requested, and such examination is not prohibited by law; (5) where permitted by law, pass a physical and/or psychological examination administered by a licensed medical practitioner selected by the City, to ensure ability to perform essential duties of the job; (6) where permitted by law, submit to alcohol and drug screening tests; (7) satisfactorily complete any interviews, examinations and performance tests, if required because of job duties; (8) show proof of United States citizenship, legal residence, or other documentation that establishes employment eligibility in the United States, as required by the Department of Justice; Page | 19 (9) possess a valid Texas driver’s license and have an acceptable driving record in compliance with the City’s personnel policies, where applicable, unless waived by the City Manager (when requested, applicants must provide a copy of their driving record to the City and/or provide the City with a signed and completed form of release that will allow the City to obtain the applicant’s official driving record); and (10) meet minimum requirements of the job description for which employment is sought, and submit to all other employment procedures administered by the Human Resources Department. An applicant shall be disqualified from consideration if he or she: (1) does not meet the necessary position-performance qualifications; (2) has made any false statements of fact on the application, depending upon the seriousness, willfulness and materiality of the false information to the position; (3) commits or attempts to commit a fraudulent act at any stage of the selection process; (4) does not have a driving record that is acceptable to the City; (5) is in violation of the City’s Substance Abuse Policy; (6) is not lawfully authorized to work in the United States in accordance with the Federal Immigration Reform and Control Act, as amended; or (7) would, if hired, be in violation of the nepotism policy or laws. Former employees of the City who were dismissed for reasons of misconduct or performance are considered ineligible for rehire. An applicant may also be disqualified from consideration upon other reasonable grounds relating to job requirements. 101.5 Americans with Disabilities Act The City is an equal opportunity employer and, as such, requires compliance with the Americans with Disabilities Act (ADA). The Act prohibits discrimination against qualified persons with disabilities in application procedures, hiring, advancement, discharge of an employee, employee compensation, job training, and other terms, conditions, and privileges of employment. All requests by City employees for reasonable accommodations under the ADA should be submitted in writing to the Human Resources Department, who shall notify the employee’s department head. The City shall comply with ADA regulations when considering all requests for accommodation. Supervisors or department heads, as applicable, are required to engage in a good faith, interactive dialogue with qualifying persons to identify whether reasonable accommodations may be available for an employee’s disability. Page | 20 101.6 Applicant Referral, Interview and Selection Process The referral of applicants to department heads for selection shall be in accordance with approved City policies, procedures, and practices developed by the City. Interviews will be structured and conducted in such manner as to appraise the applicant’s qualifications and ability to perform the essential functions of the position. All applicants meeting the minimum requirements may not receive a personal interview. All departmental proposed hiring procedures that are more specific than the policies and procedures set forth in this Manual will be submitted in writing to the City Manager and Director of Human Resources who shall forward same for review by the City Attorney. Such proposed procedures shall not go into effect unless and until approved by the City Manager and City Attorney. The department head will make the selection of the most qualified applicant. The department head will then submit the selection to the City Manager and/or his designee to proceed with any appropriate pre-hiring screening or background checks. The City may conduct criminal history records checks on all new employees, including those in part-time, temporary and selected volunteer positions. Since it may take several weeks to receive results, applicants selected for positions may be offered provisional employment. If applicants have not provided accurate information regarding their criminal history, they may be dismissed from employment. (d) The City will obtain credit history information on a candidate for employment only when the credit history is related to the position for which the person is being considered. The City shall comply with the Fair Credit Reporting Act before obtaining a job-related credit history. (e) The City will conduct a criminal history record review for a final candidate for employment and will determine through the individualized assessment procedures described below whether the individual should be excluded from employment. (f) The City will conduct a motor vehicle record review on a candidate for employment when driving is an essential job function of the position for which the person is being considered. The City will determine through the evaluation criteria for applicants, as set forth in its Motor Vehicle Operator Standards, whether the individual should be excluded from employment. (g) An employee or prospective employee must be provided written notice that a credit or background check will be done, and give their written authorization to proceed, if an outside, private-sector agency or search engine will be used (can be on same form and be part of the application materials). If the results of a credit or background check result in the applicant being rejected for employment, the City must provide written notice of why, give the applicant a copy of the report, and provide the name and address of the service which provided the information. (h) This policy applies to all employees, including all full-time and part-time employees, paid and unpaid interns, temporary employees, contract staff employees, and volunteers. Page | 21 (i) Consumer Credit Reports • "Adverse action" includes a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee. • "Consumer report" includes any information from a consumer reporting agency that is used or expected to be used as a factor in establishing the person's eligibility for employment. • "Consumer reporting agency" is an agency that, for monetary fees, dues, or on a cooperative nonprofit basis, regularly assembles or evaluates consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties. • "Employment purposes" when used in connection with a consumer report means a report used for the purpose of evaluating a person for employment, promotion, reassignment, or retention as an employee. 15 U.S.C. 1681a (j) Obtaining Reports The City may not procure a consumer report for employment purposes unless: 1) The City has provided the applicant or employee a written disclosure that a consumer report may be obtained for employment purposes; and 2) The applicant or employee has authorized in writing the procurement of the consumer report. (k) Adverse Action • Before taking any adverse action based on the consumer report, the City shall provide the applicant or employee a copy of the consumer report and a written description of the person's rights under the Fair Credit Reporting Act, as prescribed by the Federal Trade Commission. 15 U.S.C. 1681(b)(3) (l) Notice of Address Discrepancy • "Notice of address discrepancy" means a notice sent to a user by a consumer reporting agency that informs the user of a substantial difference between the address for the consumer that the user provided to request the consumer report and the address(es) in the agency's file for the consumer. (a) When the City receives a notice of address discrepancy, it will compare the Page | 22 information in the consumer report provided by the consumer reporting agency with information the City maintains in its own records, such as applications, change of address notifications, and other personnel records. In addition, the City will verify the information in the consumer report provided by the consumer reporting agency with the consumer. (b) If the City regularly and in the ordinary course of business furnishes information to the consumer reporting agency from which it received the notice of address discrepancy, the City will furnish an address for the consumer, which the City has reasonably confirmed is accurate, to the consumer reporting agency. The City will reasonably confirm an address is accurate by verifying the address with the consumer about whom it has requested the report; reviewing its own records to verify the address of the consumer; or using other reasonable means. 16 CFR 641.1 (m) Disposal of Records • The City must properly dispose of a consumer report by taking reasonable measures to protect against unauthorized access to or use of the information. • "Dispose" includes discarding or abandoning the consumer report, or selling, donating, or transferring any medium, including computer equipment, upon which the consumer report is stored. (a) Examples of reasonable measures include: 1) Burning, pulverizing, or shredding papers containing a consumer report so the information cannot practicably be read or reconstructed; 2) Destroying or erasing electronic media containing a consumer report so that the information cannot practicably be read or reconstructed; or 3) After due diligence, entering into and monitoring compliance with a contract with another party engaged in the business of record destruction to dispose of the consumer report. 16 CFR 682.3 (n) Individualized Assessment (a) Only City employee(s) authorized to view criminal history records will be involved in conducting an individualized criminal history record review. (b) Consistent with business necessity, the City shall disqualify from employment a person whose criminal history is inconsistent with the job duties of the position for which the person is being considered. Page | 23 (c) The City shall perform an individualized assessment of criminal history record information when determining a person's eligibility for employment in a specific position. (d) The City shall take into account a variety of factors, including the following: 1. The nature of the offense; 2. The age of the person when the crime was committed; 3. The date of the offense and how much time has elapsed; 4. The adjudication of the offense (e.g., whether the person was found guilty by a trier of fact, pled guilty, entered a no contest plea, or received deferred adjudication); 5. The nature and responsibilities of the job sought; 6. The accuracy of the person's disclosure of his or her criminal history during the selection process; 7. The effect of the conduct on the overall environment; and 8. Any further information provided by the person concerning his or her criminal history record. (e) In conducting the individualized assessment, the City will consider both the factors set out above and any additional information provided by the individual. The City may obtain court records, if needed, to validate the information provided. (f) Using the available information, the City will determine whether or not exclusion from employment is consistent with business necessity. (g) Failure to disclose criminal history on an employment application will exclude a candidate from employment with the City, regardless of whether the candidate's criminal history alone would have disqualified him or her for employment. (h) Arrests (1) The fact of an arrest alone does not establish that criminal conduct has occurred, and the City shall not disqualify a person based solely on an arrest. The City may make an employment decision based on the conduct underlying the arrest if that conduct makes the person unfit for the position in question. (i) Notice to Candidate for Employment (1) A candidate for employment who has a criminal history record will be notified in writing that he or she may be excluded from employment due to criminal history. The candidate will be given an opportunity to provide additional information concerning his or her criminal history record to be considered as part of the individualized assessment process. Additional information may include: Page | 24 • Documentation showing inaccuracies in the criminal record; • Any evidence related to the factors for individualized assessment listed above; • Evidence that he or she has performed the same type of work, since the incident(s) noted on the criminal history record, with no known incidents of criminal conduct; • Rehabilitation efforts, including education and training; • Employment or character references; and • Whether or not he or she is bonded (if a bond is required for the job position with the City). (2) If the individual does not provide additional information in a timely manner, the City will proceed with an individualized determination with the information available to the City. (j) Claim of Errors in the Record (1) A candidate for employment who claims that the reported criminal history record is erroneous may be provided a copy of the record so that he or she can undertake efforts to correct the record. (o) Offenses for Which Exclusion is Likely (1) A record of certain offenses carries a high likelihood that the City will exclude the individual from employment. Subject to an individualized assessment, the following classes of offense will likely preclude employment with the City: • Any offense for which employment of the individual places the safety of other employees at risk, regardless of the date of the offense, its relation to the employee's job, or the age of the victim. Such offenses include: homicide, murder, capital murder, unlawful transport, false imprisonment, trafficking of persons, sexual assault, aggravated sexual assault, rape, child abuse, sale or purchase of a child, arson, robbery, aggravated robbery, prostitution or solicitation of prostitution, child pornography, and sexual solicitation of a child. • Any offense that, because of the relationship between the offense and the duties and responsibilities of the position in question, creates a risk to the best interests of the City. For example, a person who has committed a property offense will not normally be eligible for a position with financial duties or responsibilities. • Any felony conviction that occurred within the ten years prior to application for employment with the City. • Any Class C misdemeanor conviction involving moral turpitude (i.e., theft) within the ten years prior to application for employment with the City. (p) Adjudication of Offenses Page | 25 (a) Conviction (1) In considering the adjudication of the offense, the following standards apply. The City will ordinarily treat a conviction as proof of guilt. A conviction record constitutes reliable evidence that a person engaged in the criminal conduct "beyond reasonable doubt." (b) Arrest (1) An arrest record alone does not establish criminal conduct. Before the City makes an employment decision based on an arrest, the City will examine the circumstances surrounding the arrest and will make any necessary inquiries. The City is not required to conduct an extensive investigation to determine the individual's guilt or innocence but need only make inquiries that could shed light on the likelihood of the individual's guilt in committing the underlying offense. (2) An arrest will be treated as a conviction when inquiries suggest a high likelihood that the individual committed the underlying offense. Where such a determination is not found, the arrest will not be used to take an adverse employment action against the individual. (c) Deferred Adjudication (1) A grant of deferred adjudication resulting from a no contest or guilty plea will ordinarily be treated as an admission of guilt. However, the City will make inquiries similar to the inquiries made when an arrest is reported. (2) When such inquiries suggest a high likelihood that the individual committed the underlying offense, deferred adjudication will be treated as a conviction. Where such a determination is not found, deferred adjudication will not be used to take an adverse employment action against the individual. (d) Not Guilty, Withdrawn, or Dismissed Charges (1) For a not guilty, withdrawn, or dismissed adjudication, the individual will be asked to explain, in writing, the circumstances and must provide a certified copy of the court paperwork showing the final disposition of every charge. The City may make additional inquiries into the surrounding circumstances. (2) The charges will be treated as a conviction when such inquiries suggest a high likelihood that the individual committed the underlying offense. Where such a determination is not found, the criminal history in question will not be used to take an adverse employment action against the individual. (q) Types of Convictions Page | 26 (1) If the criminal history record shows a conviction, or if inquiries made during the record review indicate a high likelihood of guilt and/or recurrence, then the following employment restrictions will apply: (a) Felony (1) For a felony offense committed within the ten years before application for employment, see OFFENSES FOR WHICH EXCLUSION IS LIKELY, above. (2) If the individual committed a felony offense more than ten years before application for employment, the City will determine whether the conviction was for an offense that generally requires exclusion by law or by policy or, if not, whether the underlying offense relates to the duties and responsibilities of the desired position. The following guidelines will apply: • If the offense does not relate to the duties and responsibilities of the position, and was not for an offense that would otherwise preclude employment, the individual may be considered for employment or continued employment. • If the offense does relate to the duties and responsibilities of the position, the City will consider the likelihood of recurrence of the criminal behavior. A determination that the behavior is unlikely to recur will result in the individual being eligible for employment; a finding to the contrary will result in the individual being ineligible for employment. (b) Class A & B Misdemeanors (1) An individual may be eligible for employment if the conviction for a Class A or Class B misdemeanor is not related to the duties and responsibilities of the position and/or has occurred more than five years prior. (2) For a Class A or Class B misdemeanor offense involving moral turpitude committed within the ten years before application for employment, as applicable, see OFFENSES FOR WHICH EXCLUSION IS LIKELY, above. The following guidelines will apply: • If the offense does not relate to the duties and responsibilities of the position, and was not for an offense that would otherwise preclude employment, the individual may be considered for employment. • If the offense does relate to the duties and responsibilities of the position, the City will consider the likelihood of recurrence of the criminal behavior. A determination that the behavior is unlikely to recur will result in the individual being eligible for Page | 27 employment; a finding to the contrary will result in the individual being ineligible for employment. (3) If the conviction occurred in the past five years and does relate to the duties and responsibilities of the position, the employee is ineligible for employment in the City if it is determined there is a high degree of likelihood for the recurrence of the behavior. (c) Class C Misdemeanors (1) For a Class C misdemeanor offense involving moral turpitude committed within the ten years before application for employment, as applicable, see OFFENSES FOR WHICH EXCLUSION IS LIKELY, above. (2) If convicted of a Class C misdemeanor that does not involve moral turpitude or that occurred more than ten years prior, the City will determine whether the underlying offense relates to the duties and responsibilities of the desired position. The following guidelines will apply: • If the offense does not relate to the duties and responsibilities of the position, and was not for an offense that would otherwise preclude employment, the individual may be considered for employment. • If the offense does relate to the duties and responsibilities of the position, the City will consider the likelihood of recurrence of the criminal behavior. A determination that the behavior is unlikely to recur will result in the individual being eligible for employment; a finding to the contrary will result in the individual being ineligible for employment. (d) Multiple Offenses (1) An individual with multiple offenses that individually do not make him or her ineligible for employment may be deemed ineligible for continued employment when repetitious criminal behavior indicates a high degree of likelihood for recurrence of the behavior. (e) Unlisted Criminal History (1) If a criminal history record does not list an event reported by the candidate for employment, he or she will be asked to explain, in writing, the circumstances foreach reported incident. A certified copy of pertinent court paperwork showing final disposition of the charge must be included. The City may make additional inquiries. (f) Applicants for Employment with Police and Fire Departments Page | 28 (1) The standards of elimination of employment for Police Department and Fire Department positions may differ and may be established by departmental policy. (g) Other Policies (1) Applicants are subject to elimination under other City policies if the applicant's criminal history limits his or her ability to perform the essential functions of the position (e.g., conditions of community supervision which restrict the applicant’s workplace activities). 101.7 Authority for Employment Hire Hirings shall be made based on the applicant’s qualifications, experience, talents and suitability for the job as ascertained through fair and practical selection methods. It shall be the policy of the City to appoint the most qualified applicant best suited for the position. The hiring authority for all City positions shall rest with the City Manager except as otherwise provided by the City Charter. The City Manager may delegate such authority to the department head for those positions under his/her supervision, and when hiring authority is delegated the department head shall keep the City Manager and Director of Human Resources informed of all proposed hirings in writing before an offer is made to an applicant. Offers of employment will be made through the Human Resources Department. 101.8 Employment Status All employees are classified into one of the following categories: • Regular or Full-Time Employee – Employment in an authorized position in which the employee works at least 40 hours in a regular work schedule. • Part-Time Employee – Employment in a position normally budgeted less than 40 hours per work week. • Temporary Employee – Employment in a position established for a specified period of time by the person(s) authorized to make such delegation(s), or for the duration of a specified project or group of assignments. 101.9 Exempt or Non-Exempt Status To determine eligibility for overtime pay, employment positions are classified as “Exempt” or “Non-Exempt” in accordance with federal and state labor laws and these Personnel Policies and Procedures. Eligibility for overtime pay is identified below: Exempt – Exempt employees are not eligible for overtime pay, but under limited circumstances may be granted personal time off during normal work hours for extra hours worked according to Section 105.4 of this Manual. Non-Exempt – This classification includes all positions that are not exempt. These positions are generally eligible for overtime pay. Page | 29 All job descriptions should state whether the position is exempt or non-exempt. However, in the event that this is not the case, or if any questions arise about whether a position is exempt or non-exempt, the matter shall be referred to the Human Resources Department prior to a final hiring or overtime payment decision. 101.10 Nepotism In addition to the minimum restrictions set forth in the Charter, the purpose of this policy is to define appropriate business relationships in the workplace that involve certain relatives either of blood, adoption, marriage or cohabitation. Definitions: (1) Nepotism - The practice of employing, favoring, providing benefits to, or giving any workplace preference to certain relatives over other employees. (2) Relatives - Includes, but are not limited to, the first, second and third degree of consanguinity (blood), including adoption; and the first and second degree of affinity (marriage). Common Law marriages, as recognized by the State of Texas, will also be included for purposes of this policy. See tables below for examples: Consanguinity (Blood Relationships) and Adoptive Relationships First Degree Second Degree Third Degree Mother Grandparent Great Grandparent Father Grandson Great Grandson Daughter Granddaughter Great Granddaughter Son Uncle Great Niece Brother Aunt Great Nephew Sister First Cousin Second Cousin Niece Nephew Affinity (Marriage Relationship) First Degree Second Degree Wife Husband Son-in-Law Daughter-in-Law Mother-in-Law Brother-in-Law Sister-in-Law Spouse’s Grandparent Spouse’s Grandchild Step-Grandparent Father-in-Law Stepmother Stepfather Stepdaughter Stepson Stepsister Stepbrother (3) Cohabitants – Persons who live together in a sexual relationship but are not married, nor are declared to be married. (4) Roommates – Any combination of Supervisor(s) and Subordinate(s) sharing the same living quarters. For the purposes of this nepotism policy, “living quarters” does Page | 30 not include City-owned or City-controlled facilities, such as a fire station, at which employees are scheduled to work or sleep overnight shifts. In addition to any limitations or restrictions under state law or the City’s Charter, relatives, cohabitants, or roommates to any elected or appointed City Official, or to any department head, shall not be employed in any paid position with the City after the effective date of this Manual. For the purposes of this provision, the term “City Official” means and includes: the Mayor; Members of the City Council; Municipal Court Judges and Magistrates; the City Manager; the City Secretary; the City Attorney; and Members of the temporary or standing, current or future Boards, Commissions, Governing Bodies, and Boards of Directors when those Boards, Commissions, Governing Bodies, and Boards of Directors are appointed in their entirety or partially by the City Council. No person related within the second degree by affinity or within the third degree by consanguinity to the Mayor or any City Council member or the City Manager may be employed by or contracted with for the City. This does not apply to: (1) any person employed by the City before the person related in the above degree files to run for elective office or is nominated for an appointment, or (2) any person who is a seasonal employee or intern of the City. No City employee shall be supervised directly by a relative, cohabitant or roommate. City employees will not be transferred or promoted into positions that would cause them to be in a direct supervisor/subordinate relationship with a relative, cohabitant, or roommate. All external applicants for employment must, at the time of application and hire, disclose the name(s) of any relative(s), cohabitant(s), or roommate(s) serving as elected City officials, or currently working for the City in any capacity. Nondisclosure of this information by an applicant shall be deemed as falsification of his/ her application and shall result in non- consideration for a position, or termination if the person has already been placed on the payroll. In the case of collusion, the current employee who is a relative, cohabitant, or roommate may be subject to disciplinary action, up to and including, termination. When a relationship is created which is not allowed by this policy, the employees are in violation of this policy. The affected employees must inform the Human Resources Department of the relationship that violates this policy within five business days of the creation of the prohibited relationship. Failure to disclose this policy violation to the Human Resources Department shall result in disciplinary action, up to and including, termination. All employees who are being considered for promotion or transfer to another position (whether in the same department, or to a position in another department) must, at the time of the application for promotion or transfer, disclose the name(s) of any relative(s), cohabitant(s), or roommate(s) serving as elected City officials or currently working for the City in any capacity. Non-disclosure may result in disciplinary action, up to and including, termination. Relatives, cohabitants, or roommates may not work in the same division, or in the same department under the direct supervision of the same immediate supervisor. Under no circumstance may relatives, cohabitants, or roommates permanently supervise one another. Further, no relatives, cohabitants, or roommates shall be placed in positions allowing for financial signature approval of any purchasing or payroll transactions for one another. In the case where business demands require indirect or temporary supervision of relatives, cohabitants, or roommates, the Department Head of the employee(s) is responsible for establishing a process of auxiliary review for the affected employee(s). This process will Page | 31 include review and signature authority over timesheets, purchase orders and any other action where a conflict could arise from the reporting relationship of relatives, cohabitants, or roommates. Additional related restrictions are set forth below in Section 101.10.1. In the event of any conflict, the more restrictive provision shall govern. (Amended 9/22/2015, Res. No. 2015-09-10) The hiring and promotion of relatives, cohabitants, or roommates shall not be allowed, even in different departments, if that action creates a conflict, or the appearance of a conflict of interest for the City, as determined by the City Manager. When any relationship through blood, adoption, marriage, or cohabitation presents a conflict of interest for the City, the City reserves the right to take appropriate action to eliminate the conflict, which may result in disciplinary action being taken up to and including termination. A current City employee may not be involved in the hiring or selection, or the recommendation of hiring or selection of a relative, cohabitant, or roommate. Supervisors may not participate in disciplinary decisions or appeals involving his/her relative, cohabitant(s), or roommate(s). When a relationship is created which is not allowed by this policy or a departmental rule, one of the employees must resign his/her position. The decision as to which employee shall vacate his/her position shall, initially, be left up to the affected employees. In all such situations, the following procedure shall apply: (1) The affected employees shall disclose their potential violation of this policy to their department head. (2) The department head will notify the Human Resources Department of the potential policy violation. (3) If the Human Resources Department determines there is a policy violation, the Director of Human Resources will notify the effected employee(s) and the City Manager of the policy violation. (4) Upon receipt of notification of the policy violation, the affected employees shall be given (15) fifteen calendar days from the date of the policy violation occurrence to make a decision as to which affected employee shall vacate his/her position. At the conclusion of 15-day post notification period, the affected employees shall be given an additional fifteen (15) calendar days in which to vacate one of the positions. (5) If the employees fail to make a decision as to whom should vacate his/her position within the fifteen (15) calendar day notification period, the City Manager shall notify the employee who has the least seniority with the City, based upon the most recent hire date, that he/she must vacate his/her position. (6) There are some departments/positions within the City that, because of the nature of work conducted with all other positions in the City, it is inappropriate for persons in these department/positions to be related to anyone employed by the City in any capacity, by blood, marriage, or cohabitation, or roommate relationship. Within the City , these departments, divisions and positions include: 1. City Secretary’s Office 2. City Manager’s Office Page | 32 3. Finance Department 4. Human Resources Department The City reserves the right to designate additional departments/positions to those listed in subsection (l), above, as necessary, to prevent adverse impact on the work environment. If relatives, cohabitants, or roommates are mistakenly awarded these positions, the opportunity for alternate placement described earlier in this practice would apply. 101.10.1 Dating/Fraternization Policy The City encourages a collegial and supportive atmosphere at work for its employees. However, interpersonal relationships such as dating or romantic relationships between employees may become a concern if they have the effect of impairing the work of any employee; harassing, demeaning, or creating a hostile working environment for any employee; disrupting the smooth and orderly flow of work within the office; or harming the goodwill and reputation of the City with its citizens, its customers, its business interests, or in the community at large. For this reason, employees are subject to the following rules with respect to their relations with other employees, both on and off duty: A supervisor shall not engage in any form of romantic relationship with a subordinate employee as doing so could impair the supervisor’s judgment with respect to the subordinate or have the appearance of creating or promoting favoritism or special treatment for the subordinate employee. In addition, employees within the same department shall not engage with one another in any form of romantic relationship as doing so tends to disrupt the smooth and orderly flow of work within a department. Any of the relationships prohibited in this subsection (b) must be promptly disclosed to the Director of Human Resources or to the City Manager, as appropriate. The employees involved will be given the opportunity to choose which of them will be reassigned to an alternative position, if feasible and in the City’s best interests as determined in the City’s sole discretion and where favoritism, special treatment, and other potential negative effects will not be an issue. Alternatively, one or both employees may be subject to dismissal, depending upon the nature of the situation. All employees, especially managers, are reminded that the qualities of good judgment,discretion, and compliance with guidelines are all taken into account when considering future advancement opportunities and salary increases. In addition to the types of relationships prohibited under subsection (b), relationships or social activity between two or more employees is prohibited if such relationship or activity: (1) has the potential or effect of involving the employees, their coworkers, or the City in any kind of dispute or conflict with other employees or third parties that is disruptive to the workplace; (2) unreasonably interferes with the work of any employee; (3) creates a harassing, demeaning, or hostile working environment for any employee; (4) disrupts the smooth and orderly flow of work within the workplace, or the delivery of services to the City’s clients or customers; (5) harms the goodwill and reputation of the City; or (6) tends to place in doubt the reliability, trustworthiness, or sound judgment of the persons involved in the relationship. Page | 33 Employees who conduct themselves in such a way that their actions and relationships with each other foreseeably become the object of gossip among others in the office, or cause unfavorable publicity in the community, should be concerned that their conduct may be inconsistent with one or more of the above guidelines. In such a situation, the employees involved should request guidance from the Director of Human Resources or the City Manager, as appropriate, to discuss the possibility of a resolution that would avoid such problems. Depending upon the circumstances, failure to seek such guidance may be considered evidence of intent to conceal a violation of the policy and to hinder an investigation into the matter. Friendships and social contacts between employees are not a matter of concern as long as they are consistent with the above rules and guidelines. Employees may address any questions on this policy to the Director of Human Resources or the City Manager, as appropriate. The terms “dating” and “romantic relationship” as used in this section include, but are not limited to casual dating, serious dating, casual sexual involvement, and any other conduct or behavior normally associated with romantic or sexual relationships. This policy applies only to consensual romantic relationships. Unwanted sexual attention (including but not limited to physical contact) and sexually oriented behavior with the purpose or effect of creating an offensive environment is prohibited, and is covered in more detail in Section 101.11 Residency Requirements 101.12 Pre-Employment Screenings and Examinations Individuals who receive an offer of employment from the City must undergo a drug screening at a pre-designated laboratory as directed by the City prior to the first day of employment. The offer of employment is conditional upon the results of the drug screening. The lab work will be covered at the expense of the City. When job-related and based on business necessity, certain pre-designated positions may Page | 34 also require individuals to take a medical and/or physical examination at City expense given by a doctor or other health care provider designated by the City. For such positions, the offer of employment is conditional upon the results of the required examination. The results and the information obtained regarding medical condition or history will be collected and maintained in separate forms and in separate medical files and shall be treated as confidential medical information to the extent required under law. The City Manager, or other hiring authority, acting upon information such medical/physical testing results, shall be the final authority in determining medical suitability for employment. The Texas Commission on Law Enforcement Officer Standards and Education requires that all peace officers be examined by a licensed psychologist who certifies that they are in satisfactory psychological and emotional health to the be a police officer. For all Fire Department employees/volunteers, the Texas Commission of Fire Protection requires a physical assessment under NFPA 1582. 101.13 Emergency Temporary Appointments The City Manager may hire temporary employees in cases of emergencies, or unusual or extraordinary circumstances that create demands for service that exceed the work force capabilities of the City. 101.14 Promotions and Temporary Promotions (a) “Promotions” are position changes to classes with higher maximum salaries or wages and/or positions that carry additional responsibilities. Qualified employees may apply for promotion to vacant positions when positions are advertised or posted. To be eligible for a promotion, an employee must meet the current minimum requirements for the vacant position. (b) Probationary employees are generally not eligible for promotion during the probationary period. Exceptions may be granted by the City Manager when such promotion is in the best interest of the City. All promotions within an employee’s current department shall be documented on appropriate forms and forwarded to the Human Resources Department for processing. (c) The following process shall be utilized for promotions: (1) Application. A current City employee applying for a position outside the employee’s department must complete a new employment application. If the position is within the employee’s department, a Consideration for Promotion/Transfer Request Form (Appendix A-3) may be completed in lieu of the regular Application for Employment Form (Appendix A-2). (2) Contacts. The applications submitted by qualified employees shall be delivered to the Human Resources Department and the department head. The department head may contact applicants to arrange interviews. (3) Transfer Dates. If a current employee is selected to fill a vacancy in a different department, the Human Resources Department shall contact the employee’s current department head to establish a mutually agreed-upon transfer date, and the City Manager shall have final authority to establish said date. Promotions must be effective the first day of a payroll period. (4) Promotion Initiation and Approval Level. The department in which a transferred Page | 35 employee will be placed must initiate a Personnel Action Form (Appendix A-4) to promote and/or transfer the employee. See additional information in the subsection below to be stated in the Personnel Action Form if the promotion is temporary. The signature/approval level for promotions and temporary promotions is the City Manager. Temporary or interim promotions may be authorized to ensure the proper performance of City functions, if a position is vacant or the regular incumbent is absent. Temporary promotions are intended to be of limited duration and shall not be used to circumvent the normal selection process. Employees given temporary promotions shall not acquire any status or rights to the positions to which they are temporarily promoted. Employees temporarily promoted may receive additional compensation for the duration of the temporary promotion. In those cases where additional compensation is provided, the City Manager or department head, as appropriate, must designate the duration of temporary assignment time period on the Personnel Action Form. Employees may be compensated at the base range for the temporary assignment position. If an interim promotion becomes permanent, the employee’s promotion date will be the effective date of the interim promotion. Exceptions to the procedures in this section may be made by the City Manager when it is in the best interest of the City. 101.15 Lateral Transfers A lateral transfer is the assignment of an employee from one position to another position without a change in compensation. Qualified employees may apply for lateral transfers to vacant positions when the positions are advertised or posted. Probationary employees are not eligible for lateral transfer during the probationary period. Exceptions may be granted by the City Manager when such lateral transfer is in the best interest of the City. The transfer process is described below: (1) Application. Employees applying for positions outside their departments must complete a new employment application. If the position is within an employee’s department, a Consideration for Promotion/Transfer Request Form (Appendix A-3) may be completed in lieu of the regular Application for Employment Form (Appendix A-2). (2) Contacts. Qualified employees referred to the Human Resources Department may be contacted by the department head for interview arrangements. (3) Transfer Dates. If an employee is selected to fill the vacancy, the Human Resources Department shall contact the employee’s current department head to establish a mutually agreed-upon transfer date. The City Manager shall have final authority to establish said date. Transfers must be effective the first day of a payroll period. (4) Transfer Initiation. The department in which a transferred employee will be placed must initiate a Personnel Action Form (Appendix A-4) to transfer the employee. See additional information in the subsection below to be stated in the Personnel Action Form if the promotion is temporary. (5) Transfers. Lateral transfers may be implemented at any time by the City Manager Page | 36 for administrative convenience. (6) Approval Levels. The signature/approval level for lateral transfers is the City Manager. Approvals will be documented on a Personnel Action Form (Appendix A- 4). (7) Exceptions to the procedures in this section may be made by the City Manager when it is in the best interest of the City. 101.16 Demotions A demotion is the assignment of a City employee from the employee’s currently held position to a new or different position that provides less compensation. A demotion may occur as a disciplinary measure or for poor work performance. Employees qualified to perform lower-level position duties may be approved for administrative demotion at their own request. Administrative demotions may be alternatives to layoffs or terminations. Administrative demotions shall not be considered disciplinary actions nor disqualify employees involved from consideration for later advancement. Demotions implemented as alternatives to layoffs may be fully or partially rescinded at any time. Probationary employees generally are not eligible for voluntary demotion during the probationary period. Exceptions may be granted by the City Manager when such voluntary demotion is in the best interest of the City. All demotions must be approved by the City Manager. 101.16.1 Reduction in Pay for Disciplinary Reasons An employee’s pay for continued performance in the same position may be reduced as a disciplinary measure. The period covered by this type of disciplinary action may not exceed sixty days. Any pay reduction for disciplinary reasons must be authorized by the City Manager. 101.17 Re-Hire Eligibility Former employees of the City who left employment in good standing are considered eligible for rehire. Former employees of the City who were dismissed for reasons of misconduct or inadequate performance are considered ineligible for rehire. Upon separation from employment, the status of eligibility for rehire shall be set forth in a Personnel Action Form (Appendix A-4). 101.18 Employee Orientation Upon hire, new employees shall go through a thorough orientation about the nature of the job, the benefits, obligations and responsibilities of the position, and the general policies and procedures of both the City and the department in which he or she is employed. Depending on the position, the orientation may be more or less formal, and may require more or less time. This orientation may be conducted by the Human Resources Department or department head, as applicable. In addition, the City shall obtain information needed for insurance programs, determining citizenship status, etc., such as date of birth, that were not provided for in the application for employment. To the extent the following has not occurred before orientation, it should be the first step in Page | 37 the employee’s orientation: (1) this Manual should be provided to and read by the employee; and (2) the employee shall provide the Director of Human Resources with a signed copy of the acknowledgement form (refer to Appendix A-1). 101.19 Employee Personal Information Duty to Update. All employees are required, as a part of their employment duties, to furnish to their department head any change in address and telephone number, and to keep current a designation of beneficiary form. This information shall be forwarded to the Director of Human Resources to be filed as a part of the personnel records of the employee. Public Information Act. Much of the information regarding employees of a governmental entity such as the City of Anna is subject to disclosure to the public under the Texas Public Information Act. Upon proper request, all information required to be disclosed under the Texas Public Information Act shall be released; however, information related to an employee’s home address, home telephone number, emergency contact information, social security number or that reveals whether the employee has family members shall not be released if the employee has requested that such information not be released. Employees who do not wish the information consisting of their address, home telephone number, or which reveals whether the employee has family members must notify the Director of Human Resources of their desire to withhold such information within fourteen days of beginning employment with the City, and must sign appropriate documentation that expresses such desire. If no request to withhold is received from an employee, by operation of state law the information will be subject to public access. 101.20 Internships Internships provide students with an opportunity to combine work experience and professional development to enhance their formal education. The City shall establish and maintain strong collaborative relationships with colleges/universities for the purpose of providing professional development opportunities to students interested in careers in local government. Each year during the budget process, departments may submit to the Human Resources Department and the City Manager a request for an internship to provide internships for the following fiscal year. The request must include a description of the goals, objectives for the assignment and length of the internship. All internships, paid or unpaid, must be approved by the City Manager and the Human Resources Department. Internships may be voluntary or paid. Candidates for internships will be required to complete a pre-employment drug screen and criminal background check as outlined in this Manual for other employees. Interns will be hired as temporary employees and therefore are not eligible for any benefits associated with permanent employment with the City. The hiring supervisor will complete an evaluation of the intern's performance at the conclusion of their assignment and submit to Human Resources. If the Intern's educational institution provides an evaluation to be completed for their records, the City's review will be completed as a supplement to the institution's requirement. Any additional requirements of the intern's educational institution should also be met. Page | 38 102.1 Reference Checks All requests for information, written or verbal, from persons outside the City concerning job applicants and/or current, retired, or terminated employees must be referred to the Director of Human Resources. Examples of requested items shall include, but not be limited to: (1) Verification of employment for loan and/or credit application; (2) Verification of employment status; (3) Salary verification or information; (4) Verification of work and/or attendance records; and (5) Prior work history. The Director of Human Resources shall inform an employee whose information has been requested. Unless the employee signs a release specifying specific additional information to be released, the Director of Human Resources will release only the dates of employment, position held and final salary, subject to any requirement to release additional information if required by law. 102.2 Recommendations Letters of Recommendation written for a current, retired or terminated employee must be approved by the City Manager or his or her designee. A copy of the letter shall become a part of the employee’s file. City of Anna Personnel Policy Manual Section 102. Reference Checks and Recommendations Page | 39 103.1 Probation Period Every newly employed person is a probationary employee until the employee successfully completes a probation period of twelve months, unless otherwise specified by department policy or law. Any newly promoted employee will begin a new probationary period for a period of six months. The department heads shall use the probation period to closely observe and evaluate the work and fitness of employees and to encourage adjustment to their jobs. Only those employees who have satisfactory job performance and meet the minimum job qualifications during their probation periods shall be retained. Satisfactory job performance includes, but is not limited to: regular attendance; punctuality; proper conduct toward the supervisor, fellow employees, City administration, City Council and the general public; and satisfactory performance of the duties of the position. An employee's probation period may be extended up to three more months if, in the opinion of the department head or the City Manager, such additional time is necessary or warranted in order to adequately evaluate the employee or to secure any license or certification required for the position. In the case of appointing or promoting department heads, the probation period shall be evaluated by the City Manager. Newly hired and newly promoted employees generally are not eligible for promotion, lateral transfer or voluntary demotion during the probationary period. Exceptions may be granted by the City Manager when such promotion, lateral transfer or voluntary demotion is in the best interest of the City. A newly promoted employee must complete their initial probationary period followed by the promotional probation period of six months. Newly hired employees generally are not eligible for paid sick time during the first thirty (30) days of the probation period. Exceptions may be granted by the City Manager when such compensation is in the best interest of the City. During the first thirty (30) days of employment, newly hired employees are not eligible to receive vacation pay, although vacation time begins accumulating upon the first day of employment. Exceptions may be granted by the City Manager when such compensation is in the best interest of the City. The probation period does not modify the “at-will” nature of City employment. During or at the end of the probation period, the department head may discharge or discipline any employee at will and such disciplinary action or discharge shall not be subject to any grievance or other review. Probationary employees are not entitled to a review period. 103.2 Completion of Probation Department heads shall submit a performance evaluation on each employee to the City Manager approximately two weeks prior to the completion of the probation period. City of Anna Personnel Policy Manual Section 103. Probation Page | 40 Notwithstanding subsection (a), an employee may be deemed to have failed their probation period at any time within the probation period or at the conclusion thereof, in which case the employee shall be subject to termination, without any recourse to grievance or other review proceedings. However, the employee may be administratively transferred to a more suitable position with approval of the City Manager. 103.3 Appeal of Failure of Probation An employee failing probation shall have no right to appeal except on the grounds of discrimination or other grounds prohibited by law and City policies, in which case the employee may appeal in writing to the City Manager within three working days following notice of failure of probation. The decision of the City Manager shall be final. Page | 41 104.1 Attendance/Standard Work Hours/Time Sheets All employees are expected to be regular in attendance, report to work as scheduled, and work their scheduled hours and overtime, if necessary. Employees shall be at their place of work in accordance with City and departmental policies and regulations. The standard work day will be eight hours exclusive of a one-hour meal period as approved. Employees in certain departments will often have designated work schedules outside of the standard work day that may exceed eight hours. . Department heads may provide for alternative schedules to the standard work day or may authorize alternative work locations (i.e. work from home) for individuals or groups of employees if necessary or desirable, subject to written approval of the City Manager which can be modified or withdrawn by the City Manager at any time. Unless otherwise authorized, an employee may take no more than two 15-minute rest periods each full work day if duties permit. Rest periods shall be considered a privilege and not a right and shall never interfere with the proper performance of the work responsibilities of each department, and time does not accumulate if not taken. For pay purposes the work week begins at 12:01 am on Monday and ends at midnight on the following Sunday. The work week for eligible non-exempt police officer and firefighter employees runs on a 14-28-day cyclework period. Department heads shall establish work schedules and maintain daily employee attendance records. All employees are expected to submit their approved time sheet signed by their supervisor according to departmental policies; failure to provide a time sheet at the time specified by the supervisor may result in a delay in an employee receiving some or all of the compensation due for time worked. The Finance Department will maintain annual employee attendance records. 104.2 Work Standards Employees while on duty are at all times individually responsible for conducting themselves in a professional and ethical manner and for treating coworkers and members of the public with respect and dignity. The intent of this policy is to make a clear statement that unprofessional and abusive behavior will not be tolerated in the workplace. In addition to the provisions in this Manual, employees are responsible for complying with any other federal and state laws or regulations and local ordinances governing their conduct. Grounds for immediate dismissal of an employee may include, but are not limited to: (1) Use of intoxicants or controlled substance while on duty, or reporting for duty while under the influence of intoxicants or otherwise violating any polices related to controlled substances or substance abuse; City of Anna Personnel Policy Manual Section 104. Code of Conduct Page | 42 (2) Unauthorized possession of firearms, explosives or any dangerous weapons at any time, on any City property (including, but not limited to parking lots and City vehicles, except as authorized by state law for concealed handgun permit holders transporting or storing a firearm in a locked and privately owned motor vehicle in accordance with the Texas Labor Code, Chapter 52, and other applicable law) or while performing City work; (3) Conviction of a felony (a plea of no contest will be considered a conviction for the purpose of this section); or crimes involving moral turpitude or dishonesty which can include, but are not be limited to, certain misdemeanors, depending on the circumstances; (4) Absence without leave for a full work day or more, with or without notice by the employee, or absence for a serious medical condition for more than twelve weeks unless such circumstances are in compliance with laws, including the Family Medical Leave Act to the extent applicable; (5) Insubordination or refusal to obey a just order, including, but not limited to, neglect of duty, refusal or failure to obey orders or instructions in the line of duty, public disrespect displayed toward a supervisor or the City while performing work for the City, abusive language to any supervisor, and refusal to sign a form acknowledging receipt of any documentation provided by the City to the employee if the documentation is accompanied by a statement indicating that the signature is not an admission of guilt; (6) Fighting, threat of violence, horseplay (even if consensual) or any unnecessary intimidating conduct or unreasonable disruption in the workplace; (7) Bullying of any employee or official of the City, including but not limited to peers, subordinates, or supervisors; (8) Willful or reckless misuse, destruction, theft or conversion of City property, whether on or off duty, including, but not limited to, destruction, misappropriation or removal of City property (including files and work documents) or the property of employees, clients or customers; (9) Falsification or unlawful destruction or use of official documents or records; (10) Repeated or habitual absenteeism, even if excused, or tardiness; (11) Abuse or unauthorized use of sick leave (12) Substandard performance, inability or unwillingness to perform the essential functions of the position with or without reasonable accommodations; (13) Misconduct or mismanagement of a position of employment by action or inaction, neglect that jeopardizes the life or property of another, intentional wrongdoing, intentional violation of a law or violation of a policy or rule adopted to ensure the orderly work and safety of employees; Page | 43 (14) Engaging in activities other than assigned work during working hours and/or while operating City equipment, without advance approval by the employee’s supervisor; (15) Use of City property or time for personal financial gain or personal enjoyment; (16) Failure to report occupational injuries or accidents promptly to the employee’s supervisor, including but not limited to motor vehicle accidents in a City vehicle; (17) Violation of the ordinances of the City or of the City’s personnel policies; (18) Non-compliance with any written or established departmental policy; or (19) Any reason or no reason as deemed appropriate by the City Manager. The City will make reasonable efforts to establish a positive working climate in which employees may function. Management must maintain efficiency within its operations and must determine the methods by which functional areas accomplish their objectives. Management also must schedule work events and employees to accomplish its mission. It shall be the duty of each employee to maintain high standards of cooperation, proficiency, and economy in their work for the City. Employees are expected to conduct their personal business in such a manner as to cause little interference with individual or group work performance. This includes personal visits of friends and relatives, phone calls, and requests for absence from work for personal, financial, medical, or other reasons. If work habits, attitude, production, and or personal conduct of an employee become a problem, supervisors should take appropriate action at that time. Paid time off may be provided to conduct personnel-related business such as Workers’ Compensation claims, promotion and transfer applications, discrimination complaints, grievances and insurance claims. These activities may be accomplished during working hours only with knowledge and approval of the employee’s supervisor. 104.3 Political Activities Employees may exercise their rights as citizens to express their opinions and vote in elections subject to the following: (1) Employees may not make, solicit or receive any contribution for any candidate for public office in the City, or take part in the management, affairs or political campaign of such candidate. (2) Employees may not use their position as a City employee to actively campaign for, or against, political issues or candidates. (3) Employees may not campaign for or against any candidate for elective office at the city, county, state or federal level, or any voter proposition of the City of Anna, during normal work hours or at any City place of work, whether they are off duty at the time. Nor may any employee represent themselves as supporting or opposing any such candidate or voter proposition using their City employment, title, uniform, or authority. Page | 44 If any employee of the City shall become a candidate for nomination or election to any elective public office for the City, then that employee shall immediately forfeit his or her place or position with the City. Any City employee who is subject to the provisions of the Federal Hatch Act may not be a candidate for elective office in a partisan election. (A partisan election is an election in which candidates are to be nominated or elected to represent a party whose candidates for presidential electors received votes in the last preceding election at which presidential electors were selected.) City employees are subject to this additional Hatch Act restriction if their principal employment is in connection with an activity which is financed in whole or in part by loans or grants made by the federal government. 104.3.1 Requests for Public Information Unless an employee is otherwise directed by the employee’s department head in writing as part of a written departmental policy that permits the employee to release specific categories of records or information to the public, the employee shall follow the procedures set forth in this section whenever an employee receives a written request for public information. If an employee receives what appears to be a request for public information via email the employee should respond only by reply email. If the employee receives such a request via facsimile, the employee should respond only via facsimile. The content of the employee’s response to a request received via email or facsimile shall be as follows, including the correct date and time of the email or fax in the blanks: Please be advised that if the email/fax that I received on , 20 , at .m. was intended to be a request for public information, I am not an authorized officer for public information for the City of Anna and therefore I cannot respond to the request. A request for public information may be sent to the City Secretary in accordance with The Anna City Code of Ordinances, Part II, Art. 48, Sec. 8. The Code can be accessed at www.annatexas.gov or by sending a written request for the Code to the City Secretary. If you have questions about this, please direct them to the City Secretary. Thank you for your cooperation. If an employee continues to receive additional requests for information by email or faxfrom the same requestor after the employee has provided the requestor with the response set forth above, or if the employee receives any harassing or threatening communications or has any questions regarding how to handle a request, the employee should report to their supervisor or department head as soon as possible. If an employee receives a written request for information that was submitted other than by email or fax (e.g., hand delivery, regular mail, courier, etc.) the employee shall promptly (same day as receipt if at all possible) provide the request to the employee’s department head. Department heads shall follow the same instruction set forth above as set forth above in this section, except that if a department head is the recipient of a written request for public information submitted other than by email or fax (or if a subordinate provides you with a request submitted to them by means other than by email or fax), the department head shall promptly (same day as receipt if at all possible) forward the request to the City Secretary. Page | 45 Certain exception to this section may apply if a department head has already established and the City Manager has already approved a routine policy that allows the release of specific categories of information (e.g., release of accident reports by the Police Department). If a department head desires to establish a special policy that differs in any manner from the procedures set forth in this section, the department head shall draft a proposed departmental policy describing same and shall submit it to the City Manager for review. If approved in writing by the City Manager, the special policy shall be distributed to all employees in the department and it shall take precedence over the procedures in this section to the extent of any conflict. 104.3.2 Communications with the Public and the News Media Communication with the public regarding City matters is the primarily the responsibility of the City Manager. Employees are to refer inquiries that are non-routine, controversial, or outside the scope of the employee's normal duties to their department head who shall consult with the City Manager. All inquiries/communications from the media or regulatory officials should be directed to the City Manager, appropriate department heads and/or the Communications Manager. city communications team. Any employee who, in the course and scope of employment, receives a news media inquiry or request for a media interview concerning City affairs shall immediately refer the inquiry to his/her department head and the city communication teamCommunications Manager. Employees in the course and scope of employment duties shall not provide the City’s position in response to a media inquiry without prior authorization from his/her department head Communications Manager city communications team or the City Manager. Before responding to a media inquiry or interview request, the department head shall notify the City Manager and/or the Communications Manager city communication team of the inquiry. The City Manager has discretion to conduct official communications with the news media when it is in the best interest of the City. 104.3.3 Communications with City Council Members Except for the purpose of inquiries and investigations as provided by the City Charter, City Council members must deal with City officers and employees who are subject to the direction and supervision of the City Manager solely through the City Manager. A City Council member may not give orders to any such officer or employee either publicly or privately except as otherwise provided in the Charter. Any communication by employees or volunteers with City Council members that circumvents or attempts to circumvent the authorities and/or duties of the City Manager in violation of the City Charter or these Personnel Policies is prohibited. It is important that when requested, members of the City Council have access to complete, accurate and factually correct information regarding City operations. In response to information requests from City Council Members, the following procedures apply: (1) Any employee or volunteer contacted by a member of the City Council shall promptly notify his or her supervisor and Department Director. Department Directors shall promptly notify the City Manager. (2) Department Directors shall immediately notify the City Manager when a request from a City Council Member is received. Information requested by City Council members will be provided consistent with the requirements of the Texas Public Information Page | 46 Act. Absent extraordinary circumstances, any information provided to one City Council Member shall be available to each member of the City Council. The City Manager and City Secretary will also receive copies of all information provided to City Council Members. Employees or volunteers who violate this Section or fail to follow the procedures outlined in this Section will be subject to disciplinary action up to and including termination of employment. For additional information on communication with City Council members, reference the Governance Guide 2021 and Ordinance 930-2021. 104.4 Solicitation Employees may not solicit other fellow employees or citizens while working or while their fellow employee is working. “Working” is all times when an employee is engaged in work tasks, but does not include an employee’s own time such as lunch breaks, scheduled breaks, and before/after work. In addition, solicitation for goods or services at counters or any location where customers are present is prohibited. In some instances, the City may consider the collection of money for particular causes or collecting money for gifts for special events as appropriate. Such approval must be granted by the department head or the City Manager. No employee shall be required to make any contribution or shall be penalized or rewarded in any way in connection with their employment according to their response to the solicitation. The City does not allow employees to distribute advertising materials, handbills, printed or written literature of any kind in work locations. The City does not allow employees to engage in personal commerce of any kind while on the job or during working hours. The City does not promote, encourage or endorse private business relationships or arrangements between City employees. City bulletin boards may be provided for promoting items of public interest to the citizens of Anna. City administration reserves the right to remove any literature deemed to be inappropriate. 104.5 Outside Employment Each full-time employee of the City shall understand that his/her position with the City is his or her primary occupation and it shall take precedence over all outside employment at all times. The same principle applies to any City employees that receive employment benefits from the City. An employee who is working another job at the time of hire, and who intends to continue the outside employment, must so advise the appropriate department head or designee and receive approval to continue the outside employment. An employee may be employed in any capacity in any other business, trade, occupation or profession, including self-employment, provided that prior written approval of the department head is secured. Such approval must be placed in the employee’s personnel file. Failure to acquire prior approval is grounds for disciplinary action. When engaged in outside employment, the employee must notify the department head in writing of the place and type of employment or business, and the hours of work. An Page | 47 employee whose position with the City requires an “on-call” status shall recognize such status as an obligation to the City, and shall fulfill that obligation if called to work for the City during these hours even while working on the second job. Outside employment shall not be permitted if it will bring the City into disrepute, reflect discredit upon the employee as an employee of the City, or interfere with the performance of the employee’s City duties. An employee shall not perform any outside work or engage in extra-duty employment at any time when the employee is on leave from the City for paid injury leave, paid sick leave or is on leave due to a serious medical condition without advance approval by the employee’s department head, who shall consult with the City Manager. No employee shall engage in any employment or business where the work performed by the employee, or that of the employee’s agents or employees, is subject to approval/rejection, inspection or licensing by the City, except pursuant to authorized department policies. An employee is not automatically prohibited from performing the same or other services, that he or she performs for the City, for a private or public organization, provided that there is no conflict with his or her employment or performance as a City employee and advance written approval has been given by the department head. No employee shall engage in any employment or business on a matter that is, or has been, the subject of an investigation by the employee’s department within the last twelve (12) months, nor may the employee appear as a witness, except by court order, in any proceeding as a result of such employment. No employee shall identify himself with his position, department, or the City in the course of a sale or solicitation for sale of any goods or services or the advocacy of any policy, practice, standard or position not officially sanctioned by the City. No employee at any time shall use or utilize City property, equipment, goods or services in the performance of outside employment. Department heads are prohibited from engaging in any form of outside employment, except as may be specifically approved in writing by the City Manager. An employee of the City who holds another office of emolument or position of honor, trust or profit shall be subject to the provisions of the Texas Constitution, Art. XIV, § 40. 104.6 Health and Fitness It is the continuing responsibility of each employee to maintain the standards of physical and mental health fitness required for performing the essential duties of his or her position. An employee who becomes aware of a physical or mental disability, which may affect his ability to perform the essential duties of his assigned position, must inform his immediate supervisor and/or department head. An employee may be required to submit to a health examination, such as in cases when it is suspected that the health condition of an employee constitutes a hazard to persons or property, or prevents the employee from effectively performing his or her essential assigned duties. Authorization for disclosure of all reports to the City, including contacting and discussing health-related issues with any physician or health care provider shall be a condition of continued employment with the City, to the extent Page | 48 not prohibited by law. The City also may require employees to return to a physician or health care provider for additional evaluation or information. If an employee is unable to perform the essential duties of his assigned position, reasonable accommodations, if available, shall be made by the City to provide for the employee to perform such duties, provided that such accommodations would not cause an undue burden. If a reasonable accommodation cannot be made without undue burden to the City, and the employee is unable to perform the essential duties of the assigned position, the employee may be terminated. Department heads may require periodic special examinations to qualify for continued employment in the specific job classification when warranted by changes in the essential job functions or potential changes in the employee’s ability to perform the essential job functions. A City designated physician will perform any physical or medical examination. The City will pay for the examination. Correction or treatment of conditions diagnosed during these examinations will be the employee’s responsibility and may or may not be covered by insurance benefits provided through the City’s employee health coverage. The City may also require a physical examination by its physician before authorizing an employee to return to work following either an on-the-job or an off-the-job injury or other incapacity of the employee that has required the employee to take leave from their job duties. 104.6.1 Tobacco Free Workplace Smoking is prohibited in the following locations: (1) within all buildings that are owned, leased, controlled or operated by the City and any political subdivision of the state; (2) on any lot or tract owned by the City of any political subdivision of the state, and on which there is a building described in subsection (a) above or on which there is any improvement that is used in connection with a building described in subsection (a) above, including but not limited to porches, balconies, stairs, and parking lots; (3) in all public parks and public recreation areas that are owned or operated by the City or any political subdivision of the state, including but not limited to recreation fields, athletic fields and stadiums, stadium seating and bleachers, trails, pools, pavilions, playground and recreation equipment, concession stands, parking lots and restrooms; and (4) at any location where smoking is prohibited by any ordinance or regulation adopted by the City Council, or this Manual. Notwithstanding the prohibitions in subsection (a) above, smoking is not prohibited in personal automobiles, public rights-of way, and public sidewalks located within public rights- of-way, except as otherwise prohibited by City Ordinance or this Manual. Smoking and the use of smokeless tobacco products, including but not limited to Electronic cigarettes, by employees and volunteers may occur only before and after work hours, during designated breaks set by the supervisor, and during lunch breaks. The use of any tobacco Page | 49 products (smoke or smokeless) and Electronic cigarettes by employees and volunteers is prohibited in any City owned building, vehicle, or piece of equipment, and in locations that are accessible or visible to the general public. The for purpose of this section, “Electronic cigarette” or “e- cigarette” means an electronic device usually composed of a mouthpiece, a heating element or atomizer, a battery, and electronic circuits that provides a gas derived from liquid nicotine and/or other substances which is inhaled by a user simulating smoking. The term includes such devices, regardless of the details of the product appearance or marketed name, generally manufactured to resemble cigarettes, cigars, pipes, or other smoking devices. 104.7 Financial Obligations No person who, after notice of any delinquency, is in arrears in the payment of taxes or any other liabilities due the City, is qualified to hold any compensative position with the City. Failure to pay other just debts may constitute grounds for disciplinary action if job performance is directly or indirectly impeded. 104.8 Conflict of Interest/Gifts No current employee of the City, or relative, shall recommend, participate in the decision, including voting or discussion, or participate in the monitoring or fulfilling obligations of any contract (whether oral or written) for materials, supplies, or service with the City, nor in any sale of any rights or interest in land, if the officer, employee, or relative has a substantial financial interest in such contract rights or interest in land. In such event, the officer or employee of the City shall sign an affidavit specifying the financial interest, to be filed with the City Secretary prior to any discussion on the item. A “substantial financial interest” for the purposes of this section requires that the employee receive an actual financial benefit from the transaction with the City. An “actual financial benefit from the transaction” shall not include: (1) ownership in the entity transacting with the City where the ownership interest is less than one percent (1%); (2) Compensation as an employee, officer, or director of the entity transacting with the City where the employee can prove that such compensation is not affected by the entity’s transaction with the City; or (3) An investment or ownership in a publicly-held company in an amount less than ten thousand dollars ($10,000.00). An employee may not: (1) represent or appear on behalf of the private interests of others before any agency of the City or any City board, commission or committee, represent any private interest of others in any action or proceeding involving the City, or voluntarily participate on behalf of others in any litigation to which the City might be party; (2) accept or solicit any gift, favor, service, or other thing of value that might reasonably tend to influence the employee in the discharge of his or her duties, or that the employee knows or reasonably should know is being offered with the intent to influence the employee's official conduct; Page | 50 (3) use their position as a City employee to secure special privileges or exemptions for the employee or others; (4) grant any special consideration, treatment, or advantage to any citizen, individual, business organization or group beyond that which is normally available to every other citizen, individual, business organization or group; (5) engage in any outside activities that will conflict with or will be incompatible with the individual’s position as an officer of the City, the duties of employment with the City, or in which employment with the City will give the employee an advantage over others engaged in a similar business, vocation or activity if the advantage is due to knowledge that the employee has obtained that is not subject to disclosure to the general public; (6) accept other employment or engage in a business or professional activity that the employee might reasonably expect would require or induce the employee to disclose confidential information acquired by reason of the official position; (7) accept other employment or compensation that could reasonably be expected to impair the employee's independence of judgment in the performance of the employee's official duties; (8) make personal investments that could reasonably be expected to create a substantial conflict between the employee's private interest and the public interest; or (9) intentionally or knowingly solicit, accept, or agree to accept any benefit for having exercised the employee's official powers or performed the employee's official duties in favor of another. Notwithstanding any provision of this section to the contrary, employees may not accept gifts in any value from persons, entities, organizations or corporations doing business with the City. Any willful violation of any provision of this section shall subject the employee to discipline up to and including termination. Except as specifically prohibited in this section, an employee is not prohibited from: (1) attending social functions, ground breakings, or civic events pertinent to the public relations and operations of the City; (2) exchanging gifts with his or her family and relatives; (3) exchanging gifts at church functions or City parties or functions where only City officers and employees and their families are invited or attend; or (4) exchanging gifts at or receiving a bonus from his or her place of full-time employment; (5) accepting a non-monetary gift with a value of no more than $50.00 or products or items to be used in an officially recognized activity of the City or department sponsored services; or Page | 51 (6) exchanging gifts between co-workers in recognition of special milestones in an employee’s life or career. 104.9 Professional Decorum All employees must adhere to high standards of public service that emphasize professionalism, courtesy, and avoidance of even the appearance of illegal or unethical conduct. The attitude and demeanor of a City employee, whether in public or private, should at all times be such as to promote the good will and favorable attitude of the public toward the City administration and its programs and policies. Employees should be mindful that public perception, even if incorrect, can greatly influence events and decisions, and employees should thus avoid anything that gives the appearance of improper conduct. The actions of one employee impact the credibility of all other employees either in a positive or negative manner. Employees should always strive to conduct themselves in a positive manner. If an employee is uncomfortable with any decision or contemplated action, he/she should seek guidance regarding the propriety of the action. Similarly, if employees become aware of known or suspected wrongdoing on the part of another employee they should report that action or activity to their supervisor/manager, the Human Resources Department or the City Manager immediately. 104.10 RESERVED 104.10104.11 Harassment and Sexual Harassment Prevention and Disciplinary Policy No-Harassment Policy. The City’s policy is to provide equal employment opportunities to persons without regard to age, race, religion, color, gender, sexual orientation, national origin, marital status, mental or physical disability, genetics, veteran’s status, or other protected status in accordance with applicable laws. It is also the City’s policy that employees have a right to work in an environment where each individual is respected. Harassment of employees, regardless of working relationships or supervisory status, is prohibited. Every employee is responsible for maintaining a professional environment free of discrimination, harassment, and retaliation, and for bringing to the City’s attention incidents that interfere with providing a work environment free of such prohibited conduct. Employees who are found to have engaged in prohibited conduct will be subject to discipline, up to and including discharge. Discrimination against any person in recruitment, examination, selection, appointment, rate of pay, promotion and transfer, retention, daily working conditions, testing and training, awards, compensation and benefits, disciplinary actions, or any other aspect of employment because of age, race, religion, sex, national origin, marital status, citizenship, mental or physical disability, genetics, veteran status, or other unlawful basis is prohibited. All City employees at every level are entitled to a workplace free of unlawful harassment by management, supervisors, co-workers, citizens, vendors and visitors. City employees are also prohibited from harassing citizens, vendors, and all other third parties. Sexual Harassment. One form of unlawful discrimination is sexual harassment. The City is committed to providing a work environment that is free of sexual harassment. Sexual harassment may include, but is not limited to unwelcome sexual advances, requests for sexual favors, and other verbal or non-verbal communication or physical conduct of a sexual nature where: Page | 52 (1) submission to such conduct is made either explicitly or implicitly a term or condition of an individual's employment, or (2) submission to or rejection of such conduct by an individual is used as a basis for employment decisions affecting such individual, or (3) such conduct has the purpose or effect of unreasonably interfering with an individual's work performance or creating an intimidating, hostile, or offensive work environment. Sexual harassment may include a range of subtle and not so subtle behaviors and may involve individuals of the same or different gender. It may be directed by a manager to a subordinate, manager-to-manager, or co-worker-to-co-worker. Conduct prohibited by this policy includes, but is not limited to: sexual advances; requests for sexual favors; sexual jokes and innuendo; verbal abuse of a sexual nature; commentary about an individual’s body, sexual prowess, sexual preference, sexual experiences, or sexual deficiencies; leering, whistling, or touching; insulting or obscene comments or gestures; display in the workplace of sexually suggestive objects or pictures; and other physical, verbal, or visual conduct of a sexual nature. Other Prohibited Harassment. In addition to the City’s prohibition against sexual harassment, harassment on the basis of any other legally protected characteristic is also strictly prohibited. This means that verbal or non-verbal communication or physical conduct that singles out, denigrates, or shows hostility or aversion toward someone because of race, religion, color, national origin, age, disability, genetics, veteran status, citizenship, or any other characteristic protected by law is also prohibited. (1) Prohibited conduct includes but is not limited to epithets, slurs and negative stereotyping; threatening, intimidating, or hostile conduct; denigrating jokes, comments, writings, or pictures any of which single out, denigrate, or show hostility or aversion toward someone on the basis of a protected characteristic. Conduct, comments, or innuendoes likely to be perceived by others as offensive and related to such protected characteristics are wholly inappropriate and are strictly prohibited. Conduct, comments, or innuendoes—related to protected characteristics—by an employee reasonably believing same will not be perceived by others as offensive may still result in disciplinary action if the employee is advised that such conduct, comments, or innuendo is offense or unwelcome and the employee persists in such conduct, comments, or innuendo. (2) This policy also prohibits sending, showing, sharing, or distributing in any form, inappropriate jokes, pictures, comics, stories, etc., by means such as facsimile, e- mail, texting, cell phone or other electronic devices, social media, and/or the Internet. Harassment of any nature, when based on race, religion, color, sex, national origin, age, disability, genetics, veteran status, citizenship or any other characteristic protected by law is prohibited and will not be tolerated. Mandatory Reporting. The City requires that all employees, including supervisors and department heads, report all perceived incidents of unlawful discrimination, harassment, or retaliation, regardless of the offender’s identity or position. Any employee who observes or otherwise learns of harassment in the workplace, believes that harassment has occurred, or has been subjected to conduct prohibited by this policy must report it as soon as possible— and no later than three business days absent justifiable circumstances—to the to the department head, Director of Human Resources, or City manager. Under this policy, an employee may report to and/or contact the Director of Human Resources or department Page | 53 directly, or the City Manager directly, without regard to the employee’s normal chain of command. If making a report of unlawful harassment or discrimination, employees are encouraged to use the Discrimination/Harassment/Sexual Harassment Complaint Form (refer to Appendix A-5). Any supervisor or department head who receives a complaint of such conduct must, without undue delay, notify the human resources director so that an investigation into the allegations may be commenced. (1) City employees are expected and encouraged to promptly raise questions and report conduct that they believe may be prohibited conduct, or conduct that, if left unchecked, may rise to the level of unlawful discrimination, harassment, or retaliation, even if an employee is unsure if the conduct violates the City’s policy. (2) City employees who wish to informally share or obtain information about perceived prohibited conduct without filing a formal complaint are expected and encouraged to promptly bring concerns to the to the department head, human resources director, or City manager. (3) A City employee who submits a report, a witness who provides information regarding a report, and alleged violator will be kept confidential to the extent possible and permitted by law, consistent with a thorough and impartial investigation. Investigation. All reports (verbal, written, or anonymous) of prohibited conduct will be treated seriously and investigated promptly thoroughly, and impartially. Information obtained during an investigation will be kept confidential to the extent consistent with a thorough and impartial investigation and to the extent permitted by law. The investigative process may include interview of the person that is the subject of the report of the harassment, the accuser, the accused, and other persons that are witnesses or who have relevant knowledge. The investigation shall be conducted by the Director of Human Resources or the City Manager as appropriate. Notwithstanding the foregoing, there may be some circumstances under which the investigation will be conducted by the office of the City Attorney. The investigation may include individual interviews with the parties involved and, where necessary, with individuals who may have other relevant knowledge. All employees are required to cooperate with the investigation and to maintain confidentiality. If the investigation confirms evidence of prohibited conduct under this policy, the supervisor or department head shall take immediate and appropriate corrective action and enforce discipline as set out in subsection (g), below. Retaliation Prohibited. Retaliation against employees who make a good faith charge or report of prohibited conduct or who assist in a complainant’s investigation is prohibited. The City strictly prohibits supervisors or managers from conditioning employment or making employment decisions based on an employee’s tolerance of or resistance to harassment. Acts of retaliation must be reported immediately as set out above in subsection (d). (1) “Retaliation” is broadly construed to mean any adverse action against an employee for opposing harassment or discrimination. It may include any on-duty or off-duty conduct, whether related to employment or not, that could discourage an employee from making a complaint or testifying, assisting or participating in an investigation or hearing under this policy. It may also include such Page | 54 conduct as “cold shoulder” treatment, changing job duties, failing to cooperate, or treating an employee rudely because he or she has made a complaint, or testified, assisted or participated in an investigation or hearing, resisted sexual advances, or intervened to protect other employees from such prohibited conduct. (2) Violation of this policy by an employee will result in appropriate disciplinary action, up to and including immediate discharge. The City may also require an employee who has violated this policy to receive appropriate training on harassment, retaliation, or other issues related to the conduct, at the employee’s expense. Discipline. Conduct prohibited by this policy is of a very serious nature and will be dealt with appropriately. Discrimination and harassment are very serious matters that can have far- reaching, immediate and long-lasting impacts on the lives and careers of individuals. Intentionally false accusations or accusations not made in good faith can have a similar impact. Both a person who is found to have engaged in unlawful harassment or retaliation under this policy, and a person who knowingly and intentionally files a false complaint under this policy, are subject to immediate and proportionate discipline. Discipline, up to and including termination, will be imposed on any employee who is found to have engaged in conduct prohibited by this policy. Likewise, disciplinary action up to and including termination may be imposed when employees are untruthful during an investigation. This policy (Section 104.11) extends to non-employees such as suppliers, contractors, City Council members, appointed officials, sales representatives, and job applicants, who may either be complainants or persons against whom a complaint is made. The City Manager or Human Resources Department, as appropriate, shall promptly notify any person of any complaints made against them. At least annually, City employees, including supervisors and department heads, are required to attend and participate in interactive anti-harassment training to ensure employee understanding of the City’s harassment policies, procedures, expectations, and consequences of misconduct. Additionally, the City may solicit information from employees through anonymous surveys regarding employee awareness of and confidence in the City’s harassment policies and complaint procedures. City employees who wish to offer suggestions or ask questions regarding the City’s policies are encouraged to submit such communications to the Director of Human Resources or the City Manager as appropriate. 104.11104.12 Indictments Against Employee An employee may be suspended and placed on administrative leave, with or without pay, if accused or indicted for a crime of official misconduct or any felony crime or Class A misdemeanor pending a decision on the indictment such as dismissal, acquittal or conviction. If the indictment is dismissed or if the employee is acquitted, the employee could still be subject to disciplinary action up to and including termination, depending on the circumstances. If the indictment is upheld, and the employee is convicted, then the employee, depending upon the severity of the crime, will be subject to disciplinary action up to and including termination. This provision in no way prevents the City from taking appropriate disciplinary action against an employee in the absence of an accusation or indictment for a crime of official misconduct or any felony crime or Class A misdemeanor. Page | 55 104.12104.13 Violence in the Workplace The City has a strong commitment to its employees to provide a safe, healthy and secure work environment. The City also expects its employees to maintain a high level of productivity and efficiency. The presence of unauthorized weapons and/or the occurrence of violent, hostile, abusive, or intimidating behavior in the workplace during working hours are inconsistent with these objectives. The City expects all employees to report to their work site without possessing weapons (with the exception of law enforcement employees authorized in writing to carry weapons, or transportation and storage of a firearm in a locked and privately owned motor vehicle by an employee who is a concealed handgun permit holder to the extent authorized by state law) and to perform their job without engaging in any of the behaviors described herein toward any other individual. The City will not tolerate any conduct or behavior, whether intentional or not, that is determined to be threatening, intimidating or coercive. Any person who acts or speaks in a violent or threatening manner will be removed from the City’s premises as quickly as safety permits. Any employee who engages in violent or threatening speech or behavior may be subject to disciplinary action up to and including termination, criminal penalties, or both. At the City’s sole discretion, employees and/or the public may be barred from City premises pending the outcome of an investigation. Employees barred from City premises on this basis will be placed on either paid or unpaid administrative leave, at the discretion of the City Manager. The City has zero tolerance for violence or threats of violence between or by employees, officials, or representatives of the City, whether conducted on or off City premises. This policy and attached procedures shall apply to all employees, officials and representatives of the City. Employees who are victims of, or witnesses to, behaviors described herein should immediately report such conduct to their supervisors. If an employee’s immediate supervisor is the person making the threats or exhibiting the violent behavior, the employee should immediately report such conduct to the department head or the City Manager, as appropriate. If an employee is injured while participating in aggressive behavior or after instigating such behavior, then entitlement to workers' compensation benefits may be denied. No part of this policy, or any procedure herein, is intended to affect the City's right to manage or control its work force, or be construed as a guarantee or contract of employment or continued employment. 104.13104.14 Workplace Bullying The City is dedicated to maintaining a psychologically healthy work environment which is free of bullying activity. For the purposes of this policy, “workplace bullying” is defined as repeated mistreatment of one or more persons by means including, but not limited to: verbal abuse; threatening, humiliating, intimidating, or offensive remarks, conduct, or behaviors, whether verbal or nonverbal; infliction of social ostracism, such as through starting or spreading destructive rumors or gossip; conduct representing coercion as defined by the Texas Penal Code; or conduct intended to interfere with an employee’s ability to perform their job duties (work interference or sabotage). Page | 56 The City will not tolerate workplace bullying among its employees. Any employee who feels that they have been or are being targeted by workplace bullying should report such activity to their immediate supervisor, or if that supervisor is the source of the bullying, to the next appropriate person within the City chain of command. Retaliation of any sort is not acceptable and may result in disciplinary action in the discretion of the City Manager. Supervisors receiving reports of workplace bullying must confidentially contact the reporting employee to investigate. Supervisors must memorialize the results of their investigation in a written report, including the names of all witnesses to the alleged bullying behavior (whether employees or nonemployees), dates and times of the events constituting bullying, and a description of the objectionable behavior in the greatest possible detail. Once complete, the report should be forwarded to the department head and the City Manager for review and possible disciplinary action. Every employee of the City deserves respectful treatment in the workplace. An employee who is found to have engaged in workplace bullying may be subject to discipline up to and including termination. 104.14104.15 City Logo Use The City’s logos, emblems and images (collectively “Logo(s)”) are exclusively the property of the City and the City is the owner of all rights to the Logo. Employees may not use Logos other than for official and authorized City business or operations. It is the policy of the City to exercise due diligence to assure that misuse of its Logo by third parties (and other approved Logos representing the City such as Police and Fire, and the City development corporations) does not occur or is corrected, and that the Logo shall not be used by any third party for any purpose without express written authorization of the City Manager. Such written authorization will be in the form of a grant of a temporary, limited and nonexclusive license to use the Logo. Requests for such use shall be made by third parties on an application form to be provided by the City Secretary’s office. Any unauthorized use of the Logo by any third party will be referred to the City Attorney for review and action. The City will determine standard City Logo apparel and other approved Logos representing the City, such as the Police and Fire Department, when and who should be wearing such apparel. The City requires each employee’s choice of attire to be appropriate and in good taste for business as stated in this manual. Page | 57 105.1 Compensation Plan and Philosophy The City will, within its financial capability, provide equitable compensation for all employees in the form of pay and benefits, but differences will exist based on factors including the nature, category and classification of each position. Salary reviews may be conducted annually, and wage or salary modifications may be based on performance and the employee’s contributions to the overall mission of the City, as well as on cost of living. In the event of promotion, the anniversary date for salary review is the date of promotion. All City pay ranges and job relationships may be reviewed annually. The City Manager may recommend blanket changes in the compensation plan to adjust salaries for individual positions as is necessary to keep the compensation plan current and competitive with other employees of the same personnel class. Recommended changes in the compensation plan will be included in the annual budget and become effective upon City Council approval of the budget. The City reserves the right to determine if and when the changes can be applied based upon budgetary realities. Compensation Philosophy: This philosophy would include the following elements, defined as follows: (1) Philosophy 1: Establish the market, defined as cities located in whole or in part in Collin County, as these cities are the competition for employment in our region. (2) Philosophy 2: Maintain pay ranges and step plans with the intent on being relevant and competitive in the Collin County Market, reviewing these for such annually, working towards the 50th percentile, weighted for organizational size and population served. (3) Philosophy 3: Maintain a merit system of compensation, whereby employees are compensated for performance, targeted at 3.5% maximum for the highest performance rating, providing for performance improvement plans and deferrals for low performers not meeting expectations, yet encouraging excellence by tying salary increases to performance. (4) Philosophy 4: Maintain a retention system, for encouraging senior and long-term employees, rewarding longevity, consistent with system internal equities, inclusive of longevity pay, incremental adjustments based on tenure, and lump sum payment when achieving the top of scale or step, not to exceed $2,000. (5) Philosophy 5: Maintain a promotional vacancy practice providing for no less than 5% increase for promotions (or the next highest step, if in a step plan) (6) Philosophy 6: All stated strategies herein are subject to annual funding availability, and not a guarantee of future compensation. 105.2 New Hires City of Anna Personnel Policy Manual Section 105. Compensation & Performance Evaluations Page | 58 In establishing new hiring rates, consideration will be given to the position in range as to whether it allows sufficient room for future growth and its relationship to rates paid to similarly qualified and more experienced employees in the job or department. Consultation with and review by the City Manager will provide a City wide perspective to department heads as they make hiring decisions. The following factors shall be considered in determining a new hire rate: (1) salaries paid to incumbents in the position and across the City; (2) salary range of the position; (3) qualifications of individuals versus qualifications of incumbents in the position; and (4) budget considerations. 105.3 Employee Pay Schedule Delivery of bi-weekly payrolls will be by electronic transfer with direct deposit to the employee’s account in a designated financial institution. Payroll will not be issued other than on designated pay days. No salary advances or loans against future salary will be made to any employee for any reason. 105.03.1 Deductions Deductions will be made from each employee’s pay for: Federal Income Tax; Social Security; Texas Municipal Retirement System Contributions (for regular full-time employees and covered part-time employees); court ordered child support; an amount required to reimburse the City for the replacement value of City property wrongfully held, converted by, damaged by, unreturned or lost by an employee; any other deductions required by law In accordance with the policies and general procedures approved by the City Council of the City, deductions from an employee’s pay may be authorized by the employee for: group health/medical insurance for dependents; life insurance for the employee; such other deductions as may be authorized by the City Manager, the City Council, or these policies. 105.4 Overtime and Compensatory Time Overtime, when ordered for the maintenance of essential City functions, shall be allocated as uniformly as reasonably possible among all eligible employees. Eligible employees, those qualified to perform overtime work, will be compensated in accordance with the Fair Labor Standards Act (FLSA) 29 C.F.R. § 785.11 et seq. Department heads are responsible for exercising adequate supervision to ensure that employees are complying with established work schedules. All overtime hours must be approved in advance by the employee’s department head. Failure to obtain permission in advance may result in disciplinary action. The use of compensatory time off is generally discouraged, but is permitted at the sole discretion of the department head and City Manager in order to offset amounts that would otherwise be paid for overtime hours worked (compensatory time received by an employee Page | 59 in lieu of cash must be at the rate of one and one-half hours of compensatory time for each hour of overtime work), as stipulated by the Fair Labor Standards Act, and as follows: (1) The use of compensatory time off is not authorized unless approved in advance and in writing by the department head or designee. The department head is responsible for the administration of compensatory time off in lieu of overtime pay. (2) The use of accrued compensatory time off will be granted to employees within a reasonable period of time of the employee’s request to use same, unless the granting of such time off would unduly disrupt the effective functioning of the department. The City does not guarantee that an employee will be able to use compensatory time off on the date(s) that the employee requests to use same. Requests for use of compensatory time off are the employee’s responsibility and shall be made in the same manner as other leave requests. Department heads may also exercise control over accrued compensatory time by requiring the employee to use it at times determined by the department head. Unless granted an extension by the department head or designee, compensatory time must be used within thirty (30) days of being accrued. If an employee’s compensatory time is not used by the employee within thirty (30) days of being accrued and no extension has been granted by the department head or designee, then the employee will receive payment for the value of the compensatory time. If the department head or designee grants an extension, it may not be for more than one year from the date that compensatory time is accrued. If the department head or designee grants an extension and the employee does not use the compensatory time before the expiration of the extension, then the employee will receive payment for the value of the compensatory time. Notwithstanding any other provision or statement in this Manual, the City always reserves the right to require an employee to use compensatory time at times determined by the City, and further reserves the right to pay the employee for the value of accrued compensatory time instead of allowing the employee to use compensatory time. (3) Upon separation from employment, employees must be paid for all accrued compensatory time at the employee's rate of pay at termination. (4) Each department is responsible for maintaining records of compensatory time off earned and taken by or paid to employees within the Department, and for keeping them current and on file in the time tracking system. (5) The City’s ability to make an election to provide compensatory time off instead of overtime pay is a term and condition of employment. Overtime and Compensatory Time Off for Eligible Non-Exempt Employees Other Than Eligible Non-Exempt Police Officer and Firefighter Employees. The official work period for eligible non-exempt employees is a 7-day period. Eligible non-exempt employees will receive overtime pay or compensatory time off for any hours worked in excess of 40 hours in the 7-day work period. It is the policy of the City to grant hours off during the work period if an eligible non-exempt employee works or is scheduled to work more than 40 hours in a 7-day work period. In the event it is not possible to grant time off during the same work period in which actual hours worked are above 40 in a 7-day work period, the eligible non- Page | 60 exempt employee will receive 1.5 times the pay rate or 1.5 hours in compensatory time off for each hour worked in excess of 40 in a 7-day work period. An employee may accrue up to a maximum of 40 hours of compensatory time off. The decision to pay overtime pay or grant compensatory time off shall be at the sole discretion of the department head and City Manager with consideration given to budgetary resources. The City’s ability to make an election to provide compensatory time off instead of overtime pay is a term and condition of employment. Overtime and Compensatory Time Off for Eligible Non-Exempt Police Officer Employees. The official work period for eligible non-exempt police officers is a 14-day period. This provision is adopted pursuant to section 207(k) of the FLSA and 29 CFR Part 553, and shall form a part of the City’s payroll records. Eligible non-exempt police officer employees will receive overtime pay or compensatory time off for any hours worked in excess of 80 hours in the 14-day work period. It is the policy of the City to grant hours off during the work period if an eligible non-exempt police officer employee works or is scheduled to work more than 80 hours in a 14-day work period. In the event it is not possible to grant time off during the same work period in which actual hours worked are above 80 in a 14-day work period, the eligible non-exempt police officer employee will receive 1.5 times the pay rate or 1.5 hours in compensatory time off for each hour worked in excess of 80 hours in a 14-day work period. An employee may accrue up to a maximum of 40 hours of compensatory time off. The decision to pay overtime pay or grant compensatory time off shall be at the sole discretion of the department head and designee with consideration given to budgetary resources. The City’s ability to make an election to provide compensatory time off instead of overtime pay is a term and condition of employment and does not change the at-will employment relationship established under this manual. This provision is adopted pursuant to section 207(k) of the FLSA and 29 CFR Part 553, and shall form a part of the City’s payroll records. For the purposes of this subsection (d), “Eligible Non-Exempt Police Officer Employees” include only uniformed or plainclothes members of the City’s Police Department who have: (1) the statutory power to enforce the law; (2) the power to arrest; and (3) participated in a special course of law enforcement training. Overtime and Compensatory Time Off for Eligible Non-Exempt Firefighter Employees. The official work period for eligible non-exempt firefighters is a 28-14-day period. This provision is adopted pursuant to section 207(k) of the FLSA and 29 CFR Part 553, and shall form a part of the City’s payroll records. Eligible non- exempt firefighter employees will receive overtime pay or compensatory time off for any hours worked in excess of 106212 hours in the 28-14-day work period with the first pay period paid for standard non-overtime hours and with overtime and/or compensatory time off figured after the 212 hours worked during the entire 28-day period. It is the policy of the City to grant hours off during the work period if an eligible non-exempt firefighter employee works or is scheduled to work more than 212106 hours in a 28-14-day work period. In the event it is not possible to grant time off during the same work period in which actual hours worked are above 212 106 in a 28-14-day work period, the eligible non-exempt firefighter employee will receive 1.5 times the pay rate or 1.5 hours in compensatory time off for each hour worked in excess of 212 106 in a 28-14-day work period. An employee may accrue up to a maximum of 40 hours of compensatory time off. The decision to pay overtime pay or grant compensatory time off shall be at the sole discretion of the department head and City Manager with consideration given to budgetary resources. The City’s ability to make an election to provide compensatory time off instead of overtime pay is a term and condition of employment and does not change the at-will employment relationship established under this Manual. Further, it is the City’s policy (subject to the discretion of the department head and internal department policies) and a term and condition of employment applicable to eligible non-exempt firefighter employees—that, for shifts in excess of 24 hours: (1) a maximum of eight hours of sleep Page | 61 time may not be compensated for and may not be counted as hours worked for purposes of calculating overtime hours; and, (2) designated meal times may not be compensated for and may not be counted as hours worked for purposes of calculating overtime hours. The policy, stated above, excluding certain time for sleep hours and designated meal times from overtime compensation does not apply to a regular 24 hour shift that starts early or is extended due to emergency call out, or to an employee that, with the permission of the department head, works a shift normally assigned to another employee resulting in the employee working consecutive 24 hour shifts. This provision is adopted pursuant to section 207(k) of the FLSA and 29 CFR Part 553, and shall form a part of the City’s payroll records. For the purposes of this subsection (e), an “Eligible Non-Exempt Firefighter Employee” includes only an employee of the City who is trained in fire suppression, has the legal authority and responsibility to engage in fire suppression, and is engaged in either: (1) preventing, controlling and extinguishing fires; or (2) responding to emergency situations where life, property or the environment is at risk. Holiday leave and vacation leave will be counted as hours worked for the purpose of overtime calculations. All other paid leave, including but not limited to sick leave, personal leave, jury duty, administrative leave, bereavement leave, workers’ compensation injury leave, disability leave, military leave, unpaid leave and compensatory time off will not be counted as hours worked for purposes of overtime calculations. Exempt Employees. Exempt personnel are paid a salary and are not eligible to receive overtime compensation. Exempt personnel are expected to work the hours necessary to complete their job assignments, and it is expected that all exempt employees will occasionally be required to work additional hours to accomplish assigned tasks. Hour for hour compensatory time off is not authorized for Exempt employees; however, when possible, these employees will be allowed time off to discharge personal responsibilities as time and work load permits. 105.5 Call-Out (a) A non-exempt employee called out to work after he/she has been released from his/her normal work day shall be credited with a minimum of two (2) hours for the time between reporting for duty and release from such duty should actual time worked not exceed two (2) hours. This provision does not apply in the case of pre-scheduled overtime. (b) If the employee completes the work required in the initial call-out, and is subsequently called out within the same initial two-hour guarantee, he/she shall be paid for the actual time worked, or the minimum two (2) hour guarantee, whichever is greater. A second call- out within the initial two-hour guarantee period does not commence a second two-hour guarantee. An employee will not be paid more than the two hour guarantee unless he/she actually works more than two hours. If the employee receives a subsequent call-out, after the expiration of the initial two-hour period, such subsequent call-out shall commence an additional two-hour guarantee. (c) Call-out time will be paid at the applicable overtime rate only if the employee has exceeded 40 hours worked for the work week (or the equivalent maximums for police and firefighter employees). Any time less than 40 hours (or the equivalent non-overtime hours for police and firefighter employees) including call-out time will be paid at straight time. 105.6 Standby (On-Call Time) Page | 62 (a) Certain employees of the City are required to be on-call or standby for various periods of time. Employees on standby are not required to restrict their movement during such time to their homes or any other location, but are required to respond to radio pages, cell phones, or other portable communication devices provided by the City. After being called to work, employees on standby status must report to work within 30 minutes. Employees on standby are prohibited from consuming alcoholic beverages. (b) Non-exempt employees designated as being on standby will receive standby pay in addition to any hours worked from call-outs. Standby pay will be credited on a daily basis at the rate specified in the pay classification plan. An employee designated to be on standby, will receive daily standby pay regardless of hours worked or call-outs. (c) This Section 105.06 shall not apply to non-exempt police officer employees and non- exempt firefighter employees. Any similar provisions shall be set forth under departmental policy as approved by the department head and City Manager. 105.7 Travel Time (a) Commute Time. Travel time at the beginning or end of the work day is not compensable. Generally, an employee is not at work until he/she reaches the work site. This includes travel to offsite locations where the employee may have a temporary assigned worksite. However, if an employee is required to report to a meeting place to pick up materials, equipment or other employees, or to receive instructions prior to traveling to the worksite, then the time is compensable. In addition, if any employee is required to report to an off- site location that results in a commute time that is more than fifteen (15) minutes longer than the employee’s normal commute time, then the difference between the employee’s normal commute time and the commute time required to report to the off-site location is compensable. An employee who operates a City vehicle need not be compensated for commute time simply because he/she is driving the vehicle, so long as it is for the employee’s convenience. An employee who is directed to chauffeur other employees by his supervisors is entitled to compensation. (b) Overnight Travel. Travel time is compensable when it occurs during the employee’s normal work hours. Moreover, if the travel occurs during normal working hours on nonworking days (i.e. Saturday or Sunday for an employee who works Monday to Friday), the time is compensable. Travel time that occurs outside of regular working hours where the employee is a passenger and free to relax does not count as working time. However, if the employee is required to drive or perform work, then the time is compensable. 105.8 Meetings and Training Time (a) Time spent attending lectures, meetings and training programs will not be counted as hours worked, provided all the following conditions are met: (1) The meetings are held outside working hours. (2) Attendance is voluntary. Page | 63 (3) The course, lecture, or meeting is not directly related to the employee’s job. If a training course is undertaken for the purpose of preparing for advancement through upgrading the employee to a higher skill, and is not intended to make the employee more efficient in his/her present job the training is not directly related to the employees job, even if the training incidentally improves his/her skill in doing his/her regular work; and (4) The employee does no productive work during the meeting or training. (b) If an employee on his or her own initiative attends school, college, or trade school after hours, that time is not hours worked even if the courses are job related. 105.9 Employee Performance Evaluation To ensure that the quantity and quality of work performed by employees meets the needs of the City, the department head shall interview each employee during the employee’s tenure at least once each year and shall prepare a written performance evaluation in conjunction with said interview. If at any time the City Manager or a department head determines that an employee must substantially improve in any area of job performance in order to adequately discharge any essential function of the employee’s job, the employee may be placed on a performance improvement plan for a time period of three to six months (“performance improvement period”). The performance improvement plan shall include a written description of: (1) the area of job performance in need of improvement; (2) the essential functions of the job at issue; (3) a description of goals, deadlines or other performance measures that the employee must meet within the performance improvement period; (4) a description of steps that the employee should take to meet certain criteria including goals, deadlines or other performance measures; and (5) a warning that failure to adhere to or meet said criteria will result in disciplinary action potentially including discharge from employment. The employee must sign the performance improvement plan to acknowledge receipt. If at the expiration of the performance improvement period the City Manager or department head determines that the employee has not been able to favorably resolve the job performance issue(s), the employee may be subject to discharge. A performance improvement plan is a tool that may be used to assist an employee with job performance issues, but it is not a prerequisite to employee discipline or discharge and does not alter the employee’s “at-will” status. The department head or City Manager shall provide a copy of any written performance evaluation or any performance improvement plan to the employee and shall place a copy of same in the employee’s personnel file together with a certification executed by the employee certifying that the employee has received and reviewed a copy of same. Refusal of the employee to sign said certification is insubordination. Employees may respond in writing to any performance evaluation or performance improvement plan. This written response must be received within 24 hours of the receipt of the performance evaluation or performance improvement plan (PIP). This written response shall be placed in the employee’s personnel file. 105.10 Training and Development In order to meet individual and organizational needs, it is the policy of the City to provide training and development opportunities to encourage high quality performance to prepare employees for Page | 64 new or increased responsibilities, skills, and to extend opportunities for individual growth, promotion, development, and self-fulfillment. Availability of training funds will be dependent on the budget available at the time and will require advance written approval of the department head and the Human Resources Department. Tuition Reimbursement. The City of Anna encourages life learning and education. In support of this value, the City of Anna offers a tuition reimbursement program subject to fund availability. Tuition Reimbursement is a tool that employees can use to grow and develop within the field of public service. (1) Scope. The policy described herein applies only to full-time, regular employees who are enrolled and participating in approved courses at approved accredited educational institutions to earn an Associates, Bachelors, or Masters degree. (2) Eligible Courses. In order to be approved hereunder, a course must be applicable to the field of public service and must be offered and completed at an accredited university or college. The following types of courses specifically are not approved for reimbursement hereunder: (i) Courses which are required by any governmental agency or professional association in order to meet the minimum educational or continuing educational requirements of the employee’s current employment. (ii) Courses which are non-credit continuing education courses. (iii) Course credit for previous work experience. (iv) On-going certification courses. (3) Course Work. All approved courses shall be scheduled outside of the employee’s regular work hours, except upon written approval of the employee’s department head. All work required by the approved course must be performed on the employee’s own time. (4) Determination of Course Approval. In each case, courses shall be reviewed and approved or disapproved by the Human Resources Department and the director of the employee’s department prior to the start of coursework. Approval of a course does not guarantee the approval of all courses required for a degree or certificate. Each course must therefore be applied for individually and will be evaluated separately from any other course. (5) Employee Eligibility. In order to be eligible for tuition reimbursement for approved courses hereunder, the employee must meet the following minimum requirements: i. The employee must be satisfactorily performing the duties and responsibilities of their current employment in the opinion of their direct supervisor or department head. ii. The employee must have satisfactorily completed any applicable period of probation or Performance Improvement Plan (PIP) relating to their employment with the City. Page | 65 (6) Application for Approval. In order to apply for tuition reimbursement the applicant must submit the following to the Human Resource Department: i. A fully completed tuition reimbursement application signed by the director of the employee’s department not later than the first day of the course; ii. A degree plan, if applicable (required if the course is part of the first semester or term in a degree program, or if the degree plan is changed after the first semester or term); iii. A written description of the course (which may be the description supplied by the accredited educational institution); and iv. A receipt showing the costs associated with the course or the tuition costs. (7) Reimbursement Procedure. i. Upon completion of course, final grade submitted, and appropriate course approval as described herein, the City shall reimburse the costs of tuition up to an annual maximum amount of $3,000 per calendar year . No reimbursement shall be provided for course fees or required texts or materials, which costs shall be the sole responsibility of the employee. No reimbursement shall be provided for any optional fees in addition to tuition (e.g. late fees, parking, athletic passes, financial aid fees, etc.), which fees shall be the sole responsibility of the employee. ii. Within thirty (30) days of completion of an approved course the employee shall submit a certificate of completion or transcript, along with all receipts for sums expended for tuition to the Human Resources Department. Upon review and approval, the Human Resources Department shall submit the documentation to the Finance Department for reimbursement to the employee. Reimbursement will be processed through payroll and will follow IRS rules regarding taxability. The employee will receive reimbursement based on the guidance below: Grade received per course: Reimbursement amount: A (or equivalent) 100% B (or equivalent) 75% C (or equivalent) 50% (None for Masters degree) D (or equivalent) None Courses graded as “pass/fail” will be reimbursed at 100% only if the course uses the “pass/fail” grading system as a mandatory requirement and a “pass” grade is received. iii. If the materials described herein are not submitted by the employee within thirty (30) days after the completion of the course, tuition reimbursement will be denied by the City, unless otherwise approved by the Human Resources Department iv. Employees who withdraw or cease employment from the City prior to course completion are ineligible for tuition reimbursement. Page | 66 v. Tuition shall not be reimbursed where the same has been or shall be paid from other sources, including but not limited to grants, scholarships, financial aid, free tuition programs, etc. In such case, reimbursement shall be limited to approved tuition expenses which are not paid by the subsidies. In addition, tuition shall not be reimbursed for any program subsidized by the City or any other governmental entity. Repayment by Employee. In the event that an employee’s employment with the City is terminated, either voluntarily or involuntarily, within two years of the completion of any approved course for which the employee has received reimbursement, the employee shall be required to repay to the City reimbursement amounts as set forth in the table below. Termination within 12 months of course completion Pay 100% Termination within 12-24 months of course completion Pay 50% Such repayment shall be deducted from the employee’s salary or other compensation that would otherwise have been compensable to the employee upon termination. If said deduction is not enough to compensate the City for the course and testing fees, the employee shall pay the remainder of the amount to the City within thirty (30)days of the effective date of the employee’s termination. (8) Acceptance of Terms. Each employee participating in the tuition reimbursement plan shall be required to sign an agreement stating that they have received a copy of this policy and agree to the terms of the same. Should an employee refuse to sign such an agreement, the employee shall not be allowed to participate in the tuition reimbursement plan described herein. Such agreement shall not alter the employee’s at-will status, shall not constitute an agreement for continued employment, and shall not provide any employee the right to employment with the City. The City reserves the right to amend, modify, suspend, or terminate this policy, its standard practices and its administrative procedures at any time at its sole discretion. Licenses and Certifications. (1) Required Licenses and Certifications. The City will pay for fees associated with renewal and continuing education and testing required to maintain a license or certification that an employee is required to maintain as a condition of his or her continued employment with the City. (2) Optional Licenses and Certifications. Subject to funds available in the annual budget and approval by the department head, the City may pay for fees associated with continuing education and testing required to obtain additional licenses and/or certifications that an employee is not required to obtain or maintain as a condition of employment, but that prepare an employee for new or increased responsibilities, skills, or that extend opportunities for individual growth, promotion, and development. (i) Repayment by Employee. In the event that an employee’s employment with the City is terminated, either voluntarily or involuntarily, within one year of the completion of a continuing education course or test for an optional license or certification paid for by the City, the employee may be required to repay to the City 100% of all fees paid by the City for the license or certification. Such repayment shall be deducted from the Page | 67 employee’s salary or other compensation that would otherwise have been compensable to the employee upon termination. If said deduction is not enough to compensate the City for the course and testing fees, the employee shall pay the remainder of the amount to the City within thirty (30) days of the effective date of the employee’s termination. (3) Acceptance of Terms. If repayment may be required, each employee that requests approval to take a continuing education course or test for any license or certification shall be required to sign an acknowledgment stating that they have received a copy of the departmental policy and this policy regarding repayment by the employee, and agree to the terms and conditions of same. Should an employee refuse to sign such an acknowledgment, the City will not pay for the continuing education course or testing fees for the license or certification as described herein. Such acknowledgment shall not alter the employee’s at-will status, shall not constitute an agreement for continued employment, and shall not provide any employee the right to employment with the City. Page | 68 105.11 Salary Increases Salary Increases. Increases in salary may be granted by the City Manager in accordance with the compensation plan based on employee performance, evaluated merit, market comparison of pay for the employee’s position, changes in an employee’s job description or duties, and availability of funds. Non-Merit Raises. As part of the City’s annual budget, the City Manager may recommend a cost-of-living adjustment (“COLA”) for employee salaries based on factors relevant to changes in the local cost of living and the availability of funds. Every COLA approved by the City Council shall apply the same percentage increase to the base salary of every City employee or group of employees, including but not limited to the City Secretary and City Manager. No provision of this Manual shall be construed as authorizing any increase in salary or wages during a fiscal year which would result in exceeding appropriations made for such purpose. 105.12 Longevity Pay Eligible regular full-time employees shall annually receive a lump sum longevity payment based on their full months of employment with the City. Employees must complete at least 12 months of employment to be eligible. Longevity pay for eligible full-time employees whose employment commenced before March 11, 2014 shall receive ten dollars per full month of employment. Longevity pay for eligible full-time employees whose employment commenced after March 11, 2014 shall be five dollars per full month of employment. Except for certain non-civilian police and fire department employees, funds will be dispersed between the second week of November and the first week of December only to eligible employees actively employed on the date of payment, and months of service shall include all months served as of December 31 of each year. Non-civilian police and fire department employees shall receive their longevity pay on or about their anniversary hire date after completion of their annual performance review. Months of service shall include all full months served as of their anniversary hire date. Any employee leaving City employment and later being re-employed will forfeit all previous longevity. Employees on any type of leave without pay, disability leave, catastrophic leave, or workers’ compensation leave will not accrue longevity for that period of leave. Maximum annual longevity pay for full-time employees will be $1,200. 105.13 Separation Pay Subject to Section 116 of this Manual and any other applicable provisions of this Manual, employees who leave the service of the City, regardless of reason for separation, shall receive all pay that is due to them in accordance with and subject to the following provisions: The final compensation check for a self-terminating employee will be issued not later than the next regularly scheduled payday after separation. The final compensation check for an Page | 69 employee who has been involuntarily terminated will be issued not later than the sixth regular working day following termination. Separation pay may be delayed due to any pending investigation of an employee or unforeseeable administrative delays in processing payment. Eligible employees will be paid for any hours worked, including any authorized overtime compensation due to him or her. Only regular full-time employees who have successfully completed their probation period shall be paid for unused vacation time earned. Employees may request that any retirement benefits paid by him or her, through payroll deductions, be refunded in accordance with the applicable program. In the event a member of the retirement system leaves the employment of the City prior to retirement and is not vested, such member may elect to leave his contributions on deposit with the system for not more than five (5) years, may file application for a full refund of the employee’s contributions and accrued interest thereon, or may roll the funds over into a qualified account. In the event that an employee receives a full refund of his contributions, the employee forfeits any seniority towards retirement under Texas Municipal Retirement System (“TMRS”). To the extent of any conflict between this provision and any mandatory provision of the City’s TMRS plan, said plan shall govern. Any indebtedness to the City which the employee might have incurred shall be deducted from their final paycheck and all City equipment and property must be returned before the final compensation check is released. A regular employee who does not provide the appropriate notice of resignation or who is dismissed because of violating personnel rules and regulations concerning conduct will forfeit accrued sick and/or vacation pay unless mutual agreement is reached between the department head, City Manager, and the employee. If any employee dies while employed by the City, the City shall pay their designated beneficiary or if no beneficiary is designated, the City shall pay their duly appointed representative or representative of their estate any unpaid compensation, unused vacation time and accumulated benefits. 105.14 Retirement Regular full-time employees are afforded retirement under the Texas Municipal Retirement System (“TMRS”). This plan is administered by the Human Resources Department and details regarding the plan may be obtained from the Human Resources Department. Participation in TMRS shall be immediate and a condition of employment. Where practical, employees shall give the Director of Human Resources written notice of their intent to retire at least three months prior to the proposed date of retirement. Details of the retirement plans, as well as additional information, is provided in the Texas Municipal Retirement System Handbook available through the Human Resources Department. Part-time and seasonal employees are not eligible to make contributions to TMRS, unless the number of hours worked requires eligibility under TMRS rules. Page | 70 Employees on leave without pay are not eligible to make contributions to TMRS. In addition to TMRS, all employees of the City are included in the Medicare System. To the extent that any provision in this Manual directly conflicts with state law governing TMRS, or directly conflicts with the plan as provided to the City through TMRS, this Manual shall yield to the extent of the conflict if the conflict. 105.15 Recovery of Pay and/or Benefits It is the employee's responsibility to review their payroll information and deductions for accuracy. In the event that an employee is over paid, given excessive leave benefits or receives any other benefit and/or compensation in error, through an employee's misrepresentation or through the misapplication of a policy or an error in processing, the employee is expected to notify their department head (or Director of Human Resources, as appropriate) and the City will take steps to recover those benefits and/or compensation. This also includes any form of payroll deduction that results in an underpayment. Attempts will be made to establish an agreed-upon method to recover the resources. Failure to agree on a method will result in appropriate actions at the City’s discretion (such as payroll deduction, reduction in leave time accrual rate, reduction in rate of pay, etc.) to recover the City's resources. An employee's failure to cooperate in the recovery process could result in disciplinary action up to and including termination. Upon notification of an error employees will be expected to repay the City. Generally, employees will be given the same amount of time to complete repayment to the City as the time period during which the error was made. For example if an employee received overpayments for three (3) pay periods, the employee will have three (3) pay periods from the date of notification to complete repayment to the City. If unusual circumstances warrant, other payback periods may be allowed by the City Manager. 105.16 Additional Pay (1) Language Pay To better serve Anna neighbors, it is the policy of the City of Anna to provide additional language pay to regular full-time employees in eligible positions who demonstrate the necessary verbal and/or written fluency in eligible languages other than English (as designated by the City) through a testing process. 1) Eligible Employees – Eligible employees are those regular full-time or part-time employees for which secondary language fluency is desirable in order to better serve the community. 2) Ineligible Employees – Ineligible employees are those for which foreign language skill is REQUIRED by their position’s job description, as it is assumed that the base pay for such positions compensates for that and other required skills. NOTE: Department Heads and Assistant Department Heads are also not eligible for language pay. 3) Employees may begin the process by completing a Language Pay application form. Department Heads are responsible for identifying employees within their departments who qualify for language pay (verbal and/or written language skills are desirable in order to better serve the community). 4) The Human Resources Department will coordinate language proficiency testing with an approved outside vendor agency, assuring that all appropriate criteria have been met. Only tests administered Page | 71 by the City-approved vendor will be accepted. 5) Employees must demonstrate abilities for verbal and/or written language fluency on a certified test conducted by the approved outside vendor agency. 6) The City will pay for one language test process (verbal and/or written) per employee. These tests will be conducted on City-paid time. After successful test results for employees have been communicated in writing from the vendor to Human Resources, employees’ departments will be notified to process a Personnel Action Form to begin paying Language Pay on the next eligible pay period. 7) Employees that are proficient in multiple languages will not receive language pay for more than one approved language. 8) Employees who fail their initial test may choose to re-test on their own time and at their own expense. Employees will coordinate such additional tests with the approved vendor agency and will be responsible for ensuring the results are sent to Human Resources. 9) Employees who receive language pay will be expected to translate for other departments as needed. They may also be requested to report to work during emergencies and/or disaster relief efforts in order to assist in translating for others. Page | 72 106.1 Holidays (a) The following holidays are declared official holidays for regular full-time employees: (1) New Year’s Day (2) Martin Luther King Jr. Day (3) President’s’ Day (4) Good Friday (5) Memorial Day (6) Independence Day (7) Labor Day (8) Veterans Day (Firefighter can observe September 11th in lieu of Veterans Day) (9) Thanksgiving Day (10) Day after Thanksgiving (11) Christmas Eve (12) Christmas Day (b) The City Council may declare special holidays in addition to the holidays identified in subsection (a), above. Any such special holidays will be taken according to established procedures relating to holidays. (c) As many employees as possible shall be given each holiday off consistent with the maintenance of essential City functions. (d) On declared official or special holidays, regular full-time employees shall be paid for holiday leave as outlined in the table below. Regular part-time employees shall not receive holiday pay. (Amended 9/22/2015, Res. No. 2015-09-10) Full-time Fire Department 24 hour Shift Employees Full-time Police Department 12 hour Shift Employees All other Full-time Employees Hours of Holiday Leave 12 hours 12 hours 8 hours (e) Employees on any type of leave without pay, disability leave, or workers compensation injury leave (except during periods of salary continuation) shall not be entitled to paid holiday leave. (f) Temporary employees will not be paid for holiday leave. (g) A regular employee who is required to work on an official or special holiday shall be paid for the City of Anna Personnel Policy Manual Section 106. Holidays, Absences & Leaves Page | 73 hours worked at a rate of one and one-half times their regular hourly rate plus receive pay for holiday leave, or take paid holiday leave within 30 days of the official holiday as approved by his/her department head. (h) Except for employees regularly scheduled to work on a shift basis outside of Monday-Friday, a holiday that falls on a Saturday will be observed the preceding Friday. A holiday that falls on a Sunday will be observed on the following Monday. The City Manager may make adjustments as necessary. (i) An employee absent without authorized leave on the working day immediately preceding and/or following a holiday shall lose pay for the holiday as well as for the unauthorized absence(s). An employee absent without permission when scheduled to work a holiday will not receive holiday pay and is subject to disciplinary action. (j) If the last day of an employee’s employment falls on a holiday, the employee will not be paid for that holiday.; Exceptions must be scheduled and authorized in advance by the department director. (k) Employees in the Fire Department shall be granted the same number of vacation and holidays, or days in lieu of vacation days or holidays, granted to other City employees. Administration personnel will accrue and utilize holiday time based on the standard for 40- hour employees with one exception: at least one holiday shall be designated as Patriots Day, September 11th. Notwithstanding any other provision of Section 106.01, this holiday shall be observed on Veterans Day for Administrative personnel. Shift-based firefighters will schedule this holiday in the same manner as all other holidays. Fire Department members receive September 11th as a symbolic holiday, but it does not increase the total number of holidays received, nor is it possible for all firefighters to utilize holiday time on September 11th. Fire Department Shift Personnel Holiday Policy Fire Department Operations personnel assigned to 24-hour shifts will accrue and utilize holiday time differently than other city employees. Due to the nature of the fire department’s perpetual rotating schedule, firefighters enter the career field with full knowledge that they will be required to work all holidays that occur on their shift. Accordingly, firefighters adopt a lifestyle that involves observance of holidays on alternate dates. In order to do so, firefighters need the ability to utilize holiday hours on dates not recognized by the city as official holidays. Fire Department Holiday Accrual At the beginning of the calendar year, each Fire Department shift employee will accrue all 12 holidays (144 regular holiday hours) that may be used, with supervisor approval, at any time during the year. Fire Department Administration will monitor and manage all holiday usage in an effort to control overtime. While the use of holiday time is strongly encouraged, it is reasonable to assume that it may not be productive for all firefighters to utilize all of their holiday time. Therefore, any holiday hours unused at the end of the year will be paid out to the employee as regular holiday hours. Holiday hours will not be carried over from one year to the next. It is the employee’s responsibility to ensure that holiday hours are used before the expiration date each year. If an employee should leave the city after using holiday leave for holidays which have not yet occurred, the pay for such leave will be deducted from their final paycheck. Fire Department Holiday Scheduling All holiday and vacation time will be scheduled annually in advance of the implementation year. This Page | 74 scheduling process will be described and managed utilizing the fire department’s internal policies and procedures (SOP’s). Page | 75 (l) Holidays falling within an employee's vacation period or within a period of absence properly chargeable to illness shall not be counted against vacation or sick leave. (m) An employee on workers’ compensation leave will receive holiday pay only when the employee would have normally been authorized to be paid for that holiday. (n) Employees desiring to observe bona-fide religious holidays not listed as an official City of Anna holiday may be given time off without pay or may be authorized to use accrued vacation leave. (o) Department heads shall ensure that eligible shift workers and other employees working unusual schedules receive benefits of the full number of official holidays. Should an official holiday fall on an employee's normal day off, the employee shall either receive holiday leave pay for the holiday, or be allowed to take paid holiday leave within 30 days of the official holiday as approved by his/her department head. 106.2 Vacation All regular full-time employees of the City shall be allowed vacation leave with pay after the successful completion of the probationary period following initial employment. (a) Regular full-time employees begin to accrue vacation leave on the first day of employment as shown in following table: Page | 76 Vacation Leave Accrual Full-time Fire Department 24 hour Shift Employees (Avg. 56 hours per week) Full-time Police Department 12 hour Shift Employees (Avg. 42 hours per week) All other Full-time Employees (Avg. 40 hours per week) Years Hours per pay period Approx. Weeks per Year Hours per pay period Approx. Weeks per Year Hours per pay period Approx. Weeks per Year 1 to 9 years 6.462 3 4.847 3 4.616 3 10 or more 9.230 4 6.920 4 6.160 4 Hours per year Approx. Weeks per year Hours per year Approx. Weeks per year Hours per year Approx. Weeks per year Maximum Annual Vacation Accrual 672 12 504 12 480 12 (b) Eligible employees accrue paid vacation at the end of each pay period. (c) All employees shall be allowed to take vacation leave with pay after the first thirty (30) days of employment. Exceptions may be granted by the City Manager when such compensation is in the best interest of the City. Approval of the City Manager’s office is required in such situations. (d) Absence on account of sickness or injury in excess of that authorized for such purposes, at the request of the employee and approval of the department head can be charged against available accrued vacation leave allowance. (e) In the event that an official paid holiday falls during the vacation period, holiday pay shall be given instead of vacation pay. (f) Full-time employees may accrue more vacation leave than the Maximum Annual Vacation Accrual, however, accumulated vacation time may not be carried forward each year in excess of the Maximum Annual Vacation Accrual. The cutoff date for vacation accumulated in excess of Maximum Annual Vacation Accrual shall be January 31 of each year. Any excess accrued vacation over the Maximum Annual Vacation Accrual on February 1 of each year will be forfeited. It is the employee’s responsibility to ensure that excess hours are used before the cutoff date. (h)(g) Department heads will approve vacation requests, giving due consideration to the needs of the department. All leave requests should be made in writing and require prior approval of the employee’s supervisor. Supervisors are encouraged to approve/disapprove an employee’s vacation request in a timely manner. (i)(h) Employees who separate from the City following satisfactory completion of the probationary period shall receive compensation for unused vacation leave up to the Maximum Annual Vacation Accrual. Employees who separate from the City prior to the satisfactory completion of their probationary period or who are dismissed due to violations of the personnel rules and Page | 77 a. regulations concerning employee conduct will forfeit accrued vacation pay unless a mutual agreement is reached between the department head, City Manager, and the employee. (i) Vacation leave shall not be advanced. (j) Vacation leave may be taken in not less than 0.25 hour (15 minute) increments. (k) Employees on leave without pay, or disability leave shall not continue to accrue vacation leave or sick leave. Employees on workers’ compensation injury leave shall continue to accrue vacation leave during the period of salary continuation only (l) Part-time, seasonal and temporary employees shall not earn or accrue paid vacation leave. (m) (n) The City Manager may authorize paid leave as part of an offer of employment to a prospective employee. 106.3 Sick Leave All regular full-time employees shall be entitled to sick leave with pay. Regular full-time employees begin to accrue sick leave on the first day of employment as shown in the following table. During the first thirty (30) days of the probationary period, sick leave may not be used as accrued unless specifically authorized under Section 103.01(f) of this Personnel Policy Manual. (Amended 9/22/2015, Res. No. 2015-09-10) Sick Leave Accrual Full-time Fire Department 24 hour Shift Employees (Avg. 56 hours per week) Full-time Police Department 12 hour Shift Employees (Avg. 42 hours per week) All other Full-time Employees (Avg. 40 hours per week) Years Hours per pay period Approx. Weeks per Year Hours per pay period Approx. Weeks per Year Hours per pay period Approx. Weeks per Year Annual Accrual 5.17 2.4 3.88 2.4 3.69 2.4 Hours per year Approx. Weeks per year Hours per year Approx. Weeks per year Hours per year Approx. Weeks per year Maximum Annual Sick Accrual 1344 24 1008 24 960 24 Page | 78 Sick leave may be taken at any time for illness, injury, exposure to contagious disease or routine medical or dental appointments which cannot reasonably be scheduled outside of working hours, and Illness of a member of the employee’s immediate family who requires the employee’s personal care and attention. For this purpose, immediate family member shall be the employee’s child, stepchild, parent, stepparent or spouse. A child is defined as a biological, adopted or foster child, stepchild, child of an employee who is standing in loco parentis or legal ward of the employee. The child must be under 18 years of age, or 18 years of age or older but incapable of self-care because of a mental or physical disability Illness arising from pregnancy or complications thereof, shall be regarded the same as other types of illness. Sick leave can be used in not less than 0.25 hour (15 minute) increments. Employees who become ill and cannot report to work are expected to ensure that proper notification is received at their department no later than one hour after regular reporting time. Individual departments may require earlier reporting times. Failure to ensure proper notification without valid reason shall constitute absence without leave. Sick leave not used during the year in which it accrues accumulates and is available for use in succeeding years up to the Maximum Annual Sick Accrual.. Each December 31, any sick leave balance in excess of the Maximum Annual Sick Accrual is reduced to the Maximum Annual Sick Accrual without compensation. Sick leave may not be used prior to accrual. Upon separating employment from the City, all sick leave credits shall not be reinstated should the employee later be re-employed. Employees shall continue to accumulate sick leave during absences from work on legal holidays, during sick leave or vacation leave. Sick leave accumulation shall be at the regularly prescribed rate during absence, as though the employee were on duty. Employees on leave without pay, or disability leave shall not continue to accrue sick leave. Employees on workers’ compensation injury leave shall continue to accrue sick leave during the period of salary continuation only. The department head may require satisfactory proof of illness at any time the employee is away from the office using sick leave. The department head may also require a statement from the attending physician of the need for an employee to remain at home to attend to a sick child, spouse or parent. A department head may disallow use of sick leave in the absence of satisfactory proof of need. Employees using or attempting to use sick leave without proper cause shall be subject to disciplinary action, up to and including dismissal. Employees on sick leave for more than two (2) consecutive work days, or three (3) or more work days within any five (5) day period, must produce a doctor’s certificate indicating treatment for a legitimate illness or injury in order to receive sick leave with pay. The doctor’s certificate must contain a specific explanation of the reasons the employee was unable to work. A department head may require the employee to furnish a statement from the attending physician confirming the employee’s ability to resume his/her job duties before permitting the employee to return to work. Upon separation from the City, an employee will receive a payout of accumulated sick leave Page | 79 based on the employee’s years of service below. Years of Service with City of Anna: Maximum Hours Eligible for Payout: 2-5 Years 80 hours 5-10 Years 120 hours (240 if retiring) 10-20 Years 160 hours (320 if retiring) 20+ Years 240 hours (480 if retiring) Page | 80 An employee on sick leave may be subject to disciplinary action, up to and including termination, under the following circumstances: (1) If the employee engages in other work for pay while receiving sick leave benefits; (2) Engages in activities not authorized by the attending physician, or fails or refuses to comply with the attending physicians instructions or advice regarding the injured condition, other than for bona-fide religious beliefs; (3) Fails to act in a manner conducive to convalescence; (4) Refuses to perform work authorized by the attending physician; (5) Refuses to accept or perform a different job, which is within the employee’s physical capacity to perform, as specified by the attending physician. (6) If the employee uses or attempts to use sick leave without proper cause. An employee who becomes ill or injured during a vacation may request that the vacation be terminated and the time off due to the illness or injury be charged to sick leave. Application for such substitution must supported by a medical certificate or other acceptable evidence. Part-time, seasonal, and temporary employees shall not earn or accrue paid sick leave. (n) Each December, employees may request up to 80 hours of accrued sick leave be converted into vacation leave at a 2 to 1 ratio (i.e. 80 hours of sick can be converted into 40 hours of vacation) up to the maximum annual vacation accrual limit. At least 480 hours must be remaining in the employee’s sick leave accrual bank after conversion. (o) In the event that an employee will be or has been absent for more than three (3) consecutive workdays for reasons covered under this policy, he/she should contact the Human Resources Department as soon as possible to determine whether the absence should be designated as a leave under the Family and Medical Leave Act (FMLA). Supervisors are also responsible for notifying the Human Resources Department of any sick leave exceeding three (3) consecutive workdays or that might otherwise qualify for FMLA leave. An employee who will be absent for more than three (3) consecutive workdays shall notify the designated supervisor of his/her expected return-to-work date as soon as is reasonably possible and prior to the date of return. (p) The City Manager may authorize paid leave as part of an offer of employment to a prospective employee. 106.4 Military Leave (a) Military Leave Eligibility Requirements. Military leave is available to active City employees who are members of uniformed services of the United States Military. This includes the United States Armed Forces, Reserves, and National/State Guard; the Commissioned Corps of the Public Health Service, and any other category of persons designated by the President of the United States as uniformed service personnel in time of war or emergency. Examples include: ▪ active duty and active/inactive duty for training; ▪ full-time National Guard duty; ▪ absence from work for examination to determine fitness for any of the above types of duty; Page | 81 ▪ funeral honors duty performed by National Guard or Reserve members; ▪ duty performed by intermittent employees of the National Disaster Medical System (NDMS) when activated for a public health emergency, and approved training to prepare for such service. Employees must notify their supervisors as soon as practicable of their duty schedule and need for military leave in accordance with the provisions of this policy. If an employee was hired by the City for a fixed period of employment and the military duty extends beyond the employee’s fixed employment term, the leave will not be extended beyond the end date of the employment term. Disaster Leave. “Disaster Leave” is a special type of leave of absence which may be used by a member of the Texas military forces, a reserve component of the armed forces, or a member of a state or federally authorized search and rescue team. If the employee is called to state active duty for training or other duty, ordered or authorized by the proper authority in response to a disaster, they shall be eligible for up to an additional 7 workdays of paid Disaster Leave each fiscal year (total of 22 paid days in combination with Military Leave). (A) Disaster Leave is only available for performance of military or emergency service for the State of Texas at the call of the Texas Governor or the governor’s designee and shall be applied only to days of work missed due to active state duty during the disaster. During Disaster Leave, employees shall accrue leave balances in the same manner as for Military Leave for up to 7 additional missed working days but shall thereafter be subject to the accrual provisions for Extended Military Leave if the absence continues. For purposes of this policy, “disaster” means the occurrence or imminent threat of widespread or severe damage, injury, or loss of life or property resulting from any natural or man-made cause, including fire, flood, earthquake, wind, storm, wave action, oil spill or other water contamination, volcanic activity, epidemic, air contamination, blight, drought, infestation, explosion, riot, hostile military or paramilitary action, extreme heat, cybersecurity event, other public calamity requiring emergency action, or energy emergency. Military Leave (Zero to 120 Hours/15 days per fiscal year). Notwithstanding any provision of this Manual, employees are entitled to military leave with pay in accordance with state and federal laws for a cumulative maximum of 120 scheduled City duty hours (or equivalent) in any federal fiscal year (October to September). The term “with pay” means full and regular pay for days and times the employee would ordinarily have been working. This leave may be expended prior to use of an employee’s accrued vacation or compensatory leave. Employees cannot accrue military leave and unused military leave will not be paid out at the time of separation. Extended Military Leave (Beyond 120 Hours per fiscal year). Employees with military leave extending beyond the 120 hours per fiscal year will be treated as employees in non-pay status. Should employees have accrued vacation or compensatory leave, they may request any part of it through their supervisors. This will not affect their military leave status. Employees cannot accrue extended military leave and unused extended military leave will not be paid out at the time of separation. Work Schedules. The City has no obligation to pay an employee on military leave for training or otherwise qualifying service activities which fall outside of the employee’s assigned duty schedule (e.g., which are on regular days off work or outside of work hours). A supervisor has no obligation to change the employee’s schedule or allow the employee to make up time missed due to military leave. In appropriate circumstances, military leave may be used for those periods of an employee’s work schedule missed due to travel to/from uniformed service activities that do not themselves fall on scheduled workdays. Uniformed Services Employment and Reemployment Rights Act. The Uniformed Services Page | 82 Employment and Reemployment Rights Act (USERRA) protects the job rights of individuals who perform duty, voluntarily or involuntarily, in the uniformed services. USERRA also prohibits employers from discriminating against past and present members of the uniformed services and applicants to the uniformed services. Unless it is impossible or unreasonable, those that served have the right to be reemployed by the City if they left to perform service in the uniformed service and meet these requirements: • The employee must have been absent from a civilian job on account of service in the uniformed services; • The employee must have given advance notice to the employer that he or she was leaving the job for service in the uniformed services, unless such notice was precluded by military necessity or otherwise impossible or unreasonable; • The cumulative period of military service with the City must not have exceeded five years; • The employee must not have been released from service under dishonorable or other punitive conditions; • The person must have reported back to the civilian job in a timely manner or have submitted a timely application for reemployment, unless timely reporting back or application was impossible or unreasonable; and • If eligible to be reemployed, the employee must be restored to the job and benefits they would have attained if they had not been absent due to military service or, in some cases, a comparable job. Seniority; Reinstatement priority. An eligible uniformed service member’s City employment rights and benefits determined by seniority shall be considered by the City as if the employee remained continuously employed, and include state, rate of pay, vesting, and service credit for the military leave period for pension benefit computations. Eligible employees who are released from military service obligations and seek to return to City employment shall be entitled to reinstatement in the following order of priority: i. The position that would have been held, with reasonable certainty, had the employee remained continuously employed, so long as the employee is still qualified for the job or can become qualified within a reasonable time after reasonable efforts by the City; ii. The same position held prior to military leave; iii. A position with the same seniority, status, and pay if the employee cannot become qualified to perform either position above; or iv. The closest position of like seniority, status, and pay the employee is qualified for. Training, Accommodations, and Other Provisions for Military Leave Recipients. The City will make reasonable efforts and accommodations to assist an employee in qualifying for the position(s) offered for reinstatement upon return from military leave. This Page | 83 includes training or retraining to update an employee’s skills to perform the essential functions of the position. The necessary and appropriate training or retraining should be requested in writing by the employee, in consultation with the Human Resources Department and the department head, after the employee receives notice of the reinstatement position(s) available and prior to the date of return to work or without undue delay thereafter. If the employee is being restored to the same position held prior to use of military leave, the determination of the necessary and appropriate training must consider any changes in the job description or duties which became effective during the military leave period. A person with service-connected disabilities, who is not qualified for a promoted position under (h)(1) above after consideration of the City’s reasonable efforts to accommodate the disability, shall be employed in an equivalent position (in terms of seniority, status, and pay) for which the person is qualified or can be qualified with reasonable efforts and accommodations by the City, so long as there is not an undue burden on the City. If no such position is available, the employee shall be placed in the nearest similar position for which appropriate and reasonable accommodations may be arranged. The employee must provide HR with notice regarding the need for service-connected disability accommodations and the nature of the accommodations necessary to allow performance of the essential job duties of the position. Pay and Benefits While on Military Leave: (1) If not already using direct deposit, employees using military leave should complete a direct deposit form and submit it to HR before the beginning date of the leave, or as soon as possible thereafter, to avoid delays in disbursement of any pay to be received from the City during their absence. This is the responsibility of the employee. (2) Military Leave (120 hours/15 days or less): Eligible employees may receive up to fifteen (15) workdays of paid military leave per fiscal year. The rate of pay is equivalent to the employee’s normal base rate. All enrolled benefits and deductions, including retirement, will continue while the employee is on leave. (3) Extended Military Leave (16 days or more): Eligible employees with leave periods greater than 15 workdays can choose one of the following options: (1) Receive supplemental pay equivalent to the difference between the [employee’s net military pay] and [City of Anna net pay] for each day of absence for up to one year. Following one year, an employee may use accrued vacation, holiday, or compensatory time. (2) Use accrued vacation, holiday, or compensatory time. (3) Choose to take the remaining military leave period as unpaid leave. (4) Exempt Employees: Military or Disaster Leave periods which include only a portion of a work week shall be paid according to the full salary rate for the entire workweek, so long as the exempt (i.e., not eligible to receive overtime pay) employee misses only part of a week due to the leave subject to this policy and also reports to work during that same week. Exempt employees shall have their Military, Disaster, and Extended Military Leave balances used in full day increments only. (5) After the employee returns to work for a partial work period, any Military Leave, Disaster Leave, and Extended Military Leave periods shall be counted as hours worked during the corresponding period for purposes of determining eligibility for overtime pay. Page | 84 (6) Other Leave Accruals: Employees on military leave shall accrue other types of leave as follows: (A) First 15 Days of Military Leave: Leave accruals will continue as normal for employees eligible to accrue vacation, sick, and/or holiday leave. (B) Extended Military Leave (over 15 days): Leave accruals will cease for vacation, sick, and holiday leave. Vacation, sick, and holiday leave accruals will be paid out in accordance with the City policies in effect at the time of separation if an employee separation occurs during a period of military leave. (7) Continuation of Benefits while on Extended Military Leave. Extended Military Leave is a COBRA qualifying life event for purposes of determining eligibility for City benefits. Enrollment, changes, or termination of benefits must be made no later than 31 days from the start of the military leave period. Benefits and employee contributions may continue during extended military leave as outlined below: (1) Medical, Pharmacy, Dental, Vision, and Flexible Spending Accounts (FSA)—An employee may continue coverage for themselves and their eligible dependents at the employee contribution rate for 6 months. Cost is based on enrolled coverage tier and benefit year. Following 6 months, coverage may be continued through COBRA for up to 18 months at the employee’s expense. Premiums charged to the employee shall not exceed 102 percent of the full premium under the plan during either of these phases. (2) Life and Disability Insurance- An employee may continue coverage for up to 6 months during military leave; after 6 months, coverage ends. Once coverage ends, employer paid and voluntary life coverages may be continued through the Portability and Conversion privileges outlined in the plan provisions. (3) Retirement- An employee may continue retirement contributions so long as he or she continues to receive a paycheck from the City. When an employee no longer receives a paycheck, contributions cease. However, upon return from leave, he or she can qualify for continued service credits for the period of active-duty service and make contributions retroactively to his or her retirement account as provided by USERRA, TMRS, and ICMA policies. (8) Reinstatement of Terminated Benefits. Upon return from Extended Military Leave, benefits which were voluntarily or involuntarily terminated will be reinstated. Employee elections must be determined within 31 days from the end of service or the end of alternative coverage, whichever date is later. For life and disability insurance, if an employee elects to continue life coverage through Portability and Conversion privileges, individual policies must be terminated prior to the effective date of reenrollment in group coverage. If the employee was injured while performing duties related to his or her military leave, an exclusion or waiting period for coverage of disabilities may apply as outlined in the plan provisions. Return from Duty. Employees must report to work on the regularly scheduled workday and apply for reemployment following the release from uniformed service activities within the following timeframes: (A) Less than 31 days of uninterrupted military leave: First scheduled workday following safe travel home and eight-hour rest period. (B) 31 to 180 days of uninterrupted military leave: First scheduled workday following 14 days after release from service. An application for reemployment may be required. Page | 85 (C) More than 180 days of uninterrupted military leave: First scheduled workday following 90 days after release from service. An application for reemployment may be required. (D) All of the deadlines set forth above are extended by up to two years if the employee is hospitalized or recovering from an injury cause by active duty. If the injury also resulted in employee disability, the two-year extension period may be further extended by the minimum time required to accommodate the employee’s disabilities. (E) For purposes of this section, “uninterrupted military leave” means each period of military leave occurring in a fiscal year where the employee does not return to work and within the timeframe of the employee’s applicable orders, i.e., multiple deployments under separate orders shall not be aggregated together for determining the employee’s required return date. Holidays, off-duty days in the employee’s regular work schedule, and days of City office closures shall not constitute interruptions in a military leave period. (F) When an application for reemployment is required, the City requests that all returning servicemembers provide documentation to establish that the application is timely, that the service limitations applicable to USERRA reinstatement rights (e.g., five year maximum on cumulative military service during City employment) have not been exceeded, and that the servicemember’s entitlement to USERRA benefits have not been terminated under 38 U.S.C. § 4304. Such documentation will be satisfactory to the City if it satisfies the corresponding regulations prescribed by the Secretary of Defense. Special Discharge Protection. An employee who returns from military leave shall not be discharged by the City, unless it is “with cause”, for the following periods of time return to work: 31-180 days of Military Leave duration: 180 days from the date of returning to City duty.181+ days of Military Leave duration: One year from the date of returning to City duty. Health Insurance Protection. If a City employee leaves their job to perform military service, they have the right to elect to continue their existing employer-based health plan coverage for themselves and their dependents for up to 24 months while in the military. Even if they do not elect to continue coverage during their military service, they have the right to be reinstated in the City's health plan if and when reemployed, generally without any waiting periods or exclusions except for service- connected illnesses or injuries. Procedures for requesting Military Leave. An employee requesting military leave must take the following actions: (1) Notify his or her supervisor of the need for leave and provide a copy of the official orders. a. An employee should provide at least two (2) weeks’ advance notice if possible. If an occasion arises where advance notice is not possible, the employee must contact the HR department immediately upon their return to work. The City may seek verification of any military leave used. b. If the military leave will be more than 15 days, the supervisor will submit an appropriate Personnel Action Form to HR with a copy of the orders. (2) Contact the City’s HR department to request military leave and provide a copy of the official Page | 86 orders. (3) Duty Verification. Employees shall provide written performed duty verification as soon as possible, but no later than their return to work. Verification is necessary in order to confirm payment of military pay and to confirm any veterans’ reemployment rights. Verification may include, but is not limited to, orders, drill letters, training schedule and or a duty verification signed by the officer in charge. Disqualifications. An employee is not eligible for the entitlements outlined in this policy or USERRA in the following cases: (1) Separation from the service with a dishonorable or bad conduct discharge (2) Separation from the service under other than honorable conditions, as characterized by the regulations prescribed by the specific military branch. (3) Dismissal of a commissioned officer in certain situations involving a court martial or by order of the President of the United States in time of war. (4) Dropping an individual from the rolls when the individual has been absent without authority for more than three months or is imprisoned by the final sentence of a civilian court. Enforcement. The U.S. Department of Labor, Veterans Employment and Training Service (VETS) is authorized to investigate and resolve complaints of USERRA violations. For assistance in filing a complaint, or for any other information on USERRA, contact VETS at 1- 866-4-USADOL or visit its website at http://www.dol.gov/vets. An interactive online USERRA Advisor can be viewed athttp://www.dol.gov/elaws/userra.htm. An employee may submit a request to HR for a statement of the number of workdays an employee claimed paid Military Leave in that fiscal year. Misuse/Misrepresentation. Misuse or misrepresentation by an employee in the use of miliary leave is a serious offense, is considered cause for termination, and will be subject to discipline accordingly. Misuse includes not returning to work in a timely manner as per the deadlines set forth in this policy. Filing of false military documents or orders for the purpose of receiving military leave is a serious military offense covered under the Uniform Code of Military Justice (UCMJ). The City takes the position that if false documents are discovered, the offense will be reported to the appropriate unit or command authority. Filing false military documents is cause for termination from City employment. 106.5 Bereavement Leave Regular full-time employees may be granted up to 24 work hours of paid leave per occurrence for deaths within the employee’s immediate family. Firefighters assigned to a 24-hour shift will be eligible to receive a maximum of 36 hours of paid leave per occurrence. For the purpose of bereavement leave, “immediate family” shall always include a spouse, parent*, parent-in-law, child*, brother*, sister*, brother-in-law, sister-in- law, son-in-law, daughter-in-law, grandparent, grandchild or grandparent- in-law. Vacation leave may be used to supplement bereavement leave, upon request and approval. Employees may be required, at the discretion of the department head, to present proof of immediate family death. Death of other relatives who had been residing in the same household will be considered on an individual case basis, with written approval, of the City Manager (or designee). * Also includes “step-[relatives]” of these types. Page | 87 106.6 Jury/Court Duty Employees required by summons to report for jury duty (including grand jury duty), or who are impaneled as a juror or alternate, shall receive their regular pay during the time period directly related to jury duty (not to exceed 40 hours of jury duty per summons). Regular Pay. (1) Employees requesting regular pay for work time spent on jury duty must present proof of attendance from the presiding court before pay can be issued. Upon release from jury duty, employees must return to their assigned work location. (2) Employees will not be discharged for reporting to jury duty or serving as a juror. Employees failing to return to work after being excused from jury duty during their normal work hours are subject to disciplinary action. Official City Business. (1) Employees who are subpoenaed to appear in court or before any other judicial or administrative body for and on behalf of official City business or on behalf of the county, state or federal government for services related to City duties, shall be compensated in accordance with the procedures specified under this Section. (2) Employees requesting regular pay shall provide a copy of the subpoena and, if available, proof of attendance by the court or respective administration body. Personal/Private Business. Employees will not be paid for time off to conduct personal or private legal business. Vacation or compensatory time may be used if approved by the department head. 106.7 Administrative Leave with Pay Elections. Employees on duty on the date of any national, state, or local election and who are eligible to vote in such elections shall be granted leave without loss of pay or benefits to exercise this right if the polls are not open for voting for two consecutive hours outside of the voter’s work hours. Evidence of voter registration and voting may be required by the supervisor. Hazardous Weather Conditions. Except for extraordinary circumstances, City offices DO NOT CLOSE. In the event of inclement weather, employees are expected to use their good judgment and are not asked to take unnecessary risks. (1) Closings of City administrative offices are only authorized by the City Manager. (2) During official closing period, each department head will designate essential or emergency service personnel who are required to be on the job regardless of weather conditions. Such employees are not given time off at a later date for hours worked during the period of closing. Employees not designated to work are granted paid administrative leave. Such employees will be compensated at their regular pay rate for the hours they were scheduled to work. This is to assure that employees do not lose compensation due to circumstances beyond their control. (3) Non-exempt employees who are designated essential and who must continue to work during emergency or weather related closings are compensated at their regular pay rate during the emergency closing period. Such employees are not given time off at a later date for hours worked during the period of closing. (4) Exempt and non-exempt employees on sick leave or vacation leave on a day when a partial or full day closing occurs are charged with sick or vacation leave for that day as was scheduled. (5) Non-exempt employees unable to travel to work during a period of non-closing will either take vacation leave or leave without pay. (6) Exempt employees unable to travel to work during a period of non-closing must miss the entire work day before having to take vacation leave or leave without pay. Partial day absences do not apply to exempt employees. If an exempt employee has no accrued vacation time, he or she will be required to make up the missed time at a later date. Disciplinary or Criminal Investigations. The City Manager may determine, as a matter of administrative discretion, that an employee subject to a disciplinary or criminal investigation should not be in the workplace while that investigation is pending. In such case, the City Manager may place an employee under investigation on administrative leave with pay for a period of time appropriate in the individualized circumstances. (d) Administrative leave with pay may be granted by the City Manager at which time it is in the best interest of the city. 106.8 Authorized Leave without Pay A leave of absence without pay may be granted at the discretion of the department head and must be approved by the City Manager. Such factors, including but not limited to, length of time away from the job, reason for, and urgency of the request, and length of service with the City, will be taken into consideration by the City Manager. Leave without pay is granted as a matter of administrative discretion. No employee may demand leave without pay as a matter of right, but it may be granted to any employee. An employee may be granted leave without pay, when all other forms of leave such as vacation, compensatory time off, holiday, and personal leave have been exhausted. If the leave is not medical in nature, then accrued sick leave is not an available option. Leave without pay may be considered for the following reasons: (1) To participate in training that would result in increased job ability. (2) To achieve an educational level necessary for advancement in the City. (3) To perform a service that will contribute to the public welfare. (4) To recover from an illness or disability, not believed to be of a permanent or disqualifying nature, for which sick leave and wage supplementation benefits have been exhausted or are not available. (5) When return to work would threaten the health of others. Page | 82 83 (6) To provide necessary care for a family member who is ill or is incapacitated. (7) For an excused absence during the initial employment period. (8) For an excused, but non-compensable, absence of less than a day. (9) To permit vacation. (10) To perform duties in the military service. In circumstances not falling within other provisions of these rules, the City Manager may authorize an employee to take leave without pay under mutually agreeable terms and conditions. Employees taking leave without pay shall not lose or gain seniority. All employee benefits will remain in effect during periods of authorized leave without pay. Service credit. An employee who is on leave without pay for more than six 6 consecutive calendar weeks loses service credit for that period in excess of the six calendar weeks except in regards to Military Leave. Accrued leave. An employee granted leave without pay forfeits use and accrual of sick leave, vacation leave, holiday leave, bereavement leave, court leave, except to the extent that leave without pay is authorized under federal or state law. Termination. An employee granted leave without pay must physically return to work to retrieve sick credit, but will be paid any vacation leave balance due if the employee terminates in accordance with the terms of this Manual. 106.9 Absence without Leave Unauthorized leave not reported within 72 hours of the scheduled reporting time shall serve as notice of immediate resignation by the employee. 84 106.10 Catastrophic Leave (a) Policy It is the policy of the City to offer eligible participating employees who have exhausted all available leave balances the opportunity to receive additional leave benefits from a Catastrophic Leave bank for extended absences in the case of catastrophic illness or injury to the employee or eligible family member for an FMLA qualifying event. (b) Procedure/Rule 1. Eligibility. All regular full-time employees are eligible to participate and contribute to the Catastrophic Leave bank. Eligible contributing employees must have successfully completed six (6) months of employment. An employee requesting catastrophic leave must be employed with the City of Anna for ninety (90) days and must be in good standing. Employees that are placed on a Performance Improvement Plan or have received any written disciplinary action within the past year of employment are not eligible to access the leave bank. Participation in the program is voluntary and must be requested in writing (Appendix A). 2. Minimum Contribution. Fulltime employees wishing to participate may contribute a minimum of one (1) hour of accrued sick or vacation leave. Contributions will be credited to the Catastrophic Leave bank. Donated hours will not be distributed directly to the recipients leave bank but will be available as needed. Employees electing to participate must contribute hours from the sick or vacation accrual account. In such case that employees lack the necessary hours in their sick accrual account, employees may contribute from their vacation accrual accounts, if applicable. Compensatory time accrual is not eligible for contribution to the leave bank. Employees contributing to the Catastrophic Leave bank, must retain no less than 50% of their annual sick and vacation accrued leave balance available after donation and must be in good standing. 3. Maximum Contribution. The maximum annual contribution to the Catastrophic Leave bank is eighty (80) hours per employee per calendar year. 4. Open Donation Period. The Human Resource Department will notify employees when there is an open period for donations. The notification will be based on the current need request by employees. The donation period will be open for thirty (30) days. 5. Contributions to the Catastrophic Leave bank may not be designated for use by any specific employee, to avoid quid pro quo, HIPAA violations, or any privacy concerns. 6. Leave cannot be traded, sold, bartered, etc. directly to any employees. 85 7. Time donated by an employee may not be recovered or recaptured. As recovering or recapturing donated time is an administrative burden, leave time donated to the bank will remain for future occurrences or incidents. 8. Employees that are terminated from the city are not eligible to donate sick or vacation hours to the catastrophic leave bank. 9. Employees that are not in good standing and have submitted a resignation are not eligible to donate sick or vacation hours to the catastrophic leave bank. 10. Employees that leave the city within good standing and successfully completed the probationary period are not eligible to donate accrued sick leave or vacation hours to the Catastrophic Leave bank. (c) Definitions 1. Catastrophic Illness or Injury: Catastrophic illness or injury is defined as a serious health condition that affects the employee, or the employee’s spouse, child or parent, which is unanticipated, non-job related, not self-inflicted, and requires an employee’s absence without pay for a period of at least two weeks after all leave balances have been exhausted. This is further defined as those illnesses or accidents which require confinement in a hospital or accidents which require extensive medical care of an unforeseeable nature. Examples include life threatening injury or illness, cancer, AIDS, heart surgery, stroke, etc. Catastrophic illnesses shall not include elective surgery nor unforeseeable medical care rendered as a result of something other than injury or disease. 2. Catastrophic Leave Administration. All requests for Catastrophic Leave shall be reviewed by the Human Resources Department. A representative from the Human Resources Department will act as the primary administrator and contact for the program. 3. Leave Request Process. An employee making application for Catastrophic Leave must be made on the standard form provided by the Human Resources Department (Appendix A). Each application must include the standard FMLA form with a health care provider’s signed statement. The request must include the health care provider’s name, address and phone number. The forms shall be submitted to the Human Resources Department. The maximum hours of Catastrophic Leave that may be requested and be granted is 480 in a calendar year. The guidelines set forth in the City of Anna Personnel Policy Manual continue to be applicable. The maximum hours of Catastrophic Leave that can be granted to a single employee is 960 hours in a lifetime. 4. Advance Notice of Need. Requests that are approved will not be granted retroactively. When possible, the employee should request catastrophic leave at least fifteen (15) working days prior to exhausting all paid leave. 5. Application Review. The Human Resources Department will review each application and ensure that each of the following conditions have been met: (a) Employee is enrolled as a participant in the Catastrophic Leave bank. This does not guarantee that requested Catastrophic Leave will be granted to a participating employee. (b) Employee’s entire accumulated leave (holiday, sick, vacation, comp- time, etc.) has been exhausted. The leave balance must be zero (0) balance. (c) Proper documentation is complete and is provided in a timely manner (Appendix A and standard FMLA form) and 86 (d) Requesting employee or immediate family member has a qualifying catastrophic illness or injury. (e.) The Human Resources Department will inform the applicant of their decision in writing within five (5) days after the receipt of the application. 6. The Human Resource Department will inform the City Manager of request for leave. The City Manager’s approval is final. 7. Employees may request donations in eight (8) hour increments only or greater if shift schedules are in larger increments, e.g. 10; 12; 24. 8. While an employee is receiving benefits from the Catastrophic Leave bank, he or she will not continue to accrue vacation time, compensatory time, sick leave, or personal holiday leave. 9. Catastrophic Leave that is granted and not used by the employee will revert back to the Catastrophic Leave Bank. 10. If a separation of employment occurs while an employee is utilizing Catastrophic Leave, the employee may not receive payment for the remaining balance of their Catastrophic Leave. 11. Ineligibility. A participating employee shall lose the right to obtain benefits from the Catastrophic Leave bank by: (a) Termination of employment, including resignation, involuntary termination and retirement; or (b) Refusal to comply with the policies and procedures set forth in the Human Resources Manual and/or this policy; or (c) Determination of permanent disability by the U.S. Social Security Administration; or (d) Accumulation of other city derived compensation, e.g. sick leave, vacation leave, etc.; or (e) Return to work after two (2) weeks in his/her normal status, at which time all unused granted leave by the bank shall be returned to the bank; or (f) Compensation from short-term disability or long-term disability; or (g) Currently on salary continuation for workers compensation. 12. Coordination with FMLA: In those cases where the employee is eligible for leave for a serious health condition which qualifies under both the Catastrophic Leave and FMLA, these benefits shall automatically run concurrently and be counted against the employee’s entitlement to family medical leave. Page | 74 CATASTROPHIC LEAVE REQUEST FORM Employee Name: Department Number: Date: I am requesting consideration for approval of Catastrophic Leave for the following reasons: The standard FMLA form including an attending physician’s signed signature must be attached to this request form. I am requesting Catastrophic Leave until: Available leave accruals were/will be exhausted on: I understand that if I receive Catastrophic Leave it will count as leave under the City’s FMLA policy. Applicant Signature Date Department Director Signature Da For Human Resource Department Use Only: □ Approved □ Denied Reason for Denial: Date: If approved, time period leave granted for: Total hours approved: Human Resource Dept. Representative Signature Date Page | 75 106.11 Mental Health Leave for Peace Officers (a) Definitions Traumatic event - an event, series of events, incident, or set of circumstances that is experienced by the employee, during the scope of employment, as physically harmful, emotionally harmful, or life threatening and that has the potential to cause lasting adverse effects on the employee’s functioning and mental, physical, social, or emotional well-being outside of the typical setting for the position. Traumatic events may include, but are not limited to, the following: (1) Major disasters which may include response to weather related events involving multiple a. casualties; or explosions with multiple casualties; or search and recovery missions involving b. multiple casualties; (2) Incidents involving multiple casualties which may include shootings or traffic accidents; (3) Line of duty death or suicide of a department member; (4) Death of a child resulting from violence or neglect; (5) Officer(s) involved shooting of a person. (b) Eligibility and Applicability (1) This policy is applicable to employees who are employed for the purpose of acting as peace officers, as defined by the Texas Commission on Law Enforcement (TCOLE), for the City of Anna. (2) This provisional policy takes effect September 1, 2021 (Texas G.C 614.015), and may be later updated by the City. (3) This policy allows the use of mental health leave for those eligible peace officer employees who experience a traumatic event in the scope of employment. (4) Employees who meet all eligibility requirements are entitled to up to three calendar days per calendar year of mental health leave. (5) Mental health leave beyond three days will be reviewed to determine if the leave is an FMLA-qualifying reason. (6) Approved mental health leave will be paid leave that does not utilize accruals or cause a deduction in salary. (7) If mental health leave is not requested by an employee during the 12 months following the traumatic event, the employee will not be compensated for unused time. This time does not roll over or accumulate over calendar years and will not be paid out upon separation from employment with the City. (c) Process (1) If eligible, an employee, or supervisor on their behalf if requested by the employee, may request Mental Health Leave in writing through a memorandum to the Human Resources Director within two days of the traumatic event. The request must be Page | 76 accompanied by an authorization from the employee for the City to access information from the employee’s treatment providers as necessary for implementation of this policy. (2) Notice of intent to utilize mental health leave should be given immediately upon a determination of need. (3) If the City determines that leave is being taken for an FMLA-qualifying reason, the City shall notify the employee in writing and generally within five business days of the determination. (4) Human Resources will provide reasonable assistance regarding obtaining mental health services and contacts for the employees who have been approved for mental health leave. (5) Approved leave will run concurrently with FMLA under appropriate circumstances. This means that use of mental health leave will count against the employee’s 12 week annual allotment of FMLA leave. (6) Prior to returning to work, the City may request the employee to submit to a fitness for duty as a requirement in order to return to work. Fitness for duty certifications will be required whenever an employee indicates any inability to fully perform any portion of their assigned job description due to experiencing a traumatic event. (7) The employee is required to authorize the City’s Human Resources Department their status with the psychologist including: status regarding their ability to return to work; additional care or treatment that is considered necessary; timeframes regarding the care expected or needed necessitating absence from the workplace; and status updates that provide a depiction of the employees ability and competency to complete their position’s requirements, attendance. (8) If an employee wants to contest a denied mental health leave request, they may do so in writing to the Director of Human Resources within 3 business days of receiving the denial. They may appeal the decision of the Director of Human Resources to the City Manager in writing within 3 business days of receiving the denial. The decision of the City Manager shall be final. (9) Once the employee’s mental health leave allotment under this policy has been exhausted, additional leave outside of this policy may be available through FMLA, which may be paid or unpaid as dictated by the City’s FMLA policy and the employee’s accrued leave balances. (d) Anonymity (1) The memorandum submission will only be sent to the employee’s department or division head and the Director of Human Resources, in order to maintain anonymity for the employee. (2) Memorandum submission will only be used in order to process the employee’s request, including: leave request review, medical professional assistance, and other items pertaining to the review and execution of mental health leave for peace officers. (3) Status of the employee, if mental health leave is granted, will only be conveyed to necessary members of the Human Resources Department for processing, the employee’s department or division head, and the City Manager. (4) Approved leave and the nature of the requested leave will not be reflected, expressed, or conveyed to employees, outside of those individuals listed above, except as necessary in order to process the claim. Page | 77 (5) Use of mental health leave by an individual will be kept confidential to the extent possible with only those on a need-to-know basis. 106.12 Public Safety Paid Quarantine Leave (a) Purpose: To provide paid quarantine leave to the City’s Public Safety employees as required by and in accordance with Texas Local Government Code, §180.008. The City provides paid quarantine leave for all employees who are certified and employed by the City as a firefighter, police officer, paramedic, and/or certified EMT (together “Public Safety employees”) in accordance with state law and this policy. (b) Eligibility. Paid quarantine leave will be provided to Public Safety employees when they are ordered by their supervisor (through the chain of command) or the City’s Health Authority (Collin County) to quarantine or isolate due to a possible or known exposure to a communicable disease while on duty. Paid leave for scheduled work time missed due to quarantine will be provided for the duration of the quarantine period. (c) The City’s Health Authority. Collin County is the City’s Health Authority and will determine when a threat of a highly communicable or a life-endangering disease is immediately present and may release quarantine orders or protocols for Public Safety employees to follow. If this occurs, Department supervisors will confer with the HR Director to allow for the use of paid quarantine leave based on the health authority’s orders/protocols for appropriately dealing with the disease and/or prevention of community spread. Public Safety employees will be released from quarantine leave based on guidance from the local health authority. (d) Required Notification by Employees. You must immediately notify your supervisor (or next in line in your chain of command if your immediate supervisor is unavailable) and the HR Director: (1) Of any known or possible on duty exposure to a communicable disease. (2) If you test positive for a communicable disease (you must provide your test results). (e) Benefits While on Leave. Employees on paid quarantine leave continue their eligibility for all employment benefits and compensation, including leave accruals, pension benefits, and group health insurance coverage for the duration of the leave. While on paid quarantine leave, the employee’s paid leave balances will not be reduced. (f) Reimbursement for Expenses. When applicable, employees ordered to quarantine may be eligible for reimbursement for reasonable costs related to the quarantine, including lodging, medical, and transportation costs. Employees must obtain written approval for reimbursement from their Department Head and the HR Director prior to incurring quarantine expenses. Timely submission of receipts and other appropriate documentation of expenses is required. See City’s Travel & Expense Reimbursement Policy for additional information on meal reimbursement, allowable and non-allowable expenses, etc. (g) Lodging During Quarantine. It is expected that most employees will stay at their primary residence (i.e., the employee’s home address on file with HR) during quarantine leave. If an employee is unable to effectively distance from other household members at their primary residence and they want to quarantine elsewhere they may, with proper authorization, elect to stay at either of the following locations: Page | 78 (h) A hotel in McKinney (or other location) that the City has arranged to provide accommodations for City employees ordered to quarantine, or (i) Another location available to the employee where distancing can be maintained, e.g., a second home or RV. (j) You must obtain written permission from both your Department Head and the HR Director if you choose to quarantine away from your primary residence. (k) Expectations During Quarantine. During quarantine, employees are expected to restrict their activities and limit actions that may put them in contact with others. This means that while necessary trips to a testing facility, doctor, or other health care provider are permissible, other activities and/or travel away from your approved quarantine location are prohibited. You must obtain written permission from both your Department Head and the HR Director if you want to quarantine away from your primary residence or if you want to travel away from your approved quarantine location. Additional expectations: (1) Stay at home (or at other approved location). Only leave to get needed medical care or to be tested. (2) If staying at home or other shared areas, separate from others (unless they are also in quarantine). a. Stay in a separate room from other household members, if possible. b. Use a separate bathroom, if possible. c. Avoid common areas, contact with other household members, and pets. d. Do not make or serve food to others. If you are the sole caregiver and must prepare and/or serve food to others, wear a mask and wash your hand frequently. e. Don’t share personal household items, like cups, towels, and utensils. f. Do not allow non-essential visitors. g. If you must be in the same room with someone else: i. Everyone should wear a mask. ii. Keep 6 feet away. iii. Open windows or use a fan or air conditioner in shared spaces. iv. If sharing a bathroom, disinfect after use. (3) Monitor your symptoms and your health. Take care of yourself. Get rest and stay hydrated. Seek medical care when needed, but call first except in an emergency. (4) When getting medical care or traveling to a testing location: a. Avoid public transportation, ride-sharing, and taxis. b. Use a private car if possible. c. If you cannot drive yourself, keep as much distance between yourself and the driver and keep the windows down. d. Have others shop for food and other necessities. (5) If you do not have someone to help you, arrange for food and other supplies to be left at your door. (6) Use common sense and take steps to prevent others from getting infected. (l) Public Safety employees are required to use appropriate PPE as set out in their Department’s internal directives, policies, and procedures in order to reduce the risk of a possible exposure to COVID-19. Employees with a possible or known exposure to COVID- 19 will be tested in accordance with Collin County’s testing orders/protocols for Public Safety employees. If you test positive for COVID-19, HR will notify the City’s workers’ compensation provider. (The absence may also be designated as FMLA.) Normally, the quarantine period Page | 79 for COVID-19 is 10 days; if, however, you test positive for COVID-19, the quarantine period may be extended in increments of 3 days to allow for additional testing. Employees must submit to all testing required by the City. (Note: The City’s COVID-19 testing and quarantine requirements are subject to change without a formal amendment to this policy.) (m) During quarantine, employees who have the ability to work from home (or other approved quarantine location) based on their job duties may be required to do so. (n) Employees must timely provide documentation requested by the City in support of their need for leave, including but not limited to test results and proof of an order to quarantine. (o) Violation of quarantine expectations and other requirements of this policy will likely result in disciplinary action, up to and including termination of employment. Violations may also result in the employee being denied paid leave and/or other benefits provided in this policy. Page | 80 City of Anna Personnel Policy Manual Section 107. Family Medical Leave Page | 81 107.1 Definitions The City will provide Family Medical Leave in accordance the terms and conditions prescribed by state and federal law and these policies. The following definitions are provided for ease of reference and employees should refer to the Family Medical Leave Act (“FMLA”) for more complete or updated information. If the following definitions conflict with the definitions set forth in the FMLA, the definitions in the FMLA shall control to the extent of the conflict. Child. A biological, adopted or foster child; a stepchild; a legal ward; or a child of a person standing in loco parentis. The child must be under 18 years of age, or 18 years of age or older, but incapable of self-care because of a mental or physical disability. Covered Servicemember. (1) a member of the Armed Forces (including a member of the National Guard or Reserves) who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness; or (2) a veteran who is undergoing medical treatment, recuperation, or therapy, for a serious injury or illness and who was a member of the Armed Forces (including a member of the National Guard or Reserves) at any time during the period of 5 years preceding the date on which the veteran undergoes that medical treatment, recuperation, or therapy. Eligible Family Member. An Eligible Employee’s child, stepchild, parent, stepparent and spouse. The term “parent” does not include a parent “in-law.” Health Care Provider. (1) Includes doctor of medicine or osteopathy, podiatrist, dentist, clinical psychologist, optometrist, chiropractor, nurse practitioner, nurse-midwife, clinical social worker, Christian Science practitioners (if listed with the First Church of Christ, Scientist in Boston, Massachusetts), and any health care provider recognized by the City or City’s group health plan benefits manager. These health care providers must be authorized to practice in the state in which the provider practices and be performing within the scope of their practice as defined under state or federal law. (2) This term also includes a health care provider listed above who practices in a country other than the United States and who is authorized to practice under the laws of that country. Outpatient status. The status of a member of the Armed Forces assigned to: (1) a military medical treatment facility as an outpatient; or Page | 82 (2) a unit established for the purpose of providing command and control of members of the Armed Forces receiving medical care as outpatients. Serious Health Condition. Includes an illness, injury, impairment, or physical or mental condition that involves any of the following: (1) Any period of incapacity or treatment connected with inpatient care (i.e., an overnight stay) in a hospital, hospice or residential medical care facility; (2) A period of incapacity requiring absence of more than three calendar days from work, school, or other regular daily activities that also involves continuing treatment by (or under the supervision of) a health care provider; (3) Any period of incapacity due to pregnancy, or for prenatal care; (4) Any period of incapacity (or treatment therefore) due to a chronic serious health condition; (5) A period of incapacity that is permanent or long-term due to a condition for which treatment may not be effective; or (6) Any absences to receive multiple treatments (including any period of recovery therefrom) by, or on referral by, a health care provider for a condition that likely would result in incapacity of more than three consecutive days if left untreated. Serious injury or illness. (1) in the case of a member of the Armed Forces (including a member of the National Guard or Reserves), means an injury or illness that was incurred by the member in line of duty on active duty in the Armed Forces (or existed before the beginning of the member's active duty and was aggravated by service in line of duty on active duty in the Armed Forces) and that may render the member medically unfit to perform the duties of the member's office, grade, rank, or rating; and (2) in the case of a veteran who was a member of the Armed Forces (including a member of the National Guard or Reserves) at any time during a period described in subsection (b)(2), above, means a qualifying (as defined by the Secretary of Labor) injury or illness that was incurred by the member in line of duty on active duty in the Armed Forces (or existed before the beginning of the member's active duty and was aggravated by service in line of duty on active duty in the Armed Forces) and that manifested itself before or after the member became a veteran. 107.2 Eligibility Subject to subsection (h), below, and only to the extent that an employee is an “eligible employee” under this section 107 and under 29 U.S.C. § 2611 (Family Medical Leave Act), the City will provide up to twelve weeks of unpaid leave in a twelve-month period. This benefit will be offered to eligible employees for the following reasons: (1) Birth of a child; Page | 83 (2) Upon placement with the employee of a child for adoption or foster care; (3) Care of an eligible family member; (4) The employee’s own serious health condition that makes the employee unable to perform the essential functions of his or her job; (5) Any qualifying exigency arising out of the fact that the employee’s spouse, child, or parent is on active duty or has been notified of an impending call or order to active duty in the U.S. National Guard or Reserves in support of a contingency operation. A list of qualifying exigencies is available from the U.S. Department of Labor (Wage and Hour Division); and (6) Any other reason if required under federal law. Time taken under (a)(1) or (a)(2) must be completed within twelve months of the occurrence. An employee who is the spouse, child, parent, or next of kin of a covered servicemember with a serious injury or illness may be eligible for up to 26 work weeks of unpaid leave during a 12-month period to care for that servicemember (Military Caregiver Leave). Employees who need further information on this type of leave should contact the U.S. Department of Labor (Wage and Hour Division). Employees must have worked for the City at least twelve months and must have worked for the City at least 1,250 hours during the twelve months prior to the request for leave under the FMLA. In determining whether or not an employee has worked for the City for the required twelve months, all time worked for the City will be counted (even if in nonconsecutive periods). In determining the amount of leave available to an employee, the City will consider any leave under the FMLA taken in the twelve (12) months prior to the date the requested leave is to begin. If both the employee and the employee’s spouse are employed by the City, family leave may be limited to a total of 12 workweeks combined if the reason for FMLA leave is for: birth and care of a child; for the placement of child for adoption or foster care, and to care for the newly placed child; or to care for an employee’s parent who has a serious health condition. As an example of how this limitation may work, during a 12‑month designated period, the married couple took 12 weeks combined (mother/wife took 10 weeks, father/husband took 2 weeks) for the birth and care of the newborn child. The mother/wife would have two workweeks of FMLA leave to care for her own serious health condition or that of her or child or spouse. The father/husband would have remaining 10 weeks of leave to care for his own serious health condition or that of his spouse or child. Since this married couple used 12 workweeks of FMLA leave for the birth and care of the newborn child, no additional FMLA leave may be taken to care for the parent with a serious health condition by either spouse in the remaining 12 months. Most employees taking leave under the FMLA will be allowed to return to the same or equivalent position upon returning to work. Certain salaried employees meeting the FMLA definition of “key” employees may be denied reinstatement to employment when the City believes it would cause substantial and grievous economic injury to its operations. If any “key” employee is to be denied reinstatement, the City will provide the employee with written Page | 84 notice of: his/her status as a “key” employee and the reasons for denying job restoration. In such circumstances, the “key” employee will be provided a reasonable opportunity to return to work after provision of the notice. Any employee taking family and medical leave due to their own serious health condition may be required to provide a completed Notice of Intent to Return from Leave form (refer to Appendix A-6). Exclusion. Notwithstanding any other provision in this Manual, an employee is not eligible for FMLA leave if employed at a worksite at which the City employs less than 50 employees if the total number of employees employed by the City within 75 miles of that worksite is less than 50. 107.3 Continuation of Medical Benefits While the employee is on family medical leave, the City will continue to provide the employee with health benefits. These benefits will be provided to the employee under the same conditions as if the employee was actively working. The employee must continue to pay applicable premiums, co-payments, deductibles and other out-of-pocket expenses (including premiums for dependent coverage, if any). Any employee taking leave under the FMLA must work with Human Resources to determine a written schedule for paying insurance benefit premiums. The meeting shall take place prior to the employee taking family medical leave. When an employee is placed on unpaid leave under the FMLA, the City will continue eligible employees’ health care benefits including medical benefits. During the period of unpaid leave, the employee receives the same benefits and has the same payment obligations as employees who are working. This means that employees on unpaid leave must make arrangements with the Human Resources Department to continue paying the employee share of premiums, if any. A 30-day grace period for payment of premiums will be provided before coverage is affected. An employee who is on unpaid leave under the FMLA and chooses not to pay, or agrees but fails to pay, insurance premiums, shall have insurance benefits cancelled for non- payment of insurance premium. An employee whose insurance benefits are cancelled (due to non-payment of premium) shall, upon returning to work (full-time), have insurance benefits restored as if there was no break in coverage. Insurance benefits for the employee will be restored without the employee having to meet any qualifications, take a physical examination or satisfy pre-existing conditions. The City will cease to make health benefit payments if and when an employee informs the employer of any intent not to return to work at the end of the leave period, or if the employee fails to return to work when the FMLA leave entitlement is exhausted. The City may, at its option, cease to make health benefit payments on behalf of an employee if the employee’s premium payment is more than 30 days late. If the City anticipates terminating health benefit payments on this basis, the employee will receive written notice advising that coverage will cease if payment is not received at least 15 days in advance of the City’s cessation of health benefit payments. Page | 85 The City may require any employee who fails to return to work after using family medical leave to reimburse the City for any insurance premiums paid by the City to maintain the employee’s dependent health coverage. 107.4 Notification Employees are required to give 30 days’ notice (when possible) to Human Resources of the intent to take leave under the FMLA. If 30-day notice is not possible, notice should be provided immediately upon a determination of need. Employees should provide at least verbal notice within two business days of learning of the need to take FMLA leave. The employee must provide sufficient information to make the City aware of the need for FMLA leave and the anticipated timing and duration of the leave. If an employee seeks leave for an FMLA-qualifying reason for which the employer has previously provided the employee with FMLA-protected leave, the employee must specifically reference either the qualifying reason for leave or the need for FMLA leave. If the City determines that leave is being taken for an FMLA-qualifying reason, it shall notify the employee that the leave is designated and will be counted as FMLA leave. Such notice will be in writing and generally provided within five business days of the determination. 107.5 Medical Certification (a) Any employee requesting family medical leave for a serious health condition of the employee or of an eligible family member shall provide a completed Certification of Health Care Provider for Employee’s Serious Health Condition or a completed Certification of Health Care Provider for Family Member’s Serious Health Condition (refer to Appendix A-7 or Appendix A-7.1, as applicable). Employees have at least 15 calendar days of the request for FMLA leave, but not more than 20 calendar days to obtain and submit to the Human Resource Department the required medical certification. The certification form must be completed by the patient’s health care provider(s) and must contain at least the following: (1) Date condition began; (2) Probably duration of condition; (3) Appropriate medical facts about the condition; and (4) Statement that the employee is needed to care for the ill family member or, in the case of their own illness, is unable to perform their job The City may require a second opinion from a health care provider of its choice at its own expense. If the opinions of the two health care providers conflict, the City may require, at its expense, a third medical opinion from a health care provider mutually agreed upon by the employee and the City. The third opinion shall be considered final and binding on both the employee and the City. The City will not require a second or third opinion of certification, or require recertification, of a covered servicemember’s serious injury or illness, or of a qualifying exigency. The City may, at its option, contact the individual or entity named in a certification of leave for a qualifying exigency for purposes of verifying the existence and nature of the meeting. Page | 86 To protect the employee’s privacy, the certifications will be treated as confidential medical records and will be disclosed on a strict need-to-know basis. 107.6 Reduced Work Schedule Any employee placed on a reduced/intermittent work schedule while on leave under the FMLA must provide Human Resources with a completed certification form (refer to Appendix A-7). The medical certification must be completed by the patient’s health care provider. The form shall state that intermittent leave is medically necessary and must specify the approximate length of time the employee will be on a modified work schedule. When an employee requests intermittent leave or a reduced work schedule, the employee may be temporarily transferred to alternative positions with equivalent pay and benefits. The purpose of the transfer is to better accommodate recurring leave periods. 107.7 Use of Paid Leave a Accrued sick leave, vacation leave, or other accrued paid leave must be used concurrently with unpaid leave under the FMLA (administrative leave without pay); provided, however, that sick leave shall not be used concurrently with unpaid leave under FMLA in any situation where sick leave is not authorized by the City’s personnel policies including without limitation Section 106.3(b) or when an employee fails to provide the proof and/or certificate that may be required under Section 106.3(i). If the City substitutes paid leave for unpaid FMLA leave, it may be counted against the 12-week FMLA entitlement if the employee is notified of the designation when the substitution begins. In the case of family and medical leave, the City shall send notification to the employee designating the time off as leave under the FMLA. 107.8 Parties’ Responsibilities Employee. (1) Notify the City of any needed leave required due to a Serious Health Condition. If the employee fails to notify the City of the reason for leave, the leave may only be retroactively designated as FMLA leave if the City is notified of the designation while the leave is in progress or within two business days of the employee’s return to work. However, retroactive designation is not available if the employee’s failure to notify the City of the reason for leave resulted in the employee’s separation of employment from the City under circumstances in which the City had no actual notice that the leave was required for a Serious Health Condition. (2) Employee on leave under the FMLA may be required to report their medical status and/or intent to return to work or expected date of return to their Department Head at least every two weeks. (3) Other responsibilities as set forth in this Section 107. Department Head. (1) Requesting leave under the FMLA and designating the same is a process that Page | 87 requires interaction by the employee and Human Resources. Because employees may not always use the specific terms “leave under the FMLA” or “family and medical leave,” upon the employee’s request for leave, it is the responsibility of the employee to discuss the reason(s) for the leave and Human Resources to determine whether they meet FMLA guidelines. As soon as possible, the employee shall inform Human Resources of a need to take leave under the FMLA an Application for Family and Medical Leave shall be completed (refer to Appendix A-8). Human Resources should review the circumstances of the leave to determine if it should be considered family medical leave. (2) At the time an employee begins taking leave that would qualify as family medical leave, Human Resources will notify the employee and the Department Head in writing, that the leave will be treated as leave under the FMLA. The Department Head (or designee) shall record when the leave began and how long it is expected to last. (3) It is the responsibility of the Department Head (or designee) to ensure FMLA leave is properly coded in the Time and Attendance software, including if an employee requests leave for family and medical purposes that necessitates time off without pay (i.e., all applicable accrued paid time has been exhausted).,This will document that the total amount of leave under the FMLA (unpaid in addition to paid) does not exceed the 12- week maximum. The City. The City, as employer, shall not use the taking of FMLA leave as a negative factor in employment actions such as hiring, promotions, or disciplinary actions. The City will not count FMLA leave under any “no fault” attendance policy currently in place or which may be enacted in the future. 107.9 Coordination with Workers’ Compensation Benefits In those cases where the employee is eligible for leave for a serious health condition which qualifies under both the FMLA and Workers’ Compensation (WC), these benefits shall automatically run concurrent. This coordination shall occur in circumstances such as when an employee sustains a serious work related injury resulting in hospitalization, or misses more than three workdays (in excess of 4 hours a day) due to a compensable work related injury. Coordination shall occur as follows: (1) Notification Procedure. The injured employee must submit a completed incident report to the Human Resources Department. This report shall be submitted within 24 hours and will serve as official notification to Human Resources that an incident has occurred. Upon receiving the completed incident report Human Resources shall notify the employee’s Department Head of a qualifying WC claim and will designate the employee’s lost time as leave under the FMLA (if applicable). If such injury is designated as leave under the FMLA the Department Head shall notify the employee in writing within two business days of such designation. The time of absence will be deducted from the employee’s available family and medical leave. (2) Light Duty Position. The City may not require employees who are using leave under the FMLA and WC leave concurrently to accept a light duty position recommended by the physician treating the employee for the WC injury if the employee is still eligible for and wants to utilize any leave under the FMLA. However, an employee who declines the City’s offer for light duty work will lose their right to collect WC benefits. Once WC benefits cease, the City will require the employee to use accrued paid leave Page | 88 (e.g. vacation, sick, etc.) before unpaid leave may be used. (3) Payment of Workers’ Compensation Benefits. At no time shall any employee be allowed to collect Workers’ Compensation benefits and sick/vacation leave benefits equal to more than 100% of employee’s normal rate of pay. 107.10 Temporary Replacements If, due to business necessity, the department needs to fill the position during the leave period, authorization may be requested from the City Manager for the hiring of a temporary employee. 107.11 Incapacity to Work 1. After twelve weeks of continuous absence and/or inability to perform the essential functions of his/her position, an employee may request an ADAAA (American with Disabilities Act Amendments Act) accommodation with Human Resources for review. If it is determined that a reasonable accommodation under ADAAA cannot be granted due to the cause of undue hardship on City operations or other lawful reasons, then the employee may be separated from employment with the City. 2. In the event FMLA leave exhausts twelve work weeks, and the employee remains incapable of returning to work in a full or limited capacity, he/she may request an additional period of leave. Each request will be reviewed on a case-by-case basis for approval by Human Resources and the City Manager (or designee). 3. Contact the Human Resources Department for guidance as soon as it becomes apparent that an FMLA leave may expire (after twelve work weeks). Page | 89 108.1 Open Communication/Open Door It is the City’s goal to maintain approachable, open-minded, two-way communication at all levels between all City employees and to improve the quality and efficiency of City services. All employees are encouraged to participate in a free and uninhibited exchange of questions, suggestions and information which may improve municipal service, safety, employee performance and morale, efficiency, cost effectiveness, effective maintenance or public relations: anything that will enable us to do a better job. Employees are strongly urged to first discuss the issue of concern with their immediate supervisor; however, when unusual circumstances merit departure of the normal chain of command, employees may contact anyone in the City administration structure, including the City Manager, to answer their questions or concerns. 108.2 Privacy Expectations All employees are responsible for maintaining a level of confidentiality that will preserve an environment that supports sincerity, honesty, and ethical behavior. City employees shall not use their position to secure official information about any person or entity for any purpose other than the performance of official responsibilities. Additionally, a City employee shall not intentionally or knowingly disclose any Confidential Government Information gained by reason of the employee’s position. Subsection (a) does not prohibit: (1) the reporting of illegal or unethical conduct to authorities designated by law; or (2) any disclosure, not otherwise prohibited by law, in furtherance of public safety. “Confidential Government Information” as used in this section includes: (1) all information held by the City that is not available to the public under the Texas Public Information Act; (2) all information held by the City that is available to certain persons based only on the person’s special right of access as applies under the Texas Public Information Act; (3) any information from a meeting closed to the public pursuant to the Texas Open Meetings Act; and (4) any information protected by client-attorney privilege, attorney work product, or other applicable legal privilege. City of Anna Personnel Policy Manual Section 108. Employee Communications Policy Page | 90 As City employees supported by public funds, employees should not expect privacy in their work facilities, workstations, and/or anything that belongs to the City used to produce that work. If an employee has questions about whether certain information is considered confidential, please contact your superior or the Director of Human Resources. 108.3 Telephone Usage If requested, department heads shall be responsible for producing logs of long distance telephone calls and for assuring that they are only made for necessary City business. Telephones should be answered promptly and courteously. Personal calls shall be limited so as to not interfere with City business. 108.3.1 Personal Use of City Provided Cell Phones (a) Employees are responsible for exercising good judgment regarding the reasonableness of personal use. City cell phones are to be used for City business. (Occasional personal use is permitted as long as it does not exceed the total monthly allocation.) Employees are subject to the rules set forth below in Section 108.03.3 when using City cell phones for personal use. (b) When personal calls cause the monthly plan minutes to be exceeded, employees shall reimburse the City for the total amount in excess of the normal monthly bill. (c) The smallest cell phone plan available that accommodates the business needs shall be utilized at all times. If the business needs of the employee require a cell phone contract based on unlimited monthly use, the employee is required to reimburse the City for monthly personal calls. The reimbursement rate will be 20% of the total monthly bill. 108.3.2 Cell Phone Issuance (a) Issuance of a city cell phone must have the approval of the City Manager or his/her designee. City positions will be evaluated on a case-by-case basis by the City Manager’s office and department directors. If a city position has been approved for issuance of a city cell phone the city equipment will be supplied by the Information Technology Director. (c) Employees are advised that records related to calls made on city issued cell phones are public information. Information related to telephone numbers called, time and date, and length of calls ordinarily may be obtained through the Open Records Act except in narrowly defined circumstances. Employees are advised and should be aware of the fact that cellular calls are not secure and can be monitored. It is a crime for a third party to intentionally monitor cellular phone conversations without the consent of one of the parties to the conversation. A party to the conversation can legally monitor or record the conversation. Page | 91 108.3.3 Use of Personal Cell Phones The City recognizes that many employees have cell phones that they bring to work. Cell phones may belong to the employee or be provided for the employee’s use by the City, as set forth in Section 108.03.1 and 108.03.2. The use of an employee’s personal cell phone—including but not limited to cell phones with functions such as cameras and video and audio recorders—at work must not interfere with job duties or performance. Employees must not allow cell phone use to become disruptive or interfere with their own or a co-worker’s job performance. Use of personal cell phones should not be used in areas that are accessible to the public, such as the front desk, or in the presence of a customer. An employee may not photograph or otherwise record any event or situation that would constitute confidential information, as that term is defined in Section 101.01.1, without obtaining the advance permission from the employee’s department head or the City Manager. An employee may not photograph or otherwise record any activity or event during work hours, without obtaining the advance permission from the employee’s department head or the City Manager, unless the employee’s work assignments include duties that would require taking photographs or recordings in the performance of their official responsibilities, in which case any such photographs or recordings are the property of the City. Cell phone use that violates any City policy, including but not limited to the policy on sexual and other unlawful harassment, will be subject to disciplinary action, up to and including termination. 108.4 Electronic Communications Policy 1 Generally. (1) The City may provide computer networks, intranet and internet access, email, telephones, digital cameras, voice mail, and fax communication systems for use by City employees in the performance of their job duties. These communication devices are referred to collectively in this policy as “electronic communications systems” or “systems.” (2) The City systems are designed to support and enhance the communication, research and information capabilities of City employees and to encourage work-related communication and sharing of information resources within the City. This policy governs user behavior pertaining to access and usage of the City’s electronic communications systems and, to a certain degree, use of employee’s personal computers or electronic communications devices used during performance of City business. 1 Notwithstanding any provision of this Manual to the contrary, this Electronic Communications Policy shall not apply to employees, including peace officers, to the extent that applying the policy would effectively: (1) require the employee to disclose information that is made confidential by law to a person who is not authorized to receive same; (2) interfere with a peace officer’s lawful attempts to enforce the law or to investigate, detect or prevent criminal activity; or (3) otherwise violate an applicable state or federal law or regulation. If an employee has any questions about the applicability of this policy, they should consult with their supervisor, their department head, or the Human Resources Director. See also Section 116.02 of this Manual. Page | 92 (3) This policy applies to all City employees, contractors, volunteers and other representatives of the City who use the City systems. The City systems must be used in a professional, responsible, efficient, ethical and legal manner and in a manner that does not unreasonably disrupt the working environment. (4) The City owns the rights to all data and files stored in the City’s electronic communications systems to the extent that such rights are not superseded by applicable laws relating to intellectual property. Employee Consent. By accepting employment with the City, employees expressly consent to the collecting, reading, cataloguing, or other monitoring of electronic communications stored on the City’s electronic communications systems, regardless of whether the City systems are being used for City business or non-City business. Employees who wish to maintain their right to confidentiality or a disclosure privilege must send or receive such information using some means other than City systems or the City-provided Internet access. Acceptable Use. (1) Acceptable uses of the City’s systems are limited to those activities that support reference, research, internal/external communication and conducting City business in line with the user’s job responsibilities, subject to the exception set forth in the following paragraph (2). Employees who use the systems are encouraged to develop uses which meet their individual job-related needs and which take advantage of the City’s electronic communications systems. The City prohibits connection to sites or forwarding of information that contain materials that may be offensive to others including, but not limited to, sites or information containing sexually explicit material. (2) Users must understand that use of the City’s electronic communications systems is a privilege. Minimal personal use of the internet or email and other electronic communications systems is allowed under this policy as long as such use is not excessive, does not impede job performance or the performance of City business, and does not result in any unauthorized expenses or charges to the City. The City is not responsible for personal communications sent or received on City systems, or for maintaining the confidentiality of such communications. (3) The City reserves the right to monitor employee email and internet usage stored on the City’s electronic communications systems, including the right to monitor electronic mail messages (including personal/private/instant messaging and text message systems) and their content, as well as any and all use by employees of the internet and computer equipment used to create, view, or access email and Internet content where such content is stored on the City’s electronic communications systems. Prohibited Uses and Rules Governing City Systems include: (1) The use of video, audio, image, storage, etc. can put a strain on the available resources of the City systems and bandwidth. The City reserves the right to prohibit or limit any bandwidth limiting activities. The City also reserves the right to require a review of any usage that is discovered to have strained the City's resources. Employees found to violate this policy will be subject to the disciplinary process. Page | 93 (2) Distributing or otherwise using profanity, obscenity, or other language or content which may be offensive or harassing to other coworkers or third parties. (3) Accessing, displaying, downloading, or distributing sexually explicit material. (4) Accessing, displaying, downloading, or distributing profane, obscene, harassing, offensive or unprofessional messages or content. (5) Copying, use, distribution, or downloading commercial software onto City systems in violation applicable licensing agreements or of copyright law. (6) Using City systems for financial gain or for any commercial activity unrelated to City business. (7) Using City systems in such a manner as to create a security breach of the City systems or network. (8) Accessing any site, or creating or forwarding messages with derogatory, inflammatory, or otherwise unwelcome remarks or content regarding race, religion, color, sex, national origin, age, disability, physical attributes, or sexual preferences. (9) Transmitting or sharing information regarding a coworker’s health status without his/her permission. (10) Expressing opinions or personal views that could be misconstrued as being those of the City. (11) Expressing opinions or personal views regarding management of the City or other political views that are unreasonably disruptive to the work environment. (12) Using the electronic communication systems for any illegal purpose or in any way that violates City policy or is contrary to the City’s best interest. (13) Playing games or gambling. (14) Initiating, propagating, forwarding, or recklessly handling of chain e-mail, unsolicited advertising materials, or other “spam.” (15) Tampering with, or alterations to, electronic mail messages without the sender’s permission; including but not limited to placement of unauthorized attachments or content on another’s electronic mail message or computer equipment. (16) Unauthorized access to or hacking into City systems. Responsibility. (1) All users that are issued access to City systems and accounts are responsible at all times for its proper use, regardless of the user’s location. The City provides and maintains these systems are designed to assist in the conduct of City business. All transmissions created, sent, received, retrieved or accessed and that are stored on Page | 94 City systems are considered property of the City and may be subject to disclosure as public information. Every employee has the responsibility to maintain and enhance the City’s public image with the proper use of City systems in a professional and productive manner. (2) Employees may only use software approved or provided by the City. Additionally, the software must be installed in compliance with procedures as established by the City Manager and the technology department head. To prevent computer viruses, there will be no unauthorized downloading of any software. Each City employee is responsible for his or her computer files and for seeing that the following precautions are in place to limit the City’s possible exposure and damage from computer viruses as follows: (i) Virus detection software has been purchased by the City and installed on all computers and the servers. The virus detection application will be set to automatically scan the computer and scan any hard disks and any removable media (e.g. CD, DVD, flash drive, external storage drive, etc.) and all of the files on such devices to be read, moved, or copied onto the City-assigned computer. (ii) No employee shall disrupt, “turn-off” or tamper with the City-assigned computer virus detection application. (iii) Any employee who identifies a virus or a problem with or absence of the virus detection software on a City-assigned computer or anywhere else on the City’s system shall immediately notify his or her supervisor and the Information Technology Department. (iv) City employees shall make every effort not to read, move or copy files from any removable media received from an unknown source. (v) City employees shall make every effort not to read, move or copy files from any removable media that has not been professionally recorded unless the source of the media is well-known and reasonably trustworthy and the content of the media is believed to be solely related to City business or City functions. (3) All computer files that are required to be maintained by the City shall be stored or saved to a network drive on the City system and backed up on a regular schedule via the chosen method and network backup software. (4) The City reserves the right to change policies as it relates to the City’s electronic communications systems and its use at any time and as may be required by changing circumstances. It is therefore the responsibility of all employees to ensure full knowledge of the City systems use policies. Violations of the policy and its guidelines may result in the loss of use privileges and disciplinary action, up to and including termination. No Right of Privacy/Monitoring. Page | 95 (1) All passwords used for any City systems are subject to be changed by the Information Technology Department at any time at the discretion of the Information Technology Department Head or designee. (2) Users of City systems may not assume they are provided any degree of anonymity and employees have no right to privacy with regard to such systems. Personal passwords are not an assurance of confidentiality. The Internet itself is not secure. To ensure proper use of City systems, the City will monitor same. (3) The City may use software in City systems that allows monitoring by authorized personnel or programs and that creates and stores copies of any messages, files, or other information that is entered into, received by, sent, or viewed on such systems. Accordingly, employees should assume that whatever they do, type, enter, send, receive, and view on City systems is electronically stored and subject to inspection, monitoring, evaluation, and City use at any time. Further, to the extent permitted under applicable law, employees who use City systems and Internet access to send or receive files or other data that would otherwise be subject to any kind of confidentiality or disclosure privilege waive whatever right they may have to assert such confidentiality or privilege from disclosure as a term and condition of City employment. (4) The City Manager or their designee reserves and intends to exercise the right to review, audit, intercept, access and disclose all transmissions created, received, sent, retrieved or accessed on the City systems to assure that the City’s resources are devoted to maintaining the highest levels of productivity, as well as proper use and compliance with this policy. The City systems may be checked periodically for business reasons, without permission from the employee in each instance, and the employee, as a term and condition of employment with the City, hereby fully consents to any and all such periodic checks. Filtering. The City may use software to filter Internet and instant message content for all employees. This software may prevent access to informational content or reduce said access. Unauthorized modifications or workarounds as relates to such filters are prohibited. Copyright Restrictions. Any software or other material, including music, downloaded to City systems may be used only in ways consistent with the licenses and copyrights of the vendor, author or owner of the material. Prior written authorization from a department head is required before introducing any software into the City systems. Employees may not download entertainment software, games or any other software unrelated to their work. Public Information. Employees are advised that any data or electronic information could be subject to release in accordance with the Public Information Act of the State of Texas. Employees must take appropriate measures to keep their private information secure. 108.4.1 Social Media Policy Policy Statement. Whether or not an employee chooses to create or participate in a blog, wiki, online social network or any other form of online publishing or discussion is his or her own decision. However, the City recognizes that emerging online collaboration platforms are fundamentally changing the way individuals and organizations communicate, and this Page | 90 policy is designed to implement policy and offer practical guidance for responsible, constructive communications via social media channels for employees. The same principles and guidelines that apply to the activities of employees in general, as found in this Manual, apply to employee activities in social media channels and any other form of online publishing. In general, what an employee does with respect to social media on their own time is their own business. However, activities in or outside of work that affect your job performance, the performance of others, or the City's governmental functions are a proper focus for City policy. Definitions. (1) Social Media Channels - Blogs, micro-blogs, wikis, social networks, social bookmarking services, user rating services and any other online collaboration, sharing or publishing platform, whether accessed through the web, a mobile device, text messaging, email or any other existing or emerging communications platform. (2) Social Media Account – A personalized presence inside a social networking channel, initiated at will by an individual. YouTube, Twitter, Facebook and other social networking channels allow users to sign-up for their own social media account, which they can use to collaborate, interact and share content and status updates. When a user communicates through a social media account, their disclosures are attributed to their User Profile. (3) Social Media Disclosures - Blog posts, blog comments, status updates, text messages, posts via email, images, audio recordings, video recordings or any other information made available through a social media channel. Social media disclosures are the actual communications a user distributes through a social media channel, usually by means of their social media account. (4) External vs. Internal Social Media Channels – External social media channels are social media services that do not reside at a domain. Internal social media channels are located at a City-owned domain, require a password to access and are only visible to employees and other approved individuals. (5) User Profile – Social Media Account holders customize their User Profile within a Social Media Channel with specific information about themselves which can be made available others users. (6) Copyrights – Copyrights protect the right of an author to control the reproduction and use of any creative expression that has been fixed in tangible form, such as literary works, graphical works, photographic works, audiovisual works, electronic works and musical works. It is illegal to reproduce and use copyrighted material through social media channels without the permission of the copyright owner. (7) Controversial Issues – Issues that form the basis of heated debate, often identified in political campaigns as wedge issues, since they provoke a strong emotional response. Examples include political views, health care reform, gun control and Page | 91 abortion. Religious beliefs may also be controversial, particularly to those intolerant of beliefs different from their own. (8) Official Content – Publicly available online content created and made public by the City verified by virtue of the fact that it is accessible through the City’s website. (9) Tweets and Retweets – A tweet is a 140 character social media disclosure distributed on the Twitter micro-blogging service. Retweets are tweets from one Twitter user that are redistributed by another Twitter user. Retweets are how information propagates on Twitter. Objectives. (1) Establish practical, reasonable and enforceable guidelines by which employees can conduct responsible, constructive social media engagement in both official and unofficial capacities. (2) Promote a safe environment for employees to share subject matter expertise that is not proprietary and earn management's recognition for the outstanding use of social media for business. (3) Prepare the City and its employees to utilize social media channels to help each other and the community that the City serves, particularly in the event of a crisis, disaster or emergency. (4) Protect the City and employees from violating local, state or federal rules, regulations or laws through social media channels. General Guidance. (1) The City trusts and expects employees to exercise personal responsibility whenever they use social media, which includes not violating the trust of those with whom they are engaging. Employees should never use social media for covert advocacy, marketing or public relations. If and when employees use social media to communicate on behalf of the City, they should clearly identify themselves as employees. (2) Only those officially designated can use social media to speak on behalf of the City in an official capacity, though employees may use social media to speak for themselves individually. (3) When an employee sees misrepresentations made about the City by media, analyst, bloggers or other social media users, employees may use their blog, social networking account, or someone else's to point that out. But an employee may only do so in an official capacity if the employee has been designated by the City Manager to do so and the employee follows the terms of this policy. (4) Different social media channels have proper and improper business uses. For example, members of social networks are expected to read, and when appropriate respond, to questions asked of them from another member of their social network. It is important for employees to understand what is recommended, expected and Page | 92 required when they discuss work-related topics, whether at work or on their own time. (5) Employees are responsible for making sure that their online activities do not interfere with their ability to fulfill their job requirements or their commitments to their managers, co-workers or members of the public. (6) Employees may not post information to Social Media Channels during work hours without obtaining advance permission from the employee’s department head or the City Manager, unless the employee’s regular work assignments include duties that would require posting information to Social Media Channels as an official representative of the City in the performance of their official responsibilities, such as the City’s public information officer. Disclosure and Transparency. (1) Since reputations are built on trust, employees are strongly requested to disclose their identity and affiliation to the City whenever discussing City or work-related topics via social media channels. Be aware of your relationship to the City in all social media disclosures. Nothing gains more notice in social media channels than honesty -- or dishonesty. If you have a vested interest in something you are discussing, be the first to acknowledge that relationship and point it out. (2) Comply with all laws and regulations regarding disclosure of your identity. (3) The City believes in transparency and honesty. Employees are encouraged to use their real name and identify that they work for the City in any social media disclosure that involves City or work-related topics. The use of pseudonyms and aliases are strongly discouraged. (4) If communicating on behalf of the City, never represent yourself to be anyone other than who you really are. (5) Whenever commenting on City or work-related topics via social media channels, employees are requested to: (i) Use a method of disclosure that makes it easy for the average reader to understand their position, avoid jargon or ambiguous language and always provide a functional means by which you can be contacted in a timely manner based on the nature of your social media disclosure. Misinformation has the potential to spread quickly online and it is our intention to limit the use of technical or ambiguous language that could be misinterpreted by others. The failure to reply to legitimate questions which arise from comments made by City employees in social media channels, particularly by employees who instigated a conversation, could also result in a negative impressions of the City and its services. Employees who choose to engage in social media channels about the City or work-related topics are required to monitor their feedback and use their best judgment to respond appropriately when warranted. Page | 93 (ii) Employees may only mention the City’s official policies in their social media disclosures when those policies are publicly available on the Internet, and may only do so if they include a link to that policy in their disclosure. (iii) If an employee chooses to share an opinion on City policy, they may do so only if they precede their social media disclosure with a disclaimer acknowledging that their personal opinion does not necessarily reflect the opinion of their employer. (See subsection (k), Disclaimers, below). (iv) When engaging in discussion with others on City or work-related topics via social media channels, employees should: (1) disclose their relationship to the City, and ask those they are engaging with to disclose their relationships and affiliations as well; (2) never ask someone else to make anonymous social media disclosures; (3) never use their relationship to the City exclusively for personal gain; (4) never use services or technologies for bulk-posting social media disclosures. Bulk posting of comments to blogs and social networking services is an unethical practice known as comment spam and is prohibited. (v) Employees are generally discouraged from engaging directly with minors via social media channels if the minor is not under the care of the employee or the engagement is not associated with some type of organizational event, activity, or program. When engaging in discussion with others on City or work-related topics via social media channels with minors, employees must have approval of a department head on the purpose and content of the interaction. Employees must always use extreme care if creating content intended to be consumed by minors. Respectfulness. (1) Employees should always be respectful of every individual’s legal right to express their opinions, whether those opinions are complimentary or critical. The City recognizes and appreciates the rights of individuals to free speech. By respectfulness, we mean tolerance and consideration for the opinions and positions of others, whether they are in alignment or conflict with your own. (2) Whether officially authorized to speak on behalf of the City or not, employees may be seen by people outside of the City as representatives of our brand. Employees are encouraged to represent the core values of the City whenever they make social media disclosures about the City or work-related topics. (3) Employees should always strive to add value to online conversations by advancing the dialogue in a constructive, meaningful way. By adding value, employees can effectively demonstrate respectfulness to those they engage via social media channels. (4) Harassment, threats, intimidation, ethnic slurs, personal insults, obscenity, racial or religious intolerance and any other form of behavior prohibited in the workplace is also prohibited via social media channels. (5) Employees who choose to make social media disclosures about topics relevant to the City or work-related topics should always be aware that their disclosures are not Page | 94 necessarily private or temporary. Social media disclosures may live online indefinitely, and employees should remember that they will be visible to a broad audience and possibly even read out of context. (6) Always show proper consideration when discussing religion, politics or any other controversial issues that may provoke a charged, emotional response by demonstrating tolerance and patience and always strive to show compassion for alternate points of view. Personal Privacy. (1) Employees have a right to their personal privacy. They have the right to keep their personal opinions, beliefs, thoughts and emotions private. Employees are prohibited from sharing anything via social media channels that could violate another employee’s right to personal privacy, especially with respect to work-related topics. (2) Examples of social media disclosures that may compromise an employee's right to privacy include, but are not limited to, pictures, video or audio recorded and shared through social media channels without the permission of any single employee featured, the public disclosure of private facts or the disclosure of information gained through unreasonable intrusion. Confidential Information. (1) Effectively managing and protecting the City’s confidential information is a critical responsibility of all employees. Failure to manage and protect confidential information correctly may result in legal or regulatory fines, damages to the City’s reputation and lost productivity. (2) Externally, employees are restricted from referencing customers, partners or suppliers by name, or the confidential details of their projects, in their social media disclosures without first obtaining the permission of the City Manager. (3) Social media channels are not the place to conduct confidential business with co- workers, customers, partners or suppliers. (4) External social media channels should not be used for internal business communications among fellow employees. It is fine for employees to disagree, but please don't use your external blog or other online social media channels to air your differences publicly. (5) Think carefully before you make any social media disclosures. What you publish online may be available to a broad audience for a very, very long time. When in doubt, leave it out. Security. (1) The use of cameras or other visual or audio recording devices is prohibited at City facilities, complexes, or at City sponsored events, unless approved in advance by the City Manager or a department head. Page | 95 (2) The creation of text messages, text notes, text descriptions, emails, photographs, sketches, pictures, drawing, maps or graphical representations or explanations of City facilities or complexes is prohibited without first obtaining permission from by the City Manager or a department head. (3) Whether internal or external, social media communications are generally not private. Sharing of any information via social media channels that could comprise the security of any City facility or complex is prohibited. Diplomacy. (1) Internal social computing platforms permit a broad audience to participate, so be sensitive to who will see your social media disclosures. If someone hasn't given explicit permission for their name to be used, think carefully about how your social media disclosure could impact intangibles such as morale or productivity. Again, when in doubt, leave it out. (2) Don't try to settle scores or goad competitors or others into inflammatory debates. Here and in other areas of public discussion, cooperate and acknowledge that everyone is important. Never assume superiority. Always be humble. And be open to compromise, particularly when the cost of conflict outweighs the cost of losing ground. Disclaimers. (1) In order to protect the City’s brand, the City wants to make it as easy as possible for others to be able to distinguish social media disclosures issued in an official capacity by management from those issued by employees who are not our official City spokespeople. Only those authorized to speak on behalf of the City in an official capacity do so via social media channels without including a disclaimer. (2) Employees who are not authorized to speak on behalf of the City in an official capacity may share their opinions or thoughts about the City and work-related topics via social media channels as long as they include a disclaimer clearly acknowledging that their personal opinions do not reflect the opinions of the City. Disclaimers do not need to be in the actual social media disclosure itself. Social media disclaimers can be stated once -- preferable in the biography or about field -- on the profile page of the social media account holder. Here are two sample social media disclaimers: (i) "I work for the City of Anna and this is my personal opinion, not the City’s." (ii) "I am not an official spokesperson but my personal opinion is..." (3) If employees choose to use social media channels to distribute links to official content, they are not required to disclaim their relationship, so long as they have clearly acknowledged their relationship to the City on the profile page of the social media account or channel used to distribute the link, and preferably any other social media channels they may use to redistribute or syndicate their social media disclosures. Page | 96 (4) Any employee who chooses to use social media to publish content or engage in online conversations in an unofficial capacity without referencing links to official content are requested to feature the following disclaimer prominently on the profile page of the social media channel used to distribute the disclosure, and the profile pages on any social media channels they use to redistribute and/or syndicate those disclosures. At a minimum, the following standard disclaimer should be used: "The postings on this site are my own and don't necessarily represent the City policies, practices, customs or opinions.” (5) This standard disclaimer does not by itself exempt employees from a special responsibility when making social media disclosures. By virtue of their position, they must consider whether the personal thoughts they publish may be misunderstood. And a department head or supervisor should assume that his or her subordinates will read what is written. Public social media channels are not the place to enforce City policy or reprimand employees. (6) Social media disclosures which do not mention the City or work-related topics do not need to include a disclaimer. Legal Matters. (1) For your protection, and the protection of the City, employees using social media channels are expected to do so without infringing on the copyrights of others. Employees are prohibited from engaging in any activities via social media channels that interferes with the copyrights of others. (2) For your protection, and the protection of the City, employees are prohibited from using internal or external social media channels for evaluating the performance of their co-workers. (3) For your protection, and the protection of the City, employees are prohibited from using internal or external social media channels to discuss confidential information, legal matters, litigation or the City’s financial performance. When asked by others to discuss any of these matters, employees should relay that “our social media policy only allows authorized employees to discuss these types of matters but I can refer you to someone at the City if you’d like to ask them,” and refer the question to an appropriate person designated by the City Manager. During Emergencies. (1) As evidenced by FEMA's adoption, social media tools are becoming increasingly important in local and incidental crisis and emergency management communications. Nevertheless, even in times of crisis, disaster or emergency, only employees with the authority to speak on behalf of the City are permitted to do so. (2) If an employee who is not authorized to speak on behalf of the City has valuable information that could benefit those affected by a crisis, disaster or emergency, they may share that information via social media channels, so long as they include a disclaimer and do so in accordance with the guidelines of this policy. Page | 97 (3) All employees may use social media channels to extend the reach of official communications. While only those officially designated by the City Manager are authorized to speak on behalf of the City, all employees are encouraged to share official content via social media channels, particularly during a crisis, disaster or emergency, so as long they take the time to verify that the information they are sharing is, in fact, official content. For example, before sharing a link, employees should always verify that (1) the source of the information is legitimate and (2) that the link they are sharing transits to the correct information hosted at the domain. (4) If an employee decides to endorse or republish someone else’s social media disclosure about City or work-related topics or emergency relief information, employees must first verify that the social media disclosure they are republishing was distributed by the designated source. For example, before retweeting someone else’s tweet, verify that the Twitter user cited did, in fact, distribute that tweet. There have been numerous cases where false tweets attributed to news sources were redistributed by other Twitter users, promoting misinformation and confusion. Penalties. Failure to comply with these social media policies may result in: withdrawal, without notice, of access to information and/or information resources; disciplinary action, up to and including termination; and/or civil or criminal penalties as provided by law. Policies and Procedures: Reference the Social Media Policies and Procedures document 108.5 Whistleblower Policy The City is committed to upholding the requirements of all state and federal laws including the applicable Whistleblower Act(s). The City will not suspend, terminate, or otherwise materially discipline or discriminate against an employee who in good faith reports a violation of law by the City or another public employee to an appropriate law enforcement authority 109.1 Disciplinary Action Generally. (1) The City is an “at-will” employer and may terminate employees at any time and for any reason, with or without cause, unless expressly prohibited by law. It is the intent of the City to provide employees with a progressive discipline process designed to help an employee correct performance problems and build a renewed commitment to the City in an equitable and consistent manner. (2) Discipline shall be administered without regard to race, color, religion, sex, national origin, age, disability or other non-performance related factors. City of Anna Personnel Policy Manual Section 109. At-Will, Discipline, Appeals and Grievances Page | 98 (3) Administrative Procedures. These administrative procedures are established to provide appropriate guidelines in carrying out the policies of the City’s progressive disciplinary program. The administrative procedures are intended to address general application of the principles of disciplinary actions in typical situations. It is the responsibility of each department head to determine the nature, extent, facts, and circumstances in each disciplinary action case and to use judgment under the City Manager’s direction in the application of the policies and procedures in this Manual. (4) Disciplinary Process. There will be two different methods for disciplinary actions. One will be based upon unsatisfactory job performance. The other will be based upon improper conduct or inappropriate behavior or unsatisfactory attendance. The City Manager may be consulted at any time should a department head wish to discuss a contemplated disciplinary action. (5) Unsatisfactory job performance may result in one or more of the following actions: (i) Oral warning. (ii) Written Reprimand. (refer to Appendix A-13) (iii) Performance Improvement Plan. (refer to Appendix A-10). (iv) Demotion, Transfer or Dismissal. (6) Inappropriate conduct or unsatisfactory attendance may result in one or more of the following actions: (i) Oral warning. (ii) Written reprimand. (iii) Pay reduction. (iv) Demotion (v) Suspension. (vi) Dismissal. (7) The City Manager shall be consulted whenever a department head wishes to issue a disciplinary action other than an oral warning. The department head may change the order of the above progressive disciplinary process, and/or may choose not to utilize one or more of these steps, depending on the facts of the case. Nothing in this Section shall preclude the department head from using alternative discipline procedures where such procedures have been approved by the City Manager. While it is the ultimate decision of the department head or, as applicable, the City Manager, to determine the type of discipline, the action should be appropriate for the deficiency or infraction. (8) Notwithstanding any other provision of this Manual, the forms in the Appendix to this Manual are for guidance, and may be altered to appropriately address any particular Page | 99 situation. Non-use of a form or use of materials that are different than the forms in the Appendix does not in any manner invalidate any otherwise valid employment action or decision. Oral Warnings. Oral warnings should be documented by department heads and kept within the department for performance evaluation and record keeping purposes. Oral warnings may not be appealed by employees. However, employees who disagree with the counseling action may discuss the basis of disagreement with their department heads. Should oral warnings be given to employees in written form, the employees may submit written responses/rebuttals to be attached to the oral warnings within 24 hours of receipt of the oral warning. Written Reprimands (refer to Appendix A-13). Written reprimands shall be presented and a copy given to the employees indicating the following: The specific employee act(s) which demonstrated the unacceptable conduct or behavior. The expected conduct or behavior. That such act(s) must not be repeated. That further disciplinary action will result if the employee fails to show and maintain satisfactory improvement. Signed acknowledgment of receipt of the written reprimand by employee. Written reprimands may not be appealed by employees; however, employees may submit responses/rebuttals for attachment to written reprimands. Written reprimands become a part of employees’ permanent personnel files and shall be forwarded, along with any employee responses/rebuttals to the City Manager. The employee’s response/rebuttals may be submitted in writing within 24 hours of receipt of the written reprimand. Placement in a Performance Improvement Plan (refer to Appendix A-10). (1) When the job performance or behaviors of an employee falls below an acceptable standard, the department head, or City Manager, if applicable, may place the employee on a Performance Improvement Plan (“PIP”). The PIP shall consist of timely discussions between the department head and the employee with the following provided in writing: (i) The specific unacceptable deficiency in the employee’s performance; (ii) The necessary improvement in performance; Page | 100 (iii) The period of time in which improvement must occur; and (iv) A statement that further disciplinary consequences will result if the employee fails to show and maintain satisfactory improvement. (2) A PIP may not be appealed. Employees may, however, submit written responses/rebuttals for attachment to the PIP within 24 hours after the receipt of the PIP. The PIP and any associated response shall be maintained in the employee’s personnel file in the Human Resources Department, with a copy given to the employee and one retained by the employee’s department. Suspensions. (1) Suspensions result in time off without pay. An employee may be suspended without pay for a period of not less than one day or more than 30 calendar days. (2) Prior to issuing a suspension for a non-exempt employee, the department head must consult with the Director of Human Resources and City Manager to ensure compliance with the Fair Labor Standards Act. (3) As notice, an employee shall be given a Notice of Disciplinary Action (Suspension) and shall have the right to respond to the department head to the alleged charges within two workdays after which the suspension becomes effective; provided, however, that the City Manager shall have discretion to dispense with the procedures outlined herein and to immediately suspend an employee with or without pay or to transfer an employee at any time and without notice if the City Manager determines that such actions are appropriate based on the conduct in question and the need to prevent disruption in the work environment. (4) Suspensions become permanent parts of the disciplinary record maintained in the employee’s permanent personnel file. (5) Suspensions may be appealed in accordance with City policy. (6) An employee may be suspended when under investigation for a crime or official misconduct, or is awaiting hearing or trial in a criminal matter. These suspensions shall be without pay for the duration of the investigation or proceedings when such suspension would be in the best interests of the City. (7) Upon completion of the investigation or proceedings, the employee may be eligible to resume work under terms and conditions specified by the City Manager. Demotions. Demotions result in employees being moved into jobs with lower responsibility levels and/or lower pay rates. Pay rates after a demotion will be reviewed on a case-by- case basis. (1) The decision to demote employees for disciplinary purposes should be written, with a copy given to the employee and the original retained in the official personnel file. (2) As notice, an employee shall be given a Notice of Disciplinary Action (Demotion) and shall have the right to respond to the department head to the alleged charges within two workdays before the demotion becomes effective. (3) Personnel Action Forms must be completed and sent to Human Resources (refer to Appendix A-4). (4) Demotions may be appealed in accordance with City policy. Dismissals. Dismissals result in termination of City employment. (1) Prior to initiating any dismissal action, the department head or designee shall confer with the Director of Human Resources and City Manager and present all relevant facts, circumstances and information, including whether the employee will be placed on administrative leave with pay or without pay pending the outcome of the proposed dismissal. (2) The City Manager will review the information and discuss available options and their consequences with the respective department head or designee. (3) It is the responsibility of the department head or designee to decide whether to initiate a dismissal and to communicate the decision to the City Manager. (4) As notice, an employee shall be given a Notice of Disciplinary Action (Proposed Dismissal) and shall have the right to respond to the department head to the alleged charges within two workdays before the dismissal becomes effective; provided, however, that the City Manager shall have discretion to dispense with the procedures outlined herein and to dismiss an employee at any time and without notice if the City Manager determines that such actions are appropriate based on the conduct in question and the need to prevent disruption in the work environment. (5) Dismissals may be appealed in accordance with City policy. (6) None of the provisions under section 109.1 (g) apply to probationary employees. Probationary employees are not entitled to a review period. Notice of Certain Proposed Disciplinary Action and Employee Response. (1) A department head who is considering disciplinary action shall prepare a notice of disciplinary action to the employee. For the purposes of this subsection, “disciplinary action” means suspension, demotion and/or dismissal. The Notice of Disciplinary Action should include an explanation of why the discipline is proposed, such as alleged policy violations, so the employee may adequately respond. The Notice of Proposed Disciplinary Action shall also establish a meeting time with the employee within two workdays or as soon as practicable thereafter if meeting within two workdays is not reasonably possible. The Notice must be forwarded to the City Manager and Director of Human Resources. (2) A regular employee who receives a Notice of Proposed Disciplinary Action may respond with any relevant facts and documentation that might affect the proposed disciplinary action. The employee’s response/rebuttal must be submitted within two workdays from the date the Notice of Proposed Disciplinary Action is received by the employee. This response should be provided to the department head and forwarded to the City Manager and the Director of Human Resources. Page | 101 102 | P a g e (3) The employee response must be presented orally during the meeting established in the Notice of Proposed Disciplinary Action. The employee may also present a response in writing as supplemental information to the meeting, or as a reasonable accommodation if oral presentation is not an option. (4) The City Manager will determine whether the City Attorney should be present at this meeting. (5) The department head will review the employee’s response/rebuttal and determine within five workdays whether the basis for the proposed disciplinary action still supports a conclusion to take the proposed action. The department head shall notify the employee of the decision within five workdays of receiving the employee’s response/rebuttal. If the decision of the department head is to take the proposed disciplinary action, the employee should be notified of the appeal procedure. (6) Whatever pay status the employee was in at the time of the proposed disciplinary action will continue until the response is completed. (7) Upon dismissal, the employee will receive accrued vacation in accordance with Human Resources procedures, in addition to their final paycheck for hours worked. The employee will also be able to purchase health insurance in accordance with current provisions. Criminal Offenses. (1) If, during the course of any disciplinary investigation, the potential exists that the employee may be charged with a criminal offense, the employee shall have the full benefit of assert the Fifth Amendment against self-incrimination. Once the potential of a criminal offense exists or becomes known, the employee shall be informed that the employee has all rights afforded to any person subject to a criminal investigation and shall specifically be given the “Garrity” warning (refer to Appendix A-9). A criminal investigation may be ordered by the department instead of or in addition to a disciplinary investigation. Once the employee has been given the “Garrity” warning, the employee is required to cooperate fully in the disciplinary investigation. Any failure on the part of the employee to cooperate fully in the disciplinary investigation shall be considered insubordination. Information obtained from an employee during a disciplinary investigation following the administration of the “Garrity” warning may not be used in any criminal prosecution. (2) In the event the department determines that a criminal investigation is necessary, the Police Chief or designee shall be notified and shall begin an official police investigation, regardless of the complainant’s predisposition concerning the filing of criminal charges. (3) The Police Department shall follow its normal departmental procedures in investigating the potential criminal complaint and may, at the discretion of the Police Chief, assign such investigation to another law enforcement entity, as may be appropriate. 103 | P a g e (4) The imposition of discipline, in whatever form, shall in no way preclude a further sanction imposed against an employee in subsequent criminal or civil proceedings. Any sanctions imposed in criminal or civil proceedings against an employee shall not preclude the imposition of administrative sanctions. Appeals. (1) Appeal Rules. Employees who are suspended, demoted or dismissed from City service may appeal such actions in accordance with the following rules. (i) Employees who are dismissed for non disciplinary reasons, such as incapacity, will use the same appeal process as for disciplinary dismissals. (ii) Employees who are terminated by the City as a result of a reduction in force may not appeal decisions of department heads. (iii) All requests, responses and decisions to appeal must be in writing. An employee who chooses to appeal may have a representative at any step during the appeal process. The City Manager may provide procedural assistance at any time. (iv) Time limits may be extended or shortened at any or all steps via a request from either party to the City Manager, who will make the final decision. If the last day of a time limit falls on a weekend or a City holiday, the time limit shall be extended to 5:00 p.m. on the next workday. (v) If an employee does not respond within the prescribed time limits, the appeal may be voided and barred from resubmittal as determined by the City Manager overseeing the appeal. (vi) Employees who have not completed their initial probationary period may not appeal. (2) Appeal Process for Suspensions, Demotions or Dismissals. (i) An employee who chooses to appeal a suspension must submit the completed appeal form to the Director of Human Resources within five workdays from the date of the letter notifying the employee of the effective action (refer to Appendix A-11). (ii) All appeals will be heard by the City Manager or his or her designee. (iii) An employee’s appeal can result in modification of the original disciplinary action. Consequently, the Personnel Action Form dismissing or taking other action against the employee and the Personnel Requisition intended to replace the employee shall be withheld or suspended pending final appeal-process disposition. Upon receipt of notification that the appeal process has been completed, the department head shall submit the forms necessary, if any, to finalize the action. 104 | P a g e (iv) Confidentiality. Any disclosure of information related to a disciplinary action or subsequent inquiry of any employee’s separation from employment must be coordinated with the City Manager. 109.2 Grievances The City believes that open communication is essential when employees have problems or concerns regarding their jobs. Misunderstandings or conflicts can arise in any organization. To ensure effective working relations, it is important that such matters be addressed before serious problems develop. Most incidents resolve themselves through effective communication by discussions between the employee and the department head. “Grievance” shall mean a claim by an employee that a violation, misinterpretation, misapplication, or disparity in the application of a written policy, regulation or procedure adversely affected the employee. Application. (1) Items covered by the Grievance Policy include misapplication of written policy, regulation or procedure of the City or department for whom the employee works, which has personally affected the grieving employee. (2) The following items are not covered under the Grievance Policy and should be resolved through the employee’s chain of command: (i) Generalized feelings of unfairness. A grievance must be specifically related to a written policy, regulation or procedure. (ii) Performance evaluations, performance improvement or discipline actions (oral correction, written reprimand, suspension, release from duty, and dismissal from employment). When allowed by appropriate policy, an employee may appeal the action in compliance with the applicable policy and procedure. (iii) Complaints of civil rights violations such as issues concerning race, color, religion, sex, national origin, age, disability, or whistleblower. An employee must complain of these violations in accordance with Section 104.11 of this Manual. (iv) Complaints questioning the substance of a policy, rule or regulation. Policy formulation is reserved as a right of management. (v) Other issues where a separate appeal process has been established. (3) To promote harmony in each department and to foster goodwill among employees, the employee must take questions or concerns that may become grievances to their department head in an attempt at resolution through a discussion between the employee and the department head. The department head is obligated to give an oral response as soon as possible. If the employee is not satisfied with the oral response or the employee declines to discuss the matter of concern with the department head, the employee may file a formal grievance. 105 | P a g e Formal Grievance Procedures. (1) Step One: The affected employee will complete a Grievance Form (refer to Appendix A-12) citing specific policy(ies) that have been violated, including the direct and adverse effect the violation had on the employee. In addition, the specific corrective action requested, and explanation supporting this request, must be included. The completed form must be submitted to the employee’s department head within ten workdays of the event giving rise to the grievance or the employee becoming aware of the event. Upon receipt of the completed Grievance Form, the department head must consult with the City Manager or designee to determine if the issue is grievable. The department head must enter comments or decision on the Grievance Form and return it to the employee within ten workdays of receipt of the grievance. (2) Step Two: If it is determined to be a grievable issue, and if the written response received in Step One does not satisfy the employee, the employee may proceed to the next level by signing the Grievance Form and submitting it to the City Manager within ten workdays from the date the decision was received in Step One. The City Manager or designee will consult with the department head and may conduct whatever investigation deemed necessary, including interviewing any person who may assist in resolving the grievance. The City Manager will render a final written decision within 30 workdays of receipt of the grievance. In the event a grievable issue is raised against the City Manager, Step Two shall be taken by the City Council. 106 | P a g e 110.1 Resignation Department heads may leave the employment with the City in “good standing” by submitting their written resignation at least 30 days before their termination date. An employee other than a department head may leave the employment with the City in "good standing" by giving two weeks’ notice. The City Manager may waive any portion of the notice periods set forth in this paragraph. The personnel records of any employee who resigned by giving proper notice shall show that the employee resigned of their own accord. An employee failing to report for duty or remain at work as scheduled without proper notification, authorization, or excuse shall be considered as absent without leave which constitutes abandonment of duties, except when the failure to notify is due to circumstances beyond the control of the employee. Absence without leave may be considered as an employee's immediate resignation without notice. In such cases, the employee's separation shall not be considered to be in "good standing." Any employee who leaves their employment with the City in “good standing” will be paid for accrued vacation time subject to the provisions of this Manual. Any employee who fails to provide such notice forfeits their accrued vacation and shall be ineligible for rehire by the City. 110.2 Reduction in Force A reduction in force (“RIF”) may occur as a result of changes in duties, organizational changes, lack of work, or budget cutbacks. A RIF shall be carried out on the basis of demonstrated job performance and efficiency, with the most proficient employees being retained the longest. Seniority within City service may be used to determine the order of layoff among employees with substantially equivalent records of job performance and efficiency, with the most senior employees being retained the longest. Temporary employees may be included in the RIF before regular employees performing similar duties. A RIF shall not be considered a disciplinary action. Employees included in a RIF may be recalled back to their job or another similar job in which they meet the minimum job requirements and qualifications in the reverse order of the RIF up to one year from the date of the lay-off. Employees being recalled within the year from the date of the RIF, shall have precedence over other job applicants. Employees recalled back to work shall report to work as instructed. An employee failing to report back to work shall be considered as having forfeited their right to reemployment. 110.3 Incapacity An employee may be terminated for medical reasons when the employee as an individual no longer meets the standards of fitness required to perform the essential functions of the position, and reasonable accommodation under the Americans with Disabilities Act is not possible City of Anna Personnel Policy Manual Section 110. Voluntary and Involuntary Separations 107 | P a g e without causing undue financial hardship to the City. A finding of incapacity shall be based on an individual medical determination by a competent physician chosen by the City. 110.4 Retirement Eligible employees may elect to retire from the City service in accordance with the applicable retirement programs. 110.5 Military Separation Employees leaving City service in “good standing” to enter active duty or for active-duty training with the armed forces of the United States shall be eligible for reinstatement in accordance with applicable state and federal laws. 110.05.1 Death If a City employee dies, his or her estate or designated beneficiary shall receive all compensation and payable benefits earned as of the date of death. The City shall assist the beneficiary in processing any claim under an insurance policy, retirement, or benefits plan issued by or through the City. 110.6 Separation Process Department heads are responsible for obtaining all City-issued property (i.e., ID cards, keys, purchasing cards, tools, manuals, protective gear, etc.) during the separation process. The replacement cost of City property not returned by an employee will be deducted from the employee’s final paycheck. Final paychecks will be processed via direct deposit and available to the employee on the next regularly scheduled payday. If not picked up by the employee on that day, the final paycheck will be sent to the employee by mail. It is the employee’s responsibility to provide the City with the employee’s current mailing address. 108 | P a g e 111.1 Personnel Files and Records The City maintains an official basic personnel file in the Human Resources Department on each employee including such information as the employee’s job application, resume, performance evaluation forms, personnel action forms, and other similar employment records. The basic personnel file does not contain benefit claims forms, reimbursement requests for medical expenses, forms relating to workers’ compensation claims, drug testing results, post-offer medical examinations, voluntary disclosure information from the applicant regarding a “disability” as defined by Section 503 of the Rehabilitation Act of 1973 or any record of voluntary medical history obtained from an employee or any documents relating to an employee’s medical condition. Medical records are kept in separate files in the Human Resources Department and are maintained as confidential employee records. Employees are required to notify the Human Resources Department when there is a change in name, address, telephone number, marital status, number of dependents, military status, person to notify in case of accident or emergency, or beneficiary assignment of any employee benefits plan. Such notification shall be provided by the employee within one week of such change. The Human Resources Department shall maintain the official personnel files and records for all City employees. Unless otherwise provided by law, personnel files shall be confidential and may not be used or divulged for purposes unconnected with the City personnel management, except with the permission of the employees involved. All personnel records are subject to the rules governing the Public Information Act and could be open to review by the public. Nothing herein shall prevent the dissemination of impersonal statistical information. An employee shall have a right of reasonable inspection of their official personnel files and records under appropriate supervision. An employee may request a copy of their personnel file upon written request to Human Resources or designee. Upon receipt of the request, Human Resources will provide a copy of the employee’s file within a reasonable time frame. Employees will be given a copy of any written record of a disciplinary or performance counseling that is added to their personnel file. An employee of the City who objects to material in the employee's personnel file on the grounds that it is inaccurate or misleading may file a statement relating to the material. Employees are expected to consistently update their personnel records. Forms are available in Human Resources to change address for payroll, medical insurance, TMRS and driver’s license. The City also requires updated Emergency Contact information for each employee. No records properly placed into an employee’s personnel file shall be removed from the file except if required by law, court order, or agreement between the City and the employee. Release of information contained in and access to employee basic (non-health related) personnel files is controlled by provisions of the Texas Public Information Act, Texas Government Code Chapter 552. No information on current or former employees will be City of Anna Personnel Policy Manual Section 111. Personnel Records 109 | P a g e released except by the Human Resources Department or the City Manager or City Secretary. 111.2 Change in Personnel Status: New Hires Department heads shall submit recommended changes in the personnel status of their employees or requests to hire new employees to the Human Resources Department prior to making any commitments to either existing employees or prospective new hires. 111.3 Personnel Records and Reports Department heads shall be responsible for providing the Human Resources Department or designee with all necessary employee reports and records associated with good personnel management for their department. Such records and reports shall include, but not be limited to, employee sick leave, vacation leave, attendance and overtime records, performance reports, counseling records, and all types of disciplinary action. Failure to do so may result in formal disciplinary action. City personnel records are property of the City and, except to the extent required to be released under the Public Information Act or other applicable law, shall not be disclosed to outside persons without the express approval of the City Manager. Any employee receiving a request for personnel records should forward it to the City Secretary. The Human Resources Department or designee shall prepare such narrative reports, statistical summaries, and other personnel reports as are necessary or desirable to provide useful information to the City Manager. 111.4 Employment Verification It is the policy of the City that all employment verifications and references be referred to the Human Resources Department. Unless exceptions are made based on established laws, such as in the field of public safety, the City will only confirm dates of employment salary and position/title. 110 | P a g e 112.1 Workers’ Compensation Insurance Any City employee injured as a result of duties performed in the course of their job shall be eligible to receive workers’ compensation benefits from the City's insurance carrier at no expense to the employee. Workers’ compensation benefits are intended to compensate workers with job-related injuries or illnesses by reimbursing them for income losses and paying for medical and rehabilitation treatment. Workers’ Compensation insurance will not provide compensation for any injury which occurred if the injury: (1) Occurred while the employee was in a state of intoxication (2) Was caused by the employee’s willful attempt to injure himself or to unlawfully injure another person; (3) Arose out of an act of a third person intended to injure the employee because of a personal reason and not directed at the employee as an employee or because of the employment; (4) Arose out of voluntary participation in an off-duty employment; (5) Arose out of voluntary participation in an off-duty recreational, social, or athletic activity that did not constitute part of the employee’s work-related duties, unless the activity is a reasonable expectancy of or is expressly or impliedly required by the employment; (6) Arose out of an act of God, unless the employment exposes the employee to a greater risk of injury from an act of God than ordinarily applies to the general public; or (7) Involves the employee’s horseplay, or negligent behavior where the employee was found at fault, or violation of the City’s safety policies including but not limited to Section 114.7. The City will promptly report any suspected fraud to the Texas Department of Insurance or to its Workers’ Compensation insurance carrier. Occupational Disability or Injury Leave. (1) An employee who is disabled as a result of an injury covered by Workers’ Compensation on the job will be granted injury leave with pay at the employee’s regular salary for up to seven calendar days following the date of the injury. This injury leave will not be charged to Personal Leave. City of Anna Personnel Policy Manual Section 112. Employee Benefits 111 | P a g e (2) After the aforementioned seven days, the employee may continue injury leave in the form of full salary continuation from the City for up to twelve weeks however, weeks.the employee’s Workers’ Compensation check must be endorsed and provided to Human Resources in exchange for the employee’s regular bi-weekly check. Otherwise, the employee will only receive from the City a smaller amount corresponding to the difference between his regular salary and the amount of Workers’ Compensation payments received. After this initial twelve week period, the injured employee may only receive Workers’ Compensation payments and may request the use of sick or vacation accruals for up to 30% of pre-injury earnings. See section 107.11 for FMLA guidance on injury leave that exceeds twelve weeks. (3) An employee will report injuries incurred in the line of duty immediately to his immediate supervisor/department head and file an accident report with Human Resources within 24 hours of the injury. Failure to report an injury or illness, within thirty days of the date on which the injury occurs or the date the employee knew or should have known of an illness, may delay the employee’s receipt of Workers’ Compensation benefits or render an employee ineligible for benefits unless good cause exists for failure to provide timely notice. (4) When an employee suffers injury or death on the job, the Human Resources Department will complete an accident report immediately on forms provided by the Texas Department of Insurance and submit it to the Division of Workers’ Compensation as directed, and retain one copy in the personnel files. Any exceptions to this policy must be approved by the City Manager (or designee). Examination and Treatment. (1) As a condition of receiving or continuing to receive salary continuation payments, Human Resources may require an injured employee to submit to examination and treatment, at the City's expense, by a physician approved by Human Resources or the Workers’ Compensation insurance carrier. An injured employee forfeits all rights to salary continuation payments if he/she refuses to submit to an examination or to any diagnostic test, x-ray, surgical procedure, or other treatment prescribed or recommended by the City designated physician as medically necessary or indicated to diagnose, treat, or cure the employee's injured condition. (2) An injured employee also forfeits all rights to any salary continuation payments to which they would normally have been entitled, if they: (i) engage in work, whether part-time or full-time, for pay or as a volunteer, for themselves or for any other person, firm or corporation, while receiving salary continuation payments; (ii) terminate employment for any reason while receiving salary continuation payments; (iii) fail or refuse to comply with the treating physician's instructions or advice regarding treatment of the injured condition, except because of a bona-fide religious belief; (iv) fail to act in a manner which is conducive to being off work convalescing; 112 | P a g e (v) refuse to perform light, partial or part-time duty when authorized by the treating physician; (vi) refuse to accept or perform a different job with the City that, in the opinion of the treating physician, is within the employee's physical capacity and for which the employee is qualified or will be trained; (vii) represent their injured condition, physical incapacity, or disability as worse than it is while receiving salary continuation payments; or (viii) refuse to return to regular duty after being released for regular duty by the treating physician. Termination for Reasons Other Than Injury or Disability. (1) The City shall not discharge, or in any other manner discriminate against, an employee because that employee filed a workers’ compensation claim in good faith or for hiring a lawyer to represent the employee in such a claim. The City also shall not discriminate against an employee for instituting in good faith a proceeding under the Workers’ Compensation Act, causing such a proceeding to be initiated, or for prior or anticipated testimony in such a proceeding. (2) This section does not preclude an employee from being terminated for reasons other than their disability or continued injury, as otherwise allowed by these regulations. An employee terminated for any such other reason is not entitled to the relief found in this section, even if the termination occurs at some time in close proximity to the time of an on-the-job injury. This section does not preclude an employee from being terminated during an official reduction in work force due to budget restrictions. Employee Assistance. The City encourages any employee injured on the job to contact the Texas Department of Insurance’s Division of Workers’ Compensation (TDI-DWC) as soon as a need for Workers’ Compensation benefits is identified. The TDI-DWC provides free information about how to file a workers’ compensation claim. Also, TDI-DWC staff can more fully explain an employee’s rights and responsibilities under the Workers’ Compensation Act and assist in resolving a dispute about a claim. Employees may obtain this assistance by contacting the local Texas Department of Insurance Division field office or by calling 1-800- 252-7031. 112.2 Modified or Light Duty Generally. Subject to the availability of positions, the City may provide employees with modified or light duty if the employee is unable to perform their regular duties due to injury or illness. If positions are available, the City will attempt to accommodate medical restrictions, when and where reasonable, to the extent required by law and in consideration 113 | P a g e of the City’s needs, whether the safety of citizens and other City employees might be compromised, and the requirements of the Americans with Disabilities Act (ADA). If provision of a modified or light duty would unduly burden the City’s operations, it may not be available to an individual employee. A decision to provide employees modified of light duty assignments is entirely at the discretion of the City, subject to applicable provisions, if any, of the ADA. (1) “Modified duty” or “light duty” is defined as any reduction, elimination or alteration of the essential job functions of a position, as outlined in the job description for the position. (2) Determination Process. All modified duty is subject to availability of positions: (i) A position must be available for an employee to be considered for eligibility under these guidelines. The City is not obligated to create a position for restricted employees. (ii) Prior to returning to work after an absence or after receiving restrictions, the employee requesting modified duty must present the physician’s directive to his/her department head or the Director of Human Resources. (iii) The Director of Human Resources, medical consultant and/or the employee’s treating physician will review the directive and determine if the directive is subject to the ADA. (iv) The employee’s supervisor may be contacted by the Human Resources Department to determine the employee’s suitability for modified duty. (v) The employee and the employee’s supervisor will engage in an interactive process to attempt to identify a reasonable accommodation for a disability or temporary medical restriction. If the City cannot accommodate the restriction, the employee will not be authorized for active duty and will be subject to the leave policies listed below until released to regular (unrestricted) duty. Procedures. Employees unable to return to work due to personal medical issues will be subject to the leave provisions of this Manual. Employees unable to return to work due to workers’ compensation will be subject to the Texas Workers’ Compensation rules and regulations and this Manual. (1) Eligibility and Notice. Subject to Texas Workers’ Compensation Commission Act rules, upon receipt of a physician’s notice regarding a return to work with restrictions, an employee may be offered modified or light duty, if available, according to the determination process listed above. (2) Modified or Light Duty in Current Position: When the employee can return to his/her regular job with restrictions, modified or light duty (if available) may continue to up to twelve weeks. Continuation after twelve weeks will be contingent upon receipt of an updated notice from the treating physician, availability of a limited duty position, and based on City need. 114 | P a g e (3) Modified Duty in Alternate Position: When an employee’s restrictions prevent temporary continuation of his/her regular job, modified duty, if available, may continue at an alternate work-site for up to twelve weeks. Continuation after twelve weeks will be contingent upon receipt of an updated notice from the treating physician, availability of a limited duty position, and based on City need. (4) Modified Duty/Transportation of Citizens & City Personnel: In order to assure safe transportation of citizens and City personnel, modified or light duty is not available for employees who transport and/or supervise citizens in/on City vehicles or transportation, subject to any applicable provisions of the ADA. (5) Worker’s Comp Treatment & Overtime Pay: “Hours worked” are defined as the hours actually worked by the employee in performance of their normal or modified job duties. Leave hours taken for worker’s-comp-related treatment, medical appointments, or meetings will not be counted as hours worked for the purpose of computing overtime. 112.3 Social Security All employees of the City are covered under the Federal Insurance Contributions Act (FICA). This type of government insurance, known as “Federal Old Age, Survivors, and Disability Insurance,” provides for benefits for retirement, disability or upon death. This insurance is financed by social security taxes, which are paid through payroll deductions by the employee. The City contributes a matching amount on behalf of the employee. 112.4 Unemployment Insurance All employees of the City are covered under the Texas Unemployment Compensation Insurance program and the Federal Unemployment Tax Act (FUTA). This program provides payments for unemployed workers in certain circumstances as provided by law. 112.5 Health Related Benefits The City is committed to providing cost-effective benefits which assist employees in being physically and mentally healthy. All regular full-time employees are offered options relating to medical (and in some instances dental) insurance provided by the City. This insurance provides coverage of hospitalization and major medical expenses for illness and accidental injuries off the job. Dependent coverage is available by payroll deductions. The Human Resources Department has more information concerning these insurance coverages and benefits. The benefits and services offered by the City may be changed or terminated at any time and do not constitute a guarantee of continued employment with the City. 112.6 Continuation of Group Insurance (COBRA) The Federal Consolidated Omnibus Budget Reconciliation Act (COBRA) gives covered employees and their qualified beneficiaries the opportunity to continue health insurance coverage under the City of Anna’s health, dental, and vision plan for specified periods of time when a "qualifying event" would normally result in the loss of eligibility. Qualified beneficiaries are individuals who, on the day before a qualifying event, are covered under a group health plan as a covered employee, spouse of a covered employee, or a dependent child of a covered employee. Qualified beneficiaries also include children who are born to, or placed for adoption with, a 115 | P a g e covered employee during the period of COBRA continuation coverage. Some common qualifying events are resignation, termination of employment, (except terminations for gross misconduct) or death of an employee; a reduction in an employee's hours; an employee's divorce or legal separation; and a dependent child who no longer meets eligibility requirements. Under COBRA, the employee or beneficiary pays the full cost of coverage plus an administrative fee. Each eligible employee will be provided with information describing rights and obligations granted under COBRA when the employee becomes eligible for coverage under The City of Anna’s health insurance plan. Once a qualifying event has occurred, the City will notify the qualified beneficiaries of their right to continue health care coverage. 112.7 Miscellaneous Benefits As with the health related benefits, the miscellaneous benefits and services offered by the City may be changed or terminated at any time and do not constitute a guarantee of continued employment with the City. (1) Life Insurance. The City may offer, if economically feasible, basic life insurance to eligible employees to help them protect their family in the event of the employee’s death. Basic life insurance may be offered for purchase by the employee and may be subsidized by the City at a level approved by the City Council on an annual basis. In addition to the basic life insurance, the City may offer eligible employees the opportunity to purchase supplemental life, accidental death and dismemberment insurance on themselves, and dependent life insurance covering their eligible dependents. (2) Short Term Disability. The City may offer, if economically feasible, Short Term Disability (STD) coverage to eligible employees to provide them a portion of their salary when they are unable to work as a result of an off-the-job disability. Short- term disability insurance may be offered for purchase by the employee and/or subsidized by the City at a level approved by the City Council on an annual basis. (3) Long Term Disability. The City may offer, if economically feasible, Long Term Disability (LTD) coverage to eligible employees to provide them a portion of their salary when they are unable to work as a result of a disability. Long-term disability insurance may be offered for purchase by the employee and/or subsidized by the City at a level approved by the City Council on an annual basis. (4) Deferred Compensation. The City may make available a deferred compensation program. The Deferred Compensation Program is a voluntary, tax-deferred program designed to help supplement eligible employees’ income at retirement. Through this program, eligible employees may designate an amount to be deducted from their gross salary on a before-tax basis each pay period and placed in an investment account selected by the employee. 116 | P a g e 113.1 Applicability of Travel Policy It is the policy of the City to reimburse certain expenses incurred by employees and other persons who are authorized to represent the City at various conferences, meetings, conventions, seminars, and functions. The City recognizes that the public interest requires employees to travel at times to conduct City business. The City also recognizes that the public interest is served by the advancement of training and professional development of employees. It is the policy of the City to arrange travel on City business utilizing the most economical means available. This policy is applicable to all City employees and applies to all travel on City business outside the City limits and to all travel reimbursements, subject to budget limitations and authenticated expenses. The purpose of this policy is to establish general guidelines and provide uniformity in handling expenditure requests, and to establish proper accounting for allowable expenses. Except for in extraordinary circumstances, the City will only reimburse travel expenses for pre-approved travel on City business. Department heads should notify the Finance Department of any travel to be undertaken by their employees at the earliest practicable date so that a decision on reimbursement can be made. Travel Policy Responsibilities. (1) Department heads are responsible for communicating and administering the provisions of this policy to employees and approving all travel requests within his/her department and should strive to be proactive in planning for the department’s travel needs in the annual budgeting process. It is the responsibility of the department head to ensure all travel expenses are accounted for within ten working days from the date of return and the Travel Expense Report forwarded to the Finance Department. (2) Employees are responsible for all pertinent information on the Travel Expense Report, indicating purpose of travel, location, type of transportation, departure date, return date, estimated expenditure and funds advanced. Employees are also responsible for retaining records of all transactions for which reimbursement is or will be requested, such as fuel receipts, registration confirmations, final hotel invoices, etc. Copies of these documents must be turned in to the employee’s department head within five working days of the return from travel in order to qualify for reimbursement. (3) The Finance Department is responsible for distributing travel funds in compliance with established policies and guidelines. City of Anna Personnel Policy Manual Section 113. Travel Policy 117 | P a g e (4) If the travel is out-of-state, the City Manager is responsible for either approving or denying the request in advance. After making a decision, the City Manager will return the Travel Expense Report to the department. 113.2 Authorization Required The department director or designee shall authorize travel leave and expenses for City business outside the City. All travel requests must be approved by the department director or designee prior to its occurrence. Any employee traveling on official City business shall communicate with their supervisor as to where they can be reached while out of the City. All travel requests must be submitted on forms provided for that purpose. Any travel out-of-state for City business requires approval of the City Manager or designee prior to its occurrence. 113.3 Allowable Expenses Registration. The City will reimburse actual expenses incurred in registering for a conference, seminar, or meeting. The registration may also be paid with the City P-Card. An original receipt must be furnished for reimbursement purposes. The City encourages advance payment of fees to take advantage of any discounts available. However, any recreation expenses included in the registration (i.e., golf, tennis, runs, etc.) will not be reimbursed. Transportation. The department head/supervisor will be expected to select the mode of transportation that is most economical to the City considering cost and time consumed. Normally, when travel is required for City business a City vehicle, rental car, or personal car may be used when such travel distances are within a 200 mile radius. Employees may be required to use a City vehicle or a rental car if it is more economical than using a personal vehicle. For travel beyond a 200 mile radius of the City, air transportation may be approved. All approved transportation expenses will be reimbursed as follows: (1) For those with a vehicle allowance in place, reimbursement for travel will be provided for pre-approved overnight travel and any travel over 50 miles from City Hall. (2) When employees use their personal vehicles, all travel mileage will be paid at the most recent corresponding GSA rate per mile plus any parking fees incurred by undertaking the City business. Employees may not use a City P-Card to purchase fuel for their personal vehicles. Fuel is included in the mileage rate. (3) When City vehicles are used, all expenses incidental to the use of such vehicle (parking, gasoline, oil, repairs, etc.) shall be reimbursed if a City P-Card is not used. Receipts will be required. (4) When air travel is permitted, employees will book their flight as far in advance as possible. Air travel reimbursement shall be limited to “coach” fares. Additionally, if the employee requires parking at the airport for 24 hours or less, the employee will be reimbursed at the short term parking rates. If requiring parking for 24hours or more, the reimbursement shall be at the long term parking rate. Original receipts will be required for reimbursement. (5) Reimbursement will be made for the use of rental vehicles, taxi or bus fares, etc., provided such expenses are necessary and reasonable. Approval to rent a vehicle 118 | P a g e should be obtained prior to the trip whenever possible. Employees are expected to use the City’s rental vehicle agreement negotiated by the City with Enterprise. The City account is TXM0048. Rental car reservations can be made at https://www.enterprise.com/en/home.html. The employee shall sign and accept the liability/collision insurance agreement on the contract. Meals. A maximum reimbursement for meals will be provided based on the General Services Administration (GSA) guidelines for the location of travel. Total allowance of reimbursement includes a maximum of twenty percent (20%) for gratuity. Expenses for alcoholic beverages are not reimbursable. Original receipts will be required for each meal and the travel expense report should include the date, location, and amount for each meal. The City Manager may approve an exception to the maximum reimbursement amount if the meal is purchased in connection with the conference or event. (1) Per Diem Rate – For overnight trips, employees may, in lieu of the per meal reimbursement and with the approval of their department head, elect to request per diem allowance as follows: Breakfast $10 (if travel commences prior to 6 a.m.) Lunch $15 Dinner $25 (if travel concludes after 7 p.m.) (Per Diem rate includes all tips) No receipts are required when the employee elects to receive the Per Diem Allowance. Reimbursement or Per Diem will not be provided for meals provided at conferences and included in the registration fees, except when limitations of an individual cannot be accommodated by the conference organizers or when the exception is approved by the department head for business purposes. Lodging. Employees are expected to make lodging reservations well in advance whenever possible, and to take other actions to ensure lodging is secured at a moderate rate. Lodging may be secured at facilities provided at the conference location or at facilities recommended by the conference sponsoring organization. Lodging should be a reasonable single accommodation. Receipts for lodging must be provided to obtain reimbursement. (1) Reimbursement will not be made for personal telephone calls, alcoholic beverages, entertainment expenses, or other sundry items not relevant to the public purpose of the travel, except as provided in subsection (f), below. (2) Employees will be allowed a reasonable amount for laundry and dry cleaning expenses for trips lasting five or more days. Original receipts will be required for reimbursement. Entertainment/Business Meals. The City recognizes that from time to time, it is necessary to entertain or provide business meals for dignitaries and state, federal, and business representatives whenever it may be deemed in the best interest of the City. Such expenses may be reimbursed at the discretion of the City Manager. Receipts will be required before reimbursement can be made. Whenever practical, prior authorization should be obtained from the City Manager. Dependent Expenses. There is no objection to a spouse/family member accompanying an employee on an out of town business trip; however, the City will not be financially 119 | P a g e responsible for the spouse/family member of the employee. Any additional expenses incurred such as travel, lodging, meals, or any other miscellaneous expenses will be the sole responsibility of the employee. Employees may not allow family members, friends, or other third parties to enter or ride in a City vehicle or a vehicle rented for the purpose of City- related travel. 113.4 Travel Advances Minimum, but sufficient cash advances may be drawn from the City treasury by employees traveling on City business. All unused travel advances shall be returned immediately upon return of the business trip. Failure to return unused funds will subject the employee to a payroll deduction to credit the proper fund and disciplinary action, up to and including termination. 113.5 Travel Expense Report Procedures Prior to Travel/Trip: (1) A Travel Expense Report form shall be filled out for all overnight travel and for all travel that takes an employee out of the Metroplex for City business. (2) The employee will fill out all information pertinent to the request, indicating purpose of travel, location, type of transportation, departure date, return date, estimated expenditures and funds required in advance. The report shall then be forwarded to the department head for approval. The department head will review the request and sign off if the trip is approved. If the request is for out-of-state travel, it must be approved by the City Manager prior to the time of travel. (3) If the request is for out-of-state travel, the City Manager will note approval or disapproval of the request. If the request is disapproved, it will be sent back to the department head. If the request is approved, it will be forwarded to the Finance Department for processing if an advance payment is requested. . Finance will then return the approved form to the employee with the advance payment. During Travel/Trip: Follow policies for reimbursable expenses. (1) If more than one employee attends the same trip/event, each employee is responsible for completing his/her own expense report. In such instances where employees dine together, a reasonable effort should be made to split the bill. (2) If the bill cannot be split, then one designated employee should pay the full amount and obtain a receipt for the entire amount and document the employees’ names that were present on the Travel Expense Report for reimbursement. Upon Completion of Travel/Trip: (1) The employee will fill out all the pertinent expenditure information, indicating what funds are due the City or what funds are due to the employee within ten working days after returning from the trip. Failure to submit an expense report will subject the employee to a payroll deduction for any funds advanced. All cash advances and expenditure reports shall be submitted on forms provided for that purpose. 120 | P a g e (2) All meeting/event expenses will be indicated on the expense form. All applicable receipts must be included with the report, including registration and airfare. (3) The employee will certify that the expenses are correct and will sign off on the report. The report will be forwarded to their department head for approval. (4) The department head will review the report, sign off and forward to the Finance Department for processing and filing. 113.6 General Provisions Employees are expected to participate each day while attending any conference, seminar or training session paid for by the City. Actions and behaviors of employees and representatives, while traveling on City business at City expense, reflect on the City of Anna. Professionalism is expected of Anna employees and representatives at all times during this type of travel. Any action that is inappropriate or would give the appearance of being inappropriate should be avoided. All employees are expected to report any abuse and/or misuse of travel and training funds to appropriate management. When travel plans are cancelled, the employee shall promptly notify the Finance Department. If the trip is cancelled due to employee illness, a conflict with City business, the City will be responsible for any fees that result from the cancellation. If the trip is cancelled for personal reasons, the employee shall reimburse the City for any fees charged as a result of the cancellation. Any exception to this rule must be approved by the City Manager. Exceptions to these Travel Policies are made only in exceptional circumstances and only in those cases where the best interests of the City are clearly manifested. The City Manager shall determine whether or not to approve such exceptions. Employees may not allow family members, friends, or other third parties to enter or ride in a City vehicle or a vehicle rented for the purpose of City-related travel; provided, however, that an employee may allow family members, friends, or other third parties to enter or ride in the employee’s personal vehicle or rental vehicle if the employee chooses to personally rent the vehicle (or chooses to drive their personal vehicle), in which case the City shall not provide any vehicle-related reimbursement except for mileage reimbursement and parking. 121 | P a g e 114.1 Purpose of Equipment/Vehicle Policy The purpose of these equipment/vehicle policies is to provide for the safe and effective utilization of the City vehicle fleet through rules, regulations and procedures. Employees using City vehicles in the performance of their job duties, or who use private vehicles in the performance of City business, must comply with all federal, state, and local laws regarding vehicle use, operator licensure, and appropriate maintenance of the motor vehicles used for said purposes. Each employee will be held responsible for the proper use, care and operation of a vehicle or piece of equipment assigned to him/her. Abuse of equipment and vehicles constitutes grounds for disciplinary action, up to and including termination. 114.2 Applicability These policies shall apply to all City-owned equipment and vehicles and all persons assigned the equipment and vehicle, inclusive of operators and passengers. These policies shall also apply to City employees who drive privately owned vehicles while conducting City business. 114.3 Use of City Vehicles All City equipment and vehicles are intended for official City business uses only. The City Manager may extend said use according to need and circumstances to another public agency or for uses beneficial to the general public; provided, however, that such extensions (unless in case of emergency or public calamity) must be specified in a written agreement in order to be valid. Use of City equipment and vehicles is limited to the Collin County area unless otherwise approved by the City Manager or a department head. The City Manager will issue any exceptions to this policy to the affected employees in writing. 114.4 City Driving Qualifications Generally. No employee or agent of the City may operate any City vehicle unless they meet all of the qualifications listed in this section. No employee or agent of the City may operate a privately owned motor vehicle in pursuance of City business unless they meet all of the applicable qualifications of this section. Driver’s License Mandatory. (1) If an employee’s position requires the operation of a motor vehicle on public roads while conducting City business, the employee must maintain the appropriate or required, valid State of Texas Driver’s License and must meet City standards for driving records. (2) No employee shall be qualified to drive on City business if he/she does not have a current, valid driver’s license (including any necessary endorsements or additional licensing requirements for the position) from applicant/employee’s state of City of Anna Personnel Policy Manual Section 114. Equipment/Vehicle Policy 122 | P a g e residence. All employees must supply their department head or supervisor with a copy of a current, valid driver’s license prior to operating any City vehicle or motor- driven equipment. (3) No temporary or provisional driver’s license will be accepted. No out-of- service order may be in effect for any CDL driver. Upon moving to the State of Texas, drivers must obtain a valid Texas Driver’s License within 30 days. (4) In addition, certain City employees must possess and carry a current, valid, Commercial Driver’s license while driving a City vehicle or privately owned vehicle being used for City business as required by state law. (5) Whenever driving a motor vehicle which does not require a Commercial Driver’s License, employees must possess and carry a current and valid operator’s license issued by the State of Texas. Employees will present their motor vehicle operator’s license to any authorized person upon request. Safe Driving Record. The City will require all persons operating City vehicles and those employees driving their own vehicles on City business to maintain a safe driving record. A “safe driving record” will be defined as: (1) No more than three moving violations or motor vehicle accidents, in any combination, within a 36 month period; (2) No conviction of driving/boating/flying while intoxicated (DWI/BWI/FWI), driving while under the influence of drugs or alcohol (DWI/DUI); and (3) No felony conviction of failure to stop and render aid, failure to leave identification at the scene of an accident, involuntary manslaughter, criminally negligent homicide, or any other felony involving use of a motor vehicle. Reporting Requirements. Each employee who drives on City business shall report to his/her supervisor (immediately if on-duty, or upon return to work if occurring off-duty) any event which might potentially disqualify the employee from driving on City business, such as citations for moving violations or motor vehicle crashes. Any failure to report a Driving Event(s) to the direct supervisor within 24 hours will subject the employee to disciplinary or corrective action, up to and including termination. At a minimum, any employee who drives on City business shall report all of the following events (“Driving Events”): (1) Moving violation conviction(s); 123 | P a g e (2) A conviction for DWI/DUI or flying/boating while intoxicated (or entering a deferred adjudication program for DWI/DUI); (3) Any cancellation, revocation, or expiration of the employee’s driver’s license without immediate renewal or reinstatement; (4) Any suspension of a driver’s license, any temporary suspension, or out-of-service order of a Commercial Driver’s License, occurring for any reason. This includes, but is not limited to: suspensions for nonpayment of child support; habitual violations; revocations for medical reasons, criminal mischief, fraud, or drug offenses; “serious” traffic violations, or as set forth in Texas Transportation Code Chapter 521; (5) Felony conviction, including but not limited to intoxication assault or intoxication manslaughter, etc., involving the use of a motor vehicle; (6) A suspension, cancellation, revocation, or expiration of the employee’s personal liability insurance on his/her privately-owned vehicle used for City business (or non- owned rider coverage); or (7) Arrest, citation, or indictment for any offense related to public intoxication (PI), driving while intoxicated (DWI), or similar offense involving alcohol or any other drug or substance, whether or not the events forming the basis of the charge or investigation occurred while the employee was on-duty. Driving Record. Employee driving records will be checked at random periodically to ensure that no persons with unsafe driving records are operating City vehicles or driving on City business. A copy of the driving record of all employees with driving responsibilities who do not meet the safe driving requirement will be submitted to their department head for review. Action to be taken in each case will be recommended by the department head, to the City Manager for final approval. Upon request, an employee shall provide their department head with a signed and completed form of release that will allow the City to obtain the employee’s official driving record. Employees who fail to meet the safe driving requirements may be required to submit to one or more of the consequences below, at the discretion of the City Manager: (1) Required to attend a defensive driving class on their own time and at their own expense; (2) Assigned non-driving responsibilities within their current department, if available; (3) Transferred to another department and assigned non-driving responsibilities, if available; (4) Assessed another type of remedial action as determined by the City Manager to be appropriate in that specific case; or (5) Dismissed from employment, if none of the above alternatives can be achieved within a reasonable period of time. A "reasonable period" will be defined as generally 124 | P a g e not to exceed 30 calendar days from the date an employee is notified of his/her failure to meet the safe driving requirements. Proof of Financial Responsibility. Any employee driving a private vehicle on City business is individually responsible for maintaining liability insurance. Employees who operate their privately owned vehicles on City business shall carry proof of financial responsibility (such as a current insurance card for an amount of liability insurance equal to or exceeding the minimum coverage required by state law) at all times the vehicle is in operation, and must present evidence of current insurance coverage upon request to any authorized person. Driver Training. Those employees who drive City-owned vehicles are required to complete a defensive driver training course. Consideration should also be given to other employees who are regularly using privately owned vehicles as part of their essential job functions. The defensive driving requirements are as follows: (1) New employees shall complete a defensive driver training course approved in advance by the employees’ department head. New employees shall take the course at the first available course date after the commencement of employment. (2) Current employees driving a City-owned vehicle—as well as those employees who change positions or assignments to include driving a City-owned vehicle—are similarly required to complete a defensive driver training course approved in advance by the employees’ department head. These employees shall take the course at the first course date as determined by their department head. (3) All employees who are required to participate in defensive driver training shall be required to repeat such training at least once every three years. Other Qualifications. (1) All employees must be at least 18 years of age before operating any City vehicle or motor-driven equipment. (2) Employees must also consistently operate any City vehicle or privately-owned vehicle used in support of City business in a manner which reflects positively on the City. This includes courtesy to other drivers, appropriate distancing when parking any City vehicle, and heightened caution in the presence of pedestrians. 114.5 Operation and Ridership Except for maintenance, service and repair, only City employees are allowed to operate a City vehicle. Ridership should be limited to employees or persons on official City business. Due to the nature of certain employees being required to be on call and take a vehicle home, the City Manager may exercise limited discretion in situations wherein the ridership policy might cause transportation difficulties to an employee required to be on standby and use a City vehicle. Employees should organize vehicle use to avoid unnecessary trips and minimize vehicle wear and tear. Employees travelling to a common destination should travel in as few vehicles as is practical under the circumstances. 125 | P a g e Employees shall be personally liable for any citations or penalties accompanying violations of this provision. Tolls and parking fees (but not fines, penalties, costs, or citations) may be reimbursed upon presentation of appropriate documentation to the Director of Human Resources or department head. In some instances, due to frequent toll use, some vehicles may be outfitted with a City-purchased and owned toll tag. Toll tags are to be assigned to a specific vehicle and are the responsibility of the department head to monitor and ensure that toll tags are maintained and used only for City business. Employees shall be responsible for paying all fines and penalties stemming from moving violations or other fines received while on duty or when operating a City vehicles or privately- owned vehicle on City business. Even if properly paid by the employee, such violations may be used to determine whether an employee may continue to drive motor vehicles on City business. 114.6 Privately Owned Vehicles on City Business Employees may use privately owned vehicles on City business only after approval from the department head or City Manager. No employee shall be allowed to use a privately owned vehicle without first providing proof of adequate insurance coverage and a valid driver’s license issued by the State of Texas. Privately owned vehicles being used for City business must display valid registration and inspection stickers and have a current, valid, Texas license plate attached to the front and rear of the vehicle. Employees are responsible for the expense of maintaining these items and shall take all steps to ensure legal operation of the vehicle during their off-work hours. Privately owned vehicles will not use City gasoline, oil, fuel additives, filters, or any maintenance supplies provided by the City. Only eligible employees can be reimbursed for mileage driven in support of City business. No mileage reimbursements will be possible without properly documented mileage and advance authorization of mileage reimbursement. 114.7 Safety, Maintenance, and Care Generally. Supervisors shall not allow any driver to operate an unsafe City vehicle or operate any vehicle for something other than its designed purpose, or issue any directives that may cause a violation of this motor vehicle use policy. Safety. All operators and passengers will be individually accountable for abiding with all laws pertaining to vehicles and their operation. (1) No one is allowed to operate a City vehicle or piece of equipment while under the influence of alcohol, medication or drugs which might impair the operator’s mental or physical faculties, including but not limited to judgment, reflexes, and senses.. (2) No person with corrective lenses, devices, or appliances shall be allowed to operate City equipment or vehicles without same being in place and in good repair. (3) No City employees may operate or place in motion any motor vehicle on City business unless all vehicle occupants are first secured using all available safety restraints, such as seat belts and shoulder harnesses, in the manner prescribed by 126 | P a g e state law. All City employees riding in a motor vehicle while on City business shall use all available safety restraints. Failure to appropriately use safety devices while operating or occupying a motor vehicle on City business may be the basis for disciplinary action, up to and including termination. (4) No motor vehicle used for performance of City business shall be operated with vision obstructed by broken or cracked glass, dirt, frost, ice, dew, or other condensation on windows or mirrors. Employees are required to remove any impediments to clear view prior to putting any vehicle in motion. (5) No City vehicle shall be operated if it has a door which does not close properly or if it has a door that must be secured by means other than the appropriate standard latching mechanism. (6) Any person who is injured or becomes ill should use the radio and/or cellular phone to obtain assistance rather than try to operate a vehicle or piece of equipment. (7) Use of tobacco is not allowed in City vehicles (see Section 104.06.1 of this Manual). (8) Employees shall take all practical measures to eliminate distractions while driving any motor vehicle in support of City business. Caution must be exercised with the use of communication radios and/or cellular phones while operating a vehicle. Every effort should be made to minimize the use of these devices while driving. Use of cellular phones or other wireless communication devices in a “hands-free” mode is permitted unless a department policy mandates otherwise. Reading or sending text messages while driving is strictly prohibited. Fire and law enforcement officers are permitted to use electronic devices while driving if the usage is within the course and scope of an official emergency response or communication, in circumstances where the device is essential for the nature of the emergency response and no other employee is available to utilize the device, so long as such use does not unduly endanger any persons or property. (9) No personal or City-issued cell phones (including texting), two-way communication radios, or any other device utilizing earphones (whether or not issued by the City) shall be worn or operated while driving, with the exception of those devices utilized by the Police Department and/or Fire Department in the execution of their job functions as necessary to communicate through dispatch services and respond to emergency situations. In the event an employee is found to be using one of these devices while driving a City vehicle, that employee is subject to disciplinary action, up to and including termination. (10) Any City employee operating a City vehicle shall avoid any behavior which presents an increased risk of damage to the vehicle or which unnecessarily accelerates wear and tear of that vehicle or its components. Forbidden behaviors include, but are not limited to: excessively racing a cold engine; riding a clutch; continuing to operate a City vehicle/item of equipment when instruments or warning lights indicate a malfunction or deficit of operating liquids (e.g., “Low Oil” light); continuing to operate a City vehicle that is producing unusual noises or is difficult to control; overloading any City vehicle or item of equipment or using it for purposes other than those for which it was designed; and introducing incorrect fuel (such as 127 | P a g e diesel rather than gasoline) or incorporating any foreign substance (such as water into the oil system) into a City vehicle or equipment. (11) Operators of City vehicles shall insure that all loads are secured in accordance with the rules of the road, that the vehicle load will safely pass under all obstructions (suspended lines, under/overpasses) on the planned route of travel, and that all passengers can be safely and lawfully transported before setting the vehicle in motion. (12) City vehicles shall not be used to push or tow any other vehicle unless properly equipped for such purpose. (13) City vehicles should not be left unlocked, except in extreme emergencies. Under no circumstances should keys be left with unattended vehicles. (14) Any employee who is using prescription or non-prescription medication or substances having side effect(s) that may hinder or impair safe driving shall not drive on City business. In the event an employee is found to be using these substances while driving a City vehicle, that employee is subject to disciplinary action, up to and including termination. (15) Employees shall not drive a City vehicle or a privately-owned vehicle on City business while under the influence of alcohol or any controlled substance. In the event an employee is found to be under the influence of alcohol or any controlled substance while driving a City vehicle, that employee is subject to disciplinary action, up to and including termination. Maintenance and Care. Periodic inventory of equipment and vehicles will be taken at the discretion of the City Manager or other functional manager. All damaged, broken, or lost equipment will be repaired, replaced, or removed from service. (1) Those personnel assigned use of a vehicle or piece of equipment will be responsible for the maintenance and care of said vehicle/equipment. (2) Damage arising from misuse or neglect attributable to operator negligence is subject to review by the City Manager and subsequent repair at the expense of employee held responsible for same. (3) No one shall operate a City vehicle or piece of equipment that is unsafe. All employees shall report any unsafe condition, maintenance warning, or other disrepair immediately to the appropriate supervisor. If a City vehicle becomes disabled, malfunctions, or is believed to possess any characteristic presenting a safety risk in the opinion of a reasonably prudent motor vehicle operator, all employees are required to report the disrepair or unsafe condition to the appropriate supervisor immediately. In the event a City vehicle can still be operated safely without harm or undue risk to the vehicle, its passengers, or others, the City vehicle may be driven to a repair facility. If it is uncertain whether or not a City vehicle is safe for driving, the department head responsible for the vehicle shall make arrangements for the vehicle to be towed to a repair facility. 128 | P a g e (4) Employees shall not make any modifications to City vehicles or City vehicle mounted equipment without prior written authorization from the appropriate department official responsible for the maintenance of that vehicle or piece of equipment. (5) Employees who drive City vehicles shall keep the interior clean and free of trash and other debris. (6) No employee shall cause or allow the engine of a City vehicle within his or her custody or control to idle for more than five consecutive minutes in a one-hour period when the City vehicle is not in motion or when that engine is not being used for its primary function. No employee shall switch the City vehicle engine off and back on in a manner that would serve to comply with the five-minute limitation, but defeat the intent of this restriction, which is to reduce emissions, fuel consumption, and vehicular wear caused by engine idling. Exceptions to this rule include: (i) City vehicles prohibited from movement due to traffic conditions over which the operator has no control; (ii) City vehicles being used in an emergency or law enforcement capacity; (iii) City vehicles being used as a primary power source for another device, such as a power take-off unit; (iv) City vehicles being operated for maintenance and diagnostic purposes; (v) City vehicles being used in transit operations, in which case the engine may be allowed to idle for up to 30 minutes; or (vi) City vehicles idling to protect employee health or safety. 114.8 Vehicle Logs It will be the responsibility of each operator of a City vehicle or piece of equipment to properly fill out any paperwork associated with the use, mileage, gas/lubricant applications, maintenance or any other documentation, which may be required from time to time. It is ultimately the department head’s responsibility to ensure that required reports associated with City vehicles in use by their department are completed and properly filed. 114.9 Take Home Vehicle Policy Under limited circumstances, employees of the City may be permitted to drive a City vehicle to be kept off of City premises in “home storage.” Employees may be authorized to drive a City vehicle home under the following conditions: (1) Employee is on 24 hour call. (2) Department heads, supervisors, or other employees that are subject to emergency call-back after regular work hours. (3) Employees that conduct City business on a frequent basis before and after normal working hours. 129 | P a g e Any employee allowed to take home a City owned vehicle must: (1) receive permission form his or her department head and the City Manager, in writing, stipulating the conditions and privileges. (2) keep the vehicle at their home or at a pre-designated area; (3) use the vehicle for City business use only. Personal or private use of a City owned take-home vehicle is prohibited. (4) park the vehicle off the street; and (5) only allow City employees to ride in the City vehicle without explicit authorization. Use of a City owned vehicle as a take-home vehicle is a discretionary privilege that can be withdrawn by the City Manager for any reason. 114.10 Traffic Citations and Accidents Generally. Supervisors receiving a report of a Driving Event, or any employee condition related to driving safety, shall promptly investigate the surrounding circumstances, prepare a written report, and forward it report to the department head within 48 hours. The supervisor shall require the employee to present all court documents and motor vehicle record reports necessary for the department to evaluate whether a potentially disqualifying Driving Event has occurred. Traffic Citations. If an employee receives a traffic citation for a moving violation committed while operating a City-owned vehicle or while driving their personal vehicle on City business, the employee will be expected to pay any resulting fine at their own expense. Repeated traffic violations or misuse of City vehicles or equipment may result in disciplinary action, up to and including termination. Accidents in City-Owned Vehicles. If an employee is involved in an accident while driving a City vehicle, that individual will be required to follow the specific accident reporting procedure outlined by the department. In general, for all departments, the employee should: (1) Call 911 for immediate assistance. (2) Call the Police Department immediately. Do not move the vehicle in the event of an injury accident until directed by a police officer. (3) Obey all state laws regarding rendering assistance to any injured persons, providing required information, and cooperating with law enforcement investigation of the accident. (4) Provide their name and department to the other driver without discussing the accident with anyone except the investigating officer or their supervisor. (5) Call the supervisor who will then be responsible to file the required accident form. Forms are available in the department or from Human Resources. An accident report 130 | P a g e shall be filed in all instances involving City vehicles and equipment, regardless of the amount of the damage or location of the accident. (6) Report to one of our drug and alcohol testing sites immediately. A supervisor or other member of City administration must provide transport unless otherwise directed by the City Manager. Exceptions can only be made by the City Manager or his or her designee. (7) Failure to report any accident or vehicle damage immediately may result in disciplinary action including termination. Employees who are involved in any arrest, citation, indictment, investigation, collision, or other incident in which the employee’s use of alcohol, over-the-counter drugs, prescription medications, or some other drug or controlled substance is alleged to be a factor are expressly forbidden from operating any motor vehicle on City business pending re- authorization by the City. This includes, but is not limited to, arrests or citations for DWI/PI which have not yet reached a final adjudication. The City Manager and department head shall review all reports of Driving Events and determine whether the employee can be permitted to drive on City business. An employee whose essential job functions including driving on City business may be subject to termination if suspended from driving City vehicles for any period. 114.11 Authority of City Manager to Control Use The City Manager has the authority to impose additional qualifications and restrictions on the operation and use of City vehicles, if such restrictions contribute to the safety of the general public and City employees, or if they serve to improve the functional operations of any City department without compromising the safety of any person. 131 | P a g e 115.1 Purpose It is the policy of the City to maintain a work environment free from the use, possession and effect of controlled substances and alcoholic beverages. The City recognizes that drugs and alcohol impair employee judgment, which may result in increased safety risks, hazards to the public, employee injuries, faulty decision-making, and reduced productivity. Therefore, the City expects all employees to be in a state of mind and physical condition fit to complete their assigned duties safely and competently during work hours. 115.2 General Policy Being under the influence of alcohol or controlled substance on City property is prohibited, regardless of whether or not the employee is currently on duty. The unauthorized use or possession of prescription drugs or excessive or improper use of over-the-counter drugs on City property is prohibited. Employees who violate this policy are subject to appropriate disciplinary action, including termination. This policy applies to all employees of the City, regardless of rank or position, and includes temporary and part time employees. 115.3 Violations The sale or unlawful manufacture, possession, distribution, and/or use of controlled substances or alcoholic beverages by an employee while on duty or during lunch and/or other breaks or at any time while the employee is on a City work site or on duty, is absolutely prohibited and constitutes cause for discipline, up to and including termination, in accordance with these personnel regulations. The appropriate law enforcement agency will be notified of any such sale, distribution, and/or use of illegal substance by employees. Any employee who is arrested for a drug-related crime under a state or federal criminal drug statute for violations occurring on or off duty must report their arrest to their supervisor within three days. The City retains the right to perform drug tests of its employees at any time when appropriate under these regulations and at a testing facility of its choosing. Failure to comply with instructions to report and submit to a drug test as authorized under these policies will be considered insubordination and may constitute grounds for disciplinary action up to and including termination. 115.4 Surveillance, Searches, and Testing Generally. By accepting an offer of employment, all employees of the City consent to the video surveillance described below, at any time the City may choose, and also release the City of Anna Personnel Policy Manual Section 115. Substance Abuse Policy 132 | P a g e City from all liability, including liability for negligence, associated with the enforcement of the policies and procedures in this Manual and/or any searches or surveillance or testing undertaken pursuant to this section. This consent to surveillance and searches and accompanying release of liability does not create, modify, or otherwise affect the employee- at-will status of any City employee, and should not be interpreted to constitute any guarantee or promise of employment. Failure to adhere to this section and any related policies or procedures may subject an employee to disciplinary action, up to and including termination without warning. Surveillance. In order to promote the safety of employees and City visitors, as well as the security of its facilities, the City may conduct video surveillance of any portion of its premises at any time, the only exception being private areas of restrooms, showers, and dressing rooms. The City may position video cameras in appropriate places within and around City buildings to monitor activity and promote the safety and security of people and property. All desks, storage areas, lockers, and all vehicles owned, financed, or leased by the City or used by the City to transport employees, goods, and/or products are subject to monitoring and search at any time without the employee’s knowledge, presence, or permission. Searches. (1) The City reserves the right to conduct searches to monitor compliance with rules concerning the safety of employees, security of the City and individual property, drugs and alcohol, and possession of other prohibited items. “Prohibited items” includes: illegal drugs, alcoholic beverages, prescription drugs or medications not used or possessed in compliance with a current valid prescription; unauthorized weapons; any items of an obscene, harassing, demeaning, or violent nature; and any property in the possession or control of an employee who does not have authorization from the owner of the property to possess or control the property. “Control” means knowing where a particular item is, having placed an item where it is currently located, or having any influence over its continued placement. The City may search employees, their work areas, lockers, personal vehicles (if driven or parked on City property), and other personal items such as bags, purses, briefcases, backpacks, lunch boxes, and other containers, and such searches shall be conducted in accordance with these policies. In requesting a search, the City makes no accusation of theft, some other crime, or any other variety of improper conduct. (2) There is no general or specific expectation of privacy in the workplace of the City, either on the premises of City property or while on duty. Employees should assume that what they do while on duty or on City premises is not private. All employees and all of the areas listed above are subject to search at any time; if an employee uses a locker or other storage area at work, including a locking desk drawer or locking cabinet, the City will either furnish the lock and keep a copy of the key or combination, or else allow the employee to furnish a personal lock, but the employee must give the City a copy of the key or combination. The areas in question may be searched at any time, with or without the employee being present. As a general rule, with the exception of items relating to personal hygiene or health, no employee should ever bring anything to work or store anything at work that he or she would not be prepared to show and possibly turn over to City officials and/or law enforcement authorities. 133 | P a g e (3) The City may conduct unannounced searches or inspections of City-owned property where there is reasonable suspicion of criminal activity or the presence of alcohol or controlled substances. These searches may include, but are not limited to, lockers, offices, tool chests, and desks located on City property, work sites and City-owned vehicles. Where an employee may be able to limit access to a City-owned container (such as a locker securable by a padlock), the City may either request that the employee remove any locks to allow a search or physically remove the locks without prior notice to the employee. The City will not reimburse any expenses associated with removal of a security device to allow a search of City premises. (4) The City may search or seize an employee’s personal property when there is reasonable suspicion of criminal activity or the presence of alcohol or controlled substances. In conducting such searches or seizures, the City will coordinate with the Police Department and/or the City Attorney’s office before conducting a search or seizure, except when exigent circumstances are present. All employees of the City are subject to this policy. However, any given search may be restricted to one or more specific individuals, depending on the situation. “Reasonable suspicion” means circumstances suggesting to a reasonable person that there is a possibility that one or more individuals may be in possession of a prohibited item as defined above. Any search performed under this policy will be done in a manner protecting the employees’ privacy, confidentiality, and personal dignity to the greatest extent possible. (5) No employee will be physically forced to submit to a search or seizure unless exigent circumstances require same. However, an employee who refuses to submit to a search request from the City will face disciplinary action, up to and possibly including immediate termination of employment. Testing. (1) When the department head, Human Resources or City Manager has a reasonable suspicion that an employee, at work or when reporting to work, is under the influence of alcohol or a controlled substance, or is abusing alcohol or a controlled substance and appears to be impaired or unfit for duty, the employee will be required to submit to a drug-alcohol test. Reasonable suspicion is a belief based on objective facts sufficient to lead a reasonable prudent person to suspect that an employee is under the influence of drugs or alcohol such that the employee’s ability to perform the functions of the job is impaired or reduced. Observations which constitute a factual basis for determining reasonable suspicion may include, but are not limited to: odor of alcoholic beverage, erratic behavior, violent mood swings, excessive absenteeism including tardiness, a medical emergency that can be attributed to drug use, physical on-the-job evidence of drug use, documented deterioration in the employee's job performance, or an accident which is caused by the apparent action or inaction of the employee. (2) The immediate supervisor or department head or Human Resources will submit information in writing, to the City Manager that describes the incident, documenting the circumstances leading to the conclusion that a drug test is necessary. Such documentation will include the date, time, place, description of incident, and statements of witnesses. Any other evidence such as drugs, drug paraphernalia and containers will be collected. After documenting the incident, the department head 134 | P a g e will contact Human Resources and the City Manager to determine if drug testing is appropriate and to arrange for testing. If drug testing is appropriate, the immediate supervisor or department head will transport the employee to the drug specimen collection facility. The drug/alcohol tests may utilize urine, blood, hair follicle, or other type of sample as medically appropriate and feasible under the circumstances. After testing, the employee will be transported home by their immediate supervisor, a relative or their emergency contact of record and instructed not to report to work until the results of the test are known. (3) Failure to comply with requested drug testing will subject the employee to disciplinary action, which may include termination. 115.5 Preventive Acts Employees taking drugs prescribed by an attending physician must advise their immediate supervisor in writing of the possible effects of such medication regarding their job performance and physical/mental capabilities. This written information must be kept confidential and communicated to the immediate supervisor prior to the employee commencing work. All prescription drugs must be kept in their original container. Supervisors should reasonably accommodate any temporary or permanent limitations caused by an employee’s medications. Extreme caution should be used in all assignments of medicated employees involving operation or supervision of motor vehicles or heavy equipment, and any doubt should be resolved in postponing any such operation or supervision until it is certain that the employee can safely do so. 115.6 Work Related Accident Any employee involved in a work related accident shall be subject to urine, breath, blood and/or hair follicle testing for drug or alcohol use or abuse. In the context of this subsection, “involved” includes all rational connections to the accident, and may call for drug testing of an employee who was injured due to the apparent fault of another person. 135 | P a g e 116.1 Reservation of Rights The City reserves the right (with or without notice) to interpret, change, suspend, cancel or dispute all or any part of this policy, or the procedures or benefits discussed herein. Where practicable, employees will be notified before implementation of any change. Although adherence to this entire Manual is considered a condition of continued employment, nothing in this Manual alters an employee’s status and shall not constitute nor be deemed a contract or promise of employment. Employees remain free to resign their employment at any time for any or no reason, without notice and the City retains the right to terminate any employee at any time, for any or no reason, without notice. In the event of a typographical or scrivener’s error in this Manual as to any number, letter, word, sentence, phrase or other content, which if implemented literally would have the effect of proving any unintended benefit or degree of benefit, the City Manager shall have full discretion to implement the provision(s) where such errors appear as if the provision(s) had been stated without the error and with the correct content. Any employee who notices a typographical or scrivener’s error in this Manual or any amendment to this Manual shall promptly report same to the employee’s supervisor or department head. 116.2 Other Laws and Regulations This Manual is not intended to fully describe or explain all of an employee’s potential rights or duties. The provisions of this policy shall apply in addition to, and shall be subordinated to, any requirements imposed by applicable federal, state, or local laws, regulations or judicial decisions. Employees who desire further information should independently investigate the governing law and contact an attorney to evaluate their position. Unenforceable provisions of this policy City of Anna Personnel Policy Manual Section 116. Reservation of Rights 136 | P a g e EXHIBIT 1 Appendix A-1 Acknowledgement Form Property of the City of Anna TO BE SIGNED & RETURNED TO THE HUMAN RESOURCE DEPARTMENT PRIOR TO START OF CITY EMPLOYMENT (Employees are not eligible for compensation, leave, or benefits until this document has been signed and included in that employee’s personnel file.) I, , acknowledge receipt of a full copy of the City of Anna Personnel Policy Manual (this “Manual”) and that I have read and understood its contents. Like all other employees of the City covered under this Manual, I am responsible for knowing its contents and keeping it updated. I understand and acknowledge that the City of Anna may change or modify the policies and procedures in this handbook at any time, with or without prior notice. I understand that violating the policies and rules set out in this handbook may lead to disciplinary action up to and including termination. I further understand that this Manual does not create a contract for employment with the City of Anna or in any way modify, limit, or alter the “at-will” nature of the undersigned’s employment with the City of Anna. Issued to: Signed: Date received: A copy of this signed page shall be placed in the employee’s personnel file. Personnel Policy Manual Appendix A-3 CONSIDERATION FOR PROMOTION/TRANSFER REQUEST Name SSN (last 4 digits) I request to be considered for a promotion/transfer (circle one) from my present job position, (Position Title and Department) to the job position of: (Position Title and Department) Years Employed with the City: Years in Current Position: Applicant’s Signature Date Appendix A-3 Receiving Department Head Approval/Denial (circle one) APPROVED/DENIED BY DATE City Manager Approval/Denial (circle one) APPROVED/DENIED BY DATE Page 1 of I understand that the information conveyed in this document shall be used to consider my request for the promotion/transfer described herein only. Furthermore, I understand that I must provide a separate completed form to be considered for each promotion/transfer. Reason for Promotion/Transfer: Current Department Head Approval/Denial (circle one) APPROVED/DENIED BY DATE Appendix A-5 Page 1 of 3 Appendix A-5 DISCRIMINATION/HARASSMENT/SEXUAL HARASSMENT COMPLAINT FORM This form may be filled-out by the complainant or person receiving the complaint. Date of Complaint: Name of Person Completing this Form: Phone Number: Title: Complainant Information Name: Title: Direct Supervisor: Department: Work Address: Work Phone: Home Address: Home Phone: Type of Complaint: (check the type(s) of discrimination/harassment that relates to this complaint) Sexual Harassment Age Discrimination Disability Discrimination Sexual Orientation Sex Discrimination Religious Discrimination Pregnancy Discrimination Gender Identity Racial Discrimination National Origin Discrimination Color Discrimination Genetic Information Hostile Work Environment or Retaliation: (must be based on one or more of the protected groups listed above, check if appropriate) Hostile Work Environment Retaliation By initialing the below box you are acknowledging that you understand that every complaint of a discrimination/harassment/sexual harassment nature will be investigated and that the accused will be notified of the complaint. Initials Appendix A-5 Page 2 of 3 Appendix A-5 What or who do you believe was responsible for the alleged discrimination or harassment incident(s)? Accused Information Name: Title: Relationship to Complainant: (i.e. supervisor, co-worker, subordinate, etc.) Direct Supervisor: Department: Work Address: Work Phone: Describe the alleged harassment or discrimination incident(s). Please specify location(s), date(s), and time(s) of each occurrence. Use as much detail as possible. Attach additional sheets, if necessary. Did you inform the alleged offender(s) their behavior was unacceptable? Yes No If yes, please describe: Appendix A-5 Page 3 of 3 Appendix A-5 Were there any witnesses to the alleged harassment or discrimination incident(s)? Yes No If yes, please provide the name(s), address(es) and phone number(s): Have you reported this incident to anyone else? Yes No If yes, please provide the name(s), address(es) and phone number(s): What remedy are you seeking? Please attach any supporting documentation to this form. I, (complainant name) certify this statement is true and factual. Complainant’s Signature: Date: Printed Name: Phone Number: Appendix A-6 NOTICE OF INTENT TO RETURN FROM FAMILY MEDICAL LEAVE Name: Date: Social Security Number: Department: Date of Leave Commenced: Date of Planned Return: I understand that my restoration to employment is subject to the following conditions: 1. If leave was for a continuous block of time and my health care provider has released me to return to work, I intend to return to work as scheduled. Yes No. If “no” is selected, I am stating I do not intend to return to work and I am resigning my employment with the City of Anna. 2. I was advised, prior to the date of this Notice, that as a condition of my restoration to employment, I would be required to provide a written certification from my health care provider that I am able to resume working and can perform the essential functions of my job. My health care provider has reviewed documents related to my job and their certification is indicated below. Employee’s Signature: Date: Health Care Provider Information: Health Care Provider Name: Certification Date: I have examined the above referenced employee and compared the employee’s condition to the job duties and requirements for the position of . I hereby certify that he/she is fully able to resume working in that position. Health Care Provider’s Signature: Date: Printed Name: Phone Number: Appendix A-6 Page 1 of 1 Certification of Health Care Provider for U.S. Department of Labor Employee’s Serious Health Condition Wage and Hour Division (Family and Medical Leave Act) DO NOT SEND COMPLETED FORM TO THE DEPARTMENT OF LABOR; RETURN TO THE PATIENT OMB Control Number: 1235-0003 Expires: 5/31/2018 SECTION I: For Completion by the EMPLOYER INSTRUCTIONS to the EMPLOYER: The Family and Medical Leave Act (FMLA) provides that an employer may require an employee seeking FMLA protections because of a need for leave due to a serious health condition to submit a medical certification issued by the employee’s health care provider. Please complete Section I before giving this form to your employee. Your response is voluntary. While you are not required to use this form, you may not ask the employee to provide more information than allowed under the FMLA regulations, 29 C.F.R. §§ 825.306-825.308. Employers must generally maintain records and documents relating to medical certifications, recertifications, or medical histories of employees created for FMLA purposes as confidential medical records in separate files/records from the usual personnel files and in accordance with 29 C.F.R. § 1630.14(c)(1), if the Americans with Disabilities Act applies, and in accordance with 29 C.F.R. § 1635.9, if the Genetic Information Nondiscrimination Act applies. Employer name and contact: Employee’s job title: Regular work schedule: Employee’s essential job functions: Check if job description is attached: SECTION II: For Completion by the EMPLOYEE INSTRUCTIONS to the EMPLOYEE: Please complete Section II before giving this form to your medical provider. The FMLA permits an employer to require that you submit a timely, complete, and sufficient medical certification to support a request for FMLA leave due to your own serious health condition. If requested by your employer, your response is required to obtain or retain the benefit of FMLA protections. 29 U.S.C. §§ 2613, 2614(c)(3). Failure to provide a complete and sufficient medical certification may result in a denial of your FMLA request. 20 C.F.R. § 825.313. Your employer must give you at least 15 calendar days to return this form. 29 C.F.R. § 825.305(b). Your name: First Middle Last SECTION III: For Completion by the HEALTH CARE PROVIDER INSTRUCTIONS to the HEALTH CARE PROVIDER: Your patient has requested leave under the FMLA. Answer, fully and completely, all applicable parts. Several questions seek a response as to the frequency or duration of a condition, treatment, etc. Your answer should be your best estimate based upon your medical knowledge, experience, and examination of the patient. Be as specific as you can; terms such as “lifetime,” “unknown,” or “indeterminate” may not be sufficient to determine FMLA coverage. Limit your responses to the condition for which the employee is seeking leave. Do not provide information about genetic tests, as defined in 29 C.F.R. § 1635.3(f), genetic services, as defined in 29 C.F.R. § 1635.3(e), or the manifestation of disease or disorder in the employee’s family members, 29 C.F.R. § 1635.3(b). Please be sure to sign the form on the last page. Provider’s name and business address: Type of practice / Medical specialty: Telephone: ( ) Fax:( ) Page 1 Form WH-380-E Revised May 2015 Page 2 CONTINUED ON NEXT PAGE Form WH-380-E Revised May 2015 PART A: MEDICAL FACTS 1. Approximate date condition commenced: Probable duration of condition: Mark below as applicable: Was the patient admitted for an overnight stay in a hospital, hospice, or residential medical care facility? No Yes. If so, dates of admission: Date(s) you treated the patient for condition: Will the patient need to have treatment visits at least twice per year due to the condition? No Yes. Was medication, other than over-the-counter medication, prescribed? No Yes. Was the patient referred to other health care provider(s) for evaluation or treatment (e.g., physical therapist)? No Yes. If so, state the nature of such treatments and expected duration of treatment: 2. Is the medical condition pregnancy? No Yes. If so, expected delivery date: 3. Use the information provided by the employer in Section I to answer this question. If the employer fails to provide a list of the employee’s essential functions or a job description, answer these questions based upon the employee’s own description of his/her job functions. Is the employee unable to perform any of his/her job functions due to the condition: No Yes. If so, identify the job functions the employee is unable to perform: 4. Describe other relevant medical facts, if any, related to the condition for which the employee seeks leave (such medical facts may include symptoms, diagnosis, or any regimen of continuing treatment such as the use of specialized equipment): Page 3 CONTINUED ON NEXT PAGE Form WH-380-E Revised May 2015 ________ PART B: AMOUNT OF LEAVE NEEDED 5. Will the employee be incapacitated for a single continuous period of time due to his/her medical condition, including any time for treatment and recovery? No Yes. If so, estimate the beginning and ending dates for the period of incapacity: 6. Will the employee need to attend follow-up treatment appointments or work part-time or on a reduced schedule because of the employee’s medical condition? No Yes. If so, are the treatments or the reduced number of hours of work medically necessary? No Yes. Estimate treatment schedule, if any, including the dates of any scheduled appointments and the time required for each appointment, including any recovery period: Estimate the part-time or reduced work schedule the employee needs, if any: hour(s) per day; days per week from through 7. Will the condition cause episodic flare-ups periodically preventing the employee from performing his/her job functions? No Yes. Is it medically necessary for the employee to be absent from work during the flare-ups? No Yes . If so, explain: Based upon the patient’s medical history and your knowledge of the medical condition, estimate the frequency of flare-ups and the duration of related incapacity that the patient may have over the next 6 months (e.g., 1 episode every 3 months lasting 1-2 days): Frequency : times per week(s) month(s) Duration: hours or day(s) per episode ADDITIONAL INFORMATION: IDENTIFY QUESTION NUMBER WITH YOUR ADDITIONAL ANSWER. Page 4 Form WH-380-E Revised May 2015 Signature of Health Care Provider Date PAPERWORK REDUCTION ACT NOTICE AND PUBLIC BURDEN STATEMENT If submitted, it is mandatory for employers to retain a copy of this disclosure in their records for three years. 29 U.S.C. § 2616; 29 C.F.R. § 825.500. Persons are not required to respond to this collection of information unless it displays a currently valid OMB control number. The Department of Labor estimates that it will take an average of 20 minutes for respondents to complete this collection of information, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. If you have any comments regarding this burden estimate or any other aspect of this collection information, including suggestions for reducing this burden, send them to the Administrator, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Ave., NW, Washington, DC 20210. DO NOT SEND COMPLETED FORM TO THE DEPARTMENT OF LABOR; RETURN TO THE PATIENT. Page 1 CONTINUED ON NEXT PAGE Form WH-380-F Revised May 2015 Certification of Health Care Provider for U.S. Department of Labor Family Member’s Serious Health Condition (Family and Medical Leave Act) Wage and Hour Division DO NOT SEND COMPLETED FORM TO THE DEPARTMENT OF LABOR; RETURN TO THE PATIENT. SECTION I: For Completion by the EMPLOYER OMB Control Number: 1235-0003 Expires: 5/31/2018 INSTRUCTIONS to the EMPLOYER: The Family and Medical Leave Act (FMLA) provides that an employer may require an employee seeking FMLA protections because of a need for leave to care for a covered family member with a serious health condition to submit a medical certification issued by the health care provider of the covered family member. Please complete Section I before giving this form to your employee. Your response is voluntary. While you are not required to use this form, you may not ask the employee to provide more information than allowed under the FMLA regulations, 29 C.F.R. §§ 825.306-825.308. Employers must generally maintain records and documents relating to medical certifications, recertifications, or medical histories of employees’ family members, created for FMLA purposes as confidential medical records in separate files/records from the usual personnel files and in accordance with 29 C.F.R. § 1630.14(c)(1), if the Americans with Disabilities Act applies, and in accordance with 29 C.F.R. § 1635.9, if the Genetic Information Nondiscrimination Act applies. Employer name and contact: SECTION II: For Completion by the EMPLOYEE INSTRUCTIONS to the EMPLOYEE: Please complete Section II before giving this form to your family member or his/her medical provider. The FMLA permits an employer to require that you submit a timely, complete, and sufficient medical certification to support a request for FMLA leave to care for a covered family member with a serious health condition. If requested by your employer, your response is required to obtain or retain the benefit of FMLA protections. 29 U.S.C. §§ 2613, 2614(c)(3). Failure to provide a complete and sufficient medical certification may result in a denial of your FMLA request. 29 C.F.R. § 825.313. Your employer must give you at least 15 calendar days to return this form to your employer. 29 C.F.R. § 825.305. Your name: First Middle Last Name of family member for whom you will provide care: First Middle Last Relationship of family member to you: If family member is your son or daughter, date of birth: _ _ _ Describe care you will provide to your family member and estimate leave needed to provide care: Page 2 CONTINUED ON NEXT PAGE Form WH-380-F Revised May 2015 Employee Signature Date Page 3 CONTINUED ON NEXT PAGE Form WH-380-F Revised May 2015 SECTION III: For Completion by the HEALTH CARE PROVIDER INSTRUCTIONS to the HEALTH CARE PROVIDER: The employee listed above has requested leave under the FMLA to care for your patient. Answer, fully and completely, all applicable parts below. Several questions seek a response as to the frequency or duration of a condition, treatment, etc. Your answer should be your best estimate based upon your medical knowledge, experience, and examination of the patient. Be as specific as you can; terms such as “lifetime,” “unknown,” or “indeterminate” may not be sufficient to determine FMLA coverage. Limit your responses to the condition for which the patient needs leave. Do not provide information about genetic tests, as defined in 29 C.F.R. § 1635.3(f), or genetic services, as defined in 29 C.F.R. § 1635.3(e). Page 3 provides space for additional information, should you need it. Please be sure to sign the form on the last page. Provider’s name and business address: Type of practice / Medical specialty: Telephone: ( ) Fax:( ) PART A: MEDICAL FACTS 1. Approximate date condition commenced: Probable duration of condition: Was the patient admitted for an overnight stay in a hospital, hospice, or residential medical care facility? No Yes. If so, dates of admission: Date(s) you treated the patient for condition: Was medication, other than over-the-counter medication, prescribed? _No Yes. Will the patient need to have treatment visits at least twice per year due to the condition? No Yes Was the patient referred to other health care provider(s) for evaluation or treatment (e.g., physical therapist)? No Yes. If so, state the nature of such treatments and expected duration of treatment: 2. Is the medical condition pregnancy? No _Yes. If so, expected delivery date: 3. Describe other relevant medical facts, if any, related to the condition for which the patient needs care (such medical facts may include symptoms, diagnosis, or any regimen of continuing treatment such as the use of specialized equipment): PART B: AMOUNT OF CARE NEEDED: When answering these questions, keep in mind that your patient’s need for care by the employee seeking leave may include assistance with basic medical, hygienic, nutritional, safety or transportation needs, or the provision of physical or psychological care: 4. Will the patient be incapacitated for a single continuous period of time, including any time for treatment and recovery? No Yes. Estimate the beginning and ending dates for the period of incapacity: During this time, will the patient need care? No Yes. Explain the care needed by the patient and why such care is medically necessary: 5. Will the patient require follow-up treatments, including any time for recovery? No Yes. Estimate treatment schedule, if any, including the dates of any scheduled appointments and the time required for each appointment, including any recovery period: Explain the care needed by the patient, and why such care is medically necessary: 6. Will the patient require care on an intermittent or reduced schedule basis, including any time for recovery? No Yes. Estimate the hours the patient needs care on an intermittent basis, if any: hour(s) per day; days per week from through Explain the care needed by the patient, and why such care is medically necessary: Page 3 CONTINUED ON NEXT PAGE Form WH-380-F Revised May 2015 7. Will the condition cause episodic flare-ups periodically preventing the patient from participating in normal daily activities? No Yes. Based upon the patient’s medical history and your knowledge of the medical condition, estimate the frequency of flare-ups and the duration of related incapacity that the patient may have over the next 6 months (e.g., 1 episode every 3 months lasting 1-2 days): Frequency: times per week(s) month(s) Duration: hours or day(s) per episode Does the patient need care during these flare-ups? No Yes. Explain the care needed by the patient, and why such care is medically necessary: ADDITIONAL INFORMATION: IDENTIFY QUESTION NUMBER WITH YOUR ADDITIONAL ANSWER. Signature of Health Care Provider Date PAPERWORK REDUCTION ACT NOTICE AND PUBLIC BURDEN STATEMENT If submitted, it is mandatory for employers to retain a copy of this disclosure in their records for three years. 29 U.S.C. § 2616; 29 C.F.R. § 825.500. Persons are not required to respond to this collection of information unless it displays a currently valid OMB control number. The Department of Labor estimates that it will take an average of 20 minutes for respondents to complete this collection of information, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. If you have any comments regarding this burden estimate or any other aspect of this collection information, including suggestions for reducing this burden, send them to the Administrator, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Ave., NW, Washington, DC 20210. DO NOT SEND COMPLETED FORM TO THE DEPARTMENT OF LABOR; RETURN TO THE PATIENT. Page 4 Form WH-380-F Revised May 2015 Appendix A-8 Page 1 of Appendix A-8 APPLICATION FOR FAMILY AND MEDICAL LEAVE (FMLA) Name: Date: Social Security Number: Department: Mailing Address (home): Home Phone Number: Supervisor’s Name: Phone Number: Full-Time Exempt Full-Time Non-Exempt Part-Time Hire Date: Normal Work Hours Per Week: Anticipated Begin Date of Leave: Expected Return to Work Date: Has the Employee Taken Other FMLA leave During this Calendar Year? No Yes No.If Yes, How Many Work Days? Explain Reason for Request: Schedule of Leave Request: For entire period requested above Intermittent (a few hours a day, for a few days a week or on an as needed basis) Reduced Schedule (reduction in hours worked per work week or work day) Retain Leave Balances During Leave1 Use Applicable Leave Balances2 Request is initiated by: Employee Supervisor Other (family member) Signature of Person Initiating Request: Signature: Date: This form must be returned to the employee’s Department Head prior to approval of any FMLA leave. Note: After making the Department Head aware that the employee needs leave for a reason that might qualify FMLA Leave, it is the responsibility of the employee to obtain from the physician the completed Certification of Health Provider Form and return to Human Resources within fifteen (15) days. 1 Results in FMLA leave being unpaid leave. Appendix A-9 Page 1 of 2 When all applicable leave balances are exhausted, approved FMLA leave will continue as unpaid leave. Appendix A-10 Page 1 of Appendix A-9 GARRITY WARNING To be given to an employee by their employer during an employment investigation that requires the employee to either provide information or be discharged for refusing to provide information. If such a warning is given, the employee may object to the use of such information in a subsequent criminal proceeding on the basis that a self-incriminating statement was made under duress. GARRITY WARNING I wish to advise you that you are being questioned as part of an official investigation of your employer. You will be asked questions specifically, directly and narrowly related to performance of your official duties or fitness for office. You are entitled to all the rights and privileges guaranteed by the law and the Constitution of the United States, including the right not to be compelled to incriminate yourself. I further wish to advise you that if you refuse to testify or to answer questions relating to the performance of your official duties or fitness for duty, you could be subject to discharge. If you do answer, neither your statement, nor any information or evidence which is gained by reason of such statement, can be used against you in any subsequent criminal proceedings. However, these statements may be used against you in relation to subsequent discipline. I, (employee name) agree to testify or to answer questions relating to the performance of my official duties or fitness for duty. Yes No. If “no” is selected, I am stating I refuse to testify or to answer questions relating to the performance of my official duties or fitness for duty and I am resigning my employment with the City of Anna. Employee’s Acknowledgment: Date: Printed Name: Human Resource Representative Acknowledgement: Date: Printed Name: Appendix A-11 Page 1 of Appendix A-10 PERFORMANCE IMPROVEMENT PLAN Employee Name: Job Title: Department: Date: Performance in need of improvement (List the goals the employee will initiate to improve work performance, as well as an action plan for how the employee will achieve each goal. Include skill development and changes needed to meet work performance expectations): Goals Action Plan 1. 2. 3. Targeted Date for Improvement: Expected results (List measurements, where possible): Projects are completed on time and within budget Dates to review progress by the employee and supervisor: Appendix A-10 Page 2 of 2 Appendix A-10 Progress at review dates (Use additional sheets as necessary):  Employee has achieved the required improvement(s) described above.  Employee has not achieved the required improvement(s) described above. Employee Signature: Date: Supervisor Signature: Date: Appendix A-11 Page 1 of 2 Appendix A-11 APPEAL OF DISCIPLINARY ACTION FORM (To be completed by Complainant and returned to Human Resources) Name: Date: Social Security Number: Department: Effective Date of Action: Type of Action: (check the type of action that relates to this appeal) Involuntary Transfer Dismissal Suspension Demotion Were you serving a probationary or trial period at the time of the action you are appealing? Yes No Employment status at the time of the action you are appealing? Permanent Seasonal Temporary Describe the action taken against you and why it was not reasonable, in your opinion. Attach additional sheets, if necessary. What remedy are you seeking? Employee’s Signature: Date: Appendix A-11 Page 2 of 2 Appendix A-11 Outcome of Appeal to be recorded by Human Resources Department, below. SUPERVISOR/DEPARTMENT HEAD DATE HUMAN RESOURCES REPRESENTATIVE DATE Appendix A-12 Page 1 of 3 Appendix A-12 FORMAL GRIEVANCE FORM (To Be Completed By Complainant) Date: (Date of Letter) To: (Employee’s Supervisor) Supervisor’s Position: From: (Name of Employee) Employee Position: Department: Nature of Grievance: Date grievance reported to Supervisor: Date to be resolved: SIGNED: COMPLAINANT DATE FIRST STEP - SUPERVISOR / DEPARTMENT HEAD: Date of Meeting: Time: Place : Comments or Additional Information (Supervisor/Department Head): SIGNED: SUPERVISOR/DEPARTMENT HEAD DATE Appendix A-12 Page 2 of 3 Appendix A-12 Outcome of Grievance (or reasons for failure to reach settlement) to be recorded by Supervisor or Department Head, whichever is appropriate, below. Accepted / Not accepted by Complainant: SIGNED : COMPLAINANT DATE WITNESS DATE WITNESS DATE SECOND STEP – CITY MANAGER LEVEL Date of Meeting: Time: Place : Comments or Additional Information (City Manager or his/her designee): Outcome of Grievance (or reasons for failure to reach settlement) to be recorded by Mayor or his/her designee, whichever is appropriate, below. Accepted/Not accepted by Complainant: Appendix A-12 Page 3 of 3 Appendix A-12 SIGNED: COMPLAINANT DATE WITNESS DATE WITNESS DATE City Manager’s Printed Name: CITY MANAGER’S SIGNATURE DATE The content of this form is Private and Confidential Appendix A-13 EMPLOYEE REPRIMAND (To be Completed by Employee’s Supervisor or Department Head)1 To: (Name of Employee / Position) From: (Name of Supervisor / Position) Department: Date(s)/time period(s) of employee’s conduct resulting in reprimand: Summary description of employee’s conduct resulting in reprimand: (continue on additional pages if necessary) The conduct described above must not be repeated and further disciplinary action will result if the employee fails to show and maintain satisfactory improvement. Summary description of expected conduct and behavior: (continue on additional pages if necessary) Date to be resolved by employee (insert date and/or circle one or more): Date: immediately / all future times / all future similar situations SIGNED: SUPERVISOR or DEPARTMENT HEAD DATE (Date of Reprimand) (Section Below to be Completed by Employee) I understand that my signature below does not necessarily mean that I agree with this reprimand, but rather only that I was given this reprimand. I also understand that if I were to refuse to sign this reprimand, I will be subject to further discipline up to and potentially including termination. SIGNED: EMPLOYEE DATE Employee’s comments (optional) (continue on additional pages if necessary) 1 Note: In certain circumstances, a reprimand may be completed and signed by the City Manager. Page 1 C2NTINUED 2N NE;T PA*E Form W+-380-F Revised 0a\ 2 15 Certification of Health Care Provider for U.S. Department of Labor Family Member's Serious Health Condition (Family and Medical Leave Act) Wage and Hour Division '2 N27 6(N' C203/(7(' F2R0 72 7+( '(3AR70(N7 2F /A%2R R(78RN 72 7+( 3A7I(N7. SECTION I: For Completion by the EMPLOYER 2M% Control Number: 1235-0003 Expires: 5/31/2018 INSTRUCTIONS to the EMPLOYER: The Family and Medical Leave Act (FMLA) provides that an employer may require an employee seeking FMLA protections because of a need for leave to care for a covered family member with a serious health condition to submit a medical certification issued by the health care provider of the covered family member. Please complete Section I before giving this form to your employee. Your response is voluntary. While you are not required to use this form, you may not ask the employee to provide more information than allowed under the FMLA regulations, 29 C.F.R. §§ 825.306-825.308. Employers must generally maintain records and documents relating to medical certifications, recertifications, or medical histories of employees' family members, created for FMLA purposes as confidential medical records in separate files/records from the usual personnel files and in accordance with 29 C.F.R. § 1630.14(c)(1), if the Americans with Disabilities Act applies, and in accordance with 29 C.F.R. § 1635.9, if the Genetic Information Nondiscrimination Act applies. Employer name and contact: SECTION II: For Completion by the EMPLOYEE INSTRUCTIONS to the EMPLOYEE: Please complete Section II before giving this form to your family member or his/her medical provider. The FMLA permits an employer to require that you submit a timely, complete, and sufficient medical certification to support a request for FMLA leave to care for a covered family member with a serious health condition. If requested by your employer, your response is required to obtain or retain the benefit of FMLA protections. 29 U.S.C. §§ 2613, 2614(c)(3). Failure to provide a complete and sufficient medical certification may result in a denial of your FMLA request. 29 C.F.R. § 825.313. Your employer must give you at least 15 calendar days to return this form to your employer. 29 C.F.R. § 825.305. Your name: First Middle Last Name of family member for whom you will provide care:---------------------------------------------- First Middle Last Relationship of family member to you: If family member is your son or daughter, date of birth:--------------------------------------------- Describe care you will provide to your family member and estimate leave needed to provide care: Page 2 C2NTINUED 2N NE;T PA*E Form W+-380-F Revised 0a\ 2 15 Employee Signature Date Page 3 C2NTINUED 2N NE;T PA*E Form W+-380-F Revised 0a\ 2 15 --- --- --- --- -- -- --- ------ --- ---- -------- ---- --- --- -- -- ---- ---- SECTION III: For Completion by the HEALTH CARE PROVIDER INSTRUCTIONS to the HEALTH CARE PROVIDER: The employee listed above has requested leave under the FMLA to care for your patient. Answer, fully and completely, all applicable parts below. Several questions seek a response as to the frequency or duration of a condition, treatment, etc. Your answer should be your best estimate based upon your medical knowledge, experience, and examination of the patient. Be as specific as you can; terms such as "lifetime," "unknown," or "indeterminate" may not be sufficient to determine FMLA coverage. Limit your responses to the condition for which the patient needs leave. Do not provide information about genetic tests, as defined in 29 C.F.R. § 1635.3(f), or genetic services, as defined in 29 C.F.R. § 1635.3(e). Page 3 provides space for additional information, should you need it. Please be sure to sign the form on the last page. Provider's name and business address: Type of practice / Medical specialty: Telephone: ( ) Fax:( ) PART A: MEDICAL FACTS 1. Approximate date condition commenced: Probable duration of condition: Was the patient admitted for an overnight stay in a hospital, hospice, or residential medical care facility? No Yes. If so, dates of admission: Date(s) you treated the patient for condition: Was medication, other than over-the-counter medication, prescribed? -No Yes. Will the patient need to have treatment visits at least twice per year due to the condition? No Yes Was the patient referred to other health care provider(s) for evaluation or treatment (e.g., physical therapist)? No Yes. If so, state the nature of such treatments and expected duration of treatment: 2. Is the medical condition pregnancy? 3. Describe other relevant medical facts, if any, related to the condition for which the patient needs care (such medical facts may include symptoms, diagnosis, or any regimen of continuing treatment such as the use of specialized equipment): --- --- --- --- -- -- -- -- --- --- --- --- -- -- -- -- PART B: AMOUNT OF CARE NEEDED: When answering these questions, keep in mind that your patient's need for care by the employee seeking leave may include assistance with basic medical, hygienic, nutritional, safety or transportation needs, or the provision of physical or psychological care: 4. Will the patient be incapacitated for a single continuous period of time, including any time for treatment and recovery? No Yes. Estimate the beginning and ending dates for the period of incapacity: ----------------------------------- During this time, will the patient need care? No Explain the care needed by the patient and why such care is medically necessary: 5. Will the patient require follow-up treatments, including any time for recovery? No Yes. Estimate treatment schedule, if any, including the dates of any scheduled appointments and the time required for each appointment, including any recovery period: Explain the care needed by the patient, and why such care is medically necessary: ------------------------ 6. Will the patient require care on an intermittent or reduced schedule basis, including any time for recovery? No Yes. Estimate the hours the patient needs care on an intermittent basis, if any: hour(s) per day; days per week from through Explain the care needed by the patient, and why such care is medically necessary: Page 3 CONTINUED ON NE;T PA*E Form W+-380-F Revised 0a\ 2 15 ---- ---- ---- ---- ---- ---- 7. Will the condition cause episodic flare-ups periodically preventing the patient from participating in normal daily activities? No Yes. Based upon the patient's medical history and your knowledge of the medical condition, estimate the frequency of flare-ups and the duration of related incapacity that the patient may have over the next 6 months (e.g., 1 episode every 3 months lasting 1-2 days): Frequency: ----- times per ----- week(s) --------- Duration: ----- hours or ------day(s) per episode Does the patient need care during these flare-ups? No Yes. Explain the care needed by the patient, and why such care is medically necessary: ------------------------ ADDITIONAL INFORMATION: IDENTIFY QUESTION NUMBER WITH YOUR ADDITIONAL ANSWER. Signature of Health Care Provider Date PAPERWORK REDUCTION ACT NOTICE AND PUBLIC BURDEN STATEMENT If submitted, it is mandatory for employers to retain a copy of this disclosure in their records for three years. 29 U.S.C. § 2616; 29 C.F.R. § 825.500. Persons are not required to respond to this collection of information unless it displays a currently valid OMB control number. The Department of Labor estimates that it will take an average of 20 minutes for respondents to complete this collection of information, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. If you have any comments regarding this burden estimate or any other aspect of this collection information, including suggestions for reducing this burden, send them to the Administrator, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Ave., NW, Washington, DC 20210. DO NOT SEND COMPLETED FORM TO THE DEPARTMENT OF LABOR; RETURN TO THE PATIENT. Page 4 Form WH-380-F Revised 0a\ 2 15 Item No. 5.f. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Natasha Roach AGENDA ITEM: Approve a Resolution authorizing the Anna Director of Economic Development to enter into purchase and sale agreements and other real estate related transactions to buy or sell property on behalf of the CDC. (Interim Director of Economic Development Natasha Roach) SUMMARY: The Anna Community Development Corporation is authorized to engage in economic development activities, including the acquisition and disposition of real property, in order to promote business growth, job creation, and community development within the City of Anna. Real estate transactions are often time-sensitive and require prompt execution of agreements to remain competitive and responsive to development opportunities. Currently, individual real estate transactions require specific board action / signatures prior to execution, which can delay negotiations and limit flexibility. The purpose of the request is to authorize the Director of Economic Development to execute purchase and sale agreements and other real estate–related documents on behalf of the Anna CDC, subject to applicable laws, CDC policies, and budgetary constraints. This authorization is intended to streamline real estate transactions while maintaining appropriate oversight. FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: The CDC Board of Directors approved a resolution at the January 8, 2026, CDC/EDC Joint Board Meeting authorizing the Director of Economic Development to enter into purchase and sale agreements and other real estate–related transactions on behalf of the Anna Community Development Corporation. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: 1. Council Resolution - CDC Signatory Authorization CITY OF ANNA the City Council of the City of Anna, Texas (the “City Council”) recognizes that on January 8, 2026, the Anna Community Development Corporation (the “CDC”) passed a resolution authorizing the Director of Economic Development to enter into purchase and sale agreements and other real estate related transactions on behalf of the CDC; and in its endeavors to promote community development in and near the City of Anna, Texas, the CDC) often buys or sells land for community development projects; and the CDC Board of Directors (the “CDC Board”) meets once each month making it difficult for the Board to evaluate and act upon opportunities to buy and sell real estate as such opportunities may occur; and the City Council has determined that said authorization should be approved; Section 1. Recitals Incorporated The recitals set forth above are incorporated herein for all purposes as if set forth in full. Section 2. Approval of Authorization The City Council hereby approves the authorization of the Anna Director of Economic Development to enter into purchase and sale agreements and other real estate related transactions to buy or sell property on behalf of the CDC; provided, however, that: (1) such authorization has first been approved by the CDC Board and is revokable by the CDC Board; (2) the CDC Board is not authorized to delegate authority to close on such transactions and must provide final approval before the CDC acquires or transfers any interest in real property; and (3) the Council, before such closing occurs, must have approved one or more CDC projects that include the acquisition or transfer of such interest in real property to the extent such approval is required under applicable law. PASSED by the City Council of the City of Anna, Texas, on this 27th day of January 2026. Item No. 5.g. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Natasha Roach AGENDA ITEM: Approve a Resolution authorizing the Anna Director of Economic Development to enter into purchase and sale agreements and other real estate related transactions to buy or sell property on behalf of the EDC. (Interim Director of Economic Development Natasha Roach) SUMMARY: Same as stated in the precious item, The Anna Economic Development Corporation is authorized to engage in economic development activities, including the acquisition and disposition of real property, in order to promote business growth, job creation, and community development within the City of Anna. Real estate transactions are often time-sensitive and require prompt execution of agreements to remain competitive and responsive to development opportunities. Currently, individual real estate transactions require specific board action / signatures prior to execution, which can delay negotiations and limit flexibility. The purpose of the request is to authorize the Director of Economic Development to execute purchase and sale agreements and other real estate–related documents on behalf of the Anna EDC, subject to applicable laws, EDC policies, and budgetary constraints. This authorization is intended to streamline real estate transactions while maintaining appropriate oversight. FINANCIAL IMPACT: This item has no financial impact. BACKGROUND: The EDC Board of Directors approved a resolution at the January 8, 2026, CDC/EDC Joint Board Meeting authorizing the Director of Economic Development to enter into purchase and sale agreements and other real estate–related transactions on behalf of the Anna Economic Development Corporation. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: 1. Council Resolution - EDC Signatory Authorization CITY OF ANNA the City Council of the City of Anna, Texas (the “City Council”) recognizes that on January 8, 2026, the Anna Economic Development Corporation (the “EDC”) passed a resolution authorizing the Director of Economic Development to enter into purchase and sale agreements and other real estate related transactions on behalf of the EDC; and in its endeavors to promote community development in and near the City of Anna, Texas, the EDC often buys or sells land for economic development projects; and the EDC Board of Directors (the “EDC” Board) meets once each month making it difficult for the Board to evaluate and act upon opportunities to buy and sell real estate as such opportunities may occur; and the City Council has determined that said authorization should be approved; Section 1. Recitals Incorporated The recitals set forth above are incorporated herein for all purposes as if set forth in full. Section 2. Approval of Authorization The City Council hereby approves the authorization of the Anna Director of Economic Development to enter into purchase and sale agreements and other real estate related transactions to buy or sell property on behalf of the EDC; provided, however, that: (1) such authorization has first been approved by the EDC Board and is revokable by the EDC Board; (2) the EDC Board is not authorized to delegate authority to close on such transactions and must provide final approval before the EDC acquires or transfers any interest in real property; and (3) the Council, before such closing occurs, must have approved one or more EDC projects that include the acquisition or transfer of such interest in real property to the extent such approval is required under applicable law. by the City Council of the City of Anna, Texas, on this 27th day of January 2026. Item No. 5.h. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Joseph Cotton AGENDA ITEM: Take action to Adopt a Resolution setting a Public Hearing under Section 372.009 of the Texas Local Government Code to be held on February 24, 2026 on the advisability of the creation of a public improvement district and improvements within the City of Anna, Texas, to be known as Liberty Hills Public Improvement District No. 1 and authorizing the issuance of notice by the City Secretary of Anna, Texas, regarding the Public Hearing. (Director of Public Works Joseph Cotton) SUMMARY: FINANCIAL IMPACT: BACKGROUND: STRATEGIC CONNECTIONS: ATTACHMENTS: 1. Resolution Accepting Petition and Calling Public Hearing (LH PID No 1) v3 CERTIFICATE FOR RESOLUTION THE STATE OF TEXAS COLLIN COUNTY CITY OF ANNA We, the undersigned officers of the City of Anna, Texas (the "City"), hereby certify as follows: 1. The City Council (the "Council") of the City convened in a regular meeting on January 27, 2026, at the regular designated meeting place, and the roll was called of the duly constituted officers and members of the Council, to wit: Pete Cain, Mayor Kelly Patterson-Herndon, Council Member Kevin Toten, Mayor Pro Tem Elden Baker, Council Member Stan Carver II, Deputy Mayor Pro-Tem Manny Singh, Council Member Nathan Bryan, Council Member Marc Marchand, Acting City Manager Carrie Land, City Secretary and all of said persons were present, except ________________________________________, thus constituting a quorum. Whereupon, among other business the following was transacted at said meeting: a written A RESOLUTION SETTING A PUBLIC HEARING UNDER SECTION 372.009 OF THE TEXAS LOCAL GOVERNMENT CODE TO BE HELD ON FEBRUARY 24, 2026 ON THE ADVISABILITY OF THE CREATION OF A PUBLIC IMPROVEMENT DISTRICT AND IMPROVEMENTS WITHIN THE CITY OF ANNA, TEXAS, TO BE KNOWN AS LIBERTY HILLS PUBLIC IMPROVEMENT DISTRICT NO. 1 AND AUTHORIZING THE ISSUANCE OF NOTICE BY THE CITY SECRETARY OF ANNA, TEXAS, REGARDING THE PUBLIC HEARING. was duly introduced for the consideration of the Council. It was then duly moved and seconded that said Resolution be passed; and, after due discussion, said motion, carrying with it the passage of said Resolution, prevailed and carried, with all members of the Council shown present above voting "Aye," except as noted below: NAYS: ABSTENTIONS: Signature Page to a Certificate for A RESOLUTION SETTING A PUBLIC HEARING UNDER SECTION 372.009 OF THE TEXAS LOCAL GOVERNMENT CODE TO BE HELD ON JANUARY 27, 2026 ON THE ADVISABILITY OF THE CREATION OF A PUBLIC IMPROVEMENT DISTRICT AND IMPROVEMENTS WITHIN THE CITY OF ANNA, TEXAS, TO BE KNOWN AS LIBERTY HILLS PUBLIC IMPROVEMENT DISTRICT NO. 1 AND AUTHORIZING THE ISSUANCE OF NOTICE BY THE CITY SECRETARY OF ANNA, TEXAS, REGARDING THE PUBLIC HEARING 2. A true, full, and correct copy of the aforesaid Resolution passed at the meeting described in the above and foregoing paragraph is attached to and follows this Certificate; said Resolution has been duly recorded in the Council's minutes of said meeting; the above and foregoing paragraph is a true, full, and correct excerpt from the Council's minutes of said meeting pertaining to the passage of said Resolution; the persons named in the above and foregoing paragraph are the duly chosen, qualified, and acting officers and members of the Council as indicated therein; that each of the officers and members of the Council was duly and sufficiently notified officially and personally, in advance, of the time, place, and purpose of the aforesaid meeting, and that said Resolution would be introduced and considered for passage at said meeting, and each of said officers and members consented, in advance, to the holding of said meeting for such purpose; and that said meeting was open to the public, and public notice of the time, place, and purpose of said meeting was given all as required by the Texas Government Code, Chapter 551. 3. The Council has approved and hereby approves the Resolution; and the Mayor and City Secretary hereby declare that their signing of this certificate shall constitute the signing of the attached and following copy of said Resolution for all purposes. SIGNED AND SEALED ON JANUARY 27, 2026. ATTEST: ___________________________________ Pete Cain, Mayor ___________________________________ Carrie Land, City Secretary (SEAL) 3 CITY OF ANNA, TEXAS RESOLUTION NO. 2026-01-____ A RESOLUTION SETTING A PUBLIC HEARING UNDER SECTION 372.009 OF THE TEXAS LOCAL GOVERNMENT CODE TO BE HELD ON FEBRUARY 24, 2026 ON THE ADVISABILITY OF THE CREATION OF A PUBLIC IMPROVEMENT DISTRICT AND IMPROVEMENTS WITHIN THE CITY OF ANNA, TEXAS, TO BE KNOWN AS LIBERTY HILLS PUBLIC IMPROVEMENT DISTRICT NO. 1 AND AUTHORIZING THE ISSUANCE OF NOTICE BY THE CITY SECRETARY OF ANNA, TEXAS, REGARDING THE PUBLIC HEARING. WHEREAS, the City of Anna, Texas (the “City”), is authorized under Chapter 372 of the Texas Local Government Code (the “Act”), to create a public improvement district within its corporate limits and extraterritorial jurisdiction; and WHEREAS, on October 29, 2025, LH Residential Development, LLC, SH Dev Liberty Hills Anna, LLC, and PH Land Holdings, LLC, each a Texas limited liability company (collectively, the “Petitioners”), being the owners of (1) taxable real property representing more than 50 percent of the appraised value of taxable real property liable for assessment under the proposal, as determined by the current roll of the appraisal district in which the property is located and (2) record owners of real property liable for assessment under the proposal who: (A) constitute more than 50 percent of all record owners of property that is liable for assessment under the proposal; or (B) own taxable real property that constitutes more than 50 percent of the area of all taxable real property that is liable for assessment under the proposal, to be included within the corporate limits of the City, submitted and filed with the City Secretary (the “City Secretary”) a petition (“Petition”), attached as Exhibit A, requesting the establishment of the Liberty Hills Public Improvement District No. 1 for approximately 139.983 acres of property to be included within the corporate limits of the City (the “District”); and WHEREAS, said petition described public improvements that the property desires to be made within the District; and WHEREAS, the City Council (the “City Council”) will hold a public hearing in accordance with Section 372.009 of the Act regarding the advisability of establishing the District, the nature of the improvements contemplated, the estimated costs of the improvements, the boundaries of the District, the method of assessment, and the apportionment, if any, of the costs; and WHEREAS, it is hereby officially found and determined that the meeting at which this resolution was considered was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code; and 4 WHEREAS, in order to hold a public hearing for the creation of a public improvement district, notice must be given in a newspaper of general circulation in the municipality and in the part of the extraterritorial jurisdiction in which the district is to be located or in which the improvements are to be undertaken before the 15th day before the date of the hearing, and written notice must be mailed to the current address of each owner, as reflected on the tax rolls, of property that would be subject to assessment under the proposed public improvement district; and WHEREAS, both newspaper notice and mailed notice must contain the information required for notice as provided for in Section 372.009 of the Act; and WHEREAS, the City Council has determined to hold a public hearing on February 24, 2026 on the creation of the District; and WHEREAS, the City Council finds that the passage of this Resolution is in the best interest of the citizens of the City. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS: Section 1: All of the above recitals are hereby found to be true and correct factual determinations of the City and are hereby approved and incorporated by reference as though fully set forth herein. Section 2: City Staff reviewed the Petition and determined that the same complied with the requirements of the Act and the City Council accepts the Petition. Section 3: That a public hearing is hereby called for February 24, 2026 at 6:00 p.m. at the Anna Municipal Complex, Council Chambers, 120 W. 7th Street, Anna, Texas 75409 for the purpose of hearing public testimony with respect to the advisability of establishing the District, the nature of the improvements contemplated, the estimated costs of the improvements, the boundaries of the District, the method of assessment, and the apportionment, if any, of the costs. .Section 4: At such time and place the City Council will hear testimony regarding the creation of the proposed public improvement district and the City Council may, within its sole discretion, consider the adoption of a resolution authorizing the creation of the proposed District. Section 5: Attached hereto as Exhibit A is the Petition to Establish Liberty Hills Public Improvement District No. 1 to be included within the City of Anna, Texas, which includes a metes and bounds description for the District. Section 6: Attached hereto as Exhibit B is a form of the Notice of Public Hearing (the “Notice”) the form and substance of which is hereby adopted and approved. 5 Section 7: Included as part of Exhibit A hereto—as Exhibit “A” thereof—is a legal description of the 139.983 acres of property to be included in the proposed District. Section 8: The City Secretary is hereby authorized and directed to cause said Notice to be published in substantially the form attached hereto, in a newspaper of general circulation in the City, and to mail a copy of said Notice to all landowners to be included within the boundaries of the proposed District as required by law. The City Secretary shall provide Notice on or before the 15th day before the February 24, 2026 hearing. Section 9: If any portion of this resolution shall, for any reason, be declared invalid by any court of competent jurisdiction, such invalidity shall not affect the remaining provisions hereof and the City Council hereby determines that it would have adopted this resolution without the invalid provision. Section 10: This resolution shall be in full force and effect from and after its passage, and it is accordingly so resolved. PASSED AND APPROVED ON THIS 27TH DAY OF JANUARY, 2026. ATTEST: APPROVED: ___________________________ __________________________ Carrie L. Land, City Secretary Pete Cain, Mayor A-1 EXHIBIT A Petition to Establish Liberty Hills Public Improvement District No. 1 712018355v1 STATE OF TEXAS § § PETITION TO ESTABLISH LIBERTY HILLS COUNTY OF COLLIN § PUBLIC IMPROVEMENT DISTRICT NO. 1 TO THE HONORABLE GOVERNING BODY OF THE CITY OF ANNA: COMES NOW LH Residential Development, LLC, a Texas limited liability company, SH Dev Liberty Hills Anna, LLC, a Texas limited liability company, and PH Land Holdings, LLC, a Texas limited liability company (the “Petitioners”), hereby request and petition the City of Anna (the “City”) to establish Liberty Hills Public Improvement District No. 1 (the “District”) under and pursuant to the provisions of Chapter 372, Texas Local Government Code, as amended (the “Act”), on the hereinafter described property situated within the corporate limits of the City, and in support thereof would respectfully show the following: I. The general nature of the proposed public improvements to be provided by the District that are necessary for the development of the Property within the District and which shall promote the interests of the City and confer a special benefit upon the Property, may include: (i) street and roadway improvements, including related sidewalks, drainage, utility relocation, signalization, landscaping, lighting, signage, off-street parking and right-of-way; (ii) establishment or improvement of parks and open space, together with the design, construction of any ancillary structures, features or amenities such as trails, playgrounds, walkways, lighting and any similar items located therein; (iii) sidewalks and landscaping, including entry monuments and features, fountains, lighting and signage; (iv) acquisition, construction, and improvement of water, wastewater and drainage improvements and facilities and facilities related thereto; (v) acquisition of real property, interests in real property, or contract rights in connection with the Authorized Improvements (as defined below); (vi) payment of costs, including, without limitation, design, engineering, permitting, legal, required payment, performance and maintenance bonds, bidding, support, construction, construction management, administrative and inspection costs, associated with developing and financing the public improvements listed in (i) through (v) above; (vii) projects similar to those listed in subsections (i) - (v) above or authorized by the Act, including similar off-site projects that provide a benefit to the property within the District; (viii) any additional improvement projects authorized in the Act; (ix) payment of costs associated with special supplemental services for improvement and promotion of the District as approved by the City including services related to advertising, promotion, health and sanitation, water and wastewater, public safety, security, business recruitment, development, recreation, and cultural enhancement; and (x) payment of costs associated with developing and financing the public improvements listed in (i) - (ix) above, as well as the interest, costs of issuance, reserve funds, or credit enhancement of bonds issued for the purposes described in (i) through (ix) above, and costs of establishing, administering and operating the District (collectively, the “Authorized Improvements”). II. The estimated costs of constructing and acquiring all of the currently proposed Authorized Improvements, together with bond issuance costs, legal and financial fees, letter of credit fees and expenses, bond credit enhancement expenses, capitalization of bond interest, the creation of a bond reserve fund, expenses incurred in the establishment, administration and operation of the District and acquisition, by purchase or otherwise, of real property or contract rights in connection with each authorized improvement, is presently estimated to be a total of approximately $44,000,000, based on the estimated current and future costs of the Authorized Improvements to serve the area within the District, as authorized by law. The total costs of the Authorized Improvements shall be paid from any revenues or assessments lawfully available to the City, anticipating that the costs of acquisition of the Authorized Improvements will be paid pursuant to a contractual reimbursement obligation or the issuance of bonds secured by and payable from a special assessment levied on all property within the District’s boundaries for the Authorized Improvements. III. The boundaries of the proposed District are fully described in Exhibit “A,” attached hereto and made a part hereof for all purposes. IV. The proposed method of assessment is to impose a special assessment to be paid in installments on all useable property within the District, net of any public right-of-way, according to the value of the property, without regard to the value of improvements on the property, or in any other manner that results in imposing equal shares of the cost on property similarly benefitted. A report will be prepared showing the special benefits accruing to property within the District and how the costs of the Authorized Improvements are assessed to property on the basis of special benefit received by the property from the Authorized Improvements. V. All costs incurred by the District shall be paid by the District, and there shall be no apportionment of costs between the District and the City as a whole. The City will not be obligated to provide any funds to finance the proposed improvements except from assessments generated by property within the District. VI. Management and administration of the District shall be by the City. The City may contract from time to time with a private company for District administrative services. VII. The individuals executing this Petition are duly authorized to execute this Petition, and the Petitioners request the establishment of the District. VIII. An Advisory Board may be established to develop and recommend an improvement plan to the City Council of the City of Anna (the “Council”). The Petitioners request that if the Council establishes an Advisory Board, that such Advisory Board should include representatives of the Petitioners or their designees. IX. This Petition has been executed for and on behalf of (i) the owners of more than 50% of the taxable real property described in said Exhibit A, representing all of the appraised value of taxable real property liable for assessment under this Petition as shown by the current roll of the Collin County Appraisal District, and (ii) the record owners of more than 50% of the real property liable for assessment under this Petition, and shall be filed with the Secretary of the City. The Petitioners own 100% of the property to be located in the District and liable for assessments. WHEREFORE, PREMISES CONSIDERED, Petitioners prays that the Council: (1) duly consider this Petition and adopt a Resolution finding (i) that this Petition complies with all legal requirements; (ii) that the proposed Authorized Improvements are necessary, advisable and will provide a public use and benefit to the City; and (iii) that the estimated costs of the improvements, the method of assessment and the apportionment of costs between the District and the City are reasonable and acceptable; (2) call a public hearing, give notice thereof as required by law and hold such hearing on the advisability of the Authorized Improvements specified in this Petition; and (3) grant all matters requested in this Petition and grant such other relief, in law or in equity, to which Petitioners shall show themselves to be entitled. [Signature pages follows] B-1 EXHIBIT B CITY OF ANNA, TEXAS NOTICE OF PUBLIC HEARING REGARDING THE CREATION OF LIBERTY HILLS PUBLIC IMPROVEMENT DISTRICT NO. 1 Pursuant to Section 372.009(c) and (d) of the Texas Local Government Code, as amended (the “Act”), notice is hereby given that the City Council of the City of Anna, Texas (“City”), will hold a public hearing to accept public comments and discuss the petition (the “Petition”), filed by LH Residential Development, LLC, SH Dev Liberty Hills Anna, LLC, and PH Land Holdings, LLC, each a Texas limited liability company (collectively, the “Petitioners”), requesting that the City create the Liberty Hills Public Improvement District No. 1 (the “District”) to include property owned by the Petitioners and further described herein (the “Property”). Time and Place of the Hearing. The public hearing will start at 6:00 p.m. on February 24, 2026 at the Anna Municipal Complex, Council Chambers, 120 W. 7th Street, Anna, Texas 75409. General Nature of the Proposed Authorized Improvements. The proposed public improvements may include: (i) street and roadway improvements, including related sidewalks, drainage, utility relocation, signalization, landscaping, lighting, signage, off-street parking and right-of-way; (ii) establishment or improvement of parks and open space, together with the design, construction of any ancillary structures, features or amenities such as trails, playgrounds, walkways, lighting and any similar items located therein; (iii) sidewalks and landscaping, including entry monuments and features, fountains, lighting and signage; (iv) acquisition, construction, and improvement of water, wastewater and drainage improvements and facilities and facilities related thereto; (v) acquisition of real property, interests in real property, or contract rights in connection with the Authorized Improvements (as defined below); (vi) payment of costs, including, without limitation, design, engineering, permitting, legal, required payment, performance and maintenance bonds, bidding, support, construction, construction management, administrative and inspection costs, associated with developing and financing the public improvements listed in (i) through (v) above; (vii) projects similar to those listed in subsections (i) - (v) above or authorized by the Act, including similar off-site projects that provide a benefit to the property within the District; (viii) any additional improvement projects authorized in the Act; (ix) payment of costs associated with special supplemental services for improvement and promotion of the District as approved by the City including services related to advertising, promotion, health and sanitation, water and wastewater, public safety, security, business recruitment, development, recreation, and cultural enhancement; and (x) payment of costs associated with developing and financing the public improvements listed in (i) - (ix) above, as well as the interest, costs of issuance, reserve funds, or credit enhancement of bonds issued for the purposes described in (i) through (ix) above, and costs of establishing, administering and operating the District (collectively, the “Authorized Improvements”). These Authorized Improvements shall promote the interests of the City and confer a special benefit upon the Property. Estimated Cost of the Authorized Improvements. The estimated cost to design, acquire and construct the Authorized Improvements, together with bond issuance costs, eligible legal and B-2 financial fees, eligible credit enhancement costs and eligible costs incurred in establishment, administration and operation of the District is approximately $44,000,000. Proposed District Boundaries. The District is proposed to include approximately 139.983 acres of land to be included within the city limits of the City and as more particularly described by a metes and bounds description available for public inspection at the office of the City Secretary, 120 W. 7th Street, Anna, Texas 75409. Proposed Method of Assessment. The City shall levy assessments on each parcel within the District in a manner that results in imposing equal shares of the costs on property similarly benefited. All assessments may be paid in full at any time (including interest and principal), and certain assessments may be paid in annual installments (including interest and principal). If an assessment is allowed to be paid in installments, then the installments must be paid in amounts necessary to meet annual costs for those Authorized Improvements financed by the assessment, and must continue for a period necessary to retire the indebtedness of those Authorized Improvements (including interest). Proposed Apportionment of Cost between the District and the City. The City will not be obligated to provide any funds to finance the Authorized Improvements, except for assessments levied on real property within the District. No municipal property in the District shall be assessed. All of the costs of the Authorized Improvements will be paid from assessments and from other sources of funds, if any, available to the Petitioner. During the public hearing, any interested person may speak for or against the establishment of the District and the advisability of the improvements to be made for the benefit of the property within the District. Item No. 5.i. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Joseph Cotton AGENDA ITEM: Take action to adopt a Resolution of the City of Anna, Texas determining the costs of certain Authorized Improvements to be financed by the Sherley Farms Public Improvement District for Improvement Area #1 thereof; Approving a Preliminary Service Plan and Assessment Plan, Including the proposed Assessment Roll for Improvement Area #1; Calling a Regular Meeting and Noticing a Public Hearing for February 24, 2026, to Consider an Ordinance Levying Assessments on property located within Improvement Area #1 of said District; Directing the Filing of the proposed Assessment Roll with the City Secretary to make available for public inspection; Directing City Staff to publish and mail notice of said Public Hearing; and Resolving other matters incident and related thereto. (Director of Public Works Joseph Cotton) SUMMARY: FINANCIAL IMPACT: BACKGROUND: STRATEGIC CONNECTIONS: ATTACHMENTS: 1. 01 - Resolution Determining Costs - Sherley Farms PID v4 2. 2026-01-19_ANN_Sherley Farms _PSAP_vFinal 3. 2026-01-19_ANN_Sherley Farms _PSAP_vFinal (redline) CERTIFICATE FOR RESOLUTION THE STATE OF TEXAS COLLIN COUNTY CITY OF ANNA We, the undersigned officers of the City of Anna, Texas (the "City"), hereby certify as follows: 1. The City Council (the "Council") of the City convened in a regular meeting on January 27, 2026, at the regular designated meeting place, and the roll was called of the duly constituted officers and members of the Council, to wit: Pete Cain, Mayor Kelly Patterson-Herndon, Council Member Kevin Toten, Mayor Pro Tem Elden Baker, Council Member Stan Carver II, Deputy Mayor Pro-Tem Manny Singh, Council Member Nathan Bryan, Council Member Marc Marchand, Acting City Manager Carrie Land, City Secretary and all of said persons were present, except ________________________________________, thus constituting a quorum. Whereupon, among other business the following was transacted at said meeting: a written A RESOLUTION OF THE CITY OF ANNA, TEXAS DETERMINING THE COSTS OF CERTAIN AUTHORIZED IMPROVEMENTS TO BE FINANCED BY THE SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT FOR IMPROVEMENT AREA #1 THEREOF; APPROVING A PRELIMINARY SERVICE PLAN AND ASSESSMENT PLAN, INCLUDING THE PROPOSED ASSESSMENT ROLL FOR IMPROVEMENT AREA #1; CALLING A REGULAR MEETING AND NOTICING A PUBLIC HEARING FOR FEBRUARY 24, 2026 TO CONSIDER AN ORDINANCE LEVYING ASSESSMENTS ON PROPERTY LOCATED WITHIN IMPROVEMENT AREA #1 OF SAID DISTRICT; DIRECTING THE FILING OF THE PROPOSED ASSESSMENT ROLL WITH THE CITY SECRETARY TO MAKE AVAILABLE FOR PUBLIC INSPECTION; DIRECTING CITY STAFF TO PUBLISH AND MAIL NOTICE OF SAID PUBLIC HEARING; AND RESOLVING OTHER MATTERS INCIDENT AND RELATED THERETO was duly introduced for the consideration of the Council. It was then duly moved and seconded that said Resolution be passed; and, after due discussion, said motion, carrying with it the passage of said Resolution, prevailed and carried, with all members of the Council shown present above voting "Aye," except as noted below: NAYS: ABSTENTIONS: 2. A true, full, and correct copy of the aforesaid Resolution passed at the meeting described in the above and foregoing paragraph is attached to and follows this Certificate; said Resolution has been duly recorded in the Council's minutes of said meeting; the above and foregoing paragraph is a true, full, and correct excerpt from the Council's minutes of said meeting pertaining to the passage of said Resolution; the persons named in the above and foregoing paragraph are the duly chosen, qualified, and acting officers and members of the Council as indicated therein; that each of the officers and members of the Council was duly and sufficiently notified officially and personally, in advance, of the time, place, and purpose of the aforesaid meeting, and that said Resolution would be introduced and considered for passage at said meeting, and each of said officers and members consented, in advance, to the holding of said meeting for such purpose; and that said meeting was open to the public, and public notice of the time, place, and purpose of said meeting was given all as required by the Texas Government Code, Chapter 551. 3. The Council has approved and hereby approves the Resolution; and the Mayor (or Mayor Pro Tem) and City Secretary hereby declare that their signing of this certificate shall constitute the signing of the attached and following copy of said Resolution for all purposes. SIGNED AND SEALED ON JANUARY 27, 2026. ATTEST: ___________________________________ Pete Cain, Mayor ___________________________________ Carrie L. Land, City Secretary (SEAL) CITY OF ANNA, TEXAS RESOLUTION NO. 2026-01-_____ A RESOLUTION OF THE CITY OF ANNA, TEXAS DETERMINING THE COSTS OF CERTAIN AUTHORIZED IMPROVEMENTS TO BE FINANCED BY THE SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT FOR IMPROVEMENT AREA #1 THEREOF; APPROVING A PRELIMINARY SERVICE PLAN AND ASSESSMENT PLAN, INCLUDING THE PROPOSED ASSESSMENT ROLL FOR IMPROVEMENT AREA #1; CALLING A REGULAR MEETING AND NOTICING A PUBLIC HEARING FOR FEBRUARY 24, 2026 TO CONSIDER AN ORDINANCE LEVYING ASSESSMENTS ON PROPERTY LOCATED WITHIN IMPROVEMENT AREA #1 OF SAID DISTRICT; DIRECTING THE FILING OF THE PROPOSED ASSESSMENT ROLL WITH THE CITY SECRETARY TO MAKE AVAILABLE FOR PUBLIC INSPECTION; DIRECTING CITY STAFF TO PUBLISH AND MAIL NOTICE OF SAID PUBLIC HEARING; AND RESOLVING OTHER MATTERS INCIDENT AND RELATED THERETO RECITALS WHEREAS, the Public Improvement District Assessment Act, Texas Local Government Code, Chapter 372, as amended (the "Act") authorizes the governing body (the “City Council”) of the City of Anna, Texas (the “City”) to create a public improvement district within the City; and WHEREAS, on March 25, 2025, the City Council conducted a public hearing to consider a petition received by the City on January 15, 2025 titled “Petition to Establish Sherley Farms Public Improvement District” requesting the creation of a public improvement district within the City; and WHEREAS, on March 25, 2025, the City Council approved Resolution No. 2025-03- 1753 (the “Authorization Resolution”), authorizing, establishing and creating Sherley Farms Public Improvement District (the "District"), which Authorization Resolution was recorded in the real property records of Collin County, Texas as Document No. 2025000037469; and WHEREAS, the City authorized the creation of the District and funding up to $300,000,000.00 in costs for the District to finance certain public improvements authorized by the Act for the benefit of the property within the District (the "Authorized Improvements"); and WHEREAS, the City Council and the City staff have been presented a "Sherley Farms Public Improvement District Preliminary Service and Assessment Plan", including the proposed Improvement Area #1 Assessment Roll attached thereto (the "Proposed Assessment Roll") (collectively, the "Preliminary SAP"), a copy of which is attached hereto as Exhibit A and is incorporated herein for all purposes; and WHEREAS, the Preliminary SAP sets forth the estimated total costs of certain Authorized Improvements to be financed by the District for the initial phase of development and the Proposed Assessment Roll states the assessments proposed to be levied against each parcel of assessable property in Improvement Area #1 of the District as determined by the method of assessment chosen by the City; and WHEREAS, the Act requires that the Proposed Assessment Roll be filed with the City Secretary of the City (the “City Secretary”) and be subject to public inspection; and WHEREAS, the Act requires that a public hearing (the “Assessment Hearing”) be called to consider proposed assessments and requires the City Council to hear and pass on any objections to the proposed assessments at, or on the adjournment of, the Assessment Hearing; and WHEREAS, the Act requires that notice of the Assessment Hearing be mailed to property owners liable for assessment and published in a newspaper of general circulation in the City and in the part of the extraterritorial jurisdiction in which the district is to be located or in which the improvements are to be undertaken before the tenth (10th) day before the date of the Assessment Hearing. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS AS FOLLOWS: SECTION 1. THAT the recitals set forth above in this Resolution are true and correct and are hereby adopted as findings of the City Council and are incorporated into the body of this Resolution as if fully set forth herein. SECTION 2. THAT the City Council does hereby accept the Preliminary SAP for the District, including the Proposed Assessment Roll, a copy of which is attached hereto as Exhibit A and is incorporated herein for all purposes. All capitalized terms not otherwise defined herein shall have the meanings given to such terms in the Preliminary SAP. SECTION 3. THAT the City Council hereby determines that the total costs of the Improvement Area #1 Projects (as defined in the Preliminary SAP) to be financed by the District are as set forth in Exhibit B of the Preliminary SAP, which costs include the payment of expenses incurred in the administration of the District or related to the issuance of any bonds. SECTION 4. THAT the City Council’s final determination and approval of the costs of the Improvement Area #1 Authorized Improvements, or any portion thereof, shall be subject to and contingent upon City Council approval of a final Service and Assessment Plan which will include the final Improvement Area #1 Assessment Roll, after the properly noticed and held Assessment Hearing. SECTION 5. THAT the Proposed Assessment Roll states the assessment proposed to be levied against each parcel of assessable property in Improvement Area #1 of the District as determined by the method of assessment chosen by the City in the Authorization Resolution and as more fully described in the Preliminary SAP. SECTION 6. THAT the City Council expressly defers the levy of assessments against property within future phases of the District for phase-specific improvements that will benefit only the property within each subsequent phase until such time as the costs of such phase- specific improvements can be determined with certainty as referenced in the Preliminary SAP. SECTION 7. THAT the City Council hereby authorizes and directs the filing of the Proposed Assessment Roll with the City Secretary and the same shall be available for public inspection. SECTION 8. THAT the City Council hereby authorizes, and calls, a meeting and a public hearing (the Assessment Hearing as defined above) to be held on February 24, 2026 at 6:00 p.m. at the City of Anna Municipal Complex, Council Chambers, 120 W. 7th Street, Anna, Texas 75409, or such other location as designated by the City and noticed pursuant to the Act, at which the City Council shall, among other actions, hear and pass on any objections to the Proposed Assessment Roll; and, upon the adjournment of the Assessment Hearing, the City Council will consider an ordinance levying the assessments as special assessments on property within Improvement Area #1 of the District (which ordinance shall specify the method of payment of the assessments). SECTION 9. THAT the City Council hereby authorizes and directs the City Secretary to publish notice of the Assessment Hearing to be held on February 24, 2026, in substantially the form attached hereto as Exhibit B and incorporated herein for all purposes; provided however, that the location is subject to change as designated by the City, in a newspaper of general circulation in the City, on or before Friday, February 13, 2026, which is before the tenth (10th) day before the date of the Assessment Hearing, as required by Section 372.016(b) of the Act. SECTION 10. THAT when the Proposed Assessment Roll is filed with the City Secretary, the City Council hereby authorizes and directs the City Secretary to mail to owners of property liable for assessment notice of the Assessment Hearing to be held on February 24, 2026, on or before Friday, February 13, 2026, as required by Section 372.016(c) of the Act. SECTION 11. THAT City staff is authorized and directed to take such other actions as are required (including, but not limited to, notice of the public hearing as required by the Texas Open Meetings Act) to place the public hearing on the agenda for the February 24, 2026 meeting of the City Council. SECTION 12. THAT this Resolution shall become effective from and after its date of passage in accordance with law. PASSED AND APPROVED on this the 27th day of January, 2026. ATTEST: _____________________________ Pete Cain, Mayor ____________________________ Carrie L. Land, City Secretary EXHIBIT A PRELIMINARY SERVICE AND ASSESSMENT PLAN EXHIBIT B CITY OF ANNA, TEXAS NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN THAT a public hearing will be conducted by the City Council of Anna, Texas on February 24, 2026 at 6:00 p.m.at the City of Anna Municipal Complex, City Council Chambers, 120 W. 7th Street, Anna, Texas 75409. The public hearing will be held to consider proposed assessments to be levied against the assessable property within Sherley Farms Public Improvement District (the “District”) pursuant to the provisions of Chapter 372 of the Texas Local Government Code, as amended (the “Act”). The general nature of the proposed public improvements (collectively, the "Authorized Improvements") may include: (i) street and roadway improvements, including related sidewalks, drainage, utility relocation, signalization, landscaping, lighting, signage, off-street parking and right-of-way; (ii) establishment or improvement of parks and open space, together with the design, construction of any ancillary structures, features or amenities such as trails, playgrounds, walkways, lighting and any similar items located therein; (iii) sidewalks and landscaping, including entry monuments and features, fountains, lighting and signage; (iv) acquisition, construction, and improvement of water, wastewater and drainage improvements and facilities and facilities related thereto; (v) acquisition of real property, interests in real property, or contract rights in connection with the Authorized Improvements (as defined below); (vi) payment of costs, including, without limitation, design, engineering, permitting, legal, required payment, performance and maintenance bonds, bidding, support, construction, construction management, administrative and inspection costs, associated with developing and financing the public improvements listed in (i) through (v) above; (vii) projects similar to those listed in subsections (i) - (v) above or authorized by the Act, including similar off-site projects that provide a benefit to the property within the District; (viii) any additional improvement projects authorized in the Act; (ix) payment of costs associated with special supplemental services for improvement and promotion of the District as approved by the City including services related to advertising, promotion, health and sanitation, water and wastewater, public safety, security, business recruitment, development, recreation, and cultural enhancement; and (x) payment of costs associated with developing and financing the public improvements listed in (i) - (ix) above, as well as the interest, costs of issuance, reserve funds, or credit enhancement of bonds issued for the purposes described in (i) through (ix) above, and costs of establishing, administering and operating the District (collectively, the “Authorized Improvements”); and (b) the payment of expenses incurred in the establishment, administration, and operation of the District, including maintenance costs, costs of issuance, funding debt service and capitalized interest reserves and credit enhancement fees of any bonds issued by or on behalf of the District, if necessary. These Authorized Improvements shall promote the interests of the City and confer a special benefit upon the property in the District. The total costs of the Improvement Area #1 Projects, including the costs of creating the District and issuing the bonds, is approximately $33,950,000. The boundaries of the District include approximately 1,123.592 acres of land located within the city limits of the City and as more particularly described by a metes and bounds description available for public inspection at the office of the City Secretary, 120 W. 7th Street, Anna, Texas 75409. All written or oral objections on the proposed assessment within the District will be considered at the public hearing. A copy of the Improvement Area #1 Assessment Roll (the "Assessment Roll"), which Assessment Roll includes the assessments to be levied against each parcel of assessable property in Improvement Area #1 of the District for the Authorized Improvements within Improvement Area #1, is available for public inspection at the office of the City Secretary, 120 W.7th Street, Anna, Texas 75409. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 0 Sherley Farms Public Improvement District PRELIMINARY SERVICE AND ASSESSMENT PLAN SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 1 TABLE OF CONTENTS Table of Contents .......................................................................................................................... 1 Introduction .................................................................................................................................. 3 Section I: Definitions ..................................................................................................................... 4 Section II: The District ................................................................................................................. 11 Section III: Authorized Improvements ......................................................................................... 11 Section IV: Service Plan ............................................................................................................... 13 Section V: Assessment Plan ......................................................................................................... 13 Section VI: Terms of the Assessments ......................................................................................... 17 Section VII: Assessment Roll ....................................................................................................... 23 Section VIII: Additional Provisions ............................................................................................... 24 Exhibits ........................................................................................................................................ 26 Appendices ................................................................................................................................. 27 Exhibit A-1 – Map of the District ................................................................................................. 28 Exhibit A-2 – Map of Improvement Area #1 ................................................................................ 29 Exhibit A-3 - Improvement Area #1 Lot Type Classification Map ................................................ 30 Exhibit B – Project Costs .............................................................................................................. 31 Exhibit C – Service Plan ............................................................................................................... 32 Exhibit D – Sources and Uses of Funds ........................................................................................ 33 Exhibit E – Maximum Assessment and Tax Rate Equivalant ........................................................ 34 Exhibit F-1 – Improvement Area #1 Assessment Roll .................................................................. 35 Exhibit F-2 – Improvement Area #1 Annual Installments ............................................................ 36 Exhibit G-1 – Maps of Major Improvements ............................................................................... 37 Exhibit G-2 – Maps of Improvement Area #1 Improvements ...................................................... 39 Exhibit H – TIRZ No. 9 Annual Credit Amount by Lot Type .......................................................... 43 Exhibit I – Form of Notice of Assessment Termination ............................................................... 44 Exhibit J – Debt Service Schedule for Improvement Area #1 Bonds ............................................ 47 Exhibit K-1 – District Legal Description ........................................................................................ 48 Exhibit K-2 – Improvement Area #1 Legal Description ................................................................ 53 Appendix A – Engineer’s Report .................................................................................................. 57 Appendix B – Buyer Disclosures .................................................................................................. 58 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 2 Sherley Farms Public Improvement District - Improvement Area #1 Initial Parcel Buyer Disclosure .................................................................................................................................... 59 Sherley Farms Public Improvement District - Improvement Area #1 Lot Type 1 Buyer Disclosure .................................................................................................................................................... 65 Sherley Farms Public Improvement District - Improvement Area #1 Lot Type 2 Buyer Disclosure .................................................................................................................................................... 71 Sherley Farms Public Improvement District Improvement Area #1 Lot Type 3 Buyer Disclosure 77 Sherley Farms Public Improvement District - Improvement Area #1 Lot Type 4 Buyer Disclosure .................................................................................................................................................... 83 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 3 INTRODUCTION Capitalized terms used in this Service and Assessment Plan shall have the meanings given to them in Section I unless otherwise defined in this Service and Assessment Plan or unless the context in which a term is used clearly requires a different meaning. Unless otherwise defined, a reference to a “Section,” an “Exhibit,” or an “Appendix” shall be a reference to a Section of this Service and Assessment Plan or an Exhibit or Appendix attached to and made a part of this Service and Assessment Plan for all purposes. On March 25, 2025, the City Council passed and approved Resolution No. 2025-03-1753 authorizing the establishment of the District in accordance with the PID Act, which authorization was effective upon approval in accordance with the PID Act. The purpose of the District is to finance the Actual Costs of Authorized Improvements that confer a special benefit on approximately 1,123.592 acres located within the corporate limits of the City, as described by the legal description on Exhibit K-1 and depicted on Exhibit A-1. The PID Act requires a service plan must (i) cover a period of at least five years; (ii) define the annual indebtedness and projected cost of the Authorized Improvements; and (iii) include a copy of the notice form required by Section 5.014 of the Texas Property Code, as amended. The Service Plan is contained in Section IV and the notice form is attached as Appendix B. The PID Act requires that the Service Plan include an Assessment Plan that assesses the Actual Costs of the Authorized Improvements against the Assessed Property within the District based on the special benefits conferred on such property by the Authorized Improvements. The Assessment Plan is contained in Section V. The PID Act requires an Assessment Roll that states the Assessment against each Parcel determined by the method chosen by the City Council. The Assessment against each Parcel of Assessed Property must be sufficient to pay the share of the Actual Costs of the Authorized Improvements apportioned to such Parcel and cannot exceed the special benefit conferred on the Parcel by such Authorized Improvements. The Improvement Area #1 Assessment Roll is included as Exhibit F-1. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 4 SECTION I: DEFINITIONS “2026 Assessment Ordinance” means an Assessment Ordinance approved and adopted by the City Council on February 27, 2026, which levied the Improvement Area #1 Assessment against Improvement Area #1 Assessed Property, and approved this Service and Assessment Plan. “Actual Costs” mean, with respect to Authorized Improvements, the actual costs paid or incurred by or on behalf of the Developer, (either directly or through affiliates), including: (1) the costs for the design, planning, financing, administration/management, acquisition, installation, construction and/or implementation of such Authorized Improvements; (2) the fees paid for obtaining permits, licenses, or other governmental approvals for such Authorized Improvements; (3) the costs for external professional services, such as engineering, geotechnical, surveying, land planning, architectural landscapers, appraisals, legal, accounting, and similar professional services; (4) the costs for all labor, bonds, and materials, including equipment and fixtures, owing to contractors, builders, and materialmen engaged in connection with the acquisition, construction, or implementation of the Authorized Improvements; (5) all related permitting and public approval expenses, and architectural, engineering, consulting, and other governmental fees and charges; and (6) costs to implement, administer, and manage the above-described activities including, but not limited to, a construction management fee equal to four percent (4%) of construction costs if managed by or on behalf of the Developer. “Additional Interest” means the amount collected by the application of the Additional Interest Rate. “Additional Interest Rate” means the up to 0.50% additional interest rate that may be charged on Assessments securing PID Bonds pursuant to Section 372.018 of the PID Act “Administrator” means the City or independent firm designated by the City who shall have the responsibilities provided in this Service and Assessment Plan, any Indenture, or any other agreement or document approved by the City related to the duties and responsibilities of the administration of the District. The initial Administrator is P3Works, LLC. “Annual Collection Costs” mean the actual or budgeted costs and expenses related to the operation of the District, including, but not limited to, costs and expenses for: (1) the Administrator; (2) City staff; (3) legal counsel, engineers, accountants, financial advisors, and other consultants engaged by the City; (4) calculating, collecting, and maintaining records with respect to Assessments and Annual Installments; (5) preparing and maintaining records with respect to Assessment Rolls and Annual Service Plan Updates; (6) paying and redeeming PID Bonds; (7) investing or depositing Assessments and Annual Installments; (8) complying with this SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 5 Service and Assessment Plan, the PID Act, and any Indenture, with respect to the PID Bonds, including the City’s continuing disclosure requirements; and (9) the paying agent/registrar and Trustee in connection with PID Bonds, including their respective legal counsel. Annual Collection Costs collected but not expended in any year shall be carried forward and applied to reduce Annual Collection Costs for subsequent years. “Annual Installment” means the annual installment payment of an Assessment as calculated by the Administrator and approved by the City Council, that includes: (1) principal; (2) interest; (3) Annual Collection Costs; and (4) Additional Interest related to the PID Bonds, if applicable. “Annual Service Plan Update” means an update to this Service and Assessment Plan prepared no less frequently than annually by the Administrator and approved by the City Council. “Assessed Property” means any Parcel within the District against which an Assessment is levied. “Assessment” means an assessment levied against Assessed Property to pay the costs of certain Authorized Improvements as specified herein, which Assessment is imposed pursuant to an Assessment Ordinance and the provisions herein, as shown on an Assessment Roll, subject to reallocation upon the subdivision of such Assessed Property or reduction according to the provisions herein and in the PID Act. “Assessment Ordinance” means an ordinance adopted by the City Council in accordance with the PID Act that levies an Assessment on the Assessed Property, as shown on any Assessment Roll. “Assessment Plan” means the methodology employed to assess the Actual Costs of the Authorized Improvements against the Assessed Property based on the special benefits conferred on such property by the Authorized Improvements, more specifically set forth and described in Section V. “Assessment Roll” means any assessment roll for the Assessed Property, including the Improvement Area #1 Assessment Roll, as updated, modified or amended from time to time in accordance with the procedures set forth herein and in the PID Act, including in any Annual Service Plan Updates. The Assessment Roll is included in this Service and Assessment Plan as Exhibit F-1. “Authorized Improvements” means the improvements authorized by Section 372.003 of the PID Act, as further depicted on Exhibit G-1 and Exhibit G-2. “Bond Issuance Costs” means the costs associated with issuing PID Bonds, including, but not limited to, attorney fees, financial advisory fees, consultant fees, appraisal fees, printing costs, publication costs, capitalized interest, reserve fund requirements, underwriter’s discount, fees SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 6 charged by the Texas Attorney General, and any other cost or expense incurred by the City directly associated with the issuance of any series of PID Bonds. “City” means the City of Anna, Texas. “City Council” means the governing body of the City. “County” means Collin County, Texas. “Delinquent Collection Costs” mean costs related to the foreclosure on Assessed Property and the costs of collection of delinquent Assessments, delinquent Annual Installments, or any other delinquent amounts due under this Service and Assessment Plan, including penalties and reasonable attorney’s fees actually paid, but excluding amounts representing interest and penalty interest. “Developer” means Tellus Texas III, LLC and Sherley Partners, LTD. and any successors or assigns that intend to develop property in the District for the ultimate purpose of transferring title to end users. “District” means the Sherley Farms Public Improvement District containing approximately 1,123.592 acres located within corporate limits of the City, and more specifically described in Exhibit K-1 and depicted on Exhibit A-1. “District Formation Costs” means the costs associated with forming the District, including, but not limited to, attorney fees, and any other cost or expense incurred by the City directly associated with the establishment of the District. “Engineer’s Report” means the report provided by a licensed professional engineer that describes the Authorized Improvements, including their costs, location, and benefit, and is attached hereto as Appendix A. “Estimated Buildout Value” means the estimated value of an Assessed Property with fully constructed buildings, as provided by the Developer and confirmed by the City Council, by considering such factors as density, lot size, proximity to amenities, view premiums, location, market conditions, historical sales, builder contracts, discussions with homebuilders, reports from third party consultants, or any other factors that, in the judgment of the City, may impact value. The Estimated Buildout Value for each Lot Type is shown on Exhibit E. “Improvement Area #1” means approximately 135.00 acres located within the District, more specifically described in Exhibit K-2 and depicted on Exhibit A-2. “Improvement Area #1 Annual Installment” means the Annual Installment of the Improvement Area #1 Assessment as calculated by the Administrator and approved by the City Council, that SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 7 includes: (1) principal; (2) interest; (3) Annual Collection Costs related to Improvement Area #1; and (4) Additional Interest related to the Improvement Area #1 Bonds, as shown on Exhibit F-2, which amount may be reduced by the TIRZ No. 9 Annual Credit Amount. “Improvement Area #1 Assessed Property” means any Parcel within Improvement Area #1 against which an Improvement Area #1 Assessment is levied. “Improvement Area #1 Assessment” means an Assessment to be levied against Improvement Area #1 Assessed Property to pay for a portion of the Improvement Area #1 Authorized Improvements, and imposed pursuant to the 2026 Assessment Ordinance and the provisions herein, as shown on the Improvement Area #1 Assessment Roll, subject to reallocation or reduction pursuant to the provisions set forth in Section VI herein and in the PID Act. “Improvement Area #1 Assessment Roll” means the Assessment Roll for the Improvement Area #1 Assessed Property, as updated, modified, or amended from time to time in accordance with the procedures set forth herein and in the PID Act, including any updates prepared in connection with the issuance of PID Bonds or any Annual Service Plan Updates. The Improvement Area #1 Assessment Roll is included in this Service and Assessment Plan as Exhibit F-1. “Improvement Area #1 Authorized Improvements” means collectively, (1) the Improvement Area #1 Improvements; (2) the first year’s Annual Collection Costs related to the Improvement Area #1 Bonds; and (3) Bond Issuance Costs incurred in connection with the issuance of Improvement Area #1 Bonds. “Improvement Area #1 Bonds” means those certain “City of Anna, Texas, Special Assessment Revenue Bonds, Series 2026 (Sherley Farms Public Improvement District Improvement Area #1 Project)” that shall be secured primarily by Improvement Area #1 Assessments. “Improvement Area #1 Improvements” means the Authorized Improvements which only benefit the Improvement Area #1 Assessed Property, as further described in Section III and depicted on Exhibit G-2. “Improvement Area #1 Initial Parcel” means all of the Improvement Area #1 Assessed Property against which the entire Improvement Area #1 Assessment is levied, as shown on the Improvement Area #1 Assessment Roll as shown on Exhibit F-1. “Improvement Area #1 Major Improvements” means the portion of the Major Improvements to be completed concurrently with the completion of Lots in Improvement Area #1. “Indenture” means an Indenture of Trust entered into between the City and the Trustee in connection with the issuance of each series of PID Bonds, as amended from time to time, setting forth the terms and conditions related to a series of PID Bonds. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 8 “Lot” means (1) for any portion of the District for which a final subdivision plat has been recorded in the Plat or Official Public Records of the County, a tract of land described by “lot” in such subdivision plat; and (2) for any portion of the District for which a subdivision plat has not been recorded in the Plat or Official Public Records of the County, a tract of land anticipated to be described as a “lot” in a final recorded subdivision plat as shown on a concept plan or a preliminary plat. A “Lot” shall not include real property owned by a government entity, even if such property is designated as a separate described tract or lot on a recorded subdivision plat. “Lot Type” means a classification of final building Lots with similar characteristics (e.g. lot size, home product, Estimated Buildout Value, etc.), as determined at the time of levying the applicable Assessment and confirmed by the City Council. In the case of single-family residential Lots, the Lot Type shall be further defined by classifying the residential Lots by the Estimated Buildout Value of the Lot as provided by the Developer, and confirmed by the City Council, as shown on Exhibit E. “Lot Type 1” means a Lot Type within Improvement Area #1 marketed to homebuilders as a 45’ lot. The buyer disclosure for Lot Type 1 is attached as Appendix B. “Lot Type 2” means a Lot Type within Improvement Area #1 marketed to homebuilders as a 50’ lot. The buyer disclosure for Lot Type 2 is attached as Appendix B. “Lot Type 3” means a Lot Type within Improvement Area #1 marketed to homebuilders as a 60’ lot. The buyer disclosure for Lot Type 3 is attached as Appendix B. “Lot Type 4” means a Lot Type within Improvement Area #1 marketed to homebuilders as a 70’ lot. The buyer disclosure for Lot Type 4 is attached as Appendix B. “Major Improvements” means those Authorized Improvements that confer a special benefit to all of the Assessed Property and Remainder Area within the District, as depicted on Exhibit G-1. “Maximum Assessment” means, for each Lot, an Assessment equal to the lesser of (1) the amount calculated pursuant to Section VI.A, or (2) for each Lot Type, the amount shown on Exhibit E. “Non-Assessed Property” means Parcels within the boundaries of the District that accrue special benefit from the Authorized Improvements as determined by the City Council but are not assessed. “Notice of Assessment Termination” means a document that shall be recorded in the Official Public Records of the County evidencing the termination of an Assessment, a form of which is attached as Exhibit I. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 9 “Parcel” or “Parcels” means a specific property within the District identified by either a tax parcel identification number assigned by the Collin Central Appraisal District for real property tax purposes, by legal description, or by lot and block number in a final subdivision plat recorded in the Official Public Records of the County, or by any other means determined by the City. “PID Act” means Chapter 372, Texas Local Government Code, as amended. “PID Bonds” means any bonds issued by the City in one or more series and secured in whole or in part by Assessments. “Prepayment” means the payment of all or a portion of an Assessment before the due date of the final Annual Installment thereof. Amounts received at the time of a Prepayment which represent a payment of principal, interest, or penalties on a delinquent installment of an Assessment are not to be considered a Prepayment, but rather are to be treated as the payment of the regularly scheduled Annual Installment. “Prepayment Costs” means interest, including Additional Interest and Annual Collection Costs, to the date of Prepayment. “Private Improvements” means those certain improvements benefitting the District, constructed and paid for by the Developer and not reimbursable from Assessments or PID Bonds, as further described on Exhibit B. “Remainder Area” means approximately 988.592 acres located within the District and entirely outside of Improvement Area #1, to be developed as one or more future improvement areas. “Service and Assessment Plan” means this Sherley Farms Public Improvement District Service and Assessment Plan as updated, amended, or supplemented from time to time. “Service Plan” means the plan described in Section IV which covers a period of at least five years and defines the annual indebtedness and projected costs of the Authorized Improvements. "TIRZ No. 9” means Reinvestment Zone Number Nine, City of Anna, Texas. "TIRZ No. 9 Agreement" means that future TIRZ reimbursement agreement to be entered into by the Developer and the City. "TIRZ No. 9 Annual Credit Amount" means, for each lot type, the amount calculated pursuant to Section V.F, which amount shall not annually exceed the TIRZ No. 9 Maximum Annual Credit Amount, and which shall be transferred from the TIRZ No. 9 Fund to the applicable pledged revenue fund pursuant to the TIRZ No. 9 Agreement and used to pay a portion of principal and interest related to the PID Bonds, but which shall not be pledged to secure the PID Bonds. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 10 "TIRZ No. 9 Plan" means the Reinvestment Zone Number Nine, City of Anna, Texas Final Project and Financing Plan, to be approved by City Council prior to the issuance of PID Bonds. "TIRZ No. 9 Fund" means the tax increment fund created pursuant to the TIRZ No. 9 Ordinance where TIRZ No. 9 Revenues are deposited annually. “TIRZ No. 9 Maximum Annual Credit Amount” means for each Lot Type, the amount of TIRZ No. 9 Revenues that results in an equivalent tax rate equal to $1.35 per $100 of assessed value for such Lot Type taking into consideration the equivalent tax rate of the applicable Annual Installment, based on Estimated Buildout Value of such Lot Type at the time the City Council approves the applicable Assessment Ordinance levying the applicable Assessment, as further described in Section V.F and shown on Exhibit H. The Estimated Buildout Values for each Lot Type are shown on Exhibit E. "TIRZ No. 9 Ordinance" means Ordinance No. __________ adopted by the City Council on February 10, 2025, approving the TIRZ No. 9 Plan and authorizing the use of TIRZ No. 9 Revenues for project costs under the Chapter 311, Texas Tax Code as amended, and related to certain public improvements as provided for in the TIRZ No. 9 Plan. "TIRZ No. 9 Revenues" mean, for each year, the amounts which are deposited in the TIRZ No. 9 Fund pursuant to the TIRZ No. 9 Ordinance, the TIRZ No. 9 Plan, and the TIRZ No. 9 Agreement. “Trustee” means the trustee or successor trustee under an Indenture. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 11 SECTION II: THE DISTRICT The District includes approximately 1,123.592 contiguous acres located within the corporate limits of the City, the boundaries of which are more particularly described on Exhibit K-1 and depicted on Exhibit A-1. Development of the District is anticipated to include approximately (i) 2,578 residential units (including 120 townhomes) to be developed by Tellus Texas III, LLC and 7 single-family units, 55 cottage homes, 400 multifamily units, and 260,000 square feet of commercial space to be developed by Sherley Partners, Ltd.. Improvement Area #1 includes approximately 135 contiguous acres located within the corporate limits of the City, the boundaries of which are more particularly described on Exhibit K-2 and depicted on Exhibit A-2. Development of Improvement Area #1 is anticipated to include approximately 418 Lots developed with single-family homes (76 single-family homes that are on Lots classified as Lot Type 1, 166 single-family homes that are on Lots classified as Lot Type 2, 143 single-family homes that are on Lots classified as Lot Type 3, and 33 single-family homes that are on Lots classified as Lot Type 4.) SECTION III: AUTHORIZED IMPROVEMENTS Based on information provided by the Developer and their engineers and reviewed by the City staff and by third-party consultants retained by the City, the City has determined that the Authorized Improvements confer a special benefit on the Assessed Property. Authorized Improvements will be designed and constructed in accordance with the City’s standards and specifications and will be owned and operated by the City. The budget for the Authorized Improvements is shown on Exhibit B. A. Improvement Area #1 Improvements  Streets Improvements including subgrade stabilization, concrete and reinforcing steel for roadways, asphalt pavement for roadways, turn lanes, pavers, stamping and staining of concrete, sidewalks, testing, handicap ramps, and streetlights. All related earthwork, excavation, erosion control, intersections, signage, traffic control, maintenance bonds, lighting and re-vegetation/landscaping of all disturbed areas within the right-of-way are included. The street improvements will provide benefit to each Lot within Improvement Area #1.  Water SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 12 Improvements including trench excavation and embedment, trench safety, PVC piping, valves, fire hydrants, service connections, meter boxes, testing, related earthwork, excavation, erosion control and all necessary appurtenances required to provide water service to all Lots within Improvement Area #1.  Sewer Improvements including trench excavation and embedment, trench safety, PVC piping, encasement pipe, boring, manholes, service connections, testing, related earthwork, excavation, erosion control and all necessary appurtenances required to provide wastewater service to all Lots within Improvement Area #1.  Storm Drainage Improvements including earthen channels, swales, ponds curb and inlets, RCP piping and boxes, headwalls, concrete flumes, manholes, junction boxes, rock rip rap, concrete outfalls, and testing as well as all related earthwork, excavation, erosion control and all necessary appurtenances required to provide storm drainage for all Lots within Improvement Area #1.  Right of Way Includes right-of-way required to provide street improvements for all Lots within Improvement Area #1.  Soft Costs Costs related to designing, constructing, and installing the Improvement Area #1 Improvements including land planning and design, City fees, engineering, landscape design, soil testing, environmental testing, survey, construction management, contingency, legal fees, and consultant fees. B. Bond Issuance Costs  Debt Service Reserve Fund Equals the amount to be deposited in a debt service reserve fund under an applicable Indenture in connection with the issuance of PID Bonds.  Capitalized Interest Equals the amount required to be deposited for the purpose of paying capitalized interest on a series of PID Bonds under an applicable Indenture in connection with the issuance of such PID Bonds. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 13  Underwriter’s Discount Equals a percentage of the par amount of a particular series of PID Bonds related to the costs of underwriting such PID Bonds, including the fee of counsel to the Underwriter.  Cost of Issuance Includes costs of issuing a particular series of PID Bonds, including but not limited to issuer fees, attorney’s fees, financial advisory fees, consultant fees, appraisal fees, printing costs, publication costs, City’s costs, fees charged by the Texas Attorney General, and any other cost or expense directly associated with the issuance of PID Bonds. C. Other Costs  Deposit to Administrative Fund Equals the amount necessary to fund the first year’s Annual Collection Costs for a particular series of PID Bonds. SECTION IV: SERVICE PLAN The PID Act requires the Service Plan to cover a period of at least five years. The Service Plan is required to define the annual projected costs and indebtedness for the Authorized Improvements undertaken within the District during the five-year period. The Service Plan is also required to include a copy of the buyer disclosure notice form required by Section 5.014 of the Texas Property Code, as amended. The Service Plan must be reviewed and updated in each Annual Service Plan Update. Exhibit C summarizes the initial Service Plan for Improvement Area #1. Per the PID Act and Section 5.014 of the Texas Property Code, as amended, this Service and Assessment Plan, and any future Annual Service Plan Updates, shall include a form of the buyer disclosure for the District. The buyer disclosures are attached hereto as Appendix B. Exhibit D summarizes the sources and uses of funds required to construct the Authorized Improvements and Private Improvements. The sources and uses of funds shown on Exhibit D shall be updated in an Annual Service Plan Update SECTION V: ASSESSMENT PLAN The PID Act allows the City Council to apportion the costs of the Authorized Improvements to the Assessed Property based on the special benefit received from the Authorized Improvements. The PID Act provides that such costs may be apportioned: (1) equally per front foot or square foot; (2) according to the value of property as determined by the City Council, with or without regard SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 14 to improvements constructed on the property; or (3) in any other manner approved by the City Council that results in imposing equal shares of such costs on property similarly benefited. The PID Act further provides that the City Council may establish by ordinance or order reasonable classifications and formulas for the apportionment of the cost between the City and the area to be assessed and the methods of assessing the special benefits for various classes of improvements. This section of this Service and Assessment Plan describes the special benefit received by each Parcel within the District as a result of the Authorized Improvements and provides the basis and justification for the determination that this special benefit equals or exceeds the amount of the Assessments to be levied on the Assessed Property for such Authorized Improvements. The determination by the City Council of the assessment methodologies set forth below is the result of the discretionary exercise by the City Council of its legislative authority and governmental powers and is conclusive and binding on the Owners, Developer, and all future owners and developers of the Assessed Property. A. Assessment Methodology Acting in its legislative capacity and based on information provided by the Developer and its engineers and reviewed by the City staff and by third-party consultants retained by the City, the City Council has determined that the costs of the Authorized Improvements shall be allocated as follows:  At the time of adoption of the 2026 Assessment Ordinance, the costs of the Improvement Area #1 Major Improvements were determined to be funded from other sources such as impact fees and private funding. The portion of Major Improvements to be constructed in the future and benefiting the Remainder Area (or individual distinct portions thereof to be developed) are expected to be funded from impacts fees and private funding but may be assessed at a later date as provided in an amendment to this Service and Assessment Plan.  By the adoption of the 2026 Assessment Ordinance, the costs of the reimbursable Improvement Area #1 Authorized Improvements are allocated to each Parcel within Improvement Area #1 based on the ratio of the Estimated Buildout Value of each Parcel designated as Improvement Area #1 Assessed Property to the Estimated Buildout Value of all Improvement Area #1 Assessed Property. Currently, the Improvement Area #1 Initial Parcel is the only Parcel within Improvement Area #1, and as such, the Improvement Area #1 Initial Parcel is allocated 100% of the Improvement Area #1 Authorized Improvements. B. Assessments SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 15 By the adoption of the 2026 Assessment Ordinance, the Improvement Area #1 Assessment shall be levied on the Improvement Area #1 Initial Parcel are in the amount shown on the Improvement Area #1 Assessment Roll, attached hereto as Exhibit F-1. The projected Improvement Area #1 Annual Installments are shown on Exhibit F-2. Upon division or subdivision of the Improvement Area #1 Initial Parcel, the Improvement Area #1 Assessment will be reallocated pursuant to Section VI. The Maximum Assessment for each Lot Type is shown on Exhibit E. In no case will the Assessment for Lots classified as Lot Type 1, Lot Type 2, Lot Type 3 or Lot Type 4, respectively, exceed the corresponding Maximum Assessment for each Lot classification. C. Findings of Special Benefit Acting in its legislative capacity and based on information provided by the Developer and tis Engineers and reviewed by the City staff and by third-party consultants retained by the City, the City Council has found and determined the following:  Improvement Area #1  The costs of the Improvement Area #1 Authorized Improvements equal $34,055,146 as shown on Exhibit B;  The Improvement Area #1 Assessed Property receives special benefit from the Improvement Area #1 Authorized Improvements equal to or greater than the Actual Cost of the Improvement Area #1 Authorized Improvements;  By the adoption of the 2026 Assessment Ordinance, the Improvement Area #1 Initial Parcel is allocated 100% of the Improvement Area #1 Assessment levied for the Improvement Area #1 Authorized Improvements, which equals $33,950,000 as shown on the Improvement Area #1 Assessment Roll attached hereto as Exhibit F-1;  The special benefit ($34,055,146) received by the Improvement Area #1 Initial Parcel from the Improvement Area #1 Authorized Improvements is equal to or greater than the amount of the Improvement Area #1 Assessment ($33,950,000) levied on the Improvement Area #1 Initial Parcel for the Improvement Area #1 Authorized Improvements; and  At the time the City Council approved this Service and Assessment Plan, the Developer owned 100% of the Improvement Area #1 Initial Parcel. The Developer acknowledged that the Improvement Area #1 Authorized Improvements confer a special benefit on the Improvement Area #1 Initial Parcel and consents to the SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 16 imposition of the Improvement Area #1 Assessment to pay for the Actual Costs associated therewith. The Developer ratified, confirmed, accepted, agreed to, and approved: (1) the determinations and findings by the City Council as to the special benefits described herein and the 2026 Assessment Ordinance; (2) the Service and Assessment Plan and the 2026 Assessment Ordinance; and (3) the levying of the Improvement Area #1 Assessment on the Improvement Area #1 Initial Parcel. D. Annual Collection Costs The Annual Collection Costs shall be paid for annually by the owner of each Parcel pro rata based on the ratio of the amount of outstanding Assessment remaining on the Parcel to the total outstanding Assessment. The Annual Collection Costs shall be collected as part of and in the same manner as Annual Installments in the amounts shown on the Assessment Roll, which may be revised based on Actual Costs incurred in Annual Service Plan Updates. E. Additional Interest The interest rate on Assessments securing each respective series of PID Bonds may exceed the interest rate on each respective series of PID Bonds by the Additional Interest Rate. To the extent required by any Indenture, Additional Interest shall be collected as part of each Annual Installment and shall be deposited pursuant to the applicable Indenture. F. TIRZ No. 9 Annual Credit Amount The City Council, in accordance with the TIRZ No. 9 Agreement, has agreed to use a portion of TIRZ No. 9 Revenues generated on a parcel-by-parcel basis from each Assessed Property to offset a portion of the principal and interest of such property’s Assessment, as applicable. 1. The principal and interest portion of the Improvement Area #1 Annual Installment for an Assessed Property shall receive a TIRZ No. 9 Annual Credit Amount equal to the TIRZ No. 9 Revenue generated by the Assessed Property for the previous Tax Year (e.g. TIRZ No. 9 Revenue collected from the Assessed Property for Tax Year 2026 shall be applied as the TIRZ No. 9 Annual Credit Amount applicable to the Assessed Property’s Improvement Area #1 Annual Installment to be collected in Tax Year 2027), but in no event shall the TIRZ No. 9 Annual Credit Amount exceed the TIRZ No. 9 Maximum Annual Credit Amount shown in Section V.F.2 as calculated on Exhibit H for each Assessed Property. 2. The TIRZ No. 9 Maximum Annual Credit Amount available to reduce the principal and interest portion of the Improvement Area #1 Annual Installment for an Assessed Property is calculated for each Lot Type, as shown on Exhibit H. The TIRZ No. 9 Maximum Annual Credit Amount is calculated so that the average Improvement Area #1 Annual Installment minus the SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 17 TIRZ No. 9 Maximum Annual Credit Amount for each Lot Type does not produce an equivalent tax rate for such Lot Type which exceeds the competitive, composite equivalent ad valorem tax rate ($1.35 per $100 of assessed value) taking into consideration the equivalent tax rate of the Improvement Area #1 Annual Installments based on Estimated Buildout Value at the time the 2026 Assessment Ordinance is approved. The resulting maximum TIRZ No. 9 Annual Credit Amount for each Lot Type is shown on Exhibit H. 3. After the TIRZ No. 9 Annual Credit Amount is applied to provide credit towards the principal and interest portion of the Improvement Area #1 Annual Installment for the Assessed Property, any excess TIRZ No. 9 Revenues available from the TIRZ No. 9 Fund shall be used in accordance with the TIRZ No. 9 Plan and the TIRZ No. 9 Agreement. SECTION VI: TERMS OF THE ASSESSMENTS Any reallocation of Assessments as described in this Section VI shall be considered an administrative action of the City and will not be subject to the notice or public hearing requirements under the PID Act. A. Reallocation of Assessment s 1. Upon Division Prior to Recording of Subdivision Plat Upon the division of any Assessed Property (without the recording of a subdivision plat), the Administrator shall reallocate the Assessment for the Assessed Property prior to the division among the newly divided Assessed Properties according to the following formula: A = B x (C ÷ D) Where the terms have the following meanings: A = the Assessment for the newly divided Assessed Property B = the Assessment for the Assessed Property prior to division C = the Estimated Buildout Value of the newly divided Assessed Property D = the sum of the Estimated Buildout Value for all of the newly divided Assessed Properties The calculation of the Assessment of an Assessed Property shall be performed by the Administrator and shall be based on the Estimated Buildout Value of that Assessed Property, as provided by the Developer, relying on information from homebuilders, market studies, appraisals, Official Public Records of the County, and any other relevant information regarding the Assessed Property, and such calculation shall be approved by SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 18 the City Council in the immediately following Annual Service Plan Update. The calculation as confirmed by the City Council shall be conclusive and binding. The Estimated Buildout Values for Lot Type 1, Lot Type 2, Lot Type 3 and Lot Type 4 are shown on Exhibit E and will not change in future Annual Service Plan Updates but Exhibit E may be updated in future Annual Service Plan Updates to account for additional Lot Types. The sum of the Assessments for all newly divided Assessed Properties shall equal the Assessment for the Assessed Property prior to subdivision. The calculation shall be made separately for each newly divided Assessed Property. The reallocation of an Assessment for an Assessed Property that is a homestead under Texas law may not exceed the Assessment prior to the reallocation. Any reallocation pursuant to this section shall be reflected in the Annual Service Plan Update immediately following such reallocation. 2. Upon Subdivision by a Recorded Subdivision Plat Upon the subdivision of any Assessed Property based on a recorded subdivision plat, the Administrator shall reallocate the Assessment for the Assessed Property prior to the subdivision among the new subdivided Lots based on Estimated Buildout Value according to the following formula: A = [B x (C ÷ D)]/E Where the terms have the following meanings: A = the Assessment for the newly subdivided Lot B = the Assessment for the Parcel prior to subdivision C = the sum of the Estimated Buildout Value of all newly subdivided Lots with the same Lot Type D = the sum of the Estimated Buildout Value for all of the newly subdivided Lots excluding Non-Benefitted Property E= the number of newly subdivided Lots with the same Lot Type Prior to the recording of a subdivision plat, the Developer shall provide the City an Estimated Buildout Value as of the date of the recorded subdivision plat for each Lot created by the recorded subdivision plat. The calculation of the Assessment for a Lot shall be performed by the Administrator based on Estimated Buildout Value information provided by the Developer, homebuilders, third party consultants, and/or the Official Public Records of the County regarding the Lot, and such calculation shall be approved by the City Council in the immediately following Annual Service Plan Update. The calculation as confirmed by the City Council shall be conclusive and binding. The Estimated Buildout SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 19 Values for Lot Type 1, Lot Type 2, Lot Type 3, and Lot Type 4 are shown on Exhibit E and will not change in future Annual Service Plan Updates. The sum of the Assessments for all newly subdivided Lots shall not exceed the Assessment for the portion of the Assessed Property subdivided prior to subdivision. The calculation shall be made separately for each newly subdivided Assessed Property. The reallocation of an Assessment for an Assessed Property that is a homestead under Texas law may not exceed the Assessment prior to the reallocation. Any reallocation pursuant to this section shall be reflected in the Annual Service Plan Update immediately following such reallocation. 3. Upon Consolidation If two or more Lots or Parcels are consolidated into a single Lot or Parcel, the Administrator shall allocate the Assessments against the Lots or Parcels before the consolidation to the consolidated Lot or Parcel, which allocation shall be approved by the City Council in the next Annual Service Plan Update immediately following such consolidation. The calculation as confirmed by the City Council shall be conclusive and binding. The Assessment for any resulting Lot may not exceed the Maximum Assessment for the applicable Lot Type and compliance may require a mandatory Prepayment of Assessments pursuant to Section VI.C. B. Mandatory Prepayment of Assessments If an Assessed Property or a portion thereof is conveyed to a party that is exempt from payment of the Assessment under applicable law, or the owner causes a Lot, Parcel or portion thereof to become Non-Benefitted Property, the owner of such Lot, Parcel or portion thereof shall pay to the City, or cause to be paid to the City, the full amount of the Assessment, plus all Prepayment Costs and Delinquent Collection Costs for such Assessed Property, prior to any such conveyance or act, and no such conveyance shall be effective until the City receives such payment. Following payment of the foregoing costs in full, the City shall provide the owner with a recordable “Notice of Assessment Termination,” a form of which is attached hereto as Exhibit I. C. True-Up of Assessments if Maximum Assessment Exceeded at Plat Prior to the City approving a final subdivision plat, the Administrator will certify that such plat will not result in the Assessment per Lot for any Lot Type to exceed the Maximum Assessment. If the Administrator determines that the resulting Assessment per Lot for any Lot Type will exceed the Maximum Assessment for that Lot Type, then (1) the Assessment applicable to each Lot Type shall each be reduced to the Maximum Assessment, and (2) the person or entity filing the plat shall pay to the City, or cause to be paid to the City, the amount the Assessment was reduced, SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 20 plus Prepayment Costs and Delinquent Collection Costs, if any, prior to the City approving the final plat. The City’s approval of a plat without payment of such amounts does not eliminate the obligation of the person or entity filing the plat to pay such amounts. At no time shall the aggregate Assessments for any Lot exceed the Maximum Assessment. D. Reduction of Assessment s If as a result of cost savings or the failure to construct all or a portion of an Authorized Improvement the Actual Costs of any Authorized Improvements are less than the Assessments, then (i) in the event PID Bonds have not been issued for the purpose of financing Authorized Improvements affected by such reduction in Actual Costs, the City Council shall reduce each Assessment on a pro rata basis such that the sum of the resulting reduced Assessments for all Assessed Property equals the reduced Actual Costs that were expended, or (ii) in the event that PID Bonds have been issued for the purpose of financing Authorized Improvements affected by such reduction in Actual Costs, the Trustee shall apply amounts on deposit in the applicable account of the project fund created under the Indenture relating to such series of PID Bonds that are not expected to be used for the purposes of the project fund as directed by the City pursuant to the terms of such Indenture, and the TIRZ No. 9 Annual Credit Amount will be reduced in the same proportion as the Assessments. Such excess PID Bond proceeds may be used for any purpose authorized by such Indenture. The Assessments shall never be reduced to an amount less than the amount required to pay all outstanding debt service requirements on all outstanding PID Bonds. The Administrator shall update (and submit to the City Council for review and approval as part of the next Annual Service Plan Update) the Assessment Roll and corresponding Annual Installments to reflect the reduced Assessments. E. Prep ayment of Assessment s The owner of any Assessed Property may, at any time, pay all or any part of an Assessment in accordance with the PID Act. Prepayment Costs, if any, may be paid from a reserve established under the applicable Indenture. If an Annual Installment has been billed, or the Annual Service Plan Update has been approved by the City Council prior to the Prepayment, the Annual Installment shall be due and payable and shall be credited against the Prepayment. If an Assessment on an Assessed Property is prepaid in full, with Prepayment Costs, (1) the Administrator shall cause the Assessment to be reduced to zero on said Assessed Property and the Assessment Roll to be revised accordingly; (2) the Administrator shall prepare the revised Assessment Roll and submit such revised Assessment Roll to the City Council for review and approval as part of the next Annual Service Plan Update; (3) the obligation to pay the Assessment SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 21 and corresponding Annual Installments shall terminate with respect to said Assessed Property; and (4) the City shall provide the owner with a recordable "Notice of Assessment Termination.” If an Assessment on an Assessed Property is prepaid in part with Prepayment Costs: (1) the Administrator shall cause the Assessment to be reduced on said Assessed Property and the Assessment Roll revised accordingly; (2) the Administrator shall prepare the revised Assessment Roll and submit such revised Assessment Roll to the City Council for review and approval as part of the next Annual Service Plan Update; and (3) the obligation to pay the Assessment will be reduced to the extent of the Prepayment made. F. Payment of Assessment in Annual Installments Assessments that are not paid in full shall be due and payable in Annual Installments. Exhibit F-2 shows the estimated Improvement Area #1 Annual Installments. Annual Installments are subject to adjustment in each Annual Service Plan Update. Prior to the recording of a final subdivision plat, if any Parcel shown on the Assessment Roll is assigned multiple tax parcel identification numbers for billing and collection purposes, the Annual Installment shall be allocated pro rata based on the acreage of the Parcel not including any Non- Benefitted Property or Non-Assessed Property, as shown by the Collin Central Appraisal District for each tax parcel identification number. The Administrator shall prepare and submit to the City Council for its review and approval an Annual Service Plan Update to allow for the billing and collection of Annual Installments. Each Annual Service Plan Update shall include updated Assessment Rolls and updated calculations of Annual Installments. The Annual Collection Costs for a given Assessment shall be paid by the owner of each Parcel pro rata based on the ratio of the amount of outstanding Assessment remaining on the Parcel to the total outstanding Assessment. Annual Installments shall be reduced by any credits applied under an applicable Indenture, such as capitalized interest, interest earnings on account balances, and any other funds available to the Trustee for such purposes. Annual Installments shall be collected by the City in the same manner and at the same time as ad valorem taxes. Annual Installments shall be subject to the penalties, procedures, and foreclosure sale in case of delinquencies as set forth in the PID Act and in the same manner as ad valorem taxes due and owing to the City. To the extent permitted by the PID Act or other applicable law, the City Council may provide for other means of collecting Annual Installments, but in no case shall the City take any action, or fail to take any action, that would cause it to be in default under any Indenture. Assessments shall have the lien priority specified in the PID Act. Sales of the Assessed Property for nonpayment of Annual Installments shall be subject to the lien for the remaining unpaid Annual Installments against the Assessed Property, and the Assessed SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 22 Property may again be sold at a judicial foreclosure sale if the purchaser fails to timely pay any of the remaining unpaid Annual Installments as they become due and payable. The City reserves the right to refund PID Bonds in accordance with applicable law, including the PID Act. In the event of a refunding, the Administrator shall recalculate the Annual Installments so that total Annual Installments will be sufficient to pay the refunding bonds, and the refunding bonds shall constitute “PID Bonds.” Each Annual Installment of an Assessment, including interest on the unpaid principal of the Assessment, shall be updated annually. Each Annual Installment shall be due when billed and shall be delinquent if not paid prior to February 1 of the following year. Failure of an owner of an Assessed Property to receive an invoice for an Annual Installment shall not relieve said owner of the responsibility for payment of the Assessment. Assessments, or Annual Installments thereof, that are delinquent shall incur Delinquent Collection Costs. G. Prepayment as a Result of an Eminent Domain Proceeding or Taking Subject to applicable law, if any portion of any Parcel of Assessed Property is taken from an owner as a result of eminent domain proceedings or if a transfer of any portion of any Parcel of Assessed Property is made to an entity with the authority to condemn all or a portion of the Assessed Property in lieu of or as a part of an eminent domain proceeding (a “Taking”), the portion of the Assessed Property that was taken or transferred (the “Taken Property”) shall be reclassified as Non-Benefitted Property. For the Assessed Property that is subject to the Taking as described in the preceding paragraph, the Assessment that was levied against the Assessed Property (when it was included in the Taken Property) prior to the Taking shall remain in force against the remaining Assessed Property (the Assessed Property less the Taken Property) (the “Remaining Property”), following the reclassification of the Taken Property as Non-Benefitted Property, subject to an adjustment of the Assessment applicable to the Remaining Property after any required Prepayment as set forth below. The owner of the Remaining Property will remain liable to pay, pursuant to the terms of this Service and Assessment Plan, as updated, and the PID Act, the Assessment that remains due on the Remaining Property, subject to an adjustment in the Assessment applicable to the Remaining Property after any required Prepayment as set forth below. Notwithstanding the foregoing, if the Assessment that remains due on the Remaining Property exceeds the applicable Maximum Assessment, the owner of the Remaining Property will be required to make a Prepayment in an amount necessary to ensure that the Assessment against the Remaining Property does not exceed such Maximum Assessment, in which case the Assessment applicable to the Remaining Property will be reduced by the amount of the partial Prepayment. If the City SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 23 receives all or a portion of the eminent domain proceeds (or payment made in an agreed sale in lieu of condemnation), such amount shall be credited against the amount of Prepayment, with any remainder credited against the Assessment on the Remaining Property. In all instances the Assessment remaining on the Remaining Property shall not exceed the applicable Maximum Assessment. By way of illustration, if an owner owns 100 acres of Assessed Property subject to a $100 Assessment and 10 acres is taken through a Taking, the 10 acres of Taken Property shall be reclassified as Non-Benefitted Property and the remaining 90 acres constituting the Remaining Property shall be subject to the $100 Assessment (provided that this $100 Assessment does not exceed the Maximum Assessment on the Remaining Property). If the Administrator determines that the $100 Assessment reallocated to the Remaining Property would exceed the Maximum Assessment, as applicable, on the Remaining Property by $10, then the owner shall be required to pay $10 as a Prepayment of the Assessment against the Remaining Property and the Assessment on the Remaining Property shall be adjusted to $90. Notwithstanding the previous paragraphs in this subsection, if the owner of the Remaining Property notifies the City and the Administrator that the Taking prevents the Remaining Property from being developed for any use which could support the Estimated Buildout Value requirement, the owner shall, upon receipt of the compensation for the Taken Property, be required to prepay the amount of the Assessment required to buy down the outstanding Assessment to the applicable Maximum Assessment on the Remaining Property to support the Estimated Buildout Value requirement. The owner will remain liable to pay the Assessment on both the Taken Property and the Remaining Property until such time that such Assessment has been prepaid in full. Notwithstanding the previous paragraphs in this subsection, the Assessments shall never be reduced to an amount less than the amount required to pay all outstanding debt service requirements on all outstanding PID Bonds. SECTION VII: ASSESSMENT ROLL The Improvement Area #1 Assessment Roll is attached as Exhibit F-1. The Administrator shall prepare and submit to the City Council for review and approval proposed revisions to the Improvement Area #1 Assessment Roll and Improvement Area #1 Annual Installments for each Parcel as part of each Annual Service Plan Update. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 24 SECTION VIII: ADDITIONAL PROVISIONS A. Calculation Errors If the owner of a Parcel claims that an error has been made in any calculation required by this Service and Assessment Plan, including, but not limited to, any calculation made as part of any Annual Service Plan Update, the owner’s sole and exclusive remedy shall be to submit a written notice of error to the Administrator by December 1st of each year following City Council’s approval of the calculation. Otherwise, the owner shall be deemed to have unconditionally approved and accepted the calculation. The Administrator shall provide a written response to the City Council and the owner not later than 30 days after receipt of such written notice of error by the Administrator. The City Council shall consider the owner’s notice of error and the Administrator’s response at a public meeting, and, not later than 30 days after closing such meeting, the City Council shall make a final determination as to whether an error has been made. If the City Council determines that an error has been made, the City Council shall take such corrective action as is authorized by the PID Act, this Service and Assessment Plan, the applicable Assessment Ordinance, the applicable Indenture, or as otherwise authorized by the discretionary power of the City Council. The determination by the City Council as to whether an error has been made, and any corrective action taken by the City Council, shall be final and binding on the owner and the Administrator. B. Amendments Amendments to this Service and Assessment Plan must be made by the City Council in accordance with the PID Act. To the extent permitted by the PID Act, this Service and Assessment Plan may be amended without notice to owners of the Assessed Property: (1) to correct mistakes and clerical errors; (2) to clarify ambiguities; and (3) to provide procedures to collect Assessments, Annual Installments, and other charges imposed by this Service and Assessment Plan. C. Administration and Interpretation The Administrator shall: (1) perform the obligations of the Administrator as set forth in this Service and Assessment Plan; (2) administer the District for and on behalf of and at the direction of the City Council; and (3) interpret the provisions of this Service and Assessment Plan. Interpretations of this Service and Assessment Plan by the Administrator shall be in writing and shall be appealable to the City Council by owners of Assessed Property adversely affected by the interpretation. Appeals shall be decided by the City Council after holding a public meeting at which all interested parties have an opportunity to be heard. Decisions by the City Council shall SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 25 be final and binding on the owners of Assessed Property and developers and their successors and assigns. D. Form of Buyer Disclosure/Filing Requirements Per Section 5.014 of the Texas Property Code, as amended, this Service and Assessment Plan, and any future Annual Service Plan Updates, shall include a form of the buyer disclosures for the District. The buyer disclosures are attached hereto as Appendix B. Within seven days of approval by the City Council, the City shall file and record in the real property records of the County the executed ordinance of this Service and Assessment Plan, or any future Annual Service Plan Updates. The executed ordinance, including any attachments, approving this Service an Assessment Plan or any future Annual Service Plan Updates shall be filed and recorded in their entirety. E. Severability If any provision of this Service and Assessment Plan is determined by a governmental agency or court to be unenforceable, the unenforceable provision shall be deleted and, to the maximum extent possible, shall be rewritten to be enforceable. Every effort shall be made to enforce the remaining provisions. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 26 EXHIBITS The following Exhibits are attached to and made a part of this Service and Assessment Plan for all purposes: Exhibit A-1 Map of the District Exhibit A-2 Map of Improvement Area #1 Exhibit A-3 Improvement Area #1 Lot Type Classification Map Exhibit B Project Costs Exhibit C Service Plan Exhibit D Sources and Uses of Funds Exhibit E Maximum Assessment and Tax Rate Equivalent Exhibit F-1 Improvement Area #1 Assessment Roll Exhibit F-2 Improvement Area # 1 Annual Installments Exhibit G-1 Maps of Major Improvements Exhibit G-2 Maps of Improvement Area #1 Improvements Exhibit H TIRZ No. 9 Annual Credit Amount by Lot Type Exhibit I Form of Notice of Assessment Termination Exhibit J Debt Service Schedule for Improvement Area #1 Bonds Exhibit K-1 District Legal Description Exhibit K-2 Improvement Area #1 Legal Description SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 27 APPENDICES The following Appendices are attached to and made a part of this Service and Assessment Plan for all purposes: Appendix A Engineer’s Report Appendix B Buyer Disclosures SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 28 EXHIBIT A-1 – MAP OF THE DISTRICT SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 29 EXHIBIT A-2 – MAP OF IMPROVEMENT AREA #1 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 30 EXHIBIT A-3 - IMPROVEMENT AREA #1 LOT TYPE CLASSIFICATION MAP SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 31 EXHIBIT B – PROJECT COSTS Improvement Area #1 Improvements Streets[e]9,627,483$ -$ -$ 9,627,483$ 100%9,627,483$ Water 2,285,898 - - 2,285,898 100%2,285,898 Sewer 2,797,636 - - 2,797,636 100%2,797,636 Storm Drainage 3,583,566 - - 3,583,566 100%3,583,566 Right of Way[j]3,696,000 - - 3,696,000 100%3,696,000 Soft Costs[i]5,588,068 - - 5,588,068 100%5,588,068 27,578,651$ -$ -$ 27,578,651$ 27,578,651$ Major Improvements Improvement Area #1 Major Improvements[h] Water 2,218,535$ -$ 2,218,535$ -$ 0.0%-$ Sewer 6,100,420 - 6,100,420 - 0.0%- Soft Costs 3,078,013 - 3,078,013 - 0.0%- 11,396,968$ -$ 11,396,968$ -$ -$ Private Improvements [b] Parkland Infrastructure/Hardscape/Trails[c][d]3,701,922$ 3,701,922$ -$ -$ 0.0%-$ Private Improvements 3,237,511 3,237,511 - - 0.0%- 6,939,433$ 6,939,433$ -$ -$ -$ Bond Issuance Costs [f] Debt Service Reserve Fund 2,482,455$ -$ -$ 2,482,455$ 2,482,455$ Capitalized Interest 1,131,667 - - 1,131,667 1,131,667 Underwriter Discount[g]1,018,500 - - 1,018,500 1,018,500 Cost of Issuance 1,763,873 - - 1,763,873 1,763,873 6,396,495$ -$ -$ 6,396,495$ 6,396,495$ Other Costs [f] Deposit to Administrative Fund 80,000$ -$ -$ 80,000$ 80,000$ 80,000$ -$ -$ 80,000$ 80,000$ Footnotes: [a] Per Engineer's Report attached hereto as Appendix A. [b] Not reimbursable to the Developer through Assessments or the issuance of PID Bonds. [c] Unless otherwise approved by the City Council, in the event PID Bonds are not issued, right-of-way acquisition, as defined in Section III.A, shall not be a reimbursable Authorized Improvement, but instead will be replaced by the Actual Costs of Parkland Infrastructure/Hardscape/Trails. [d] Unless otherwise approved by the City Council, in the event PID Bonds are issued, the Parkland Infrastructure/Hardscape/Trails, will be replaced by right-of-way acquisition, which right-of-way acquisition cost shall not exceed (i) the Actual Costs of Parkland Infrastructure/Hardscape/Trails, and (ii) the fair market value supported by an independent appraisal as required by Section 252.051 of the Texas Local Government Code. [e] Includes Mass Grading and Final Stabilization Methods. [f] Preliminary estimates only and subject to change upon the issuance of PID Bonds. [g] Includes the fee of counsel to the Underwriter. [h] Improvement Area #1 Major Improvements are improvements that benefit the entire District and shall be completed concurrently with the Improvement Area #1 Improvements, but are not anticipated to be reimbursed from Assessments or PID Bonds. Future Major Improvements shall be included in this Service and Assessment Plan as they are constructed with future Improvement Areas. [i] Soft Costs include bonds fees, contingency, engineering, testing, survey, and inspection fees. [j] Based on Right of Way Appraisal dated January 8, 2026. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 32 EXHIBIT C – SERVICE PLAN Annual Installment Due 1/61/2026[b]1/31/2027 1/31/2028 1/31/2029 1/31/2030 1/31/2031 Principal -$ 403,000.00$ 428,000.00$ 455,000.00$ 484,000.00$ 514,000.00$ Interest 1,131,667.00 2,037,000.00 2,012,820.00 1,987,140.00 1,959,840.00 1,930,800.00 TIRZ No. 9 Annual Credit Amount[a]- - - - - - Capitalized Interest (1,131,667.00) - - - - - (1)-$ 2,440,000.00$ 2,440,820.00$ 2,442,140.00$ 2,443,840.00$ 2,444,800.00$ Additional Interest (2)-$ 169,750.00$ 167,735.00$ 165,595.00$ 163,320.00$ 160,900.00$ Annual Collection Costs (3)-$ 40,800.00$ 41,616.00$ 42,448.00$ 43,297.00$ 44,163.00$ Total Annual Installment Due (4) = (1) + (2) + (3)-$ 2,650,550.00$ 2,650,171.00$ 2,650,183.00$ 2,650,457.00$ 2,649,863.00$ Footnotes: [a] Each year, the TIRZ No. 9 Revenue generated by each Lot shall be applied to the principal and interest portion of the Annual Installment, up to the Maximum TIRZ No. 9 Annual Credit Amount. The TIRZ No. 9 Annual Credit Amount shall be updated each year in the Annual Service Plan Update as TIRZ No. 9 Revenue is generated. [b] No Assessment collected in 2026 and capitalized interest is contemplated from bond issuance to the 9/15/2026 debt service payment. Improvement Area #1 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 33 EXHIBIT D – SOURCES AND USES OF FUNDS Privately Funded Impact Fee Eligible Improvement Area #1 Total Improvement Area #1 Bonds -$ -$ 33,950,000$ 33,950,000$ Developer Contribution - Improvement Area #1[a]- - 105,146 105,146 Eligible Infrastructure Grant[f]- 11,396,968 - 11,396,968 Developer Contribution - Parkland Infrastructure/Hardscape/Trails[a][b][c]3,701,922 - - 3,701,922 Developer Contribution - Private Improvements[a]3,237,511 - - 3,237,511 Total Sources of Funds 6,939,433$ 11,396,968$ 34,055,146$ 52,391,548$ Improvement Area #1 Major Improvements[f]-$ 11,396,968$ -$ 11,396,968 Improvement Area #1 Improvements - - 27,578,651 27,578,651 Parkland Infrastructure/Hardscape/Trails[a][b][c]3,701,922 - - 3,701,922 Private Improvements[a]3,237,511 - - 3,237,511 6,939,433$ 11,396,968$ 27,578,651$ 45,915,053$ Bond Issuance Costs [d] Debt Service Reserve Fund -$ -$ 2,482,455$ 2,482,455$ Capitalized Interest - - 1,131,667 1,131,667 Underwriter Discount[e]- - 1,018,500 1,018,500 Cost of Issuance - - 1,763,873 1,763,873 -$ -$ 6,396,495.00$ 6,396,495$ Other Costs [d] Deposit to Administrative Fund -$ -$ 80,000$ 80,000$ -$ -$ 80,000.00$ 80,000$ Total Uses of Funds 6,939,433$ 11,396,968$ 34,055,146$ 52,391,548$ Footnotes: [a] Not reimbursable to the Developer through Assessments or the issuance of PID Bonds. [b] Unless otherwise approved by the City Council, in the event PID Bonds are not issued, right-of-way acquisition, as defined in Section III.A, shall not be a reimbursable Authorized Improvement, but instead will be replaced by the Actual Costs of Parkland Infrastructure/Hardscape/Trail improvements. [c] Unless otherwise approved by the City Council, in the event PID Bonds are issued, the Parkland Infrastructure/Hardscape/Trail improvements, will be replaced by right-of-way acquisition, which right-of-way acquisition cost shall not exceed (i) the Actual Costs of Parkland Infrastructure/Hardscape/Trail improvements, and (ii) the fair market value supported by an independent appraisal as required by Section 252.051 of the Texas Local Government Code. [d] Preliminary estimates only and subject to change upon the issuance of PID Bonds. [e] Includes the fee of counsel to the Underwriter. [f] Improvement Area #1 Major Improvements are improvements that benefit the entire District and shall be completed concurrently with the Improvement Area #1 Improvements, but are not anticipated to be reimbursed from Assessments or PID Bonds. Future Major Improvements shall be included in this Service and Assessment Plan as they are constructed with future Improvement Areas. Sources of Funds Uses of Funds SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 34 EXHIBIT E – MAXIMUM ASSESSMENT AND TAX RATE EQUIVALANT Per Unit Total Per Unit Total Per Unit Total Improvement Area #1 Lot Type 1 76 477,000$ 36,252,000$ 67,570$ 5,135,294$ 5,275$ 400,872$ 1.105792$ Lot Type 2 166 530,000 87,980,000 75,077 12,462,848 5,861 972,876 1.105792 Lot Type 3 143 636,000 90,948,000 90,093 12,883,282 7,033 1,005,696 1.105792 Lot Type 4 33 742,000 24,486,000 105,108 3,468,576 8,205 270,764 1.105792 Improvement Area #1 Subtotal 418 239,666,000$ 33,950,000$ 2,650,208$ 1.105792 Footnotes: [a] As provided by the Developer. [b] Subject to change based on the final Appraisal. [c] Does not include TIRZ No. 9 Annual Credit Amount. Lot Type Units[a]Gross PID TRE[c] Estimated Buildout Value[a]Assessment[b]Average Annual Installment SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 35 EXHIBIT F-1 – IMPROVEMENT AREA #1 ASSESSMENT ROLL Property ID[a]Lot Type Outstanding Assessment Annual Installment Due 1/31/2027 2937949 Improvement Area #1 Initial Parcel 33,950,000.00$ 2,650,550.00$ 33,950,000.00$ 2,650,550.00$ Footnotes: Total [a] The entire Improvement Area #1 is contained within Property ID 2937949. For billing purposes, the Annual Installment due 1/31/2027 shall be allocated pro rata based on acreage. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 36 EXHIBIT F-2 – IMPROVEMENT AREA #1 ANNUAL INSTALLMENTS Installment Due 1/31 Principal Interest[a]Capitalized Interest[c] Reserve Fund[d] Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2026 $ -1,131,667$ (1,131,667)$ -$ $ -$ --$ 2027 403,000$ 2,037,000$ -$ -$ 169,750$ 40,800$ 2,650,550$ 2028 428,000$ 2,012,820$ -$ -$ 167,735$ 41,616$ 2,650,171$ 2029 455,000$ 1,987,140$ -$ -$ 165,595$ 42,448$ 2,650,183$ 2030 484,000$ 1,959,840$ -$ -$ 163,320$ 43,297$ 2,650,457$ 2031 514,000$ 1,930,800$ -$ -$ 160,900$ 44,163$ 2,649,863$ 2032 547,000$ 1,899,960$ -$ -$ 158,330$ 45,046$ 2,650,336$ 2033 582,000$ 1,867,140$ -$ -$ 155,595$ 45,947$ 2,650,682$ 2034 618,000$ 1,832,220$ -$ -$ 152,685$ 46,866$ 2,649,771$ 2035 658,000$ 1,795,140$ -$ -$ 149,595$ 47,804$ 2,650,539$ 2036 699,000$ 1,755,660$ -$ -$ 146,305$ 48,760$ 2,649,725$ 2037 744,000$ 1,713,720$ -$ -$ 142,810$ 49,735$ 2,650,265$ 2038 791,000$ 1,669,080$ -$ -$ 139,090$ 50,730$ 2,649,900$ 2039 842,000$ 1,621,620$ -$ -$ 135,135$ 51,744$ 2,650,499$ 2040 895,000$ 1,571,100$ -$ -$ 130,925$ 52,779$ 2,649,804$ 2041 953,000$ 1,517,400$ -$ -$ 126,450$ 53,835$ 2,650,685$ 2042 1,013,000$ 1,460,220$ -$ -$ 121,685$ 54,911$ 2,649,816$ 2043 1,078,000$ 1,399,440$ -$ -$ 116,620$ 56,010$ 2,650,070$ 2044 1,147,000$ 1,334,760$ -$ -$ 111,230$ 57,130$ 2,650,120$ 2045 1,221,000$ 1,265,940$ -$ -$ 105,495$ 58,272$ 2,650,707$ 2046 1,299,000$ 1,192,680$ -$ -$ 99,390$ 59,438$ 2,650,508$ 2047 1,382,000$ 1,114,740$ -$ -$ 92,895$ 60,627$ 2,650,262$ 2048 1,471,000$ 1,031,820$ -$ -$ 85,985$ 61,839$ 2,650,644$ 2049 1,565,000$ 943,560$ -$ -$ 78,630$ 63,076$ 2,650,266$ 2050 1,665,000$ 849,660$ -$ -$ 70,805$ 64,337$ 2,649,802$ 2051 1,772,000$ 749,760$ -$ -$ 62,480$ 65,624$ 2,649,864$ 2052 1,886,000$ 643,440$ -$ -$ 53,620$ 66,937$ 2,649,997$ 2053 2,007,000$ 530,280$ -$ -$ 44,190$ 68,275$ 2,649,745$ 2054 2,137,000$ 409,860$ -$ -$ 34,155$ 69,641$ 2,650,656$ 2055 2,274,000$ 281,640$ -$ -$ 23,470$ 71,034$ 2,650,144$ 2056 2,420,000$ 145,200$ -$ (2,482,455)$ 12,100$ 72,454$ 2,649,754$ Total 33,950,000$ 40,523,640$ -$ (2,482,455)$ 3,376,970$ 1,655,175$ 79,505,785$ Footnotes: [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. [c] No Annual Installment shall be collected and capitalized interest is expected to fund the 9/15/2026 debt service payment. [d] Assumes Reserve Fund is fully funded and available to reduce Annual Installments in the final year. [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon PID Bond issuance. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 37 EXHIBIT G-1 – MAPS OF MAJOR IMPROVEMENTS SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 38 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 39 EXHIBIT G-2 – MAPS OF IMPROVEMENT AREA #1 IMPROVEMENTS SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 40 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 41 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 42 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 43 EXHIBIT H – TIRZ NO. 9 ANNUAL CREDIT AMOUNT BY LOT TYPE Improvement Area #1 Lot Type 1 (45')76 1.105792 (1,252.30)$ 0.843256$ 2.838792$ Lot Type 2 (50')166 1.105792 (1,391.44)$ 0.843256$ 2.838792$ Lot Type 3 (60')143 1.105792 (1,669.73)$ 0.843256$ 2.838792$ Lot Type 4 (70')33 1.105792 (1,948.02)$ 0.843256$ 2.838792$ [a] Per information provided by the Developer. [b] To be determined at the time of PID Bond issuance; based on information provided by the Developer as to Estimated Buildout Value. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 44 EXHIBIT I – FORM OF NOTICE OF ASSESSMENT TERMINATION P3Works, LLC 9284 Huntington Square, Suite 100 North Richland Hills, TX 76182 ______________________________________________________________________________ [Date] Collin County Clerk’s Office Honorable [County Clerk] Collin County Administration Building 2300 Bloomdale Rd, Suite 2106 McKinney, TX 75071 Re: City of Anna Lien Release documents for filing Dear Ms./Mr. [County Clerk] Enclosed is a lien release that the City of Anna is requesting to be filed in your office. Lien release for [insert legal description]. Recording Numbers: [Plat]. Please forward copies of the filed documents to my attention: City of Anna Attn: City Secretary 120 W. 7th Street Anna, TX 75409 Please contact me if you have any questions or need additional information. Sincerely, [Signature] P3Works, LLC (817) 393-0353 Admin@P3-Works.com www.P3-Works.com SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 45 AFTER RECORDING RETURN TO: [City Secretary Name] 120 W. 7th Street Anna, TX 75409 NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. FULL RELEASE OF PUBLIC IMPROVEMENT DISTRICT LIEN STATE OF TEXAS § § KNOWN ALL MEN BY THESE PRESENTS: COUNTY OF COLLIN § THIS FULL RELEASE OF PUBLIC IMPROVEMENT DISTRICT LIEN (this "Full Release") is executed and delivered as of the Effective Date by the City of Anna, Texas, a Texas home rule municipality (the “City”). RECITALS WHEREAS, the governing body (hereinafter referred to as the "City Council” of Anna, Texas is authorized by Chapter 372, Texas Local Government Code, as amended (hereinafter referred to as the "Act"), to create public improvement districts within the corporate limits of the City; and WHEREAS, on March 25, 2025 the City Council of the City approved Resolution No. 2025- 03-1753 creating the Sherley Farms Public Improvement District (the “District”); and WHEREAS, the District consists of approximately 1,123.592 contiguous acres within the corporate limits of the City; and WHEREAS, on ____________, the City Council, approved Ordinance No. __________, (hereinafter referred to as the "Assessment Ordinance") approving a service and assessment plan and assessment roll for the real property located with the District, the Assessment Ordinance being recorded on _____________, as Instrument No. ________ in the Official Public Records of Collin County, Texas; and WHEREAS, the Assessment Ordinance imposed an assessment in the amount of [amount] (hereinafter referred to as the "Lien Amount") and further imposed a lien to secure the payment of the Lien Amount (the “Lien”) against the following property located within the District, to wit: SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 46 [legal description], an addition to the City of Anna, Collin County, Texas, according to the map or plat thereof recorded as Instrument No. ________ in the Map Records of Collin County, Texas (the "Property"); and WHEREAS, the Lien Amount has been paid in full. RELEASE NOW THEREFORE, for and in consideration of the full payment of the Lien Amount, the City hereby releases and discharges, and by these presents does hereby release and discharge, the Lien to the extent that is affects and encumbers the Property. EXECUTED to be EFFECTIVE this the _____ day of _________, 20__. CITY OF ANNA, TEXAS, A Texas home rule municipality, By: _______________________________ [Manager Name], City Manager ATTEST: _______________________________ [Secretary Name], City Secretary STATE OF TEXAS § § COUNTY OF COLLIN § This instrument was acknowledged before me on the ____ day of ________, 20__, by the City Manager for the City of Anna, Texas, a Texas home rule municipality, on behalf of said municipality. _______________________________ Notary Public, State of Texas SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 47 EXHIBIT J – DEBT SERVICE SCHEDULE FOR IMPROVEMENT AREA #1 BONDS [To be provided at PID Bond pricing.] SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 48 EXHIBIT K-1 – DISTRICT LEGAL DESCRIPTION SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 49 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 50 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 51 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 52 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 53 EXHIBIT K-2 – IMPROVEMENT AREA #1 LEGAL DESCRIPTION PHASE 1 METES AND BOUNDS DESCRIPTION BEING a tract of land situated in the G. Morrison Survey, Abstract No. 559, and the S. Moore Survey, Abstract No. 625, in Collin County, Texas, being part of Tracts 1.1, 1.3, and 1.4, recorded in Volume 4466, Page 153, Deed Records, Collin County, Texas (DRCCT), and part of Tract 1.1, recorded in Volume 4466, Page 183 DRCCT, and all of Tract 1.2, recorded in Volume 4466, Page 201, DRCCT, with the subject tract being more particularly described as follows: BEGINNING at a 1/2" iron rod with plastic cap stamped "SPIARSENG" set along the south line of Farm to Market Road 2862, a 90-foot-wide right-of-way, from which a 1/2" iron rod found bears N 84°54'26" W, 1658.47 feet for the southeast corner of the "Second Tract" conveyed to Daniel W. Koen and Sue Ann Burleson-Koen, recorded in Document No. 93-0107055 DRCCT; THENCE S 87°35'00" E, 3.15 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 87°54'00" E, 852.06 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 88°23'00" E, 1005.18 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the left having a central angle of 61°39'58", a radius of 363.31 feet, a chord of N 60°47'01" E - 372.42 feet, an arc length of 391.02 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set on the west line of a tract conveyed to Larry Kropman Bennett and Jill Rae Bennett, recorded in Volume 1718, Page 193 DRCCT; THENCE S 02°42'15" W, 147.06 feet along the west line thereof to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 88°34'52" E, along the south line of said Bennett tract, passing at 317.47 feet a 3/8" iron rod found for the southeast corner thereof, being the southwest corner of a tract described in deed recorded in Document No. 20160209000150410 OPRCCT, and continuing along the south line thereof a total distance of 673.49 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 19°13'14" E, 988.05 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 54 THENCE around a non-tangent curve to the right having a central angle of 31°18'08", a radius of 1355.00 feet, a chord of S 38°55'42" W - 731.10 feet, an arc length of 740.27 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 54°34'46" W, 675.31 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the left having a central angle of 8°25'51", a radius of 2545.00 feet, a chord of S 50°21'50" W - 374.15 feet, an arc length of 374.49 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a compound curve to the left having a central angle of 1°21'02", a radius of 1545.00 feet, a chord of S 45°28'23" W - 36.42 feet, an arc length of 36.42 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 47°52'56" W, 117.77 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 63°22'52" W, 674.62 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 26°37'08" W, 490.25 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 63°19'59" W, 296.01 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 26°37'08" W, 130.00 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 63°22'52" W, 268.53 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the left having a central angle of 36°00'21", a radius of 95.00 feet, a chord of N 81°23'03" W - 58.72 feet, an arc length of 59.70 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 80°36'47" W, 80.83 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the left having a central angle of 7°19'45", a radius of 345.00 feet, a chord of S 76°56'54" W - 44.10 feet, an arc length of 44.13 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 55 THENCE S 52°52'29" W, 50.00 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a non-tangent curve to the right having a central angle of 33°46'17", a radius of 850.00 feet, a chord of N 20°14'22" W - 493.79 feet, an arc length of 501.01 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 03°21'14" W, 51.20 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 87°03'38" W, 802.11 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a non-tangent curve to the right having a central angle of 09°05'47", a radius of 1,245 feet, a chord of N 63°23'05" E - 197.45 feet, an arc length of 197.66 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a reverse curve to the left having a central angle of 05°45'11", a radius of 1245.00 feet, a chord of N 65°03'23" E - 124.96 feet, an arc length of 125.01 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 62°10'47" E, 501.95 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the left having a central angle of 24°42'42", a radius of 780.00 feet, a chord of N 49°49'26" E - 333.81 feet, an arc length of 336.41 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a compound curve to the left having a central angle of 43°38'06", a radius of 365.00 feet, a chord of N 15°33'38" E - 271.31 feet, an arc length of 277.98 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a non-tangent curve to the right having a central angle of 98°57'03", a radius of 71.50 feet, a chord of N 80°15'05" W - 108.70 feet, an arc length of 123.48 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 30°46'33" W, 84.43 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 25°05'59" W, 115.10 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the right having a central angle of 62°31'41", a radius of 379.50 feet, a chord of N 06°09'52" E - 393.91 feet, an arc length of 414.16 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 56 THENCE around a reverse curve to the left having a central angle of 04°49'49", a radius of 220.50 feet, a chord of N 35°00'48" E - 18.58 feet, an arc length of 18.59 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 87°54'00" W, 104.75 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 02°06'00" E 150.02 feet to the POINT OF BEGINNING, with the subject tract containing 5,880,591 square feet or 135.00 acres of land. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 57 APPENDIX A – ENGINEER’S REPORT [Developer to Provide.] SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 58 APPENDIX B – BUYER DISCLOSURES Forms of the buyer disclosures for the following Lot Types are found in this appendix: Improvement Area #1  Initial Parcel  Lot Type 1  Lot Type 2  Lot Type 3  Lot Type 4 [Remainder of page left intentionally blank.] SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT - IMPROVEMENT AREA #1 INITIAL PARCEL BUYER DISCLOSURE NOTICE OF OBLIGATIONS RELATED TO PUBLIC IMPROVEMENT DISTRICT A person who proposes to sell or otherwise convey real property that is located in a public improvement district established under Subchapter A, Chapter 372, Local Government Code (except for public improvement districts described under Section 372.005), or Chapter 382, Local Government Code, shall first give to the purchaser of the property this written notice, signed by the seller. For the purposes of this notice, a contract for the purchase and sale of real property having a performance period of less than six months is considered a sale requiring the notice set forth below. This notice requirement does not apply to a transfer: 1) under a court order or foreclosure sale; 2) by a trustee in bankruptcy; 3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest; 4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure; 5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; 6) from one co-owner to another co-owner of an undivided interest in the real property; 7) to a spouse or a person in the lineal line of consanguinity of the seller; 8) to or from a governmental entity; or 9) of only a mineral interest, leasehold interest, or security interest The following notice shall be given to a prospective purchaser before the execution of a binding contract of purchase and sale, either separately or as an addendum or paragraph of a purchase contract. In the event a contract of purchase and sale is entered into without the seller having provided the required notice, the purchaser, subject to certain exceptions, is entitled to terminate the contract. A separate copy of this notice shall be executed by the seller and the purchaser and must be filed in the real property records of the county in which the property is located at the closing of the purchase and sale of the property. AFTER RECORDING1 RETURN TO: ____________________ ____________________ ____________________ ____________________ ____________________ NOTICE OF OBLIGATION TO PAY IMPROVEMENT DISTRICT ASSESSMENT TO CITY OF ANNA, TEXAS CONCERNING THE FOLLOWING PROPERTY __________________________________________ STREET ADDRESS IMPROVEMENT AREA #1 INITIAL PARCEL PRINCIPAL ASSESSMENT: $33,950,000.00 As the purchaser of the real property described above, you are obligated to pay assessments to City of Anna, Texas, for the costs of a portion of a public improvement or services project (the "Authorized Improvements") undertaken for the benefit of the property within Sherley Farms Public Improvement District (the "District") created under Subchapter A, Chapter 372, Local Government Code. AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE COSTS, AND DELINQUENCY COSTS. The exact amount of the assessment may be obtained from the City of Anna. The exact amount of each annual installment will be approved each year by the Anna City Council in the annual service plan update for the District. More information about the assessments, including the amounts and due dates, may be obtained from City of Anna. Your failure to pay any assessment or any annual installment may result in penalties and interest being added to what you owe or in a lien on and the foreclosure of your property. _________________ 1 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County when updating for the Current Information of Obligation to Pay Improvement District Assessment. Signature Page to Initial Notice of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned seller acknowledges providing this notice to the potential purchaser before the effective date of a binding contract for the purchase of the real property at the address described above. ______________ 2 To be included in copy of the notice required by Section 5.014, Tex. Prop. Code, to be executed by seller in accordance with Section 5.014(a-1), Tex. Prop. Code. Purchaser Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned purchaser acknowledged the receipt of this notice including the current information required by Section 5.0143, Texas Property Code, as amended. STATE OF TEXAS § § COUNTY OF _______ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]3 ______________ 3 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Seller Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned seller acknowledges providing a separate copy of the notice required by Section 5.014 of the Texas Property Code including the current information required by Section 5.0143, Texas Property Code, as amended, at the closing of the purchase of the real property at the address above. STATE OF TEXAS § § COUNTY OF ________ § The foregoing instrument was acknowledged before me by ______________________ and ____________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________, 20__. Notary Public, State of Texas]4 ______________ 4 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Annual Installment Schedule to Notice of Obligation to Pay Improvement District Assessment Installment Due 1/31 Principal Interest[a]Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2027 403,000$ 2,037,000$ 169,750$ 40,800$ 2,650,550$ 2028 428,000$ 2,012,820$ 167,735$ 41,616$ 2,650,171$ 2029 455,000$ 1,987,140$ 165,595$ 42,448$ 2,650,183$ 2030 484,000$ 1,959,840$ 163,320$ 43,297$ 2,650,457$ 2031 514,000$ 1,930,800$ 160,900$ 44,163$ 2,649,863$ 2032 547,000$ 1,899,960$ 158,330$ 45,046$ 2,650,336$ 2033 582,000$ 1,867,140$ 155,595$ 45,947$ 2,650,682$ 2034 618,000$ 1,832,220$ 152,685$ 46,866$ 2,649,771$ 2035 658,000$ 1,795,140$ 149,595$ 47,804$ 2,650,539$ 2036 699,000$ 1,755,660$ 146,305$ 48,760$ 2,649,725$ 2037 744,000$ 1,713,720$ 142,810$ 49,735$ 2,650,265$ 2038 791,000$ 1,669,080$ 139,090$ 50,730$ 2,649,900$ 2039 842,000$ 1,621,620$ 135,135$ 51,744$ 2,650,499$ 2040 895,000$ 1,571,100$ 130,925$ 52,779$ 2,649,804$ 2041 953,000$ 1,517,400$ 126,450$ 53,835$ 2,650,685$ 2042 1,013,000$ 1,460,220$ 121,685$ 54,911$ 2,649,816$ 2043 1,078,000$ 1,399,440$ 116,620$ 56,010$ 2,650,070$ 2044 1,147,000$ 1,334,760$ 111,230$ 57,130$ 2,650,120$ 2045 1,221,000$ 1,265,940$ 105,495$ 58,272$ 2,650,707$ 2046 1,299,000$ 1,192,680$ 99,390$ 59,438$ 2,650,508$ 2047 1,382,000$ 1,114,740$ 92,895$ 60,627$ 2,650,262$ 2048 1,471,000$ 1,031,820$ 85,985$ 61,839$ 2,650,644$ 2049 1,565,000$ 943,560$ 78,630$ 63,076$ 2,650,266$ 2050 1,665,000$ 849,660$ 70,805$ 64,337$ 2,649,802$ 2051 1,772,000$ 749,760$ 62,480$ 65,624$ 2,649,864$ 2052 1,886,000$ 643,440$ 53,620$ 66,937$ 2,649,997$ 2053 2,007,000$ 530,280$ 44,190$ 68,275$ 2,649,745$ 2054 2,137,000$ 409,860$ 34,155$ 69,641$ 2,650,656$ 2055 2,274,000$ 281,640$ 23,470$ 71,034$ 2,650,144$ 2056 2,420,000$ 145,200$ 12,100$ 72,454$ 2,649,754$ Total 33,950,000$ 40,523,640$ 3,376,970$ 1,655,175$ 79,505,785$ Footnotes: [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon ANNUAL INSTALLMENTS - IMPROVEMENT AREA #1 INITIAL PARCEL SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT - IMPROVEMENT AREA #1 LOT TYPE 1 BUYER DISCLOSURE NOTICE OF OBLIGATIONS RELATED TO PUBLIC IMPROVEMENT DISTRICT A person who proposes to sell or otherwise convey real property that is located in a public improvement district established under Subchapter A, Chapter 372, Local Government Code (except for public improvement districts described under Section 372.005), or Chapter 382, Local Government Code, shall first give to the purchaser of the property this written notice, signed by the seller. For the purposes of this notice, a contract for the purchase and sale of real property having a performance period of less than six months is considered a sale requiring the notice set forth below. This notice requirement does not apply to a transfer: 1) under a court order or foreclosure sale; 2) by a trustee in bankruptcy; 3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest; 4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure; 5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; 6) from one co-owner to another co-owner of an undivided interest in the real property; 7) to a spouse or a person in the lineal line of consanguinity of the seller; 8) to or from a governmental entity; or 9) of only a mineral interest, leasehold interest, or security interest The following notice shall be given to a prospective purchaser before the execution of a binding contract of purchase and sale, either separately or as an addendum or paragraph of a purchase contract. In the event a contract of purchase and sale is entered into without the seller having provided the required notice, the purchaser, subject to certain exceptions, is entitled to terminate the contract. A separate copy of this notice shall be executed by the seller and the purchaser and must be filed in the real property records of the county in which the property is located at the closing of the purchase and sale of the property. AFTER RECORDING1 RETURN TO: ____________________ ____________________ ____________________ ____________________ ____________________ NOTICE OF OBLIGATION TO PAY IMPROVEMENT DISTRICT ASSESSMENT TO CITY OF ANNA, TEXAS CONCERNING THE FOLLOWING PROPERTY __________________________________________ STREET ADDRESS IMPROVEMENT AREA #1 LOT TYPE 1 PRINCIPAL ASSESSMENT: $67,569.66 As the purchaser of the real property described above, you are obligated to pay assessments to City of Anna, Texas, for the costs of a portion of a public improvement or services project (the "Authorized Improvements") undertaken for the benefit of the property within Sherley Farms Public Improvement District (the "District") created under Subchapter A, Chapter 372, Local Government Code. AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE COSTS, AND DELINQUENCY COSTS. The exact amount of the assessment may be obtained from the City of Anna. The exact amount of each annual installment will be approved each year by the Anna City Council in the annual service plan update for the District. More information about the assessments, including the amounts and due dates, may be obtained from City of Anna. Your failure to pay any assessment or any annual installment may result in penalties and interest being added to what you owe or in a lien on and the foreclosure of your property. _________________ 1 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County when updating for the Current Information of Obligation to Pay Improvement District Assessment. Signature Page to Initial Notice of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned seller acknowledges providing this notice to the potential purchaser before the effective date of a binding contract for the purchase of the real property at the address described above. ______________ 2 To be included in copy of the notice required by Section 5.014, Tex. Prop. Code, to be executed by seller in accordance with Section 5.014(a-1), Tex. Prop. Code. Purchaser Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned purchaser acknowledged the receipt of this notice including the current information required by Section 5.0143, Texas Property Code, as amended. STATE OF TEXAS § § COUNTY OF _______ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]3 ______________ 3 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Seller Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned seller acknowledges providing a separate copy of the notice required by Section 5.014 of the Texas Property Code including the current information required by Section 5.0143, Texas Property Code, as amended, at the closing of the purchase of the real property at the address above. STATE OF TEXAS § § COUNTY OF ________ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]4 ______________ 4 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Annual Installment Schedule to Notice of Obligation to Pay Improvement District Assessment Annual Installment Due 1/31 Principal Interest[a]Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2027 802.08$ 4,054.18$ 337.85$ 81.20$ 5,275.31$ 2028 851.84$ 4,006.05$ 333.84$ 82.83$ 5,274.56$ 2029 905.57$ 3,954.94$ 329.58$ 84.48$ 5,274.58$ 2030 963.29$ 3,900.61$ 325.05$ 86.17$ 5,275.12$ 2031 1,023.00$ 3,842.81$ 320.23$ 87.90$ 5,273.94$ 2032 1,088.68$ 3,781.43$ 315.12$ 89.65$ 5,274.88$ 2033 1,158.34$ 3,716.11$ 309.68$ 91.45$ 5,275.57$ 2034 1,229.99$ 3,646.61$ 303.88$ 93.28$ 5,273.76$ 2035 1,309.60$ 3,572.81$ 297.73$ 95.14$ 5,275.29$ 2036 1,391.20$ 3,494.24$ 291.19$ 97.05$ 5,273.67$ 2037 1,480.76$ 3,410.77$ 284.23$ 98.99$ 5,274.74$ 2038 1,574.30$ 3,321.92$ 276.83$ 100.97$ 5,274.02$ 2039 1,675.81$ 3,227.46$ 268.96$ 102.98$ 5,275.21$ 2040 1,781.29$ 3,126.91$ 260.58$ 105.04$ 5,273.82$ 2041 1,896.73$ 3,020.04$ 251.67$ 107.15$ 5,275.58$ 2042 2,016.14$ 2,906.23$ 242.19$ 109.29$ 5,273.85$ 2043 2,145.51$ 2,785.26$ 232.11$ 111.48$ 5,274.35$ 2044 2,282.84$ 2,656.53$ 221.38$ 113.70$ 5,274.45$ 2045 2,430.12$ 2,519.56$ 209.96$ 115.98$ 5,275.62$ 2046 2,585.36$ 2,373.75$ 197.81$ 118.30$ 5,275.23$ 2047 2,750.55$ 2,218.63$ 184.89$ 120.66$ 5,274.74$ 2048 2,927.69$ 2,053.60$ 171.13$ 123.08$ 5,275.50$ 2049 3,114.77$ 1,877.94$ 156.49$ 125.54$ 5,274.74$ 2050 3,313.80$ 1,691.05$ 140.92$ 128.05$ 5,273.82$ 2051 3,526.76$ 1,492.22$ 124.35$ 130.61$ 5,273.94$ 2052 3,753.65$ 1,280.62$ 106.72$ 133.22$ 5,274.21$ 2053 3,994.47$ 1,055.40$ 87.95$ 135.89$ 5,273.71$ 2054 4,253.21$ 815.73$ 67.98$ 138.60$ 5,275.52$ 2055 4,525.87$ 560.54$ 46.71$ 141.38$ 5,274.50$ 2056 4,816.45$ 288.99$ 24.08$ 144.20$ 5,273.73$ Total 67,569.66$ 80,652.98$ 6,721.08$ 3,294.24$ 158,237.96$ Footnotes: [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon PID Bond issuance. [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. ANNUAL INSTALLMENTS - IMPROVEMENT AREA #1 LOT TYPE 1 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT - IMPROVEMENT AREA #1 LOT TYPE 2 BUYER DISCLOSURE NOTICE OF OBLIGATIONS RELATED TO PUBLIC IMPROVEMENT DISTRICT A person who proposes to sell or otherwise convey real property that is located in a public improvement district established under Subchapter A, Chapter 372, Local Government Code (except for public improvement districts described under Section 372.005), or Chapter 382, Local Government Code, shall first give to the purchaser of the property this written notice, signed by the seller. For the purposes of this notice, a contract for the purchase and sale of real property having a performance period of less than six months is considered a sale requiring the notice set forth below. This notice requirement does not apply to a transfer: 1) under a court order or foreclosure sale; 2) by a trustee in bankruptcy; 3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest; 4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure; 5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; 6) from one co-owner to another co-owner of an undivided interest in the real property; 7) to a spouse or a person in the lineal line of consanguinity of the seller; 8) to or from a governmental entity; or 9) of only a mineral interest, leasehold interest, or security interest The following notice shall be given to a prospective purchaser before the execution of a binding contract of purchase and sale, either separately or as an addendum or paragraph of a purchase contract. In the event a contract of purchase and sale is entered into without the seller having provided the required notice, the purchaser, subject to certain exceptions, is entitled to terminate the contract. A separate copy of this notice shall be executed by the seller and the purchaser and must be filed in the real property records of the county in which the property is located at the closing of the purchase and sale of the property. AFTER RECORDING1 RETURN TO: ____________________ ____________________ ____________________ ____________________ ____________________ NOTICE OF OBLIGATION TO PAY IMPROVEMENT DISTRICT ASSESSMENT TO CITY OF ANNA, TEXAS CONCERNING THE FOLLOWING PROPERTY __________________________________________ STREET ADDRESS IMPROVEMENT AREA #1 LOT TYPE 2 PRINCIPAL ASSESSMENT: $75,077.40 As the purchaser of the real property described above, you are obligated to pay assessments to City of Anna, Texas, for the costs of a portion of a public improvement or services project (the "Authorized Improvements") undertaken for the benefit of the property within Sherley Farms Public Improvement District (the "District") created under Subchapter A, Chapter 372, Local Government Code. AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE COSTS, AND DELINQUENCY COSTS. The exact amount of the assessment may be obtained from the City of Anna. The exact amount of each annual installment will be approved each year by the Anna City Council in the annual service plan update for the District. More information about the assessments, including the amounts and due dates, may be obtained from City of Anna. Your failure to pay any assessment or any annual installment may result in penalties and interest being added to what you owe or in a lien on and the foreclosure of your property. _________________ 1 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County when updating for the Current Information of Obligation to Pay Improvement District Assessment. Signature Page to Initial Notice of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned seller acknowledges providing this notice to the potential purchaser before the effective date of a binding contract for the purchase of the real property at the address described above. ______________ 2 To be included in copy of the notice required by Section 5.014, Tex. Prop. Code, to be executed by seller in accordance with Section 5.014(a-1), Tex. Prop. Code. Purchaser Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned purchaser acknowledged the receipt of this notice including the current information required by Section 5.0143, Texas Property Code, as amended. STATE OF TEXAS § § COUNTY OF _______ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]3 ______________ 3 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Seller Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned seller acknowledges providing a separate copy of the notice required by Section 5.014 of the Texas Property Code including the current information required by Section 5.0143, Texas Property Code, as amended, at the closing of the purchase of the real property at the address above. STATE OF TEXAS § § COUNTY OF ________ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]4 ______________ 4 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Annual Installment Schedule to Notice of Obligation to Pay Improvement District Assessment Annual Installment Due 1/31 Principal Interest[a]Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2027 891.20$ 4,504.64$ 375.39$ 90.23$ 5,861.46$ 2028 946.48$ 4,451.17$ 370.93$ 92.03$ 5,860.62$ 2029 1,006.19$ 4,394.38$ 366.20$ 93.87$ 5,860.64$ 2030 1,070.32$ 4,334.01$ 361.17$ 95.75$ 5,861.25$ 2031 1,136.67$ 4,269.79$ 355.82$ 97.66$ 5,859.94$ 2032 1,209.64$ 4,201.59$ 350.13$ 99.62$ 5,860.98$ 2033 1,287.04$ 4,129.01$ 344.08$ 101.61$ 5,861.75$ 2034 1,366.65$ 4,051.79$ 337.65$ 103.64$ 5,859.73$ 2035 1,455.11$ 3,969.79$ 330.82$ 105.71$ 5,861.43$ 2036 1,545.78$ 3,882.49$ 323.54$ 107.83$ 5,859.63$ 2037 1,645.29$ 3,789.74$ 315.81$ 109.98$ 5,860.82$ 2038 1,749.23$ 3,691.02$ 307.59$ 112.18$ 5,860.02$ 2039 1,862.01$ 3,586.07$ 298.84$ 114.43$ 5,861.34$ 2040 1,979.21$ 3,474.35$ 289.53$ 116.72$ 5,859.81$ 2041 2,107.47$ 3,355.59$ 279.63$ 119.05$ 5,861.75$ 2042 2,240.16$ 3,229.15$ 269.10$ 121.43$ 5,859.83$ 2043 2,383.90$ 3,094.74$ 257.89$ 123.86$ 5,860.39$ 2044 2,536.49$ 2,951.70$ 245.98$ 126.34$ 5,860.50$ 2045 2,700.13$ 2,799.51$ 233.29$ 128.86$ 5,861.80$ 2046 2,872.62$ 2,637.51$ 219.79$ 131.44$ 5,861.36$ 2047 3,056.17$ 2,465.15$ 205.43$ 134.07$ 5,860.82$ 2048 3,252.99$ 2,281.78$ 190.15$ 136.75$ 5,861.66$ 2049 3,460.86$ 2,086.60$ 173.88$ 139.49$ 5,860.83$ 2050 3,682.00$ 1,878.95$ 156.58$ 142.28$ 5,859.80$ 2051 3,918.62$ 1,658.03$ 138.17$ 145.12$ 5,859.94$ 2052 4,170.72$ 1,422.91$ 118.58$ 148.03$ 5,860.23$ 2053 4,438.30$ 1,172.67$ 97.72$ 150.98$ 5,859.67$ 2054 4,725.79$ 906.37$ 75.53$ 154.00$ 5,861.69$ 2055 5,028.75$ 622.82$ 51.90$ 157.09$ 5,860.56$ 2056 5,351.61$ 321.10$ 26.76$ 160.23$ 5,859.69$ Total 75,077.40$ 89,614.42$ 7,467.87$ 3,660.27$ 175,819.96$ Footnotes: [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon PID Bond issuance. [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. ANNUAL INSTALLMENTS - IMPROVEMENT AREA #1 LOT TYPE 2 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 LOT TYPE 3 BUYER DISCLOSURE NOTICE OF OBLIGATIONS RELATED TO PUBLIC IMPROVEMENT DISTRICT A person who proposes to sell or otherwise convey real property that is located in a public improvement district established under Subchapter A, Chapter 372, Local Government Code (except for public improvement districts described under Section 372.005), or Chapter 382, Local Government Code, shall first give to the purchaser of the property this written notice, signed by the seller. For the purposes of this notice, a contract for the purchase and sale of real property having a performance period of less than six months is considered a sale requiring the notice set forth below. This notice requirement does not apply to a transfer: 1) under a court order or foreclosure sale; 2) by a trustee in bankruptcy; 3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest; 4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure; 5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; 6) from one co-owner to another co-owner of an undivided interest in the real property; 7) to a spouse or a person in the lineal line of consanguinity of the seller; 8) to or from a governmental entity; or 9) of only a mineral interest, leasehold interest, or security interest The following notice shall be given to a prospective purchaser before the execution of a binding contract of purchase and sale, either separately or as an addendum or paragraph of a purchase contract. In the event a contract of purchase and sale is entered into without the seller having provided the required notice, the purchaser, subject to certain exceptions, is entitled to terminate the contract. A separate copy of this notice shall be executed by the seller and the purchaser and must be filed in the real property records of the county in which the property is located at the closing of the purchase and sale of the property. AFTER RECORDING1 RETURN TO: ____________________ ____________________ ____________________ ____________________ ____________________ NOTICE OF OBLIGATION TO PAY IMPROVEMENT DISTRICT ASSESSMENT TO CITY OF ANNA, TEXAS CONCERNING THE FOLLOWING PROPERTY __________________________________________ STREET ADDRESS IMPROVEMENT AREA #1 LOT TYPE 3 PRINCIPAL ASSESSMENT: $90,092.88 As the purchaser of the real property described above, you are obligated to pay assessments to City of Anna, Texas, for the costs of a portion of a public improvement or services project (the "Authorized Improvements") undertaken for the benefit of the property within Sherley Farms Public Improvement District (the "District") created under Subchapter A, Chapter 372, Local Government Code. AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE COSTS, AND DELINQUENCY COSTS. The exact amount of the assessment may be obtained from the City of Anna. The exact amount of each annual installment will be approved each year by the Anna City Council in the annual service plan update for the District. More information about the assessments, including the amounts and due dates, may be obtained from City of Anna. Your failure to pay any assessment or any annual installment may result in penalties and interest being added to what you owe or in a lien on and the foreclosure of your property. _________________ 1 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County when updating for the Current Information of Obligation to Pay Improvement District Assessment. Signature Page to Initial Notice of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned seller acknowledges providing this notice to the potential purchaser before the effective date of a binding contract for the purchase of the real property at the address described above. ______________ 2 To be included in copy of the notice required by Section 5.014, Tex. Prop. Code, to be executed by seller in accordance with Section 5.014(a-1), Tex. Prop. Code. Purchaser Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned purchaser acknowledged the receipt of this notice including the current information required by Section 5.0143, Texas Property Code, as amended. STATE OF TEXAS § § COUNTY OF _______ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]3 ______________ 3 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Seller Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned seller acknowledges providing a separate copy of the notice required by Section 5.014 of the Texas Property Code including the current information required by Section 5.0143, Texas Property Code, as amended, at the closing of the purchase of the real property at the address above. STATE OF TEXAS § § COUNTY OF ________ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]4 ______________ 4 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Annual Installment Schedule to Notice of Obligation to Pay Improvement District Assessment Annual Installment Due 1/31 Principal Interest[a]Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2027 1,069.44$ 5,405.57$ 450.46$ 108.27$ 7,033.75$ 2028 1,135.78$ 5,341.41$ 445.12$ 110.44$ 7,032.74$ 2029 1,207.43$ 5,273.26$ 439.44$ 112.64$ 7,032.77$ 2030 1,284.39$ 5,200.81$ 433.40$ 114.90$ 7,033.50$ 2031 1,364.00$ 5,123.75$ 426.98$ 117.20$ 7,031.92$ 2032 1,451.57$ 5,041.91$ 420.16$ 119.54$ 7,033.18$ 2033 1,544.45$ 4,954.82$ 412.90$ 121.93$ 7,034.10$ 2034 1,639.98$ 4,862.15$ 405.18$ 124.37$ 7,031.68$ 2035 1,746.13$ 4,763.75$ 396.98$ 126.86$ 7,033.72$ 2036 1,854.93$ 4,658.98$ 388.25$ 129.39$ 7,031.56$ 2037 1,974.35$ 4,547.69$ 378.97$ 131.98$ 7,032.99$ 2038 2,099.07$ 4,429.23$ 369.10$ 134.62$ 7,032.02$ 2039 2,234.41$ 4,303.28$ 358.61$ 137.31$ 7,033.61$ 2040 2,375.06$ 4,169.22$ 347.43$ 140.06$ 7,031.77$ 2041 2,528.97$ 4,026.71$ 335.56$ 142.86$ 7,034.10$ 2042 2,688.19$ 3,874.98$ 322.91$ 145.72$ 7,031.80$ 2043 2,860.68$ 3,713.68$ 309.47$ 148.63$ 7,032.47$ 2044 3,043.79$ 3,542.04$ 295.17$ 151.61$ 7,032.61$ 2045 3,240.16$ 3,359.42$ 279.95$ 154.64$ 7,034.16$ 2046 3,447.15$ 3,165.01$ 263.75$ 157.73$ 7,033.63$ 2047 3,667.40$ 2,958.18$ 246.51$ 160.89$ 7,032.98$ 2048 3,903.58$ 2,738.13$ 228.18$ 164.10$ 7,034.00$ 2049 4,153.03$ 2,503.92$ 208.66$ 167.38$ 7,032.99$ 2050 4,418.40$ 2,254.74$ 187.89$ 170.73$ 7,031.76$ 2051 4,702.34$ 1,989.63$ 165.80$ 174.15$ 7,031.93$ 2052 5,004.87$ 1,707.49$ 142.29$ 177.63$ 7,032.28$ 2053 5,325.96$ 1,407.20$ 117.27$ 181.18$ 7,031.61$ 2054 5,670.94$ 1,087.64$ 90.64$ 184.81$ 7,034.03$ 2055 6,034.50$ 747.39$ 62.28$ 188.50$ 7,032.67$ 2056 6,421.94$ 385.32$ 32.11$ 192.27$ 7,031.63$ Total 90,092.88$ 107,537.30$ 8,961.44$ 4,392.33$ 210,983.95$ Footnotes: [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon PID Bond issuance. [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. ANNUAL INSTALLMENTS - IMPROVEMENT AREA #1 LOT TYPE 3 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT - IMPROVEMENT AREA #1 LOT TYPE 4 BUYER DISCLOSURE NOTICE OF OBLIGATIONS RELATED TO PUBLIC IMPROVEMENT DISTRICT A person who proposes to sell or otherwise convey real property that is located in a public improvement district established under Subchapter A, Chapter 372, Local Government Code (except for public improvement districts described under Section 372.005), or Chapter 382, Local Government Code, shall first give to the purchaser of the property this written notice, signed by the seller. For the purposes of this notice, a contract for the purchase and sale of real property having a performance period of less than six months is considered a sale requiring the notice set forth below. This notice requirement does not apply to a transfer: 1) under a court order or foreclosure sale; 2) by a trustee in bankruptcy; 3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest; 4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure; 5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; 6) from one co-owner to another co-owner of an undivided interest in the real property; 7) to a spouse or a person in the lineal line of consanguinity of the seller; 8) to or from a governmental entity; or 9) of only a mineral interest, leasehold interest, or security interest The following notice shall be given to a prospective purchaser before the execution of a binding contract of purchase and sale, either separately or as an addendum or paragraph of a purchase contract. In the event a contract of purchase and sale is entered into without the seller having provided the required notice, the purchaser, subject to certain exceptions, is entitled to terminate the contract. A separate copy of this notice shall be executed by the seller and the purchaser and must be filed in the real property records of the county in which the property is located at the closing of the purchase and sale of the property. AFTER RECORDING1 RETURN TO: ____________________ ____________________ ____________________ ____________________ ____________________ NOTICE OF OBLIGATION TO PAY IMPROVEMENT DISTRICT ASSESSMENT TO CITY OF ANNA, TEXAS CONCERNING THE FOLLOWING PROPERTY __________________________________________ STREET ADDRESS IMPROVEMENT AREA #1 LOT TYPE 4 PRINCIPAL ASSESSMENT: $105,108.36 As the purchaser of the real property described above, you are obligated to pay assessments to City of Anna, Texas, for the costs of a portion of a public improvement or services project (the "Authorized Improvements") undertaken for the benefit of the property within Sherley Farms Public Improvement District (the "District") created under Subchapter A, Chapter 372, Local Government Code. AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE COSTS, AND DELINQUENCY COSTS. The exact amount of the assessment may be obtained from the City of Anna. The exact amount of each annual installment will be approved each year by the Anna City Council in the annual service plan update for the District. More information about the assessments, including the amounts and due dates, may be obtained from City of Anna. Your failure to pay any assessment or any annual installment may result in penalties and interest being added to what you owe or in a lien on and the foreclosure of your property. _________________ 1 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County when updating for the Current Information of Obligation to Pay Improvement District Assessment. Signature Page to Initial Notice of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned seller acknowledges providing this notice to the potential purchaser before the effective date of a binding contract for the purchase of the real property at the address described above. ______________ 2 To be included in copy of the notice required by Section 5.014, Tex. Prop. Code, to be executed by seller in accordance with Section 5.014(a-1), Tex. Prop. Code. Purchaser Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned purchaser acknowledged the receipt of this notice including the current information required by Section 5.0143, Texas Property Code, as amended. STATE OF TEXAS § § COUNTY OF _______ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]3 ______________ 3 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Seller Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned seller acknowledges providing a separate copy of the notice required by Section 5.014 of the Texas Property Code including the current information required by Section 5.0143, Texas Property Code, as amended, at the closing of the purchase of the real property at the address above. STATE OF TEXAS § § COUNTY OF ________ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]4 ______________ 4 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Annual Installment Schedule to Notice of Obligation to Pay Improvement District Assessment Annual Installment Due 1/31 Principal Interest[a]Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2027 1,247.68$ 6,306.50$ 525.54$ 126.32$ 8,206.04$ 2028 1,325.08$ 6,231.64$ 519.30$ 128.84$ 8,204.86$ 2029 1,408.67$ 6,152.14$ 512.68$ 131.42$ 8,204.90$ 2030 1,498.45$ 6,067.62$ 505.63$ 134.05$ 8,205.75$ 2031 1,591.33$ 5,977.71$ 498.14$ 136.73$ 8,203.91$ 2032 1,693.50$ 5,882.23$ 490.19$ 139.46$ 8,205.37$ 2033 1,801.86$ 5,780.62$ 481.72$ 142.25$ 8,206.45$ 2034 1,913.31$ 5,672.51$ 472.71$ 145.10$ 8,203.63$ 2035 2,037.15$ 5,557.71$ 463.14$ 148.00$ 8,206.00$ 2036 2,164.09$ 5,435.48$ 452.96$ 150.96$ 8,203.48$ 2037 2,303.41$ 5,305.63$ 442.14$ 153.98$ 8,205.15$ 2038 2,448.92$ 5,167.43$ 430.62$ 157.06$ 8,204.02$ 2039 2,606.81$ 5,020.50$ 418.37$ 160.20$ 8,205.88$ 2040 2,770.90$ 4,864.09$ 405.34$ 163.40$ 8,203.73$ 2041 2,950.46$ 4,697.83$ 391.49$ 166.67$ 8,206.46$ 2042 3,136.22$ 4,520.80$ 376.73$ 170.00$ 8,203.76$ 2043 3,337.46$ 4,332.63$ 361.05$ 173.41$ 8,204.55$ 2044 3,551.08$ 4,132.38$ 344.37$ 176.87$ 8,204.71$ 2045 3,780.19$ 3,919.32$ 326.61$ 180.41$ 8,206.52$ 2046 4,021.67$ 3,692.51$ 307.71$ 184.02$ 8,205.91$ 2047 4,278.64$ 3,451.21$ 287.60$ 187.70$ 8,205.15$ 2048 4,554.18$ 3,194.49$ 266.21$ 191.45$ 8,206.33$ 2049 4,845.20$ 2,921.24$ 243.44$ 195.28$ 8,205.16$ 2050 5,154.80$ 2,630.53$ 219.21$ 199.19$ 8,203.72$ 2051 5,486.07$ 2,321.24$ 193.44$ 203.17$ 8,203.91$ 2052 5,839.01$ 1,992.07$ 166.01$ 207.24$ 8,204.33$ 2053 6,213.62$ 1,641.73$ 136.81$ 211.38$ 8,203.54$ 2054 6,616.10$ 1,268.92$ 105.74$ 215.61$ 8,206.37$ 2055 7,040.25$ 871.95$ 72.66$ 219.92$ 8,204.78$ 2056 7,492.26$ 449.54$ 37.46$ 224.32$ 8,203.57$ Total 105,108.36$ 125,460.19$ 10,455.02$ 5,124.38$ 246,147.94$ Footnotes: [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon PID Bond issuance. [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. ANNUAL INSTALLMENTS - IMPROVEMENT AREA #1 LOT TYPE 4 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 0 AUSTIN, TX | NORTH RICHLAND HILLS, TX | HOUSTON, TX Sherley Farms Public Improvement District PRELIMINARY SERVICE AND ASSESSMENT PLAN JANUARY 1227, 2026 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 1 TABLE OF CONTENTS Table of Contents .......................................................................................................................... 1 Introduction .................................................................................................................................. 3 Section I: Definitions ..................................................................................................................... 4 Section II: The District ................................................................................................................. 11 Section III: Authorized Improvements ......................................................................................... 11 Section IV: Service Plan ............................................................................................................... 13 Section V: Assessment Plan ......................................................................................................... 13 Section VI: Terms of the Assessments ......................................................................................... 17 Section VII: Assessment Roll ....................................................................................................... 23 Section VIII: Additional Provisions ............................................................................................... 24 Exhibits ........................................................................................................................................ 26 Appendices ................................................................................................................................. 27 Exhibit A-1 – Map of the District ................................................................................................. 28 Exhibit A-2 – Map of Improvement Area #1 ................................................................................ 29 Exhibit A-3 - Improvement Area #1 Lot Type Classification Map ................................................ 30 Exhibit B – Project Costs .............................................................................................................. 31 Exhibit C – Service Plan ............................................................................................................... 32 Exhibit D – Sources and Uses of Funds ........................................................................................ 33 Exhibit E – Maximum Assessment and Tax Rate Equivalant ........................................................ 34 Exhibit F-1 – Improvement Area #1 Assessment Roll .................................................................. 35 Exhibit F-2 – Improvement Area #1 Annual Installments ............................................................ 36 Exhibit G-1 – Maps of Major Improvements ............................................................................... 37 Exhibit G-2 – Maps of Improvement Area #1 Improvements ...................................................... 39 Exhibit G-3 - Maps of Trail Improvements ................................................................................... 43 Exhibit H – TIRZ No. 9 Annual Credit Amount by Lot Type .......................................................... 44 Exhibit I – Form of Notice of Assessment Termination ............................................................... 45 Exhibit J – Debt Service Schedule for Improvement Area #1 Bonds ............................................ 48 Exhibit K-1 – District Legal Description ........................................................................................ 49 Exhibit K-2 – Improvement Area #1 Legal Description ................................................................ 54 Appendix A – Engineer’s Report .................................................................................................. 58 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 2 Appendix B – Buyer Disclosures .................................................................................................. 59 Sherley Farms Public Improvement District - Improvement Area #1 Initial Parcel Buyer Disclosure .................................................................................................................................... 60 Sherley Farms Public Improvement District - Improvement Area #1 Lot Type 1 Buyer Disclosure .................................................................................................................................................... 66 Sherley Farms Public Improvement District - Improvement Area #1 Lot Type 2 Buyer Disclosure .................................................................................................................................................... 72 Sherley Farms Public Improvement District Improvement Area #1 Lot Type 3 Buyer Disclosure 78 Sherley Farms Public Improvement District - Improvement Area #1 Lot Type 4 Buyer Disclosure .................................................................................................................................................... 84 Table of Contents .......................................................................................................................... 1 Introduction .................................................................................................................................. 4 Section I: Definitions ..................................................................................................................... 5 Section II: The District ................................................................................................................. 12 Section III: Authorized Improvements ......................................................................................... 12 Section IV: Service Plan ............................................................................................................... 14 Section V: Assessment Plan ......................................................................................................... 14 Section VI: Terms of the Assessments ......................................................................................... 18 Section VII: Assessment Roll ....................................................................................................... 24 Section VIII: Additional Provisions ............................................................................................... 25 Exhibits ........................................................................................................................................ 27 Appendices ................................................................................................................................. 28 Exhibit A-1 – Map of the District ................................................................................................. 29 Exhibit A-2 – Map of Improvement Area #1 ................................................................................ 30 Exhibit A-3 - Improvement Area #1 Lot Type Classification Map ................................................ 31 Exhibit B – Project Costs .............................................................................................................. 32 Exhibit C – Service Plan ............................................................................................................... 34 Exhibit D – Sources and Uses of Funds ........................................................................................ 35 Exhibit E – Maximum Assessment and Tax Rate Equivalant ........................................................ 37 Exhibit F-1 – Improvement Area #1 Assessment Roll .................................................................. 38 Exhibit F-2 – Improvement Area #1 Annual Installments ............................................................ 39 Exhibit G-1 – Maps of Major Improvements ............................................................................... 40 Exhibit G-2 – Maps of Improvement Area #1 Improvements ...................................................... 42 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 3 Exhibit H – TIRZ No. 9 Annual Credit Amount by Lot Type .......................................................... 47 Exhibit I – Form of Notice of Assessment Termination ............................................................... 48 Exhibit J – Debt Service Schedule for Improvement Area #1 Bonds ............................................ 51 Exhibit K-1 – District Legal Description ........................................................................................ 52 Exhibit K-2 – Improvement Area #1 Legal Description ................................................................ 57 Appendix A – Engineer’s Report .................................................................................................. 61 Appendix B – Buyer Disclosures .................................................................................................. 62 Sherley Farms Public Improvement District - Improvement Area #1 Initial Parcel Buyer Disclosure .................................................................................................................................... 63 Sherley Farms Public Improvement District - Improvement Area #1 Lot Type 1 Buyer Disclosure .................................................................................................................................................... 69 Sherley Farms Public Improvement District - Improvement Area #1 Lot Type 2 Buyer Disclosure .................................................................................................................................................... 75 Sherley Farms Public Improvement District Improvement Area #1 Lot Type 3 Buyer Disclosure 81 Sherley Farms Public Improvement District - Improvement Area #1 Lot Type 4 Buyer Disclosure .................................................................................................................................................... 87 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 4 INTRODUCTION Capitalized terms used in this Service and Assessment Plan shall have the meanings given to them in Section I unless otherwise defined in this Service and Assessment Plan or unless the context in which a term is used clearly requires a different meaning. Unless otherwise defined, a reference to a “Section,” an “Exhibit,” or an “Appendix” shall be a reference to a Section of this Service and Assessment Plan or an Exhibit or Appendix attached to and made a part of this Service and Assessment Plan for all purposes. On March 25, 2025, the City Council passed and approved Resolution No. 2025-03-1753 authorizing the establishment of the District in accordance with the PID Act, which authorization was effective upon approval in accordance with the PID Act. The purpose of the District is to finance the Actual Costs of Authorized Improvements that confer a special benefit on approximately 1,123.592 acres located within the corporate limits of the City, as described by the legal description on Exhibit K-1 and depicted on Exhibit A-1. The PID Act requires a service plan must (i) cover a period of at least five years; (ii) define the annual indebtedness and projected cost of the Authorized Improvements; and (iii) include a copy of the notice form required by Section 5.014 of the Texas Property Code, as amended. The Service Plan is contained in Section IV and the notice form is attached as Appendix B. The PID Act requires that the Service Plan include an Assessment Plan that assesses the Actual Costs of the Authorized Improvements against the Assessed Property within the District based on the special benefits conferred on such property by the Authorized Improvements. The Assessment Plan is contained in Section V. The PID Act requires an Assessment Roll that states the Assessment against each Parcel determined by the method chosen by the City Council. The Assessment against each Parcel of Assessed Property must be sufficient to pay the share of the Actual Costs of the Authorized Improvements apportioned to such Parcel and cannot exceed the special benefit conferred on the Parcel by such Authorized Improvements. The Improvement Area #1 Assessment Roll is included as Exhibit F-1. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 5 SECTION I: DEFINITIONS “2026 Assessment Ordinance” means an Assessment Ordinance approved and adopted by the City Council on February 1027, 2026, which levied the Improvement Area #1 Assessment against Improvement Area #1 Assessed Property, and approved this Service and Assessment Plan. “Actual Costs” mean, with respect to Authorized Improvements, the actual costs paid or incurred by or on behalf of the Developer, (either directly or through affiliates), including: (1) the costs for the design, planning, financing, administration/management, acquisition, installation, construction and/or implementation of such Authorized Improvements; (2) the fees paid for obtaining permits, licenses, or other governmental approvals for such Authorized Improvements; (3) the costs for external professional services, such as engineering, geotechnical, surveying, land planning, architectural landscapers, appraisals, legal, accounting, and similar professional services; (4) the costs for all labor, bonds, and materials, including equipment and fixtures, owing to contractors, builders, and materialmen engaged in connection with the acquisition, construction, or implementation of the Authorized Improvements; (5) all related permitting and public approval expenses, and architectural, engineering, consulting, and other governmental fees and charges; and (6) costs to implement, administer, and manage the above-described activities including, but not limited to, a construction management fee equal to four percent (4%) of construction costs if managed by or on behalf of the Developer. “Additional Interest” means the amount collected by the application of the Additional Interest Rate. “Additional Interest Rate” means the up to 0.50% additional interest rate that may be charged on Assessments securing PID Bonds pursuant to Section 372.018 of the PID Act “Administrator” means the City or independent firm designated by the City who shall have the responsibilities provided in this Service and Assessment Plan, any Indenture, or any other agreement or document approved by the City related to the duties and responsibilities of the administration of the District. The initial Administrator is P3Works, LLC. “Annual Collection Costs” mean the actual or budgeted costs and expenses related to the operation of the District, including, but not limited to, costs and expenses for: (1) the Administrator; (2) City staff; (3) legal counsel, engineers, accountants, financial advisors, and other consultants engaged by the City; (4) calculating, collecting, and maintaining records with respect to Assessments and Annual Installments; (5) preparing and maintaining records with respect to Assessment Rolls and Annual Service Plan Updates; (6) paying and redeeming PID Bonds; (7) investing or depositing Assessments and Annual Installments; (8) complying with this SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 6 Service and Assessment Plan, the PID Act, and any Indenture, with respect to the PID Bonds, including the City’s continuing disclosure requirements; and (9) the paying agent/registrar and Trustee in connection with PID Bonds, including their respective legal counsel. Annual Collection Costs collected but not expended in any year shall be carried forward and applied to reduce Annual Collection Costs for subsequent years. “Annual Installment” means the annual installment payment of an Assessment as calculated by the Administrator and approved by the City Council, that includes: (1) principal; (2) interest; (3) Annual Collection Costs; and (4) Additional Interest related to the PID Bonds, if applicable. “Annual Service Plan Update” means an update to this Service and Assessment Plan prepared no less frequently than annually by the Administrator and approved by the City Council. “Assessed Property” means any Parcel within the District against which an Assessment is levied. “Assessment” means an assessment levied against Assessed Property to pay the costs of certain Authorized Improvements as specified herein, which Assessment is imposed pursuant to an Assessment Ordinance and the provisions herein, as shown on an Assessment Roll, subject to reallocation upon the subdivision of such Assessed Property or reduction according to the provisions herein and in the PID Act. “Assessment Ordinance” means an ordinance adopted by the City Council in accordance with the PID Act that levies an Assessment on the Assessed Property, as shown on any Assessment Roll. “Assessment Plan” means the methodology employed to assess the Actual Costs of the Authorized Improvements against the Assessed Property based on the special benefits conferred on such property by the Authorized Improvements, more specifically set forth and described in Section V. “Assessment Roll” means any assessment roll for the Assessed Property, including the Improvement Area #1 Assessment Roll, as updated, modified or amended from time to time in accordance with the procedures set forth herein and in the PID Act, including in any Annual Service Plan Updates. The Assessment Roll is included in this Service and Assessment Plan as Exhibit F-1. “Authorized Improvements” means the improvements authorized by Section 372.003 of the PID Act, as further depicted on Exhibit G-1 and Exhibit G-2. “Bond Issuance Costs” means the costs associated with issuing PID Bonds, including, but not limited to, attorney fees, financial advisory fees, consultant fees, appraisal fees, printing costs, publication costs, capitalized interest, reserve fund requirements, underwriter’s discount, fees SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 7 charged by the Texas Attorney General, and any other cost or expense incurred by the City directly associated with the issuance of any series of PID Bonds. “City” means the City of Anna, Texas. “City Council” means the governing body of the City. “County” means Collin County, Texas. “Delinquent Collection Costs” mean costs related to the foreclosure on Assessed Property and the costs of collection of delinquent Assessments, delinquent Annual Installments, or any other delinquent amounts due under this Service and Assessment Plan, including penalties and reasonable attorney’s fees actually paid, but excluding amounts representing interest and penalty interest. “Developer” means Tellus Texas III, LLC and Sherley Partners, LTD. and any successors or assigns that intend to develop property in the District for the ultimate purpose of transferring title to end users. “District” means the Sherley Farms Public Improvement District containing approximately 1,123.592 acres located within corporate limits of the City, and more specifically described in Exhibit K-1 and depicted on Exhibit A-1. “District Formation Costs” means the costs associated with forming the District, including, but not limited to, attorney fees, and any other cost or expense incurred by the City directly associated with the establishment of the District. “Engineer’s Report” means the report provided by a licensed professional engineer that describes the Authorized Improvements, including their costs, location, and benefit, and is attached hereto as Appendix A. “Estimated Buildout Value” means the estimated value of an Assessed Property with fully constructed buildings, as provided by the Developer and confirmed by the City Council, by considering such factors as density, lot size, proximity to amenities, view premiums, location, market conditions, historical sales, builder contracts, discussions with homebuilders, reports from third party consultants, or any other factors that, in the judgment of the City, may impact value. The Estimated Buildout Value for each Lot Type is shown on Exhibit E. “Improvement Area #1” means approximately 135.00 acres located within the District, more specifically described in Exhibit K-2 and depicted on Exhibit A-2. “Improvement Area #1 Annual Installment” means the Annual Installment of the Improvement Area #1 Assessment as calculated by the Administrator and approved by the City Council, that SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 8 includes: (1) principal; (2) interest; (3) Annual Collection Costs related to Improvement Area #1; and (4) Additional Interest related to the Improvement Area #1 Bonds, as shown on Exhibit F-2, which amount may be reduced by the TIRZ No. 9 Annual Credit Amount. “Improvement Area #1 Assessed Property” means any Parcel within Improvement Area #1 against which an Improvement Area #1 Assessment is levied. “Improvement Area #1 Assessment” means an Assessment to be levied against Improvement Area #1 Assessed Property to pay for a portion of the Improvement Area #1 Authorized Improvements, and imposed pursuant to the 2026 Assessment Ordinance and the provisions herein, as shown on the Improvement Area #1 Assessment Roll, subject to reallocation or reduction pursuant to the provisions set forth in Section VI herein and in the PID Act. “Improvement Area #1 Assessment Roll” means the Assessment Roll for the Improvement Area #1 Assessed Property, as updated, modified, or amended from time to time in accordance with the procedures set forth herein and in the PID Act, including any updates prepared in connection with the issuance of PID Bonds or any Annual Service Plan Updates. The Improvement Area #1 Assessment Roll is included in this Service and Assessment Plan as Exhibit F-1. “Improvement Area #1 Authorized Improvements” means collectively, (1) the Improvement Area #1 Improvements; (2) the first year’s Annual Collection Costs related to the Improvement Area #1 Bonds; and (3) Bond Issuance Costs incurred in connection with the issuance of Improvement Area #1 Bonds. “Improvement Area #1 Bonds” means those certain “City of Anna, Texas, Special Assessment Revenue Bonds, Series 2026 (Sherley Farms Public Improvement District Improvement Area #1 Project)” that shall be secured primarily by Improvement Area #1 Assessments. “Improvement Area #1 Improvements” means the Authorized Improvements which only benefit the Improvement Area #1 Assessed Property, as further described in Section III and depicted on Exhibit G-2. “Improvement Area #1 Initial Parcel” means all of the Improvement Area #1 Assessed Property against which the entire Improvement Area #1 Assessment is levied, as shown on the Improvement Area #1 Assessment Roll as shown on Exhibit F-1. “Improvement Area #1 Major Improvements” means the portion of the Major Improvements to be completed concurrently with the completion of lotsLots in Improvement Area #1. “Indenture” means an Indenture of Trust entered into between the City and the Trustee in connection with the issuance of each series of PID Bonds, as amended from time to time, setting forth the terms and conditions related to a series of PID Bonds. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 9 “Lot” means (1) for any portion of the District for which a final subdivision plat has been recorded in the Plat or Official Public Records of the County, a tract of land described by “lot” in such subdivision plat; and (2) for any portion of the District for which a subdivision plat has not been recorded in the Plat or Official Public Records of the County, a tract of land anticipated to be described as a “lot” in a final recorded subdivision plat as shown on a concept plan or a preliminary plat. A “Lot” shall not include real property owned by a government entity, even if such property is designated as a separate described tract or lot on a recorded subdivision plat. “Lot Type” means a classification of final building Lots with similar characteristics (e.g. lot size, home product, Estimated Buildout Value, etc.), as determined at the time of levying the applicable Assessment and confirmed by the City Council. In the case of single-family residential Lots, the Lot Type shall be further defined by classifying the residential Lots by the Estimated Buildout Value of the Lot as provided by the Developer, and confirmed by the City Council, as shown on Exhibit E. “Lot Type 1” means a Lot Type within Improvement Area #1 marketed to homebuilders as a 45’ lot. The buyer disclosure for Lot Type 1 is attached as Appendix B. “Lot Type 2” means a Lot Type within Improvement Area #1 marketed to homebuilders as a 50’ lot. The buyer disclosure for Lot Type 2 is attached as Appendix B. “Lot Type 3” means a Lot Type within Improvement Area #1 marketed to homebuilders as a 60’ lot. The buyer disclosure for Lot Type 3 is attached as Appendix B. “Lot Type 4” means a Lot Type within Improvement Area #1 marketed to homebuilders as a 70’ lot. The buyer disclosure for Lot Type 4 is attached as Appendix B. “Major Improvements” means those Authorized Improvements that confer a special benefit to all of the Assessed Property and Remainder Area within the District, as depicted on Exhibit G-1. “Maximum Assessment” means, for each Lot, an Assessment equal to the lesser of (1) the amount calculated pursuant to Section VI.A, or (2) for each Lot Type, the amount shown on Exhibit E. “Non-Assessed Property” means Parcels within the boundaries of the District that accrue special benefit from the Authorized Improvements as determined by the City Council but are not assessed. “Notice of Assessment Termination” means a document that shall be recorded in the Official Public Records of the County evidencing the termination of an Assessment, a form of which is attached as Exhibit I. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 10 “Parcel” or “Parcels” means a specific property within the District identified by either a tax parcel identification number assigned by the Collin Central Appraisal District for real property tax purposes, by legal description, or by lot and block number in a final subdivision plat recorded in the Official Public Records of the County, or by any other means determined by the City. “PID Act” means Chapter 372, Texas Local Government Code, as amended. “PID Bonds” means any bonds issued by the City in one or more series and secured in whole or in part by Assessments. “Prepayment” means the payment of all or a portion of an Assessment before the due date of the final Annual Installment thereof. Amounts received at the time of a Prepayment which represent a payment of principal, interest, or penalties on a delinquent installment of an Assessment are not to be considered a Prepayment, but rather are to be treated as the payment of the regularly scheduled Annual Installment. “Prepayment Costs” means interest, including Additional Interest and Annual Collection Costs, to the date of Prepayment. “Private Improvements” means those certain improvements benefitting the District, constructed and paid for by the Developer and not reimbursable from Assessments or PID Bonds, as further described on Exhibit B. “Remainder Area” means approximately 988.592 acres located within the District and entirely outside of Improvement Area #1, to be developed as one or more future improvement areas. “Service and Assessment Plan” means this Sherley Farms Public Improvement District Service and Assessment Plan as updated, amended, or supplemented from time to time. “Service Plan” means the plan described in Section IV which covers a period of at least five years and defines the annual indebtedness and projected costs of the Authorized Improvements. "TIRZ No. 9” means Reinvestment Zone Number Nine, City of Anna, Texas. "TIRZ No. 9 Agreement" means that future TIRZ reimbursement agreement to be entered into by the Developer and the City. "TIRZ No. 9 Annual Credit Amount" means, for each lot type, the amount calculated pursuant to Section V.F, which amount shall not annually exceed the TIRZ No. 9 Maximum Annual Credit Amount, and which shall be transferred from the TIRZ No. 9 Fund to the applicable pledged revenue fund pursuant to the TIRZ No. 9 Agreement and used to pay a portion of principal and interest related to the PID Bonds, but which shall not be pledged to secure the PID Bonds. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 11 "TIRZ No. 9 Plan" means the Reinvestment Zone Number Nine, City of Anna, Texas Final Project and Financing Plan, to be approved by City Council prior to the issuance of PID Bonds. "TIRZ No. 9 Fund" means the tax increment fund created pursuant to the TIRZ No. 9 Ordinance where TIRZ No. 9 Revenues are deposited annually. “TIRZ No. 9 Maximum Annual Credit Amount” means for each Lot Type, the amount of TIRZ No. 9 Revenues that results in an equivalent tax rate equal to $1.35 per $100 of assessed value for such Lot Type taking into consideration the equivalent tax rate of the applicable Annual Installment, based on Estimated Buildout Value of such Lot Type at the time the City Council approves the applicable Assessment Ordinance levying the applicable Assessment, as further described in Section V.F and shown on Exhibit H. The Estimated Buildout Values for each Lot Type are shown on Exhibit E. "TIRZ No. 9 Ordinance" means Ordinance No. __________ adopted by the City Council on February 10, 2025, approving the TIRZ No. 9 Plan and authorizing the use of TIRZ No. 9 Revenues for project costs under the Chapter 311, Texas Tax Code as amended, and related to certain public improvements as provided for in the TIRZ No. 9 Plan. "TIRZ No. 9 Revenues" mean, for each year, the amounts which are deposited in the TIRZ No. 9 Fund pursuant to the TIRZ No. 9 Ordinance, the TIRZ No. 9 Plan, and the TIRZ No. 9 Agreement. “Trustee” means the trustee or successor trustee under an Indenture. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 12 SECTION II: THE DISTRICT The District includes approximately 1,123.592 contiguous acres located within the corporate limits of the City, the boundaries of which are more particularly described on Exhibit K-1 and depicted on Exhibit A-1. Development of the District is anticipated to include approximately (i) 2,578 residential units (including 120 townhomes) to be developed by Tellus Texas III, LLC and 7 single-family units, 55 cottage homes, 400 multifamily units, and 260,000 square feet of commercial space to be developed by Sherley Partners, Ltd.. Improvement Area #1 includes approximately 135 contiguous acres located within the corporate limits of the City, the boundaries of which are more particularly described on Exhibit K-2 and depicted on Exhibit A-2. Development of Improvement Area #1 is anticipated to include approximately 418 Lots developed with single-family homes (76 single-family homes that are on Lots classified as Lot Type 1, 166 single-family homes that are on Lots classified as Lot Type 2, 143 single-family homes that are on Lots classified as Lot Type 3, and 33 single-family homes that are on Lots classified as Lot Type 4.) SECTION III: AUTHORIZED IMPROVEMENTS Based on information provided by the Developer and their engineers and reviewed by the City staff and by third-party consultants retained by the City, the City has determined that the Authorized Improvements confer a special benefit on the Assessed Property. Authorized Improvements will be designed and constructed in accordance with the City’s standards and specifications and will be owned and operated by the City. The budget for the Authorized Improvements is shown on Exhibit B. A. Improvement Area #1 Improvements  Streets Improvements including subgrade stabilization, concrete and reinforcing steel for roadways, asphalt pavement for roadways, turn lanes, pavers, stamping and staining of concrete, sidewalks, testing, handicap ramps, and streetlights. All related earthwork, excavation, erosion control, intersections, signage, traffic control, maintenance bonds, lighting and re-vegetation/landscaping of all disturbed areas within the right-of-way are included. The street improvements will provide benefit to each Lot within Improvement Area #1.  Water SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 13 Improvements including trench excavation and embedment, trench safety, PVC piping, valves, fire hydrants, service connections, meter boxes, testing, related earthwork, excavation, erosion control and all necessary appurtenances required to provide water service to all Lots within Improvement Area #1.  Sewer Improvements including trench excavation and embedment, trench safety, PVC piping, encasement pipe, boring, manholes, service connections, testing, related earthwork, excavation, erosion control and all necessary appurtenances required to provide wastewater service to all Lots within Improvement Area #1.  Storm Drainage Improvements including earthen channels, swales, ponds curb and inlets, RCP piping and boxes, headwalls, concrete flumes, manholes, junction boxes, rock rip rap, concrete outfalls, and testing as well as all related earthwork, excavation, erosion control and all necessary appurtenances required to provide storm drainage for all Lots within Improvement Area #1.  Right of Way Includes right-of-way required to provide street improvements for all Lots within Improvement Area #1.  Soft Costs Costs related to designing, constructing, and installing the Improvement Area #1 Improvements including land planning and design, City fees, engineering, landscape design, soil testing, environmental testing, survey, construction management, contingency, legal fees, and consultant fees. B. Bond Issuance Costs  Debt Service Reserve Fund Equals the amount to be deposited in a debt service reserve fund under an applicable Indenture in connection with the issuance of PID Bonds.  Capitalized Interest Equals the amount required to be deposited for the purpose of paying capitalized interest on a series of PID Bonds under an applicable Indenture in connection with the issuance of such PID Bonds. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 14  Underwriter’s Discount Equals a percentage of the par amount of a particular series of PID Bonds related to the costs of underwriting such PID Bonds, including the fee of counsel to the Underwriter.  Cost of Issuance Includes costs of issuing a particular series of PID Bonds, including but not limited to issuer fees, attorney’s fees, financial advisory fees, consultant fees, appraisal fees, printing costs, publication costs, City’s costs, fees charged by the Texas Attorney General, and any other cost or expense directly associated with the issuance of PID Bonds. C. Other Costs  Deposit to Administrative Fund Equals the amount necessary to fund the first year’s Annual Collection Costs for a particular series of PID Bonds. SECTION IV: SERVICE PLAN The PID Act requires the Service Plan to cover a period of at least five years. The Service Plan is required to define the annual projected costs and indebtedness for the Authorized Improvements undertaken within the District during the five-year period. The Service Plan is also required to include a copy of the buyer disclosure notice form required by Section 5.014 of the Texas Property Code, as amended. The Service Plan must be reviewed and updated in each Annual Service Plan Update. Exhibit C summarizes the initial Service Plan for Improvement Area #1. Per the PID Act and Section 5.014 of the Texas Property Code, as amended, this Service and Assessment Plan, and any future Annual Service Plan Updates, shall include a form of the buyer disclosure for the District. The buyer disclosures are attached hereto as Appendix B. Exhibit D summarizes the sources and uses of funds required to construct the Authorized Improvements and Private Improvements. The sources and uses of funds shown on Exhibit D shall be updated in an Annual Service Plan Update SECTION V: ASSESSMENT PLAN The PID Act allows the City Council to apportion the costs of the Authorized Improvements to the Assessed Property based on the special benefit received from the Authorized Improvements. The PID Act provides that such costs may be apportioned: (1) equally per front foot or square foot; (2) according to the value of property as determined by the City Council, with or without regard SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 15 to improvements constructed on the property; or (3) in any other manner approved by the City Council that results in imposing equal shares of such costs on property similarly benefited. The PID Act further provides that the City Council may establish by ordinance or order reasonable classifications and formulas for the apportionment of the cost between the City and the area to be assessed and the methods of assessing the special benefits for various classes of improvements. This section of this Service and Assessment Plan describes the special benefit received by each Parcel within the District as a result of the Authorized Improvements and provides the basis and justification for the determination that this special benefit equals or exceeds the amount of the Assessments to be levied on the Assessed Property for such Authorized Improvements. The determination by the City Council of the assessment methodologies set forth below is the result of the discretionary exercise by the City Council of its legislative authority and governmental powers and is conclusive and binding on the Owners, Developer, and all future owners and developers of the Assessed Property. A. Assessment Methodology Acting in its legislative capacity and based on information provided by the Developer and its engineers and reviewed by the City staff and by third-party consultants retained by the City, the City Council has determined that the costs of the Authorized Improvements shall be allocated as follows:  At the time of adoption of the 2026 Assessment Ordinance, the costs of the Improvement Area #1 Major Improvements were determined to be funded from other sources such as impact fees and private funding. The portion of Major Improvements to be constructed in the future and benefiting the Remainder Area (or individual distinct portions thereof to be developed) are expected to be funded from impacts fees and private funding but may be assessed at a later date as provided in an amendment to this Service and Assessment Plan.  By the adoption of the 2026 Assessment Ordinance, the costs of the reimbursable Improvement Area #1 Authorized Improvements are allocated to each Parcel within Improvement Area #1 based on the ratio of the Estimated Buildout Value of each Parcel designated as Improvement Area #1 Assessed Property to the Estimated Buildout Value of all Improvement Area #1 Assessed Property. Currently, the Improvement Area #1 Initial Parcel is the only Parcel within Improvement Area #1, and as such, the Improvement Area #1 Initial Parcel is allocated 100% of the Improvement Area #1 Authorized Improvements. B. Assessments SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 16 By the adoption of the 2026 Assessment Ordinance, the Improvement Area #1 Assessment shall be levied on the Improvement Area #1 Initial Parcel are in the amount shown on the Improvement Area #1 Assessment Roll, attached hereto as Exhibit F-1. The projected Improvement Area #1 Annual Installments are shown on Exhibit F-2. Upon division or subdivision of the Improvement Area #1 Initial Parcel, the Improvement Area #1 Assessment will be reallocated pursuant to Section VI. The Maximum Assessment for each Lot Type is shown on Exhibit E. In no case will the Assessment for Lots classified as Lot Type 1, Lot Type 2, Lot Type 3 or Lot Type 4, respectively, exceed the corresponding Maximum Assessment for each Lot classification. C. Findings of Special Benefit Acting in its legislative capacity and based on information provided by the Developer and tis Engineers and reviewed by the City staff and by third-party consultants retained by the City, the City Council has found and determined the following:  Improvement Area #1  The costs of the Improvement Area #1 Authorized Improvements equal $33,950,00034,055,146 as shown on Exhibit B;  The Improvement Area #1 Assessed Property receives special benefit from the Improvement Area #1 Authorized Improvements equal to or greater than the Actual Cost of the Improvement Area #1 Authorized Improvements;  By the adoption of the 2026 Assessment Ordinance, the Improvement Area #1 Initial Parcel is allocated 100% of the Improvement Area #1 Assessment levied for the Improvement Area #1 Authorized Improvements, which equals $33,950,000 as shown on the Improvement Area #1 Assessment Roll attached hereto as Exhibit F-1;  The special benefit ($33,950,00034,055,146) received by the Improvement Area #1 Initial Parcel from the Improvement Area #1 Authorized Improvements is equal to or greater than the amount of the Improvement Area #1 Assessment ($33,950,000) levied on the Improvement Area #1 Initial Parcel for the Improvement Area #1 Authorized Improvements; and  At the time the City Council approved this Service and Assessment Plan, the Developer owned 100% of the Improvement Area #1 Initial Parcel. The Developer acknowledged that the Improvement Area #1 Authorized Improvements confer a special benefit on the Improvement Area #1 Initial Parcel and consents to the SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 17 imposition of the Improvement Area #1 Assessment to pay for the Actual Costs associated therewith. The Developer ratified, confirmed, accepted, agreed to, and approved: (1) the determinations and findings by the City Council as to the special benefits described herein and the 2026 Assessment Ordinance; (2) the Service and Assessment Plan and the 2026 Assessment Ordinance; and (3) the levying of the Improvement Area #1 Assessment on the Improvement Area #1 Initial Parcel. D. Annual Collection Costs The Annual Collection Costs shall be paid for annually by the owner of each Parcel pro rata based on the ratio of the amount of outstanding Assessment remaining on the Parcel to the total outstanding Assessment. The Annual Collection Costs shall be collected as part of and in the same manner as Annual Installments in the amounts shown on the Assessment Roll, which may be revised based on Actual Costs incurred in Annual Service Plan Updates. E. Additional Interest The interest rate on Assessments securing each respective series of PID Bonds may exceed the interest rate on each respective series of PID Bonds by the Additional Interest Rate. To the extent required by any Indenture, Additional Interest shall be collected as part of each Annual Installment and shall be deposited pursuant to the applicable Indenture. F. TIRZ No. 9 Annual Credit Amount The City Council, in accordance with the TIRZ No. 9 Agreement, has agreed to use a portion of TIRZ No. 9 Revenues generated on a parcel-by-parcel basis from each Assessed Property to offset a portion of the principal and interest of such property’s Assessment, as applicable. 1. The principal and interest portion of the Improvement Area #1 Annual Installment for an Assessed Property shall receive a TIRZ No. 9 Annual Credit Amount equal to the TIRZ No. 9 Revenue generated by the Assessed Property for the previous Tax Year (e.g. TIRZ No. 9 Revenue collected from the Assessed Property for Tax Year 2026 shall be applied as the TIRZ No. 9 Annual Credit Amount applicable to the Assessed Property’s Improvement Area #1 Annual Installment to be collected in Tax Year 2027), but in no event shall the TIRZ No. 9 Annual Credit Amount exceed the TIRZ No. 9 Maximum Annual Credit Amount shown in Section V.F.2 as calculated on Exhibit H for each Assessed Property. 2. The TIRZ No. 9 Maximum Annual Credit Amount available to reduce the principal and interest portion of the Improvement Area #1 Annual Installment for an Assessed Property is calculated for each Lot Type, as shown on Exhibit H. The TIRZ No. 9 Maximum Annual Credit Amount is calculated so that the average Improvement Area #1 Annual Installment minus the SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 18 TIRZ No. 9 Maximum Annual Credit Amount for each Lot Type does not produce an equivalent tax rate for such Lot Type which exceeds the competitive, composite equivalent ad valorem tax rate ($1.35 per $100 of assessed value) taking into consideration the equivalent tax rate of the Improvement Area #1 Annual Installments based on Estimated Buildout Value at the time the 2026 Assessment Ordinance is approved. The resulting maximum TIRZ No. 9 Annual Credit Amount for each Lot Type is shown on Exhibit H. 3. After the TIRZ No. 9 Annual Credit Amount is applied to provide credit towards the principal and interest portion of the Improvement Area #1 Annual Installment for the Assessed Property, any excess TIRZ No. 9 Revenues available from the TIRZ No. 9 Fund shall be used in accordance with the TIRZ No. 9 Plan and the TIRZ No. 9 Agreement. SECTION VI: TERMS OF THE ASSESSMENTS Any reallocation of Assessments as described in this Section VI shall be considered an administrative action of the City and will not be subject to the notice or public hearing requirements under the PID Act. A. Reallocation of Assessments 1. Upon Division Prior to Recording of Subdivision Plat Upon the division of any Assessed Property (without the recording of a subdivision plat), the Administrator shall reallocate the Assessment for the Assessed Property prior to the division among the newly divided Assessed Properties according to the following formula: A = B x (C ÷ D) Where the terms have the following meanings: A = the Assessment for the newly divided Assessed Property B = the Assessment for the Assessed Property prior to division C = the Estimated Buildout Value of the newly divided Assessed Property D = the sum of the Estimated Buildout Value for all of the newly divided Assessed Properties The calculation of the Assessment of an Assessed Property shall be performed by the Administrator and shall be based on the Estimated Buildout Value of that Assessed Property, as provided by the Developer, relying on information from homebuilders, market studies, appraisals, Official Public Records of the County, and any other relevant information regarding the Assessed Property, and such calculation shall be approved by SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 19 the City Council in the immediately following Annual Service Plan Update. The calculation as confirmed by the City Council shall be conclusive and binding. The Estimated Buildout Values for Lot Type 1, Lot Type 2, Lot Type 3 and Lot Type 4 are shown on Exhibit E and will not change in future Annual Service Plan Updates but Exhibit E may be updated in future Annual Service Plan Updates to account for additional Lot Types. The sum of the Assessments for all newly divided Assessed Properties shall equal the Assessment for the Assessed Property prior to subdivision. The calculation shall be made separately for each newly divided Assessed Property. The reallocation of an Assessment for an Assessed Property that is a homestead under Texas law may not exceed the Assessment prior to the reallocation. Any reallocation pursuant to this section shall be reflected in the Annual Service Plan Update immediately following such reallocation. 2. Upon Subdivision by a Recorded Subdivision Plat Upon the subdivision of any Assessed Property based on a recorded subdivision plat, the Administrator shall reallocate the Assessment for the Assessed Property prior to the subdivision among the new subdivided Lots based on Estimated Buildout Value according to the following formula: A = [B x (C ÷ D)]/E Where the terms have the following meanings: A = the Assessment for the newly subdivided Lot B = the Assessment for the Parcel prior to subdivision C = the sum of the Estimated Buildout Value of all newly subdivided Lots with the same Lot Type D = the sum of the Estimated Buildout Value for all of the newly subdivided Lots excluding Non-Benefitted Property E= the number of newly subdivided Lots with the same Lot Type Prior to the recording of a subdivision plat, the Developer shall provide the City an Estimated Buildout Value as of the date of the recorded subdivision plat for each Lot created by the recorded subdivision plat. The calculation of the Assessment for a Lot shall be performed by the Administrator based on Estimated Buildout Value information provided by the Developer, homebuilders, third party consultants, and/or the Official Public Records of the County regarding the Lot, and such calculation shall be approved by the City Council in the immediately following Annual Service Plan Update. The calculation as confirmed by the City Council shall be conclusive and binding. The Estimated Buildout SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 20 Values for Lot Type 1, Lot Type 2, Lot Type 3, and Lot Type 4 are shown on Exhibit E and will not change in future Annual Service Plan Updates. The sum of the Assessments for all newly subdivided Lots shall not exceed the Assessment for the portion of the Assessed Property subdivided prior to subdivision. The calculation shall be made separately for each newly subdivided Assessed Property. The reallocation of an Assessment for an Assessed Property that is a homestead under Texas law may not exceed the Assessment prior to the reallocation. Any reallocation pursuant to this section shall be reflected in the Annual Service Plan Update immediately following such reallocation. 3. Upon Consolidation If two or more Lots or Parcels are consolidated into a single Lot or Parcel, the Administrator shall allocate the Assessments against the Lots or Parcels before the consolidation to the consolidated Lot or Parcel, which allocation shall be approved by the City Council in the next Annual Service Plan Update immediately following such consolidation. The calculation as confirmed by the City Council shall be conclusive and binding. The Assessment for any resulting Lot may not exceed the Maximum Assessment for the applicable Lot Type and compliance may require a mandatory Prepayment of Assessments pursuant to Section VI.C. B. Mandatory Prepayment of Assessments If an Assessed Property or a portion thereof is conveyed to a party that is exempt from payment of the Assessment under applicable law, or the owner causes a Lot, Parcel or portion thereof to become Non-Benefitted Property, the owner of such Lot, Parcel or portion thereof shall pay to the City, or cause to be paid to the City, the full amount of the Assessment, plus all Prepayment Costs and Delinquent Collection Costs for such Assessed Property, prior to any such conveyance or act, and no such conveyance shall be effective until the City receives such payment. Following payment of the foregoing costs in full, the City shall provide the owner with a recordable “Notice of Assessment Termination,” a form of which is attached hereto as Exhibit I. C. True-Up of Assessments if Maximum Assessment Exceeded at Plat Prior to the City approving a final subdivision plat, the Administrator will certify that such plat will not result in the Assessment per Lot for any Lot Type to exceed the Maximum Assessment. If the Administrator determines that the resulting Assessment per Lot for any Lot Type will exceed the Maximum Assessment for that Lot Type, then (1) the Assessment applicable to each Lot Type shall each be reduced to the Maximum Assessment, and (2) the person or entity filing the plat shall pay to the City, or cause to be paid to the City, the amount the Assessment was reduced, SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 21 plus Prepayment Costs and Delinquent Collection Costs, if any, prior to the City approving the final plat. The City’s approval of a plat without payment of such amounts does not eliminate the obligation of the person or entity filing the plat to pay such amounts. At no time shall the aggregate Assessments for any Lot exceed the Maximum Assessment. D. Reduction of Assessments If as a result of cost savings or the failure to construct all or a portion of an Authorized Improvement the Actual Costs of any Authorized Improvements are less than the Assessments, then (i) in the event PID Bonds have not been issued for the purpose of financing Authorized Improvements affected by such reduction in Actual Costs, the City Council shall reduce each Assessment on a pro rata basis such that the sum of the resulting reduced Assessments for all Assessed Property equals the reduced Actual Costs that were expended, or (ii) in the event that PID Bonds have been issued for the purpose of financing Authorized Improvements affected by such reduction in Actual Costs, the Trustee shall apply amounts on deposit in the applicable account of the project fund created under the Indenture relating to such series of PID Bonds that are not expected to be used for the purposes of the project fund as directed by the City pursuant to the terms of such Indenture, and the TIRZ No. 9 Annual Credit Amount will be reduced in the same proportion as the Assessments. Such excess PID Bond proceeds may be used for any purpose authorized by such Indenture. The Assessments shall never be reduced to an amount less than the amount required to pay all outstanding debt service requirements on all outstanding PID Bonds. The Administrator shall update (and submit to the City Council for review and approval as part of the next Annual Service Plan Update) the Assessment Roll and corresponding Annual Installments to reflect the reduced Assessments. E. Prepayment of Assessments The owner of any Assessed Property may, at any time, pay all or any part of an Assessment in accordance with the PID Act. Prepayment Costs, if any, may be paid from a reserve established under the applicable Indenture. If an Annual Installment has been billed, or the Annual Service Plan Update has been approved by the City Council prior to the Prepayment, the Annual Installment shall be due and payable and shall be credited against the Prepayment. If an Assessment on an Assessed Property is prepaid in full, with Prepayment Costs, (1) the Administrator shall cause the Assessment to be reduced to zero on said Assessed Property and the Assessment Roll to be revised accordingly; (2) the Administrator shall prepare the revised Assessment Roll and submit such revised Assessment Roll to the City Council for review and approval as part of the next Annual Service Plan Update; (3) the obligation to pay the Assessment SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 22 and corresponding Annual Installments shall terminate with respect to said Assessed Property; and (4) the City shall provide the owner with a recordable "Notice of Assessment Termination.” If an Assessment on an Assessed Property is prepaid in part with Prepayment Costs: (1) the Administrator shall cause the Assessment to be reduced on said Assessed Property and the Assessment Roll revised accordingly; (2) the Administrator shall prepare the revised Assessment Roll and submit such revised Assessment Roll to the City Council for review and approval as part of the next Annual Service Plan Update; and (3) the obligation to pay the Assessment will be reduced to the extent of the Prepayment made. F. Payment of Assessment in Annual Installments Assessments that are not paid in full shall be due and payable in Annual Installments. Exhibit F-2 shows the estimated Improvement Area #1 Annual Installments. Annual Installments are subject to adjustment in each Annual Service Plan Update. Prior to the recording of a final subdivision plat, if any Parcel shown on the Assessment Roll is assigned multiple tax parcel identification numbers for billing and collection purposes, the Annual Installment shall be allocated pro rata based on the acreage of the Parcel not including any Non- Benefitted Property or Non-Assessed Property, as shown by the Collin Central Appraisal District for each tax parcel identification number. The Administrator shall prepare and submit to the City Council for its review and approval an Annual Service Plan Update to allow for the billing and collection of Annual Installments. Each Annual Service Plan Update shall include updated Assessment Rolls and updated calculations of Annual Installments. The Annual Collection Costs for a given Assessment shall be paid by the owner of each Parcel pro rata based on the ratio of the amount of outstanding Assessment remaining on the Parcel to the total outstanding Assessment. Annual Installments shall be reduced by any credits applied under an applicable Indenture, such as capitalized interest, interest earnings on account balances, and any other funds available to the Trustee for such purposes. Annual Installments shall be collected by the City in the same manner and at the same time as ad valorem taxes. Annual Installments shall be subject to the penalties, procedures, and foreclosure sale in case of delinquencies as set forth in the PID Act and in the same manner as ad valorem taxes due and owing to the City. To the extent permitted by the PID Act or other applicable law, the City Council may provide for other means of collecting Annual Installments, but in no case shall the City take any action, or fail to take any action, that would cause it to be in default under any Indenture. Assessments shall have the lien priority specified in the PID Act. Sales of the Assessed Property for nonpayment of Annual Installments shall be subject to the lien for the remaining unpaid Annual Installments against the Assessed Property, and the Assessed SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 23 Property may again be sold at a judicial foreclosure sale if the purchaser fails to timely pay any of the remaining unpaid Annual Installments as they become due and payable. The City reserves the right to refund PID Bonds in accordance with applicable law, including the PID Act. In the event of a refunding, the Administrator shall recalculate the Annual Installments so that total Annual Installments will be sufficient to pay the refunding bonds, and the refunding bonds shall constitute “PID Bonds.” Each Annual Installment of an Assessment, including interest on the unpaid principal of the Assessment, shall be updated annually. Each Annual Installment shall be due when billed and shall be delinquent if not paid prior to February 1 of the following year. Failure of an owner of an Assessed Property to receive an invoice for an Annual Installment shall not relieve said owner of the responsibility for payment of the Assessment. Assessments, or Annual Installments thereof, that are delinquent shall incur Delinquent Collection Costs. G. Prepayment as a Result of an Eminent Domain Proceeding or Taking Subject to applicable law, if any portion of any Parcel of Assessed Property is taken from an owner as a result of eminent domain proceedings or if a transfer of any portion of any Parcel of Assessed Property is made to an entity with the authority to condemn all or a portion of the Assessed Property in lieu of or as a part of an eminent domain proceeding (a “Taking”), the portion of the Assessed Property that was taken or transferred (the “Taken Property”) shall be reclassified as Non-Benefitted Property. For the Assessed Property that is subject to the Taking as described in the preceding paragraph, the Assessment that was levied against the Assessed Property (when it was included in the Taken Property) prior to the Taking shall remain in force against the remaining Assessed Property (the Assessed Property less the Taken Property) (the “Remaining Property”), following the reclassification of the Taken Property as Non-Benefitted Property, subject to an adjustment of the Assessment applicable to the Remaining Property after any required Prepayment as set forth below. The owner of the Remaining Property will remain liable to pay, pursuant to the terms of this Service and Assessment Plan, as updated, and the PID Act, the Assessment that remains due on the Remaining Property, subject to an adjustment in the Assessment applicable to the Remaining Property after any required Prepayment as set forth below. Notwithstanding the foregoing, if the Assessment that remains due on the Remaining Property exceeds the applicable Maximum Assessment, the owner of the Remaining Property will be required to make a Prepayment in an amount necessary to ensure that the Assessment against the Remaining Property does not exceed such Maximum Assessment, in which case the Assessment applicable to the Remaining Property will be reduced by the amount of the partial Prepayment. If the City SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 24 receives all or a portion of the eminent domain proceeds (or payment made in an agreed sale in lieu of condemnation), such amount shall be credited against the amount of Prepayment, with any remainder credited against the Assessment on the Remaining Property. In all instances the Assessment remaining on the Remaining Property shall not exceed the applicable Maximum Assessment. By way of illustration, if an owner owns 100 acres of Assessed Property subject to a $100 Assessment and 10 acres is taken through a Taking, the 10 acres of Taken Property shall be reclassified as Non-Benefitted Property and the remaining 90 acres constituting the Remaining Property shall be subject to the $100 Assessment (provided that this $100 Assessment does not exceed the Maximum Assessment on the Remaining Property). If the Administrator determines that the $100 Assessment reallocated to the Remaining Property would exceed the Maximum Assessment, as applicable, on the Remaining Property by $10, then the owner shall be required to pay $10 as a Prepayment of the Assessment against the Remaining Property and the Assessment on the Remaining Property shall be adjusted to $90. Notwithstanding the previous paragraphs in this subsection, if the owner of the Remaining Property notifies the City and the Administrator that the Taking prevents the Remaining Property from being developed for any use which could support the Estimated Buildout Value requirement, the owner shall, upon receipt of the compensation for the Taken Property, be required to prepay the amount of the Assessment required to buy down the outstanding Assessment to the applicable Maximum Assessment on the Remaining Property to support the Estimated Buildout Value requirement. The owner will remain liable to pay the Assessment on both the Taken Property and the Remaining Property until such time that such Assessment has been prepaid in full. Notwithstanding the previous paragraphs in this subsection, the Assessments shall never be reduced to an amount less than the amount required to pay all outstanding debt service requirements on all outstanding PID Bonds. SECTION VII: ASSESSMENT ROLL The Improvement Area #1 Assessment Roll is attached as Exhibit F-1. The Administrator shall prepare and submit to the City Council for review and approval proposed revisions to the Improvement Area #1 Assessment Roll and Improvement Area #1 Annual Installments for each Parcel as part of each Annual Service Plan Update. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 25 SECTION VIII: ADDITIONAL PROVISIONS A. Calculation Errors If the owner of a Parcel claims that an error has been made in any calculation required by this Service and Assessment Plan, including, but not limited to, any calculation made as part of any Annual Service Plan Update, the owner’s sole and exclusive remedy shall be to submit a written notice of error to the Administrator by December 1st of each year following City Council’s approval of the calculation. Otherwise, the owner shall be deemed to have unconditionally approved and accepted the calculation. The Administrator shall provide a written response to the City Council and the owner not later than 30 days after receipt of such written notice of error by the Administrator. The City Council shall consider the owner’s notice of error and the Administrator’s response at a public meeting, and, not later than 30 days after closing such meeting, the City Council shall make a final determination as to whether an error has been made. If the City Council determines that an error has been made, the City Council shall take such corrective action as is authorized by the PID Act, this Service and Assessment Plan, the applicable Assessment Ordinance, the applicable Indenture, or as otherwise authorized by the discretionary power of the City Council. The determination by the City Council as to whether an error has been made, and any corrective action taken by the City Council, shall be final and binding on the owner and the Administrator. B. Amendments Amendments to this Service and Assessment Plan must be made by the City Council in accordance with the PID Act. To the extent permitted by the PID Act, this Service and Assessment Plan may be amended without notice to owners of the Assessed Property: (1) to correct mistakes and clerical errors; (2) to clarify ambiguities; and (3) to provide procedures to collect Assessments, Annual Installments, and other charges imposed by this Service and Assessment Plan. C. Administration a nd Interpretation The Administrator shall: (1) perform the obligations of the Administrator as set forth in this Service and Assessment Plan; (2) administer the District for and on behalf of and at the direction of the City Council; and (3) interpret the provisions of this Service and Assessment Plan. Interpretations of this Service and Assessment Plan by the Administrator shall be in writing and shall be appealable to the City Council by owners of Assessed Property adversely affected by the interpretation. Appeals shall be decided by the City Council after holding a public meeting at which all interested parties have an opportunity to be heard. Decisions by the City Council shall SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 26 be final and binding on the owners of Assessed Property and developers and their successors and assigns. D. Form of Buyer Disclosure/Filing Requirements Per Section 5.014 of the Texas Property Code, as amended, this Service and Assessment Plan, and any future Annual Service Plan Updates, shall include a form of the buyer disclosures for the District. The buyer disclosures are attached hereto as Appendix B. Within seven days of approval by the City Council, the City shall file and record in the real property records of the County the executed ordinance of this Service and Assessment Plan, or any future Annual Service Plan Updates. The executed ordinance, including any attachments, approving this Service an Assessment Plan or any future Annual Service Plan Updates shall be filed and recorded in their entirety. E. Severability If any provision of this Service and Assessment Plan is determined by a governmental agency or court to be unenforceable, the unenforceable provision shall be deleted and, to the maximum extent possible, shall be rewritten to be enforceable. Every effort shall be made to enforce the remaining provisions. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 27 EXHIBITS The following Exhibits are attached to and made a part of this Service and Assessment Plan for all purposes: Exhibit A-1 Map of the District Exhibit A-2 Map of Improvement Area #1 Exhibit A-3 Improvement Area #1 Lot Type Classification Map Exhibit B Project Costs Exhibit C Service Plan Exhibit D Sources and Uses of Funds Exhibit E Maximum Assessment and Tax Rate Equivalent Exhibit F-1 Improvement Area #1 Assessment Roll Exhibit F-2 Improvement Area # 1 Annual Installments Exhibit G-1 Maps of Major Improvements Exhibit G-2 Maps of Improvement Area #1 Improvements Exhibit G-3 Maps of Trail Improvements Exhibit H TIRZ No. 9 Annual Credit Amount by Lot Type Exhibit I Form of Notice of Assessment Termination Exhibit J Debt Service Schedule for Improvement Area #1 Bonds Exhibit K-1 District Legal Description Exhibit K-2 Improvement Area #1 Legal Description SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 28 APPENDICES The following Appendices are attached to and made a part of this Service and Assessment Plan for all purposes: Appendix A Engineer’s Report Appendix B Buyer Disclosures SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 29 EXHIBIT A-1 – MAP OF THE DISTRICT SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 30 EXHIBIT A-2 – MAP OF IMPROVEMENT AREA #1 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 31 EXHIBIT A-3 - IMPROVEMENT AREA #1 LOT TYPE CLASSIFICATION MAP SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 32 EXHIBIT B – PROJECT COSTS % Cost Improvement Area #1 Improvements Streets 6,887,888$ -$ -$ 6,887,888$ 100% 6,887,888$ Water 2,285,898 - - 2,285,898 100% 2,285,898 Sewer 2,797,636 - - 2,797,636 100% 2,797,636 Storm Drainage 3,483,566 - - 3,483,566 100% 3,483,566 Right of Way[j]7,093,494 - - 7,093,494 100% 7,093,494 Soft Costs[i]4,925,023 - - 4,925,023 100% 4,925,023 27,473,505$ -$ -$ 27,473,505$ 27,473,505$ Major Improvements Improvement Area #1 Major Improvements Water 2,218,535$ -$ 2,218,535$ -$ 0.0% -$ Sewer 6,100,420 - 6,100,420 - 0.0% - Soft Costs 3,078,013 - 3,078,013 - 0.0% - 11,396,968$ -$ 11,396,968$ -$ -$ Private Improvements [b][e] Landscape/Hardscape/Trails[c][d]7,257,142$ 7,257,142$ -$ -$ 0.0% -$ Private Improvements 3,237,511 3,237,511 - - 0.0% - 10,494,653$ 10,494,653$ -$ -$ -$ Bond Issuance Costs [f] Debt Service Reserve Fund 2,482,455$ -$ -$ 2,482,455$ 2,482,455$ Capitalized Interest 1,131,667 - - 1,131,667 1,131,667 Underwriter Discount g 1,018,500 - - 1,018,500 1,018,500 Cost of Issuance 1,763,873 - - 1,763,873 1,763,873 6,396,495$ -$ -$ 6,396,495$ 6,396,495$ Other Costs [f] Deposit to Administrative Fund 80,000$ -$ -$ 80,000$ 80,000$ 80,000$ -$ -$ 80,000$ 80,000$ 55,841,622$ 10,494,653$ 11,396,968$ 33,950,000$ 33,950,000$ Footnotes: Privately Funded[b] District Eligible Improvements Total Costs[a]Impact Fee Eligible[h] [a] Per Engineer's Report attached hereto as Appendix A. [b] Not reimbursable to the Developer through Assessments or the issuance of PID Bonds. [c] Unless otherwise approved by the City Council, in the event PID Bonds are not issued, right-of-way acquisition, as defined in Section III.A, shall not be a reimbursable Authorized Improvement, but instead will be replaced by the Actual Costs of Landscape/Hardscape/Trail improvements. [d] Unless otherwise approved by the City Council, in the event PID Bonds are issued, the Landscape/Hardscape/Trail improvements, will be replaced by right-of-way acquisition, which right-of-way acquisition cost shall not exceed (i) the Actual Costs of Landscape/Hardscape/Trail improvements, and (ii) the fair market value supported by an independent appraisal as required by Section 252.051 of the Texas Local Government Code. [e] Does not include $8,235,358.44 of amenity center and development entry - monument costs. [f] Preliminary estimates only and subject to change upon the issuance of PID Bonds. [g] Includes the fee of counsel to the Underwriter. [h] Improvement Area #1 Major Improvements are improvements that benefit the entire District but are not anticipated to be reimbursed by PID Assessment Bonds. Future improvement areas will be added to the SAP as they are constructed with future improvement areas. [i] Soft Costs include bonds fees, contingency, engineering, testing, survey, and inspection fees. [j] Estimated right-of-way reimbursement to the Developer. Final amount of right-of-way will be determined by appraisal; however, overall bonds sizing provided by the City’s Financial Advisor’s debt service schedule. Improvement Area #1 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 33 % Cost Improvement Area #1 Improvements Streets[e]9,627,483$ -$ -$ 9,627,483$ 100% 9,627,483$ Water 2,285,898 - - 2,285,898 100% 2,285,898 Sewer 2,797,636 - - 2,797,636 100% 2,797,636 Storm Drainage 3,583,566 - - 3,583,566 100% 3,583,566 Right of Way[j]3,696,000 - - 3,696,000 100% 3,696,000 Soft Costs[i]5,588,068 - - 5,588,068 100% 5,588,068 27,578,651$ -$ -$ 27,578,651$ 27,578,651$ Major Improvements Improvement Area #1 Major Improvements Water 2,218,535$ -$ 2,218,535$ -$ 0.0% -$ Sewer 6,100,420 - 6,100,420 - 0.0% - Soft Costs 3,078,013 - 3,078,013 - 0.0% - 11,396,968$ -$ 11,396,968$ -$ -$ Private Improvements [b] Parkland Infrastructure/Hardscape/Trails[c][d]3,701,922$ 3,701,922$ -$ -$ 0.0% -$ Private Improvements 3,237,511 3,237,511 - - 0.0% - 6,939,433$ 6,939,433$ -$ -$ -$ Bond Issuance Costs [f] Debt Service Reserve Fund 2,482,455$ -$ -$ 2,482,455$ 2,482,455$ Capitalized Interest 1,131,667 - - 1,131,667 1,131,667 Underwriter Discount g 1,018,500 - - 1,018,500 1,018,500 Cost of Issuance 1,763,873 - - 1,763,873 1,763,873 6,396,495$ -$ -$ 6,396,495$ 6,396,495$ Other Costs [f] Deposit to Administrative Fund 80,000$ -$ -$ 80,000$ 80,000$ 80,000$ -$ -$ 80,000$ 80,000$ Total 52,391,548$ 6,939,433$ 11,396,968$ 34,055,146$ 34,055,146$ Footnotes: Total Costs[a]Impact Fee Eligible[h] [a] Per Engineer's Report attached hereto as Appendix A. [b] Not reimbursable to the Developer through Assessments or the issuance of PID Bonds. [c] Unless otherwise approved by the City Council, in the event PID Bonds are not issued, right-of-way acquisition, as defined in Section III.A, shall not be a reimbursable Authorized Improvement, but instead will be replaced by the Actual Costs of Parkland Infrastructure/Hardscape/Trails. [d] Unless otherwise approved by the City Council, in the event PID Bonds are issued, the Parkland Infrastructure/Hardscape/Trails, will be replaced by right-of-way acquisition, which right-of-way acquisition cost shall not exceed (i) the Actual Costs of Parkland Infrastructure/Hardscape/Trails, and (ii) the fair market value supported by an independent appraisal as required by Section 252.051 of the Texas Local Government Code. [e] Includes Mass Grading and Final Stabilization Methods. [f] Preliminary estimates only and subject to change upon the issuance of PID Bonds. [g] Includes the fee of counsel to the Underwriter. [h] Improvement Area #1 Major Improvements are improvements that benefit the entire District and shall be completed concurrently with the Improvement Area #1 Improvements, but are not anticipated to be reimbursed from Assessments or PID Bonds. Future Major Improvements shall be included in this Service and Assessment Plan as they are constructed with future Improvement Areas. [i] Soft Costs include bonds fees, contingency, engineering, testing, survey, and inspection fees. Improvement Area #1Privately Funded[b] District Eligible Improvements SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 34 EXHIBIT C – SERVICE PLAN Annual Installment Due 1/61/2026[b]1/31/2027 1/31/2028 1/31/2029 1/31/2030 1/31/2031 Principal -$ 403,000.00$ 428,000.00$ 455,000.00$ 484,000.00$ 514,000.00$ Interest 1,131,667.00 2,037,000.00 2,012,820.00 1,987,140.00 1,959,840.00 1,930,800.00 TIRZ No. 9 Annual Credit Amount[a]- - - - - - Capitalized Interest (1,131,667.00) - - - - - (1) -$ 2,440,000.00$ 2,440,820.00$ 2,442,140.00$ 2,443,840.00$ 2,444,800.00$ Additional Interest (2) -$ 169,750.00$ 167,735.00$ 165,595.00$ 163,320.00$ 160,900.00$ Annual Collection Costs (3) -$ 40,800.00$ 41,616.00$ 42,448.00$ 43,297.00$ 44,163.00$ Total Annual Installment Due (4) = (1) + (2) + (3)-$ 2,650,550.00$ 2,650,171.00$ 2,650,183.00$ 2,650,457.00$ 2,649,863.00$ Footnotes: [a] Each year, the TIRZ No. 9 Revenue generated by each Lot shall be applied to the principal and interest portion of the Annual Installment, up to the Maximum TIRZ No. 9 Annual Credit Amount. The TIRZ No. 9 Annual Credit Amount shall be updated each year in the Annual Service Plan Update as TIRZ No. 9 Revenue is generated. [b] No Assessment collected in 2026 and capitalized interest is contemplated from bond issuance to the 9/15/2026 debt service payment. Improvement Area #1 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 35 EXHIBIT D – SOURCES AND USES OF FUNDS Privately Funded Impact Fee Eligible Improvement Area #1 Total Improvement Area #1 Bonds -$ -$ 33,950,000$ 33,950,000$ Developer Contribution - Improvement Area #1[a]- - - - Eligible Infrastructure Grant[f]- 11,396,968 - 11,396,968 Developer Contribution - Landscape/Hardscape/Trails[a][b][c]7,257,142 - - 7,257,142 Developer Contribution - Private Improvements[a]3,237,511 - - 3,237,511 Total Sources of Funds 10,494,653$ 11,396,968$ 33,950,000$ 55,841,622$ Improvement Area #1 Major Improvements[f]-$ 11,396,968$ -$ 11,396,968 Improvement Area #1 Improvements - - 27,473,505 27,473,505 Landscape/Hardscape/Trails[a][b][c]7,257,142 - - 7,257,142 Private Improvements[a]3,237,511 - - 3,237,511 10,494,653$ 11,396,968$ 27,473,505$ 49,365,127$ Bond Issuance Costs [d] Debt Service Reserve Fund -$ -$ 2,482,455$ 2,482,455$ Capitalized Interest - - 1,131,667 1,131,667 Underwriter Discount[e]- - 1,018,500 1,018,500 Cost of Issuance - - 1,763,873 1,763,873 -$ -$ 6,396,495.00$ 6,396,495$ Other Costs [d] Deposit to Administrative Fund -$ -$ 80,000$ 80,000$ -$ -$ 80,000.00$ 80,000$ Total Uses of Funds 10,494,653$ 11,396,968$ 33,950,000$ 55,841,622$ Footnotes: [a] Not reimbursable to the Developer through Assessments or the issuance of PID Bonds. [b] Unless otherwise approved by the City Council, in the event PID Bonds are not issued, right-of-way acquisition, as defined in Section III.A, shall not be a reimbursable Authorized Improvement, but instead will be replaced by the Actual Costs of Landscape/Hardscape/Trail improvements. [c] Unless otherwise approved by the City Council, in the event PID Bonds are issued, the Landscape/Hardscape/Trail improvements, will be replaced by right-of-way acquisition, which right-of-way acquisition cost shall not exceed (i) the Actual Costs of Landscape/Hardscape/Trail improvements, and (ii) the fair market value supported by an independent appraisal as required by Section 252.051 of the Texas Local Government Code. [d] Preliminary estimates only and subject to change upon the issuance of PID Bonds. [e] Includes the fee of counsel to the Underwriter. [f] Improvement Area #1 Major Improvements are improvements that benefit the entire District but are not anticipated to be reimbursed by PID Assessment Bonds. Future improvement areas will be added to the SAP as they are constructed with future improvement areas. Sources of Funds Uses of Funds SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 36 Privately Funded Impact Fee Eligible Improvement Area #1 Total Improvement Area #1 Bonds -$ -$ 33,950,000$ 33,950,000$ Developer Contribution - Improvement Area #1[a]- - 105,146 105,146 Eligible Infrastructure Grant[f]- 11,396,968 - 11,396,968 Developer Contribution - Parkland Infrastructure/Hardscape/Trails[a][b][c]3,701,922 - - 3,701,922 Developer Contribution - Private Improvements[a]3,237,511 - - 3,237,511 Total Sources of Funds 6,939,433$ 11,396,968$ 34,055,146$ 52,391,548$ Improvement Area #1 Major Improvements[f]-$ 11,396,968$ -$ 11,396,968 Improvement Area #1 Improvements - - 27,578,651 27,578,651 Parkland Infrastructure/Hardscape/Trails[a][b][c]3,701,922 - - 3,701,922 Private Improvements[a]3,237,511 - - 3,237,511 6,939,433$ 11,396,968$ 27,578,651$ 45,915,053$ Bond Issuance Costs [d] Debt Service Reserve Fund -$ -$ 2,482,455$ 2,482,455$ Capitalized Interest - - 1,131,667 1,131,667 Underwriter Discount[e]- - 1,018,500 1,018,500 Cost of Issuance - - 1,763,873 1,763,873 -$ -$ 6,396,495.00$ 6,396,495$ Other Costs [d] Deposit to Administrative Fund -$ -$ 80,000$ 80,000$ -$ -$ 80,000.00$ 80,000$ Total Uses of Funds 6,939,433$ 11,396,968$ 34,055,146$ 52,391,548$ Footnotes: [a] Not reimbursable to the Developer through Assessments or the issuance of PID Bonds. [b] Unless otherwise approved by the City Council, in the event PID Bonds are not issued, right-of-way acquisition, as defined in Section III.A, shall not be a reimbursable Authorized Improvement, but instead will be replaced by the Actual Costs of Parkland Infrastructure/Hardscape/Trail improvements. [c] Unless otherwise approved by the City Council, in the event PID Bonds are issued, the Parkland Infrastructure/Hardscape/Trail improvements, will be replaced by right-of-way acquisition, which right-of-way acquisition cost shall not exceed (i) the Actual Costs of Parkland Infrastructure/Hardscape/Trail improvements, and (ii) the fair market value supported by an independent appraisal as required by Section 252.051 of the Texas Local Government Code. [d] Preliminary estimates only and subject to change upon the issuance of PID Bonds. [e] Includes the fee of counsel to the Underwriter. [f] Improvement Area #1 Major Improvements are improvements that benefit the entire District and shall be completed concurrently with the Improvement Area #1 Improvements, but are not anticipated to be reimbursed from Assessments or PID Bonds. Future Major Improvements shall be included in this Service and Assessment Plan as they are constructed with future Improvement Areas. Sources of Funds Uses of Funds SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 37 EXHIBIT E – MAXIMUM ASSESSMENT AND TAX RATE EQUIVALANT Per Unit Total Per Unit Total Per Unit Total Improvement Area #1 Lot Type 1 76 477,000$ 36,252,000$ 67,570$ 5,135,294$ 5,275$ 400,872$ 1.105792$ Lot Type 2 166 530,000 87,980,000 75,077 12,462,848 5,861 972,876 1.105792 Lot Type 3 143 636,000 90,948,000 90,093 12,883,282 7,033 1,005,696 1.105792 Lot Type 4 33 742,000 24,486,000 105,108 3,468,576 8,205 270,764 1.105792 Improvement Area #1 Subtotal 418 239,666,000$ 33,950,000$ 2,650,208$ 1.105792 Footnotes: [a] As provided by the Developer. [b] Subject to change based on the final Appraisal. [c] Does not include TIRZ No. 9 Annual Credit Amount. Lot Type Units[a]Gross PID TRE[c] Estimated Buildout Value[a]Assessment[b]Average Annual Installment SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 38 EXHIBIT F-1 – IMPROVEMENT AREA #1 ASSESSMENT ROLL Property ID[a]Lot Type Outstanding Assessment Annual Installment Due 1/31/2027 2937949 Improvement Area #1 Initial Parcel 33,950,000.00$ 2,650,550.00$ 33,950,000.00$ 2,650,550.00$ Footnotes: Total [a] The entire Improvement Area #1 is contained within Property ID 2937949. For billing purposes, the Annual Installment due 1/31/2027 shall be allocated pro rata based on acreage. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 39 EXHIBIT F-2 – IMPROVEMENT AREA #1 ANNUAL INSTALLMENTS Installment Due 1/31 Principal Interest[a]Capitalized Interest[c] Reserve Fund[d] Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2026 $ - 1,131,667$ (1,131,667)$ -$ $ - $ - -$ 2027 403,000$ 2,037,000$ -$ -$ 169,750$ 40,800$ 2,650,550$ 2028 428,000$ 2,012,820$ -$ -$ 167,735$ 41,616$ 2,650,171$ 2029 455,000$ 1,987,140$ -$ -$ 165,595$ 42,448$ 2,650,183$ 2030 484,000$ 1,959,840$ -$ -$ 163,320$ 43,297$ 2,650,457$ 2031 514,000$ 1,930,800$ -$ -$ 160,900$ 44,163$ 2,649,863$ 2032 547,000$ 1,899,960$ -$ -$ 158,330$ 45,046$ 2,650,336$ 2033 582,000$ 1,867,140$ -$ -$ 155,595$ 45,947$ 2,650,682$ 2034 618,000$ 1,832,220$ -$ -$ 152,685$ 46,866$ 2,649,771$ 2035 658,000$ 1,795,140$ -$ -$ 149,595$ 47,804$ 2,650,539$ 2036 699,000$ 1,755,660$ -$ -$ 146,305$ 48,760$ 2,649,725$ 2037 744,000$ 1,713,720$ -$ -$ 142,810$ 49,735$ 2,650,265$ 2038 791,000$ 1,669,080$ -$ -$ 139,090$ 50,730$ 2,649,900$ 2039 842,000$ 1,621,620$ -$ -$ 135,135$ 51,744$ 2,650,499$ 2040 895,000$ 1,571,100$ -$ -$ 130,925$ 52,779$ 2,649,804$ 2041 953,000$ 1,517,400$ -$ -$ 126,450$ 53,835$ 2,650,685$ 2042 1,013,000$ 1,460,220$ -$ -$ 121,685$ 54,911$ 2,649,816$ 2043 1,078,000$ 1,399,440$ -$ -$ 116,620$ 56,010$ 2,650,070$ 2044 1,147,000$ 1,334,760$ -$ -$ 111,230$ 57,130$ 2,650,120$ 2045 1,221,000$ 1,265,940$ -$ -$ 105,495$ 58,272$ 2,650,707$ 2046 1,299,000$ 1,192,680$ -$ -$ 99,390$ 59,438$ 2,650,508$ 2047 1,382,000$ 1,114,740$ -$ -$ 92,895$ 60,627$ 2,650,262$ 2048 1,471,000$ 1,031,820$ -$ -$ 85,985$ 61,839$ 2,650,644$ 2049 1,565,000$ 943,560$ -$ -$ 78,630$ 63,076$ 2,650,266$ 2050 1,665,000$ 849,660$ -$ -$ 70,805$ 64,337$ 2,649,802$ 2051 1,772,000$ 749,760$ -$ -$ 62,480$ 65,624$ 2,649,864$ 2052 1,886,000$ 643,440$ -$ -$ 53,620$ 66,937$ 2,649,997$ 2053 2,007,000$ 530,280$ -$ -$ 44,190$ 68,275$ 2,649,745$ 2054 2,137,000$ 409,860$ -$ -$ 34,155$ 69,641$ 2,650,656$ 2055 2,274,000$ 281,640$ -$ -$ 23,470$ 71,034$ 2,650,144$ 2056 2,420,000$ 145,200$ -$ (2,482,455)$ 12,100$ 72,454$ 2,649,754$ Total 33,950,000$ 40,523,640$ -$ (2,482,455)$ 3,376,970$ 1,655,175$ 79,505,785$ Footnotes: [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. [c] No Annual Installment shall be collected and capitalized interest is expected to fund the 9/15/2026 debt service payment. [d] Assumes Reserve Fund is fully funded and available to reduce Annual Installments in the final year. [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon PID Bond issuance. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 40 EXHIBIT G-1 – MAPS OF MAJOR IMPROVEMENTS SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 41 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 42 EXHIBIT G-2 – MAPS OF IMPROVEMENT AREA #1 IMPROVEMENTS SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 43 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 44 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 45 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 46 EXHIBIT G-3 - MAPS OF TRAIL IMPROVEMENTS SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 47 EXHIBIT H – TIRZ NO. 9 ANNUAL CREDIT AMOUNT BY LOT TYPE Improvement Area #1 Lot Type 1 (45') 76 1.105792 (1,252.30)$ 0.843256$ 2.838792$ Lot Type 2 (50') 166 1.105792 (1,391.44)$ 0.843256$ 2.838792$ Lot Type 3 (60') 143 1.105792 (1,669.73)$ 0.843256$ 2.838792$ Lot Type 4 (70') 33 1.105792 (1,948.02)$ 0.843256$ 2.838792$ Improvement Area #1 418 Footnotes: [a] Per information provided by the Developer. [b] To be determined at the time of PID Bond issuance; based on information provided by the Developer as to Estimated Buildout Value. Lot Type Units[a]Gross TRE Maximum Annual TIRZ Credit Amount[b]Net TRE Net Tax Stack SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 48 EXHIBIT I – FORM OF NOTICE OF ASSESSMENT TERMINATION P3Works, LLC 9284 Huntington Square, Suite 100 North Richland Hills, TX 76182 ______________________________________________________________________________ [Date] Collin County Clerk’s Office Honorable [County Clerk] Collin County Administration Building 2300 Bloomdale Rd, Suite 2106 McKinney, TX 75071 Re: City of Anna Lien Release documents for filing Dear Ms./Mr. [County Clerk] Enclosed is a lien release that the City of Anna is requesting to be filed in your office. Lien release for [insert legal description]. Recording Numbers: [Plat]. Please forward copies of the filed documents to my attention: City of Anna Attn: City Secretary 120 W. 7th Street Anna, TX 75409 Please contact me if you have any questions or need additional information. Sincerely, [Signature] P3Works, LLC (817) 393-0353 Admin@P3-Works.com www.P3-Works.com SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 49 AFTER RECORDING RETURN TO: [City Secretary Name] 120 W. 7th Street Anna, TX 75409 NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. FULL RELEASE OF PUBLIC IMPROVEMENT DISTRICT LIEN STATE OF TEXAS § § KNOWN ALL MEN BY THESE PRESENTS: COUNTY OF COLLIN § THIS FULL RELEASE OF PUBLIC IMPROVEMENT DISTRICT LIEN (this "Full Release") is executed and delivered as of the Effective Date by the City of Anna, Texas, a Texas home rule municipality (the “City”). RECITALS WHEREAS, the governing body (hereinafter referred to as the "City Council” of Anna, Texas is authorized by Chapter 372, Texas Local Government Code, as amended (hereinafter referred to as the "Act"), to create public improvement districts within the corporate limits of the City; and WHEREAS, on March 25, 2025 the City Council of the City approved Resolution No. 2025- 03-1753 creating the Sherley Farms Public Improvement District (the “District”); and WHEREAS, the District consists of approximately 1,123.592 contiguous acres within the corporate limits of the City; and WHEREAS, on ____________, the City Council, approved Ordinance No. __________, (hereinafter referred to as the "Assessment Ordinance") approving a service and assessment plan and assessment roll for the real property located with the District, the Assessment Ordinance being recorded on _____________, as Instrument No. ________ in the Official Public Records of Collin County, Texas; and WHEREAS, the Assessment Ordinance imposed an assessment in the amount of [amount] (hereinafter referred to as the "Lien Amount") and further imposed a lien to secure the payment of the Lien Amount (the “Lien”) against the following property located within the District, to wit: SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 50 [legal description], an addition to the City of Anna, Collin County, Texas, according to the map or plat thereof recorded as Instrument No. ________ in the Map Records of Collin County, Texas (the "Property"); and WHEREAS, the Lien Amount has been paid in full. RELEASE NOW THEREFORE, for and in consideration of the full payment of the Lien Amount, the City hereby releases and discharges, and by these presents does hereby release and discharge, the Lien to the extent that is affects and encumbers the Property. EXECUTED to be EFFECTIVE this the _____ day of _________, 20__. CITY OF ANNA, TEXAS, A Texas home rule municipality, By: _______________________________ [Manager Name], City Manager ATTEST: _______________________________ [Secretary Name], City Secretary STATE OF TEXAS § § COUNTY OF COLLIN § This instrument was acknowledged before me on the ____ day of ________, 20__, by the City Manager for the City of Anna, Texas, a Texas home rule municipality, on behalf of said municipality. _______________________________ Notary Public, State of Texas SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 51 EXHIBIT J – DEBT SERVICE SCHEDULE FOR IMPROVEMENT AREA #1 BONDS [To be provided at PID Bond pricing.] SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 52 EXHIBIT K-1 – DISTRICT LEGAL DESCRIPTION SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 53 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 54 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 55 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 56 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 57 EXHIBIT K-2 – IMPROVEMENT AREA #1 LEGAL DESCRIPTION PHASE 1 METES AND BOUNDS DESCRIPTION BEING a tract of land situated in the G. Morrison Survey, Abstract No. 559, and the S. Moore Survey, Abstract No. 625, in Collin County, Texas, being part of Tracts 1.1, 1.3, and 1.4, recorded in Volume 4466, Page 153, Deed Records, Collin County, Texas (DRCCT), and part of Tract 1.1, recorded in Volume 4466, Page 183 DRCCT, and all of Tract 1.2, recorded in Volume 4466, Page 201, DRCCT, with the subject tract being more particularly described as follows: BEGINNING at a 1/2" iron rod with plastic cap stamped "SPIARSENG" set along the south line of Farm to Market Road 2862, a 90-foot-wide right-of-way, from which a 1/2" iron rod found bears N 84°54'26" W, 1658.47 feet for the southeast corner of the "Second Tract" conveyed to Daniel W. Koen and Sue Ann Burleson-Koen, recorded in Document No. 93-0107055 DRCCT; THENCE S 87°35'00" E, 3.15 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 87°54'00" E, 852.06 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 88°23'00" E, 1005.18 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the left having a central angle of 61°39'58", a radius of 363.31 feet, a chord of N 60°47'01" E - 372.42 feet, an arc length of 391.02 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set on the west line of a tract conveyed to Larry Kropman Bennett and Jill Rae Bennett, recorded in Volume 1718, Page 193 DRCCT; THENCE S 02°42'15" W, 147.06 feet along the west line thereof to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 88°34'52" E, along the south line of said Bennett tract, passing at 317.47 feet a 3/8" iron rod found for the southeast corner thereof, being the southwest corner of a tract described in deed recorded in Document No. 20160209000150410 OPRCCT, and continuing along the south line thereof a total distance of 673.49 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 19°13'14" E, 988.05 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 58 THENCE around a non-tangent curve to the right having a central angle of 31°18'08", a radius of 1355.00 feet, a chord of S 38°55'42" W - 731.10 feet, an arc length of 740.27 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 54°34'46" W, 675.31 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the left having a central angle of 8°25'51", a radius of 2545.00 feet, a chord of S 50°21'50" W - 374.15 feet, an arc length of 374.49 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a compound curve to the left having a central angle of 1°21'02", a radius of 1545.00 feet, a chord of S 45°28'23" W - 36.42 feet, an arc length of 36.42 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 47°52'56" W, 117.77 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 63°22'52" W, 674.62 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 26°37'08" W, 490.25 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 63°19'59" W, 296.01 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 26°37'08" W, 130.00 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 63°22'52" W, 268.53 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the left having a central angle of 36°00'21", a radius of 95.00 feet, a chord of N 81°23'03" W - 58.72 feet, an arc length of 59.70 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE S 80°36'47" W, 80.83 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the left having a central angle of 7°19'45", a radius of 345.00 feet, a chord of S 76°56'54" W - 44.10 feet, an arc length of 44.13 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 59 THENCE S 52°52'29" W, 50.00 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a non-tangent curve to the right having a central angle of 33°46'17", a radius of 850.00 feet, a chord of N 20°14'22" W - 493.79 feet, an arc length of 501.01 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 03°21'14" W, 51.20 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 87°03'38" W, 802.11 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a non-tangent curve to the right having a central angle of 09°05'47", a radius of 1,245 feet, a chord of N 63°23'05" E - 197.45 feet, an arc length of 197.66 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a reverse curve to the left having a central angle of 05°45'11", a radius of 1245.00 feet, a chord of N 65°03'23" E - 124.96 feet, an arc length of 125.01 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 62°10'47" E, 501.95 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the left having a central angle of 24°42'42", a radius of 780.00 feet, a chord of N 49°49'26" E - 333.81 feet, an arc length of 336.41 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a compound curve to the left having a central angle of 43°38'06", a radius of 365.00 feet, a chord of N 15°33'38" E - 271.31 feet, an arc length of 277.98 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a non-tangent curve to the right having a central angle of 98°57'03", a radius of 71.50 feet, a chord of N 80°15'05" W - 108.70 feet, an arc length of 123.48 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 30°46'33" W, 84.43 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 25°05'59" W, 115.10 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE around a tangent curve to the right having a central angle of 62°31'41", a radius of 379.50 feet, a chord of N 06°09'52" E - 393.91 feet, an arc length of 414.16 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 60 THENCE around a reverse curve to the left having a central angle of 04°49'49", a radius of 220.50 feet, a chord of N 35°00'48" E - 18.58 feet, an arc length of 18.59 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 87°54'00" W, 104.75 feet to a 1/2" iron rod with plastic cap stamped "SPIARSENG" set; THENCE N 02°06'00" E 150.02 feet to the POINT OF BEGINNING, with the subject tract containing 5,880,591 square feet or 135.00 acres of land. SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 61 APPENDIX A – ENGINEER’S REPORT [To be provided on final pricing.][Developer to Provide.] SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT PRELIMINARY SERVICE AND ASSESSMENT PLAN 62 APPENDIX B – BUYER DISCLOSURES Forms of the buyer disclosures for the following Lot Types are found in this appendix: Improvement Area #1  Initial Parcel  Lot Type 1  Lot Type 2  Lot Type 3  Lot Type 4 [Remainder of page left intentionally blank.] SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT - IMPROVEMENT AREA #1 INITIAL PARCEL BUYER DISCLOSURE NOTICE OF OBLIGATIONS RELATED TO PUBLIC IMPROVEMENT DISTRICT A person who proposes to sell or otherwise convey real property that is located in a public improvement district established under Subchapter A, Chapter 372, Local Government Code (except for public improvement districts described under Section 372.005), or Chapter 382, Local Government Code, shall first give to the purchaser of the property this written notice, signed by the seller. For the purposes of this notice, a contract for the purchase and sale of real property having a performance period of less than six months is considered a sale requiring the notice set forth below. This notice requirement does not apply to a transfer: 1) under a court order or foreclosure sale; 2) by a trustee in bankruptcy; 3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest; 4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure; 5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; 6) from one co-owner to another co-owner of an undivided interest in the real property; 7) to a spouse or a person in the lineal line of consanguinity of the seller; 8) to or from a governmental entity; or 9) of only a mineral interest, leasehold interest, or security interest The following notice shall be given to a prospective purchaser before the execution of a binding contract of purchase and sale, either separately or as an addendum or paragraph of a purchase contract. In the event a contract of purchase and sale is entered into without the seller having provided the required notice, the purchaser, subject to certain exceptions, is entitled to terminate the contract. A separate copy of this notice shall be executed by the seller and the purchaser and must be filed in the real property records of the county in which the property is located at the closing of the purchase and sale of the property. AFTER RECORDING1 RETURN TO: ____________________ ____________________ ____________________ ____________________ ____________________ NOTICE OF OBLIGATION TO PAY IMPROVEMENT DISTRICT ASSESSMENT TO CITY OF ANNA, TEXAS CONCERNING THE FOLLOWING PROPERTY __________________________________________ STREET ADDRESS IMPROVEMENT AREA #1 INITIAL PARCEL PRINCIPAL ASSESSMENT: $33,950,000.00 As the purchaser of the real property described above, you are obligated to pay assessments to City of Anna, Texas, for the costs of a portion of a public improvement or services project (the "Authorized Improvements") undertaken for the benefit of the property within Sherley Farms Public Improvement District (the "District") created under Subchapter A, Chapter 372, Local Government Code. AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE COSTS, AND DELINQUENCY COSTS. The exact amount of the assessment may be obtained from the City of Anna. The exact amount of each annual installment will be approved each year by the Anna City Council in the annual service plan update for the District. More information about the assessments, including the amounts and due dates, may be obtained from City of Anna. Your failure to pay any assessment or any annual installment may result in penalties and interest being added to what you owe or in a lien on and the foreclosure of your property. _________________ 1 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County when updating for the Current Information of Obligation to Pay Improvement District Assessment. Signature Page to Initial Notice of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. DATE: DATE: SIGNATURE OF PURCHASER SIGNATURE OF PURCHASER The undersigned seller acknowledges providing this notice to the potential purchaser before the effective date of a binding contract for the purchase of the real property at the address described above. DATE: DATE: SIGNATURE OF SELLER SIGNATURE OF SELLER]2 ______________ 2 To be included in copy of the notice required by Section 5.014, Tex. Prop. Code, to be executed by seller in accordance with Section 5.014(a-1), Tex. Prop. Code. Purchaser Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned purchaser acknowledged the receipt of this notice including the current information required by Section 5.0143, Texas Property Code, as amended. DATE: DATE: SIGNATURE OF PURCHASER SIGNATURE OF PURCHASER STATE OF TEXAS § § COUNTY OF _______ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]3 ______________ 3 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Seller Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned seller acknowledges providing a separate copy of the notice required by Section 5.014 of the Texas Property Code including the current information required by Section 5.0143, Texas Property Code, as amended, at the closing of the purchase of the real property at the address above. DATE: DATE: SIGNATURE OF SELLER SIGNATURE OF SELLER STATE OF TEXAS § § COUNTY OF ________ § The foregoing instrument was acknowledged before me by ______________________ and ____________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________, 20__. Notary Public, State of Texas]4 ______________ 4 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Annual Installment Schedule to Notice of Obligation to Pay Improvement District Assessment Installment Due 1/31 Principal Interest[a]Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2027 403,000$ 2,037,000$ 169,750$ 40,800$ 2,650,550$ 2028 428,000$ 2,012,820$ 167,735$ 41,616$ 2,650,171$ 2029 455,000$ 1,987,140$ 165,595$ 42,448$ 2,650,183$ 2030 484,000$ 1,959,840$ 163,320$ 43,297$ 2,650,457$ 2031 514,000$ 1,930,800$ 160,900$ 44,163$ 2,649,863$ 2032 547,000$ 1,899,960$ 158,330$ 45,046$ 2,650,336$ 2033 582,000$ 1,867,140$ 155,595$ 45,947$ 2,650,682$ 2034 618,000$ 1,832,220$ 152,685$ 46,866$ 2,649,771$ 2035 658,000$ 1,795,140$ 149,595$ 47,804$ 2,650,539$ 2036 699,000$ 1,755,660$ 146,305$ 48,760$ 2,649,725$ 2037 744,000$ 1,713,720$ 142,810$ 49,735$ 2,650,265$ 2038 791,000$ 1,669,080$ 139,090$ 50,730$ 2,649,900$ 2039 842,000$ 1,621,620$ 135,135$ 51,744$ 2,650,499$ 2040 895,000$ 1,571,100$ 130,925$ 52,779$ 2,649,804$ 2041 953,000$ 1,517,400$ 126,450$ 53,835$ 2,650,685$ 2042 1,013,000$ 1,460,220$ 121,685$ 54,911$ 2,649,816$ 2043 1,078,000$ 1,399,440$ 116,620$ 56,010$ 2,650,070$ 2044 1,147,000$ 1,334,760$ 111,230$ 57,130$ 2,650,120$ 2045 1,221,000$ 1,265,940$ 105,495$ 58,272$ 2,650,707$ 2046 1,299,000$ 1,192,680$ 99,390$ 59,438$ 2,650,508$ 2047 1,382,000$ 1,114,740$ 92,895$ 60,627$ 2,650,262$ 2048 1,471,000$ 1,031,820$ 85,985$ 61,839$ 2,650,644$ 2049 1,565,000$ 943,560$ 78,630$ 63,076$ 2,650,266$ 2050 1,665,000$ 849,660$ 70,805$ 64,337$ 2,649,802$ 2051 1,772,000$ 749,760$ 62,480$ 65,624$ 2,649,864$ 2052 1,886,000$ 643,440$ 53,620$ 66,937$ 2,649,997$ 2053 2,007,000$ 530,280$ 44,190$ 68,275$ 2,649,745$ 2054 2,137,000$ 409,860$ 34,155$ 69,641$ 2,650,656$ 2055 2,274,000$ 281,640$ 23,470$ 71,034$ 2,650,144$ 2056 2,420,000$ 145,200$ 12,100$ 72,454$ 2,649,754$ Total 33,950,000$ 40,523,640$ 3,376,970$ 1,655,175$ 79,505,785$ Footnotes: [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon ANNUAL INSTALLMENTS - IMPROVEMENT AREA #1 INITIAL PARCEL SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT - IMPROVEMENT AREA #1 LOT TYPE 1 BUYER DISCLOSURE NOTICE OF OBLIGATIONS RELATED TO PUBLIC IMPROVEMENT DISTRICT A person who proposes to sell or otherwise convey real property that is located in a public improvement district established under Subchapter A, Chapter 372, Local Government Code (except for public improvement districts described under Section 372.005), or Chapter 382, Local Government Code, shall first give to the purchaser of the property this written notice, signed by the seller. For the purposes of this notice, a contract for the purchase and sale of real property having a performance period of less than six months is considered a sale requiring the notice set forth below. This notice requirement does not apply to a transfer: 1) under a court order or foreclosure sale; 2) by a trustee in bankruptcy; 3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest; 4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure; 5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; 6) from one co-owner to another co-owner of an undivided interest in the real property; 7) to a spouse or a person in the lineal line of consanguinity of the seller; 8) to or from a governmental entity; or 9) of only a mineral interest, leasehold interest, or security interest The following notice shall be given to a prospective purchaser before the execution of a binding contract of purchase and sale, either separately or as an addendum or paragraph of a purchase contract. In the event a contract of purchase and sale is entered into without the seller having provided the required notice, the purchaser, subject to certain exceptions, is entitled to terminate the contract. A separate copy of this notice shall be executed by the seller and the purchaser and must be filed in the real property records of the county in which the property is located at the closing of the purchase and sale of the property. AFTER RECORDING1 RETURN TO: ____________________ ____________________ ____________________ ____________________ ____________________ NOTICE OF OBLIGATION TO PAY IMPROVEMENT DISTRICT ASSESSMENT TO CITY OF ANNA, TEXAS CONCERNING THE FOLLOWING PROPERTY __________________________________________ STREET ADDRESS IMPROVEMENT AREA #1 LOT TYPE 1 PRINCIPAL ASSESSMENT: $67,569.66 As the purchaser of the real property described above, you are obligated to pay assessments to City of Anna, Texas, for the costs of a portion of a public improvement or services project (the "Authorized Improvements") undertaken for the benefit of the property within Sherley Farms Public Improvement District (the "District") created under Subchapter A, Chapter 372, Local Government Code. AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE COSTS, AND DELINQUENCY COSTS. The exact amount of the assessment may be obtained from the City of Anna. The exact amount of each annual installment will be approved each year by the Anna City Council in the annual service plan update for the District. More information about the assessments, including the amounts and due dates, may be obtained from City of Anna. Your failure to pay any assessment or any annual installment may result in penalties and interest being added to what you owe or in a lien on and the foreclosure of your property. _________________ 1 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County when updating for the Current Information of Obligation to Pay Improvement District Assessment. Signature Page to Initial Notice of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. DATE: DATE: SIGNATURE OF PURCHASER SIGNATURE OF PURCHASER The undersigned seller acknowledges providing this notice to the potential purchaser before the effective date of a binding contract for the purchase of the real property at the address described above. DATE: DATE: SIGNATURE OF SELLER SIGNATURE OF SELLER]2 ______________ 2 To be included in copy of the notice required by Section 5.014, Tex. Prop. Code, to be executed by seller in accordance with Section 5.014(a-1), Tex. Prop. Code. Purchaser Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned purchaser acknowledged the receipt of this notice including the current information required by Section 5.0143, Texas Property Code, as amended. DATE: DATE: SIGNATURE OF PURCHASER SIGNATURE OF PURCHASER STATE OF TEXAS § § COUNTY OF _______ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]3 ______________ 3 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Seller Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned seller acknowledges providing a separate copy of the notice required by Section 5.014 of the Texas Property Code including the current information required by Section 5.0143, Texas Property Code, as amended, at the closing of the purchase of the real property at the address above. DATE: DATE: SIGNATURE OF SELLER SIGNATURE OF SELLER STATE OF TEXAS § § COUNTY OF ________ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]4 ______________ 4 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Annual Installment Schedule to Notice of Obligation to Pay Improvement District Assessment Annual Installment Due 1/31 Principal Interest[a]Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2027 802.08$ 4,054.18$ 337.85$ 81.20$ 5,275.31$ 2028 851.84$ 4,006.05$ 333.84$ 82.83$ 5,274.56$ 2029 905.57$ 3,954.94$ 329.58$ 84.48$ 5,274.58$ 2030 963.29$ 3,900.61$ 325.05$ 86.17$ 5,275.12$ 2031 1,023.00$ 3,842.81$ 320.23$ 87.90$ 5,273.94$ 2032 1,088.68$ 3,781.43$ 315.12$ 89.65$ 5,274.88$ 2033 1,158.34$ 3,716.11$ 309.68$ 91.45$ 5,275.57$ 2034 1,229.99$ 3,646.61$ 303.88$ 93.28$ 5,273.76$ 2035 1,309.60$ 3,572.81$ 297.73$ 95.14$ 5,275.29$ 2036 1,391.20$ 3,494.24$ 291.19$ 97.05$ 5,273.67$ 2037 1,480.76$ 3,410.77$ 284.23$ 98.99$ 5,274.74$ 2038 1,574.30$ 3,321.92$ 276.83$ 100.97$ 5,274.02$ 2039 1,675.81$ 3,227.46$ 268.96$ 102.98$ 5,275.21$ 2040 1,781.29$ 3,126.91$ 260.58$ 105.04$ 5,273.82$ 2041 1,896.73$ 3,020.04$ 251.67$ 107.15$ 5,275.58$ 2042 2,016.14$ 2,906.23$ 242.19$ 109.29$ 5,273.85$ 2043 2,145.51$ 2,785.26$ 232.11$ 111.48$ 5,274.35$ 2044 2,282.84$ 2,656.53$ 221.38$ 113.70$ 5,274.45$ 2045 2,430.12$ 2,519.56$ 209.96$ 115.98$ 5,275.62$ 2046 2,585.36$ 2,373.75$ 197.81$ 118.30$ 5,275.23$ 2047 2,750.55$ 2,218.63$ 184.89$ 120.66$ 5,274.74$ 2048 2,927.69$ 2,053.60$ 171.13$ 123.08$ 5,275.50$ 2049 3,114.77$ 1,877.94$ 156.49$ 125.54$ 5,274.74$ 2050 3,313.80$ 1,691.05$ 140.92$ 128.05$ 5,273.82$ 2051 3,526.76$ 1,492.22$ 124.35$ 130.61$ 5,273.94$ 2052 3,753.65$ 1,280.62$ 106.72$ 133.22$ 5,274.21$ 2053 3,994.47$ 1,055.40$ 87.95$ 135.89$ 5,273.71$ 2054 4,253.21$ 815.73$ 67.98$ 138.60$ 5,275.52$ 2055 4,525.87$ 560.54$ 46.71$ 141.38$ 5,274.50$ 2056 4,816.45$ 288.99$ 24.08$ 144.20$ 5,273.73$ Total 67,569.66$ 80,652.98$ 6,721.08$ 3,294.24$ 158,237.96$ Footnotes: [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon PID Bond issuance. [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. ANNUAL INSTALLMENTS - IMPROVEMENT AREA #1 LOT TYPE 1 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT - IMPROVEMENT AREA #1 LOT TYPE 2 BUYER DISCLOSURE NOTICE OF OBLIGATIONS RELATED TO PUBLIC IMPROVEMENT DISTRICT A person who proposes to sell or otherwise convey real property that is located in a public improvement district established under Subchapter A, Chapter 372, Local Government Code (except for public improvement districts described under Section 372.005), or Chapter 382, Local Government Code, shall first give to the purchaser of the property this written notice, signed by the seller. For the purposes of this notice, a contract for the purchase and sale of real property having a performance period of less than six months is considered a sale requiring the notice set forth below. This notice requirement does not apply to a transfer: 1) under a court order or foreclosure sale; 2) by a trustee in bankruptcy; 3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest; 4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure; 5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; 6) from one co-owner to another co-owner of an undivided interest in the real property; 7) to a spouse or a person in the lineal line of consanguinity of the seller; 8) to or from a governmental entity; or 9) of only a mineral interest, leasehold interest, or security interest The following notice shall be given to a prospective purchaser before the execution of a binding contract of purchase and sale, either separately or as an addendum or paragraph of a purchase contract. In the event a contract of purchase and sale is entered into without the seller having provided the required notice, the purchaser, subject to certain exceptions, is entitled to terminate the contract. A separate copy of this notice shall be executed by the seller and the purchaser and must be filed in the real property records of the county in which the property is located at the closing of the purchase and sale of the property. AFTER RECORDING1 RETURN TO: ____________________ ____________________ ____________________ ____________________ ____________________ NOTICE OF OBLIGATION TO PAY IMPROVEMENT DISTRICT ASSESSMENT TO CITY OF ANNA, TEXAS CONCERNING THE FOLLOWING PROPERTY __________________________________________ STREET ADDRESS IMPROVEMENT AREA #1 LOT TYPE 2 PRINCIPAL ASSESSMENT: $75,077.40 As the purchaser of the real property described above, you are obligated to pay assessments to City of Anna, Texas, for the costs of a portion of a public improvement or services project (the "Authorized Improvements") undertaken for the benefit of the property within Sherley Farms Public Improvement District (the "District") created under Subchapter A, Chapter 372, Local Government Code. AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE COSTS, AND DELINQUENCY COSTS. The exact amount of the assessment may be obtained from the City of Anna. The exact amount of each annual installment will be approved each year by the Anna City Council in the annual service plan update for the District. More information about the assessments, including the amounts and due dates, may be obtained from City of Anna. Your failure to pay any assessment or any annual installment may result in penalties and interest being added to what you owe or in a lien on and the foreclosure of your property. _________________ 1 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County when updating for the Current Information of Obligation to Pay Improvement District Assessment. Signature Page to Initial Notice of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. DATE: DATE: SIGNATURE OF PURCHASER SIGNATURE OF PURCHASER The undersigned seller acknowledges providing this notice to the potential purchaser before the effective date of a binding contract for the purchase of the real property at the address described above. DATE: DATE: SIGNATURE OF SELLER SIGNATURE OF SELLER]2 ______________ 2 To be included in copy of the notice required by Section 5.014, Tex. Prop. Code, to be executed by seller in accordance with Section 5.014(a-1), Tex. Prop. Code. Purchaser Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned purchaser acknowledged the receipt of this notice including the current information required by Section 5.0143, Texas Property Code, as amended. DATE: DATE: SIGNATURE OF PURCHASER SIGNATURE OF PURCHASER STATE OF TEXAS § § COUNTY OF _______ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]3 ______________ 3 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Seller Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned seller acknowledges providing a separate copy of the notice required by Section 5.014 of the Texas Property Code including the current information required by Section 5.0143, Texas Property Code, as amended, at the closing of the purchase of the real property at the address above. DATE: DATE: SIGNATURE OF SELLER SIGNATURE OF SELLER STATE OF TEXAS § § COUNTY OF ________ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]4 ______________ 4 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Annual Installment Schedule to Notice of Obligation to Pay Improvement District Assessment Annual Installment Due 1/31 Principal Interest[a]Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2027 891.20$ 4,504.64$ 375.39$ 90.23$ 5,861.46$ 2028 946.48$ 4,451.17$ 370.93$ 92.03$ 5,860.62$ 2029 1,006.19$ 4,394.38$ 366.20$ 93.87$ 5,860.64$ 2030 1,070.32$ 4,334.01$ 361.17$ 95.75$ 5,861.25$ 2031 1,136.67$ 4,269.79$ 355.82$ 97.66$ 5,859.94$ 2032 1,209.64$ 4,201.59$ 350.13$ 99.62$ 5,860.98$ 2033 1,287.04$ 4,129.01$ 344.08$ 101.61$ 5,861.75$ 2034 1,366.65$ 4,051.79$ 337.65$ 103.64$ 5,859.73$ 2035 1,455.11$ 3,969.79$ 330.82$ 105.71$ 5,861.43$ 2036 1,545.78$ 3,882.49$ 323.54$ 107.83$ 5,859.63$ 2037 1,645.29$ 3,789.74$ 315.81$ 109.98$ 5,860.82$ 2038 1,749.23$ 3,691.02$ 307.59$ 112.18$ 5,860.02$ 2039 1,862.01$ 3,586.07$ 298.84$ 114.43$ 5,861.34$ 2040 1,979.21$ 3,474.35$ 289.53$ 116.72$ 5,859.81$ 2041 2,107.47$ 3,355.59$ 279.63$ 119.05$ 5,861.75$ 2042 2,240.16$ 3,229.15$ 269.10$ 121.43$ 5,859.83$ 2043 2,383.90$ 3,094.74$ 257.89$ 123.86$ 5,860.39$ 2044 2,536.49$ 2,951.70$ 245.98$ 126.34$ 5,860.50$ 2045 2,700.13$ 2,799.51$ 233.29$ 128.86$ 5,861.80$ 2046 2,872.62$ 2,637.51$ 219.79$ 131.44$ 5,861.36$ 2047 3,056.17$ 2,465.15$ 205.43$ 134.07$ 5,860.82$ 2048 3,252.99$ 2,281.78$ 190.15$ 136.75$ 5,861.66$ 2049 3,460.86$ 2,086.60$ 173.88$ 139.49$ 5,860.83$ 2050 3,682.00$ 1,878.95$ 156.58$ 142.28$ 5,859.80$ 2051 3,918.62$ 1,658.03$ 138.17$ 145.12$ 5,859.94$ 2052 4,170.72$ 1,422.91$ 118.58$ 148.03$ 5,860.23$ 2053 4,438.30$ 1,172.67$ 97.72$ 150.98$ 5,859.67$ 2054 4,725.79$ 906.37$ 75.53$ 154.00$ 5,861.69$ 2055 5,028.75$ 622.82$ 51.90$ 157.09$ 5,860.56$ 2056 5,351.61$ 321.10$ 26.76$ 160.23$ 5,859.69$ Total 75,077.40$ 89,614.42$ 7,467.87$ 3,660.27$ 175,819.96$ Footnotes: [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon PID Bond issuance. [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. ANNUAL INSTALLMENTS - IMPROVEMENT AREA #1 LOT TYPE 2 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT IMPROVEMENT AREA #1 LOT TYPE 3 BUYER DISCLOSURE NOTICE OF OBLIGATIONS RELATED TO PUBLIC IMPROVEMENT DISTRICT A person who proposes to sell or otherwise convey real property that is located in a public improvement district established under Subchapter A, Chapter 372, Local Government Code (except for public improvement districts described under Section 372.005), or Chapter 382, Local Government Code, shall first give to the purchaser of the property this written notice, signed by the seller. For the purposes of this notice, a contract for the purchase and sale of real property having a performance period of less than six months is considered a sale requiring the notice set forth below. This notice requirement does not apply to a transfer: 1) under a court order or foreclosure sale; 2) by a trustee in bankruptcy; 3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest; 4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure; 5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; 6) from one co-owner to another co-owner of an undivided interest in the real property; 7) to a spouse or a person in the lineal line of consanguinity of the seller; 8) to or from a governmental entity; or 9) of only a mineral interest, leasehold interest, or security interest The following notice shall be given to a prospective purchaser before the execution of a binding contract of purchase and sale, either separately or as an addendum or paragraph of a purchase contract. In the event a contract of purchase and sale is entered into without the seller having provided the required notice, the purchaser, subject to certain exceptions, is entitled to terminate the contract. A separate copy of this notice shall be executed by the seller and the purchaser and must be filed in the real property records of the county in which the property is located at the closing of the purchase and sale of the property. AFTER RECORDING1 RETURN TO: ____________________ ____________________ ____________________ ____________________ ____________________ NOTICE OF OBLIGATION TO PAY IMPROVEMENT DISTRICT ASSESSMENT TO CITY OF ANNA, TEXAS CONCERNING THE FOLLOWING PROPERTY __________________________________________ STREET ADDRESS IMPROVEMENT AREA #1 LOT TYPE 3 PRINCIPAL ASSESSMENT: $90,092.88 As the purchaser of the real property described above, you are obligated to pay assessments to City of Anna, Texas, for the costs of a portion of a public improvement or services project (the "Authorized Improvements") undertaken for the benefit of the property within Sherley Farms Public Improvement District (the "District") created under Subchapter A, Chapter 372, Local Government Code. AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE COSTS, AND DELINQUENCY COSTS. The exact amount of the assessment may be obtained from the City of Anna. The exact amount of each annual installment will be approved each year by the Anna City Council in the annual service plan update for the District. More information about the assessments, including the amounts and due dates, may be obtained from City of Anna. Your failure to pay any assessment or any annual installment may result in penalties and interest being added to what you owe or in a lien on and the foreclosure of your property. _________________ 1 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County when updating for the Current Information of Obligation to Pay Improvement District Assessment. Signature Page to Initial Notice of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. DATE: DATE: SIGNATURE OF PURCHASER SIGNATURE OF PURCHASER The undersigned seller acknowledges providing this notice to the potential purchaser before the effective date of a binding contract for the purchase of the real property at the address described above. DATE: DATE: SIGNATURE OF SELLER SIGNATURE OF SELLER]2 ______________ 2 To be included in copy of the notice required by Section 5.014, Tex. Prop. Code, to be executed by seller in accordance with Section 5.014(a-1), Tex. Prop. Code. Purchaser Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned purchaser acknowledged the receipt of this notice including the current information required by Section 5.0143, Texas Property Code, as amended. DATE: DATE: SIGNATURE OF PURCHASER SIGNATURE OF PURCHASER STATE OF TEXAS § § COUNTY OF _______ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]3 ______________ 3 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Seller Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned seller acknowledges providing a separate copy of the notice required by Section 5.014 of the Texas Property Code including the current information required by Section 5.0143, Texas Property Code, as amended, at the closing of the purchase of the real property at the address above. DATE: DATE: SIGNATURE OF SELLER SIGNATURE OF SELLER STATE OF TEXAS § § COUNTY OF ________ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]4 ______________ 4 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Annual Installment Schedule to Notice of Obligation to Pay Improvement District Assessment Annual Installment Due 1/31 Principal Interest[a]Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2027 1,069.44$ 5,405.57$ 450.46$ 108.27$ 7,033.75$ 2028 1,135.78$ 5,341.41$ 445.12$ 110.44$ 7,032.74$ 2029 1,207.43$ 5,273.26$ 439.44$ 112.64$ 7,032.77$ 2030 1,284.39$ 5,200.81$ 433.40$ 114.90$ 7,033.50$ 2031 1,364.00$ 5,123.75$ 426.98$ 117.20$ 7,031.92$ 2032 1,451.57$ 5,041.91$ 420.16$ 119.54$ 7,033.18$ 2033 1,544.45$ 4,954.82$ 412.90$ 121.93$ 7,034.10$ 2034 1,639.98$ 4,862.15$ 405.18$ 124.37$ 7,031.68$ 2035 1,746.13$ 4,763.75$ 396.98$ 126.86$ 7,033.72$ 2036 1,854.93$ 4,658.98$ 388.25$ 129.39$ 7,031.56$ 2037 1,974.35$ 4,547.69$ 378.97$ 131.98$ 7,032.99$ 2038 2,099.07$ 4,429.23$ 369.10$ 134.62$ 7,032.02$ 2039 2,234.41$ 4,303.28$ 358.61$ 137.31$ 7,033.61$ 2040 2,375.06$ 4,169.22$ 347.43$ 140.06$ 7,031.77$ 2041 2,528.97$ 4,026.71$ 335.56$ 142.86$ 7,034.10$ 2042 2,688.19$ 3,874.98$ 322.91$ 145.72$ 7,031.80$ 2043 2,860.68$ 3,713.68$ 309.47$ 148.63$ 7,032.47$ 2044 3,043.79$ 3,542.04$ 295.17$ 151.61$ 7,032.61$ 2045 3,240.16$ 3,359.42$ 279.95$ 154.64$ 7,034.16$ 2046 3,447.15$ 3,165.01$ 263.75$ 157.73$ 7,033.63$ 2047 3,667.40$ 2,958.18$ 246.51$ 160.89$ 7,032.98$ 2048 3,903.58$ 2,738.13$ 228.18$ 164.10$ 7,034.00$ 2049 4,153.03$ 2,503.92$ 208.66$ 167.38$ 7,032.99$ 2050 4,418.40$ 2,254.74$ 187.89$ 170.73$ 7,031.76$ 2051 4,702.34$ 1,989.63$ 165.80$ 174.15$ 7,031.93$ 2052 5,004.87$ 1,707.49$ 142.29$ 177.63$ 7,032.28$ 2053 5,325.96$ 1,407.20$ 117.27$ 181.18$ 7,031.61$ 2054 5,670.94$ 1,087.64$ 90.64$ 184.81$ 7,034.03$ 2055 6,034.50$ 747.39$ 62.28$ 188.50$ 7,032.67$ 2056 6,421.94$ 385.32$ 32.11$ 192.27$ 7,031.63$ Total 90,092.88$ 107,537.30$ 8,961.44$ 4,392.33$ 210,983.95$ Footnotes: [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon PID Bond issuance. [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. ANNUAL INSTALLMENTS - IMPROVEMENT AREA #1 LOT TYPE 3 SHERLEY FARMS PUBLIC IMPROVEMENT DISTRICT - IMPROVEMENT AREA #1 LOT TYPE 4 BUYER DISCLOSURE NOTICE OF OBLIGATIONS RELATED TO PUBLIC IMPROVEMENT DISTRICT A person who proposes to sell or otherwise convey real property that is located in a public improvement district established under Subchapter A, Chapter 372, Local Government Code (except for public improvement districts described under Section 372.005), or Chapter 382, Local Government Code, shall first give to the purchaser of the property this written notice, signed by the seller. For the purposes of this notice, a contract for the purchase and sale of real property having a performance period of less than six months is considered a sale requiring the notice set forth below. This notice requirement does not apply to a transfer: 1) under a court order or foreclosure sale; 2) by a trustee in bankruptcy; 3) to a mortgagee by a mortgagor or successor in interest or to a beneficiary of a deed of trust by a trustor or successor in interest; 4) by a mortgagee or a beneficiary under a deed of trust who has acquired the land at a sale conducted under a power of sale under a deed of trust or a sale under a court-ordered foreclosure or has acquired the land by a deed in lieu of foreclosure; 5) by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust; 6) from one co-owner to another co-owner of an undivided interest in the real property; 7) to a spouse or a person in the lineal line of consanguinity of the seller; 8) to or from a governmental entity; or 9) of only a mineral interest, leasehold interest, or security interest The following notice shall be given to a prospective purchaser before the execution of a binding contract of purchase and sale, either separately or as an addendum or paragraph of a purchase contract. In the event a contract of purchase and sale is entered into without the seller having provided the required notice, the purchaser, subject to certain exceptions, is entitled to terminate the contract. A separate copy of this notice shall be executed by the seller and the purchaser and must be filed in the real property records of the county in which the property is located at the closing of the purchase and sale of the property. AFTER RECORDING1 RETURN TO: ____________________ ____________________ ____________________ ____________________ ____________________ NOTICE OF OBLIGATION TO PAY IMPROVEMENT DISTRICT ASSESSMENT TO CITY OF ANNA, TEXAS CONCERNING THE FOLLOWING PROPERTY __________________________________________ STREET ADDRESS IMPROVEMENT AREA #1 LOT TYPE 4 PRINCIPAL ASSESSMENT: $105,108.36 As the purchaser of the real property described above, you are obligated to pay assessments to City of Anna, Texas, for the costs of a portion of a public improvement or services project (the "Authorized Improvements") undertaken for the benefit of the property within Sherley Farms Public Improvement District (the "District") created under Subchapter A, Chapter 372, Local Government Code. AN ASSESSMENT HAS BEEN LEVIED AGAINST YOUR PROPERTY FOR THE AUTHORIZED IMPROVEMENTS, WHICH MAY BE PAID IN FULL AT ANY TIME. IF THE ASSESSMENT IS NOT PAID IN FULL, IT WILL BE DUE AND PAYABLE IN ANNUAL INSTALLMENTS THAT WILL VARY FROM YEAR TO YEAR DEPENDING ON THE AMOUNT OF INTEREST PAID, COLLECTION COSTS, ADMINISTRATIVE COSTS, AND DELINQUENCY COSTS. The exact amount of the assessment may be obtained from the City of Anna. The exact amount of each annual installment will be approved each year by the Anna City Council in the annual service plan update for the District. More information about the assessments, including the amounts and due dates, may be obtained from City of Anna. Your failure to pay any assessment or any annual installment may result in penalties and interest being added to what you owe or in a lien on and the foreclosure of your property. _________________ 1 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County when updating for the Current Information of Obligation to Pay Improvement District Assessment. Signature Page to Initial Notice of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. DATE: DATE: SIGNATURE OF PURCHASER SIGNATURE OF PURCHASER The undersigned seller acknowledges providing this notice to the potential purchaser before the effective date of a binding contract for the purchase of the real property at the address described above. DATE: DATE: SIGNATURE OF SELLER SIGNATURE OF SELLER]2 ______________ 2 To be included in copy of the notice required by Section 5.014, Tex. Prop. Code, to be executed by seller in accordance with Section 5.014(a-1), Tex. Prop. Code. Purchaser Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned purchaser acknowledges receipt of this notice before the effective date of a binding contract for the purchase of the real property at the address described above. The undersigned purchaser acknowledged the receipt of this notice including the current information required by Section 5.0143, Texas Property Code, as amended. DATE: DATE: SIGNATURE OF PURCHASER SIGNATURE OF PURCHASER STATE OF TEXAS § § COUNTY OF _______ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]3 ______________ 3 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Seller Signature Page to Final Notice with Current Information of Obligation to Pay Improvement District Assessment [The undersigned seller acknowledges providing a separate copy of the notice required by Section 5.014 of the Texas Property Code including the current information required by Section 5.0143, Texas Property Code, as amended, at the closing of the purchase of the real property at the address above. DATE: DATE: SIGNATURE OF SELLER SIGNATURE OF SELLER STATE OF TEXAS § § COUNTY OF ________ § The foregoing instrument was acknowledged before me by ____________________ and _________________ , known to me to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes therein expressed. Given under my hand and seal of office on this _________________ , 20__. Notary Public, State of Texas]4 ______________ 4 To be included in separate copy of the notice required by Section 5.0143, Tex. Prop. Code, to be executed at the closing of the purchase and sale and to be recorded in the deed records of Collin County. Annual Installment Schedule to Notice of Obligation to Pay Improvement District Assessment Annual Installment Due 1/31 Principal Interest[a]Additional Interest Annual Collection Costs Total Annual Installment Due[b] 2027 1,247.68$ 6,306.50$ 525.54$ 126.32$ 8,206.04$ 2028 1,325.08$ 6,231.64$ 519.30$ 128.84$ 8,204.86$ 2029 1,408.67$ 6,152.14$ 512.68$ 131.42$ 8,204.90$ 2030 1,498.45$ 6,067.62$ 505.63$ 134.05$ 8,205.75$ 2031 1,591.33$ 5,977.71$ 498.14$ 136.73$ 8,203.91$ 2032 1,693.50$ 5,882.23$ 490.19$ 139.46$ 8,205.37$ 2033 1,801.86$ 5,780.62$ 481.72$ 142.25$ 8,206.45$ 2034 1,913.31$ 5,672.51$ 472.71$ 145.10$ 8,203.63$ 2035 2,037.15$ 5,557.71$ 463.14$ 148.00$ 8,206.00$ 2036 2,164.09$ 5,435.48$ 452.96$ 150.96$ 8,203.48$ 2037 2,303.41$ 5,305.63$ 442.14$ 153.98$ 8,205.15$ 2038 2,448.92$ 5,167.43$ 430.62$ 157.06$ 8,204.02$ 2039 2,606.81$ 5,020.50$ 418.37$ 160.20$ 8,205.88$ 2040 2,770.90$ 4,864.09$ 405.34$ 163.40$ 8,203.73$ 2041 2,950.46$ 4,697.83$ 391.49$ 166.67$ 8,206.46$ 2042 3,136.22$ 4,520.80$ 376.73$ 170.00$ 8,203.76$ 2043 3,337.46$ 4,332.63$ 361.05$ 173.41$ 8,204.55$ 2044 3,551.08$ 4,132.38$ 344.37$ 176.87$ 8,204.71$ 2045 3,780.19$ 3,919.32$ 326.61$ 180.41$ 8,206.52$ 2046 4,021.67$ 3,692.51$ 307.71$ 184.02$ 8,205.91$ 2047 4,278.64$ 3,451.21$ 287.60$ 187.70$ 8,205.15$ 2048 4,554.18$ 3,194.49$ 266.21$ 191.45$ 8,206.33$ 2049 4,845.20$ 2,921.24$ 243.44$ 195.28$ 8,205.16$ 2050 5,154.80$ 2,630.53$ 219.21$ 199.19$ 8,203.72$ 2051 5,486.07$ 2,321.24$ 193.44$ 203.17$ 8,203.91$ 2052 5,839.01$ 1,992.07$ 166.01$ 207.24$ 8,204.33$ 2053 6,213.62$ 1,641.73$ 136.81$ 211.38$ 8,203.54$ 2054 6,616.10$ 1,268.92$ 105.74$ 215.61$ 8,206.37$ 2055 7,040.25$ 871.95$ 72.66$ 219.92$ 8,204.78$ 2056 7,492.26$ 449.54$ 37.46$ 224.32$ 8,203.57$ Total 105,108.36$ 125,460.19$ 10,455.02$ 5,124.38$ 246,147.94$ Footnotes: [a] Interest is calculated at a 6.00% rate for illustrative purposes and is subject to change upon PID Bond issuance. [b] The figures shown above are estimates only and subject to change in Annual Service Plan Updates. Changes in Annual Collection Costs, reserve fund requirements, interest earnings, or other available offsets could increase or decrease the amounts shown. ANNUAL INSTALLMENTS - IMPROVEMENT AREA #1 LOT TYPE 4 Item No. 6.a. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Natasha Roach AGENDA ITEM: First Reading of a Resolution approving an Economic Development Incentive Agreement between the Anna Community Development Corporation and the Seitz Group, Inc. (Interim Director of Economic Development Natasha Roach) SUMMARY: Two readings of the Resolution are required prior to authorization of the agreement. The Resolution is included in the proceeding item approving an agreement between the CDC and the Seitz Group, Inc. The CDC Board approved the agreement on January 8, 2026. This is the first reading of the Resolution. The presiding officer should read the following: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS APPROVING THE ANNA COMMUNITY DEVELOPMENT CORPORATION TO ENTER INTO AN ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT WITH THE SEITZ GROUP, INC. FINANCIAL IMPACT: BACKGROUND: See Next Item STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: Item No. 6.b. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Natasha Roach AGENDA ITEM: Second Reading of a Resolution approving an Economic Development Incentive Agreement between the Anna Community Development Corporation and the Seitz Group, Inc. (Interim Director of Economic Development Natasha Roach) SUMMARY: Two readings of the Resolution are required prior to authorization of the agreement. The Resolution is included in the proceeding item approving an agreement between the CDC and the Seitz Group, Inc. The CDC Board approved the agreement on January 8, 2026. This is the second reading of the Resolution. The presiding officer should read the following: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANNA, TEXAS APPROVING THE ANNA COMMUNITY DEVELOPMENT CORPORATION TO ENTER INTO AN ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT WITH THE SEITZ GROUP, INC. FINANCIAL IMPACT: BACKGROUND: See Next Item. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: Item No. 6.c. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Natasha Roach AGENDA ITEM: Consider/Discuss/Action on a Resolution approving an Economic Development Incentive Agreement between the Anna Community Development Corporation and the Seitz Group, Inc. (Interim Director of Economic Development Natasha Roach) SUMMARY: This Economic Development Incentive Agreement is for approximately 27.256 acres of land located at or near the southeast corner of the intersection of Highway 75 and Rosamond Parkway. The construction of the Grocery and Retail Improvements will require installation of certain public roadway improvements, including deceleration turn lanes to serve the property. Details of these incentives are as follows: • Reimbursable Construction Costs: In exchange for Developer timely and completely satisfying its obligations to construct the Roadway Turn-Lane Infrastructure under this Agreement, the CDC shall provide reimbursement to Developer for the Reimbursable Construction Costs of the Roadway Turn-Lane Infrastructure in a total amount not to exceed $294,147.15. These improvements will require the approval and acceptance by the City or Texas Department of Transportation before the reimbursement of funds can be issued. These improvements shall be completed in sufficient time to allow for the opening of the Grocery Improvements for use by the public by the Grocery Improvements Deadline of December 31, 2027. FINANCIAL IMPACT: There is no fiscal impact for the 2025-2026 budget. The anticipated cost of $294,147.15 will be included in the CDC's Economic Development Grant Expense category for the 2026-2027 fiscal budget. BACKGROUND: The CDC Board of Directors approved a Resolution at their January 8, 2026 CDC/EDC Joint Board Meeting approving the Economic Development Incentive Agreement. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Vibrant. ATTACHMENTS: 1. Council Resolution - CDC Seitz Incentive Agreement 2. Exhibit 1 (SEITZ) ANNA SEC CORNER -- CDC Incentives Agreement CITY OF ANNA, TEXAS the Anna Community Development Corporation (the “CDC”) has approved an Economic Development Incentive Agreement with the Seitz Group, Inc., (the “Developer”), a copy of which is attached as Exhibit 1 (the “Incentive Agreement”); and the City Council desires to approve of the CDC entering into the Incentive Agreement with the Seitz Group, Inc.; Recitals Incorporated The recitals set forth above are incorporated herein for all purposes as if set forth in full. Approval of CDC’s Incentive Agreement The City Council hereby approves of the CDC entering into the Incentive Agreement; provided, however, it be understood that that the City of Anna is not a party to the Incentive Agreement. PASSED AND APPROVED by the City Council of the City of Anna, Texas on this 27th day of January 2026. ATTEST: APPROVED: _____________________________ ____________________________ Carrie Land, City Secretary Pete Cain, Mayor ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT PAGE 1 ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT This ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT (this “Agreement”) is made and entered into as of ______________, 2026 (the “Effective Date”), by and between the Anna Community Development Corporation(the “CDC”) and Seitz Group, Inc. (“Developer”) (each a “Party” and collectively the “Parties”). that certain real property consisting of approximately 27.356 acres of land located at or near the southeast corner of the intersection of Highway 75 and Rosamond Parkway, in the City of Anna, County of Collin, State of Texas, as generally depicted in Exhibit A attached hereto and incorporated by reference (“the Property”), has been acquired or is in the process of being acquired in order to be developed and used by Developer for a new retail grocery store anchor and adjoining fuel center and other strip center retail uses (the “Project”); and , the construction and installation of the Grocery Improvements (defined below) and the Retail Improvements (defined below) will require installation of certain public roadway improvements including deceleration turn lanes to serve the Property as more particularly described and depicted on Exhibit B (the “Roadway Turn-Lane Infrastructure”); and the estimated budgeted costs of the Roadway Turn-Lane Infrastructure is shown on Exhibit C; and Developer has requested certain economic development incentives for development of the Property to defray the costs or a portion of the costs of the Roadway Turn- Lane Infrastructure; and the CDC has concluded and hereby finds that the Roadway Turn-Lane Infrastructure Project will promote new or expanded business development in and near the City of Anna, Texas (the “City”); and the CDC has determined that making economic development grants to Developer in accordance with this Agreement will further the objectives of the CDC and the City, will benefit the City and the City's inhabitants, will promote local economic development, will stimulate commercial and business activity, and will generate additional sales tax and will enhance the property tax base and economic vitality of the City; in consideration of the foregoing premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the CDC and Developer covenant and agree as follows: For purposes of this Agreement, each of the following terms shall have the meanings set forth below unless the context clearly indicates otherwise: ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT PAGE 2 “Bankruptcy or Insolvency'' shall mean the dissolution or termination of a Party’s existence as a going business, insolvency, appointment of receiver for any part of such Party’s property and such appointment is not terminated within one hundred twenty (120) days after such appointment is initially made, any general assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against such Party and such proceeding is not dismissed within one hundred twenty (120) days after the filing thereof. “City Regulations” means the City’s applicable development regulations in effect on the Effective Date, including without limitation City code provisions, ordinances, design standards (including, without limitation, pavement thickness); provided, however, nothing herein shall be construed as a waiver by the Developer or any owner of all or a portion of the Property of any rights or protections that may exist under Chapter 3000 of the Texas Government Code, as it exists or may be amended, with respect to any existing or future improvements on the Property. “Commencement Date” shall mean the date a certificate of occupancy is issued by the City for occupancy of the Retail Improvements or the Grocery Improvements, as applicable. “Completion of Construction of the Grocery Improvements” shall mean that (i) the Grocery Improvements are sufficiently complete, so as to be operational and fit for the intended use, and only minor items such as touch-up, adjustments, and minor replacements or installations remain to be completed; and (ii) the City has issued a certificate of occupancy for occupancy of the Grocery Improvements. “Completion of Construction of Roadway Turn-Lane Infrastructure” shall mean that the Roadway Turn-Lane Infrastructure is sufficiently complete, so as to be operational and fit for the intended use, and only minor items such as touch-up, adjustments, and minor replacements or installations remain to be completed. “Effective Date” shall mean the last date of execution hereof. “Expiration Date” shall mean the earlier of (a) the date on which Developer has been reimbursed for the costs of construction of the Roadway Turn-Lane Infrastructure have been issued, or (b) the date that is ten years from the Effective Date of this Agreement. “Force Majeure Event” shall mean any contingency or cause beyond the reasonable control of a Party including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, government or de facto governmental action or inaction (unless caused by the intentionally wrongful acts or omissions of the Party), fires, explosions or floods, strikes, slowdowns or work stoppages, and epidemic, pandemic or other widespread disease (and including delays due thereto continuing after such event has ended). “Grocery Improvements” shall mean a grocery store containing not less than approximately 100,000 square feet and an adjoining fuel center to be constructed on the Property, as more fully described in the submittals filed by Developer, or any of its agents, with the City, ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT PAGE 3 from time to time, in order to obtain a building permit(s). For the avoidance of doubt, the Grocery Improvements shall only include those improvements constructed on Lot 1and Lot 7 as identified in Exhibit A, and shall not include any other lots or outparcels located on the Property. “Party” shall mean any party to this Agreement. “Property” shall mean the real property described in Exhibit A. “Public Infrastructure,” generally, shall mean all water, wastewater/sewer, detention and drainage, roadway, park and trail, and other infrastructure serving the Property which is dedicated to the City. Such term includes the Roadway Turn-Lane Infrastructure. “Real Property Records” means the official land recordings of the Collin County Clerk’s Office. “Reimbursable Construction Costs” shall mean the costs of design and construction of the Roadway Turn-Lane Infrastructure as further described in this Agreement but shall not include costs or expenses associated with right-of-way, land, or easement acquisition costs. “Roadway Turn-Lane Infrastructure” shall mean the deceleration turn lanes as described and depicted in Exhibit B. Section 2.Incentives. (a)Reimbursable Construction Costs. In exchange for Developer timely and completely satisfying its obligations to construct the Roadway Turn-Lane Infrastructure under this Agreement, the CDC shall provide reimbursement to Developer for the Reimbursable Construction Costs of the Roadway Turn-Lane Infrastructure in a total amount not to exceed $294,147.15 (the “Maximum Reimbursement Amount”); provided, however, that if the actual cost to construct and/or effectuate the Roadway Turn-Lane Infrastructure is less than the Maximum Reimbursement Amount, Developer shall only receive the actual costs of the Roadway Turn-Lane Infrastructure. In no event shall the CDC be required to provide reimbursements in an amount greater than the Maximum Reimbursement Amount even if the actual cost of the Roadway Turn-Lane Infrastructure exceeds the Maximum Reimbursement Amount. At the Completion of Construction of the Roadway Turn-Lane Infrastructure, Developer shall provide any and all documentation satisfactory to the CDC, in the CDC’s discretion, evidencing the actual costs of the Roadway Turn-Lane Infrastructure. (b)Improvements Requiring Approval of the City or Texas Department of Transportation (“TxDOT”). The Parties understand and acknowledge that the CDC cannot control the determinations or decisions made by the City or TxDOT. The CDC will reasonably cooperate with the City and TxDOT to attempt to facilitate any necessary approvals from the City or TxDOT for the City and/or TxDOT roadway improvements being constructed on the west side of the site (which TxDOT improvements will be constructed at Developer’s cost). ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT PAGE 4 Section 3.Obligations. The obligation of the CDC to provide the Incentives described in Section 2 shall be conditioned upon the compliance and satisfaction of each of the terms and conditions of this Agreement by Developer including without limitation each of the terms and conditions set forth below: (a)Required Construction of Roadway Turn-Lane Infrastructure. The obligation of the CDC to provide the Incentives described in Section 2(b) shall be conditioned upon the compliance and satisfaction of each of the terms and conditions of this section 3(a). Developer shall construct the Roadway Turn-Lane Infrastructure and shall complete such Roadway Turn- Lane Infrastructure in sufficient time to allow for the opening of the Grocery Improvements for use by the public by the Grocery Improvement Deadline as may be extended as set forth below for obtaining the certificates of occupancy for the Grocery Improvements. Upon the Completion of Construction of Roadway Turn-Lane Infrastructure, the CDC shall provide the reimbursement of the Reimbursable Construction Costs of the Roadway Turn-Lane Infrastructure as set forth in Section 2(b) hereof. (b)Completion of Construction of the Grocery Improvements; Employment Requirements. The obligation of the CDC to provide the Incentives described in Section 2(a) shall be conditioned upon the compliance and satisfaction of each of the terms and conditions of this Agreement by Developer including without limitation each of the terms and conditions set forth below: (1) Developer shall cause Completion of Construction of the Grocery Improvements and shall obtain the certificates of occupancy necessary to open to the Grocery Improvements to the public for the intended grocery and fuel store uses on or before December 31, 2027 (the “Grocery Improvements Deadline”). Notwithstanding the foregoing, Developer may: (i) extend the Grocery Improvements Deadline for a six-month period by delivering a written notice of extension to the CDC on or before the Grocery Improvements Deadline, and upon the delivery of such notice, the Grocery Improvements Deadline shall be extended to June 30, 2028; and (ii) extend the Grocery Improvements Deadline for a second six-month period by delivering a written notice of such second extension to the CDC on or before the expiration of the first six-month extension period, and upon the delivery of such notice, the Grocery Improvements Deadline shall be extended to December 31, 2028 (the “Outside Grocery Improvements Deadline”). Such extensions requested by the Developer as described in the preceding sentence shall be automatic upon delivery of notice and shall not require separate approval of the CDC. Notwithstanding the foregoing or any other provision of this Agreement, the Grocery Improvements Deadline shall not be extended beyond the Outside Grocery Improvements Deadline set forth in this paragraph unless this Agreement is amended to expressly provide for an additional extension by the mutual written agreement of the Parties. (2) Developer shall cause the tenant or purchaser of the Grocery Improvements to agree to employ, during the Term of this Agreement not less than 175 full- ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT PAGE 5 time equivalent employees, which shall be calculated by the number of total hours worked by employees working in the Grocery Improvements, divided by the maximum number of compensable hours for a full-time work schedule (35hrs/week). (c)Required Use. During the term of this Agreement following the applicable Commencement Date and continuing thereafter until the Expiration Date, the Retail Improvements shall not be used for any purpose other than a retail strip center and the Grocery Improvements shall not be used for any other purpose than a grocery and fuel center. (d)Ownership. During the term of this Agreement, Developer may sell all or a portion of the Property; provided, however, Developer shall remain liable for all obligations hereunder other than any obligations properly assigned pursuant to Section 27. For clarity, the CDC acknowledges that the Developer may transfer all or a portion of the Property for development of the Grocery Improvements or Retail Improvements. Section 4.Additional Agreements. (a)Construction of Roadway Turn-Lane Infrastructure and Public Infrastructure, Developer hereby represents and warrants that all construction and inspection activities and improvements in connection with or relating to the Project shall (i) be conducted in a good, safe, and workmanlike manner; and (ii) materially comply with the City Regulations. Unless otherwise provided herein, Developer further agrees and acknowledges that the CDC shall have no responsibility to perform, monitor, supervise, manage, inspect, or control the construction of the Project or related improvements. (b)Intentionally Left Blank. Section 5.Termination Provisions. (a)Termination. This Agreement terminates on the Expiration Date, and may, prior to the Expiration Date, be terminated upon any one or more of the following: (1) by mutual written agreement of the Parties; (2) by a Party, if another Party defaults or breaches any of the terms or conditions of this Agreement, and such default or breach is not cured within ninety (90) days, after written notice thereof; provided, it shall not constitute a breach or default if corrective action is instituted by or on behalf of such Party within the ninety (90) day period and diligently pursued until the breach or default is corrected; provided, further that a Party will not be deemed to be in breach, default or otherwise in violation of any term of this Agreement (other than the obligation to make a payment) to the extent such Party’s action, inaction or omission is the result of a Force Majeure Event as defined herein; ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT PAGE 6 (3) by the CDC if any taxes or assessments owed to the CDC, City or the State of Texas by Developer with respect to the Property shall have become delinquent (provided, however, Developer retains the right to timely and properly protest and contest any such taxes or assessments); or. (4) by the CDC if Developer suffers a Bankruptcy or Insolvency. (b)Effect of Termination. Except to the extent provided herein, upon termination of this Agreement, the Parties shall have no further liabilities or obligations under this Agreement. Section 6.Binding Agreement. The terms and conditions of this Agreement are binding upon the successors and permitted assigns of the Parties. Section 7.Limitation on Liability. It is understood and agreed between the Parties that Developer in satisfying the conditions of this Agreement has acted independently, and the CDC assumes no responsibilities or liabilities to third parties in connection with Developer’s actions. Section 8.No Joint Venture. It is acknowledged and agreed by the Parties that the terms hereof are not intended to and shall not be deemed to create a partnership or joint venture among the Parties. Section 9.Authorization. Each Party represents that it has full capacity and authority to grant all rights and assume all obligations that are granted and assumed under this Agreement. Section 10.Construction of Agreement; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, and all obligations of the parties created hereunder are performable in Collin County, Texas. Venue for any action arising under this Agreement shall lie in Collin County, Texas. Section 11.Notices. Any notices required or permitted to be given hereunder shall be given by hand delivery with proof of delivery or certified or registered mail, return receipt requested, to the addresses set forth below. Any notice sent by certified or registered mail shall be deemed delivered three days after deposit with USPS with proper postage paid. If to the CDC: Anna CDC Attn: President 120 W. 7th Street Anna, Texas 75409 With a copy to: City of Anna Attn: City Manager 120 W. 7th Street Anna, Texas 75409 ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT PAGE 7 And a copy to: Wolfe, Tidwell & McCoy, LLP Attn: Clark McCoy 2591 Dallas Parkway, Ste. 300 Frisco, Texas 75034 If to the Developer: Seitz Group, Inc. Attn: Eric Seitz 1110 Cowan Rd. Celina, TX 75009 With a copy to: Attn: Drew Slone Greenberg Traurig, LLP 2200 Ross Avenue, Suite 5200 Dallas, Texas 75201 Email: drew.slone@gtlaw.com Section 12.Attorney's Fees to Prevailing Party. In the event any Party initiates or defends any legal action or proceeding against another Party to enforce or interpret any of the terms of this Agreement, the prevailing Party in any such action or proceeding shall be entitled to recover its reasonable costs and attorney's fees (including its reasonable costs and attorney's fees on any appeal). Section 13.Entire Agreement; Binding Effect of Agreement. This Agreement contains the entire agreement between the parties hereto and supersedes all prior agreements, oral or written, with respect to the subject matter hereof. Section 14.INDEMNIFICATION and HOLD HARMLESS. THE DEVELOPER AND ITS SUCCESSORS AND ASSIGNS, HEREBY COVENANT AND AGREE TO RELEASE, DEFEND, HOLD HARMLESS, AND INDEMNIFY THE CDC AND ITS OFFICIALS, OFFICERS, AGENTS, ATTORNEYS, REPRESENTATIVES, SERVANTS AND EMPLOYEES (COLLECTIVELY, THE “RELEASED PARTIES”), FROM AND AGAINST ALL THIRD-PARTY CLAIMS, SUITS, JUDGMENTS, DAMAGES, AND DEMANDS AGAINST THE CDC OR ANY OF THE RELEASED PARTIES, WHETHER REAL OR ASSERTED INCLUDING WITHOUT LIMITATION REASONABLE ATTORNEY’S FEES AND RELATED EXPENSES, EXPERT WITNESS FEES, CONSULTANT FEES, AND OTHER COSTS, ARISING OUT OF THE NEGLIGENCE OR OTHER WRONGFUL CONDUCT OF DEVELOPER OR OWNERS, INCLUDING THE NEGLIGENCE OF THEIR RESPECTIVE EMPLOYEES, CONTRACTORS, SUBCONTRACTORS, MATERIAL MEN, AND/OR AGENTS, IN CONNECTION WITH THE DESIGN OR CONSTRUCTION OF ANY PUBLIC INFRASTRUCTURE, STRUCTURES, OR OTHER FACILITIES OR IMPROVEMENTS THAT ARE REQUIRED OR PERMITTED UNDER THIS AGREEMENT (TOGETHER, “CLAIMS”); AND IT IS EXPRESSLY UNDERSTOOD THAT SUCH CLAIMS SHALL, EXCEPT AS MODIFIED BELOW, INCLUDE CLAIMS EVEN IF CAUSED BY THE CDC’s OWN CONCURRENT NEGLIGENCE SUBJECT TO THE TERMS OF THIS SECTION. DEVELOPER AND OWNERS SHALL NOT, HOWEVER, BE REQUIRED TO INDEMNIFY THE CDC AGAINST CLAIMS CAUSED BY THE CDC’S SOLE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. IF THE CDC INCURS CLAIMS THAT ARE CAUSED BY THE CONCURRENT NEGLIGENCE OF DEVELOPER AND/OR OWNERS AND THE ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT PAGE 8 CDC, DEVELOPER’S AND/OR OWNERS’ INDEMNITY OBLIGATION(S) WILL BE LIMITED TO A FRACTION OF THE TOTAL CLAIMS EQUIVALENT TO DEVELOPER’S AND/OR OWNERS’ OWN PERCENTAGE OF RESPONSIBILITY. DEVELOPER AND OWNERS, INCLUDING THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, FURTHER COVENANTS AND AGREES TO RELEASE, DEFEND, HOLD HARMLESS, AND INDEMNIFY, THE CDC AGAINST ANY AND ALL CLAIMS BY ANY PERSON CLAIMING AN OWNERSHIP INTEREST IN THE PROPERTY PRIOR TO THE EFFECTIVE DATE WHO HAS NOT SIGNED THIS AGREEMENT IF SUCH CLAIMS RELATE IN ANY MANNER OR ARISE IN CONNECTION WITH: (1) THE CDC’s RELIANCE UPON DEVELOPER’S REPRESENTATIONS IN THIS AGREEMENT; OR (2) THIS AGREEMENT OR OWNERSHIP OF THE PROPERTY. Section 15.Invalidation. Invalidation of any one of the provisions of this Agreement by judgment or court order shall in no way affect any of the other provisions, which shall remain in full force and effect. The stricken provision will then be deemed replaced with one that is valid and enforceable and that comes closest to expressing the Parties' original intent. Section 16.Facsimile. A telecopied or electronic facsimile of a duly executed counterpart of this Agreement shall be sufficient to evidence the binding agreement of each party to the terms herein. Section 17.Severability. In the event any provision of this Agreement shall be determined by any court of competent jurisdiction to be invalid or unenforceable, this Agreement shall, to the extent reasonably possible, remain in force as to the balance of its provisions as if such invalid provision were not a part hereof. Section 18.Authority to Execute Agreement. This Agreement shall become a binding obligation on the signatories upon execution by all signatories hereto. The CDC warrants and represents that (1) it has all requisite power and authority under the Constitution and laws of the State of Texas to enter into and perform its obligations under this Agreement, and (2) the individual executing this Agreement on behalf of the CDC has full authority to execute this Agreement and bind the CDC to the same. Developer warrants and represents that the individual executing this Agreement on its behalf has full authority to execute this Agreement and bind Developer to same. Section 19.Employment of Undocumented Workers. During the term of this Agreement, Developer agrees not to knowingly employ any undocumented workers and if convicted of a violation under 8 U.S.C. Section 1324a (f), Developer shall repay the amount of any Reimbursement Payment or other funds received by Developer from CDC from the date of this Agreement to the date of such violation within 120 days after the date Developer is notified by CDC of such violation, plus interest at the rate of 4% compounded annually from the date of violation until paid. Developer is not liable for a violation of this section by a subsidiary, affiliate, or franchisee of Developer or by a person with whom Developer contracts. Section 20.Statutory Verifications. Developer makes the following representations and covenants pursuant to Chapters 2252, 2271, 2274, and 2276, Texas Government Code, as heretofore amended (the “Government Code”), in entering into this Agreement. As used in such verifications, “affiliate” means an entity that controls, is controlled by, or is under common control with Developer ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT PAGE 9 within the meaning of SEC Rule 405, 17 C.F.R. § 230.405, and exists to make a profit. Liability for breach of any such verification during the term of this Agreement shall survive until barred by the applicable statute of limitations, and shall not be liquidated or otherwise limited by any provision of this Agreement, notwithstanding anything in this Agreement to the contrary. a. Not a Sanctioned Company. Developer represents that neither it nor any of its parent company, wholly- or majority-owned subsidiaries, and other affiliates is a company identified on a list prepared and maintained by the Texas Comptroller of Public Accounts under Section 2252.153 or Section 2270.0201, Government Code. The foregoing representation excludes Developer and each of its parent company, wholly- or majority- owned subsidiaries, and other affiliates, if any, that the United States government has affirmatively declared to be excluded from its federal sanctions regime relating to Sudan or Iran or any federal sanctions regime relating to a foreign terrorist organization. b. No Boycott of Israel. Developer hereby verifies that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not boycott Israel and will not boycott Israel during the term of this Agreement. As used in the foregoing verification, “boycott Israel” has the meaning provided in Section 2271.001, Government Code. c. No Discrimination Against Firearm Entities. Developer hereby verifies that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not have a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade association and will not discriminate against a firearm entity or firearm trade association during the term of this Agreement. As used in the foregoing verification, “discriminate against a firearm entity or firearm trade association” has the meaning provided in Section 2274.001(3), Government Code. d. No Boycott of Energy Companies. Developer hereby verifies that it and its parent company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do not boycott energy companies and will not boycott energy companies during the term of this Agreement. As used in the foregoing verification, “boycott energy companies” has the meaning provided in Section 2276.001(1), Government Code. Section 21.Form 1295. Developer represents that it has complied with Texas Government Code, Section 2252.908 and in connection therewith, Developer has completed a Texas Ethics Commission Form 1295 Certificate generated by the Texas Ethics Commission’s electronic filing system in accordance with the rules promulgated by the Texas Ethics Commission. Developer further agrees to print the completed certificate and execute the completed certificate in such form as is required by Texas Government Code, Section 2252.908 and the rules of the Texas Ethics Commission and provide to the CDC at the time of delivery of an executed counterpart of this Agreement, a duly executed completed Form 1295 Certificate. The Parties agree that, except for the information identifying the Cirt and the contract identification number, the CDC is not responsible for the information contained in the Form 1295 completed by Developer. The information contained in the Form 1295 completed by Developer has been provided solely by Developer and the CDC has not verified such information. ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT PAGE 10 Section 22.Amendment. This Agreement may only be amended by a written agreement executed by the Parties. Section 23.Recitals. The recitals in this Agreement are true and correct, represent representations and warranties of the Parties, and are incorporated as part of this Agreement for all purposes. Section 24.Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original instrument, but all of the counterparts shall constitute one and the same instrument. Section 25.Exhibits. All exhibits to this Agreement are incorporated herein by reference for all purposes wherever reference is made to the same. Section 26.Survival of Covenants. Any covenants of the Parties that are to be performed after termination of this Agreement shall survive termination of this Agreement. Section 27.Assignment. This Agreement may not be assigned by Developer, in whole or in part, without the prior written consent of the CDC, which shall not be unreasonably withheld, delayed or conditioned; provided, however, Developer may assign this Agreement to any affiliate of Developer or to any buyer of all or a portion of the Property without the prior consent of the CDC. Any attempted assignment by Developer in violation of the terms and provisions of this section shall be void. [Signatures to follow] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. ANNA COMMUNITY DEVELOPMENT CORPORATION By: ________________________________ Bruce Norwood, President IN WITNESS WHEREOF: STATE OF TEXAS COUNTY OF COLLIN Before me, the undersigned notary public, on the ______ day of ______________ 2025, appeared Bruce Norwood, known to me (or proved to me) to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same in his capacity as President of the Anna Community Development Corporation. ______________________________ Notary Public, State of Texas [Signature Page to Economic Development Incentive Agreement] SEITZ GROUP, INC., a Texas corporation By: _______________________ Name : Eric Seitz, Its President STATE OF TEXAS ) ) COUNTY OF _________ ) This instrument was acknowledged before me on ______________, 2025 by Eric Seitz in his capacity as President of Seitz Group, Inc., a Texas corporation. [Seal] Notary Public—State of Texas [Developer’s Signature Page to Economic Development Incentive Agreement] EXHIBIT A EXHIBIT B EXHIBIT C Item No. 6.d. City Council Agenda Staff Report Meeting Date: 1/27/2026 Staff Contact: Kaleb Kentner AGENDA ITEM: Consider/Discuss/Action on a Development Agreement for Thompson Grove. (Development Services Director Kaleb Kentner) SUMMARY: In the attached Development Agreement, the applicant: Exceeds regulations Falls below regulations Enhanced Landscape within the required common area lot and additional trees for each home Would not make any improvements to Ferguson Parkway Provides detailed architectural guidelines with a masonry requirement and slightly increased house repetition Would not provide lots larger than the surrounding developments Does not meet the City of Anna Neighborhood Points requirements for entry features and interior amenities Does not provide land for commercial activities nor public benefits such as a park or fire station Requests a higher lot coverage than permitted in the SF-6.0 District Due to the previous direction from City Council regarding the City's PID Policy, staff requested the applicant to removed language regarding a PID to have this placed on the City Council agenda or that it would need to wait until after staff was able to obtain clearer direction. The City's staff and consultants have not exchanged all the necessary information with the applicant and their counsel to provide a recommendation for approval at this time. City Council may choose to: • Table this item to a date certain, • Approve this item as submitted, or • Deny this item as submitted. FINANCIAL IMPACT: This item has no direct financial impact. However, annexation of the property will make it subject to City of Anna property taxes. Properties located in the Extraterritorial Jurisdiction (ETJ) are not taxed by the City. BACKGROUND: This Pre-Annexation Development Agreement is associated with an active zoning case (PD 25-0007). The property is currently vacant and located within the extraterritorial jurisdiction (ETJ). History • The applicant gave a presentation at the October 27, 2025 City Council meeting with facade illustrations. • The applicant gave a presentation at the November 3, 2025 Planning & Zoning Commission meeting for a recommendation to City Council on zoning. The P&Z Commission's recommendation was unanimously in favor of the applicant's zoning request with the stipulation that the applicant submit a home repetition plan with each building permit. COMPATIBILITY CONSIDERATIONS Future Land Use Plan (FLUP): Suburban Living Character & Intent: Single-family homes on platted lots < 1 acre, served by utilities, streets, sidewalks, open space, parks and amenities. Near neighborhood/commercial hubs, these self-contained neighborhoods buffer non-residential uses with landscaping. Thoroughfare Plan: Ferguson Parkway is identified as a Major Arterial (120') right-of- way. Lakeview Estates dedicated a variable width right-of-way. The dedication's width begins with a 90-foot right-of-way adjacent to Oak Hollow and transitions to a 60-foot right-of-way at Candlewood Drive. The Lakeview Estates Final Plat is attached for reference. PROPOSED MODIFICATIONS FROM EXISTING ORDINANCES Subdivision Regulations: • Allow for a shortened cul-de-sac (§9.02.081(p)) o Regulation: 400 feet (minimum) to 600 feet (maximum) o Request: 200 feet as the minimum • Remove the requirement of the additional Residential Lot Depth for residential lots backing to a major road (§9.02.087 (g)(2)). o "Residential lot depth of lots backing an arterial or collector must be at least 10’ deeper than the average depth of lots facing local streets." • In lieu of the Neighborhood Point System (§9.02.262), the developer will provide the Landscape Design Enhancement Plan as depicted in Exhibit C. The Neighborhood Points System Total is attached for reference with a calculation for Thompson Grove as proposed. Zoning Ordinance: • Maximum Lot Coverage (§9.04.016): o Increase from 50% (3,000 square feet of a 6,000 square foot lot) to 55% (3,300 square feet of a 6,000 square foot lot) o Lot Coverage is defined as (§9.04.082): The percentage of the total area of a lot occupied by the base (first story or floor) of buildings located on the lot. CITY OF ANNA PUBLIC IMPROVEMENT DISTRICT (PID) POLICY City staff has been directed by City Council to review the City of Anna's PID Policy, which was last amended in 2022 (Res. No. 2022-05-1165). Under the current PID Policy, this Development Agreement does not align with the following components: a. Generate economic and superior development benefits to the City beyond what normal development would generate. c. Provide for enhanced improvements in the public right of way (e.g., entryways. landscaping, fountains, specialty lighting, art, decorative and landscaped streets and sidewalks, bike lanes, multi-use trails, signage, etc.) d. Meet community needs (e.g., enhanced drainage improvements, parks and off- street public parking facilities, pedestrian connectivity, wastewater and/or water on or off-site improvements) including without limitation development’s pro-rata share of off-site improvements and regional public facilities and services. e. Increase or enhance City's multimodal transportation and roadway plans. f. Exceed development requirements of the City; in particular, enhanced architectural standards, enhanced landscaping, enhanced amenities, and provide for superior design of lots or buildings. The development as it is proposed does not meet staff's expectations based on the City's PID Policy and previously approved PID developments. STRATEGIC CONNECTIONS: This item supports the City of Anna Strategic Plan, specifically advancing the strategic outcome area: Unique. ATTACHMENTS: 1. Anna Thompson Grove PID Bond Financing Analysis for DA 1.21.26 City of Anna, Texas For illustration purposes only Thompson Grove Public Improvement District PROPOSED DEVELOPMENT PLAN - RESIDENTIAL Expected Expected Expected Expected Finished Lot Build Out Finished Build Out Category No. of Units Unit Value Unit Value Lots Value Value SF 76 120,000$ 580,000$ 9,120,000$ 44,080,000$ 76 9,120,000$ 44,080,000$ Notes: Information provided by the Developer on January 21, 2026. Subject to change. THOMPSON GROVE PUBLIC IMPROVEMENT DISTRICT Hilltop Securities Inc.Page 1 of 4 1/21/2026 City of Anna, Texas For illustration purposes only Thompson Grove Public Improvement District PROJECT DEBT CAPACITY SUMMARY PID BONDS SOURCES OF FUNDS Estimated Par Amount of Bonds 5,126,000$ Total Sources of Funds 5,126,000$ USES OF FUNDS Project Fund (Bond Proceeds PID Projects)4,127,673$ Capitalized Interest Fund(1)- Debt Service Reserve Fund(2)371,871 Financing Costs & Deposits to Admin Fund(3)626,456 Total Uses of Funds 5,126,000$ Expected Value-to-Lien per Parcel at Bond Issuance(4)1.78x Assumed Bond Interest Rate(5)5.85% Average Annual Installment as Tax Rate Equivalent $1.0045 Term of Bonds 30 years Number of Benefited Units 76 PID Assessment per Benefited Unit $67,447 Project Funds per Benefited Unit $54,311 City PID Fee per SF Unit ($3,400) Net Project Funds per Benefited Unit $50,911 Notes: (1) Assumes no use of capitalized interest, subject to change. Use of Cap-I reduces project funds generated through bond proceeds. (2) Assumes to be the max annual debt service payment. (3) For illustration and discussion purposes only; subject to change. (4) Assumes no appraisal discounts for illustration purposes only; subject to change. (5) For illustration purposes only; subject to change at any time. Hilltop Securities Inc.Page 2 of 4 1/21/2026 City of Anna, Texas For illustration purposes only Thompson Grove Public Improvement District PROJECTED TAX STATEMENT Tax 2025 Levy on Tax $580,000 Rate SF Home City of Anna $ 0.5251 3,045.42$ Collin County 0.1493 866.19 Collin County Community College District 0.0812 471.08 Anna Independent School District 1.2399 7,191.42 Total Tax Rate 1.9955$ 11,574.11$ GROSS Avg. Annual Installment as a Tax Rate Equivalent/Levy(1)1.0045$ 5,825.89$ Total GROSS Overlapping Tax Rate Equivalent/Levy plus Special Assessment(2)3.0000$ 17,400.00$ (1) Inclusive of principal, interest, additonal interest and admin levies. (2) Not to exceed $3 per $100. Projected Tax Statement Hilltop Securities Inc.Page 3 of 4 1/21/2026 City of Anna, Texas For illustration purposes only Thompson Grove Public Improvement District PID BONDS DEBT CAPACITY Total Levy Additional as Bond Interest Administrative TOTAL Tax Rate Year Principal LEVY Equivalent 442,501$ 1.0039$ 441,829 1.0023 441,985 1.0027 441,904 1.0025 442,589 1.0041 441,975 1.0027 442,127 1.0030 441,981 1.0027 442,538 1.0039 441,734 1.0021 442,634 1.0042 442,111 1.0030 442,229 1.0032 441,925 1.0026 442,200 1.0032 441,989 1.0027 442,294 1.0034 442,052 1.0028 442,264 1.0033 441,865 1.0024 441,857 1.0024 442,177 1.0031 441,762 1.0022 442,611 1.0041 442,600 1.0041 442,728 1.0044 441,933 1.0026 442,214 1.0032 442,447 1.0037 442,567 1.0040 13,265,623$ Hilltop Securities Inc.Page 4 of 4 1/21/2026