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HomeMy WebLinkAboutCC Resolution 11112 (C St. Parking Structure; Jones Hall)RESOLUTION NO. 11112 A RESOLUTION AUTHORIZING AN AGREEMENT WITH JONES HALL, A PROFESSIONAL LAW CORPORATION FOR BOND AND UNDERWRITER COUNSEL SERVICES REQUIRED FOR THE PARKING STRUCTURE AT 3RD AND 'C' STREETS (Term of Agreement: from June 17, 2002 and ending on December 31, 2002, for a not to exceed sum of $63,500). WHEREAS, the cost of providing legal and disclosure services is a necessary and important tool in completing the financing for a new parking structure in downtown San Rafael at 3rd and C streets; and WHEREAS, the City Council has studied the options for financing the construction, design and site acquisitions costs associated with completion of the new parking garage; and WHEREAS, the City of San Rafael recognizes that professional legal services are an integral component of preparing a new parking bond financings. NOW, THEREFORE, BE IT RESOLVED THAT: The CITY MANAGER and CITY CLERK are authorized to execute, on behalf of the City of San Rafael, an agreement with a copy of which is hereby attached and by this reference made a part hereof. ORMN `�,� I, JEANNE M. LEONCINI, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of said City held on Monday, the 17th day of June, 20-2, by the following vote, to wit: AYES: COUNCILMEMBERS: Heller, Miller, and Phillips, Mayor Pro tem NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Vice -Mayor Cohen and Mayor Boro JEANNE M. LEONCINI, City Clerk WAManagement Services- WorkFile\Finance- WorkFile\Council Material\Resolutions\2002\City\jones hall reso.doc AGREEMENT WITH JONES HALL, A PROFESSIONAL LAW CORPORATION FOR BOND AND UNDERWRITER COUNSEL SERVICES REQUIRED FOR THE PARKING STRUCTURE AT 3RD AND 'C' STREETS This Agreement is made and entered into this 17th day of June 2002, by and between the CITY OF SAN RAFAEL (hereinafter "CITY"), and Jones Hall, A Professional Law Corporation (hereinafter "CONTRACTOR"). PROJECT COORDINATION A. CITY. The City Manager shall be the representative of the CITY for all purposes under this Agreement. The Assistant City Manager, Ken Nordhoff, is hereby designated the PROJECT MANAGER for the CITY, and said PROJECT MANAGER shall supervise all aspects of the progress and execution of this Agreement. B. CONTRACTOR. CONTRACTOR shall assign a single PROJECT DIRECTOR to have overall responsibility for the progress and execution of this Agreement for CONTRACTOR. Stephen Melikian is hereby designated as the PROJECT DIRECTOR for CONTRACTOR. Should circumstances or conditions subsequent to the execution of this Agreement require a substitute PROJECT DIRECTOR for any reason, the CONTRACTOR shall notify the CITY within ten (10) business days of the substitution. 2. DUTIES OF CONTRACTOR CONTRACTOR shall perform the duties and/or provide bond and disclosure counsel services as described in Attachment " A " attached and incorporated herein. Disclosure services, as described in Attachment "A" shall include preparation of both draft and final official issuance statements, as well as compliance filings with the Security and Exchange Commission. 3. DUTIES OF CITY CITY shall cooperate with CONTRACTOR in his performance under this agreement and shall compensate CONTRACTOR as provided herein. 4. COMPENSATION For the full performance of the services described herein by CONTRACTOR, CITY shall pay CONTRACTOR a not to exceed sum of $63,500, inclusive of the cost of incidental expenses and the local business license taxes as described in Section 20, but exclusive of any costs of publication of legal notices required in connection with CONTRACTOR'S services. Said sum shall only be paid when the CITY issues a parking structure bond (or similar debt instrument). CONTRACTOR shall be paid for the performance of services from the proceeds on a parking structure bond for the Third and C Street facility. Payments for services will be made by PROJECT MANAGER upon receipt of itemized invoices submitted by CONTRACTOR. I f., 7 5. TERM OF AGREEMENT The term of this Agreement shall commence upon the date of execution of this agreement and shall end on December 31, 2003. The term can be extended at the mutual agreement of both parties to a date certain. 6. TERMINATION A. Discretionary. Either party may terminate this Agreement without cause upon thirty days written notice mailed or personally delivered to the other party. B. Cause. Either party may terminate this Agreement for cause upon ten (10) days written notice mailed or personally delivered to the other party, and the notified party's failure to cure or correct the cause of the termination notice, to the reasonable satisfaction of the party giving such notice, within thirty (30) days of the receipt of said notice. C. Effect of Termination. Upon receipt of notice of termination, neither party shall incur additional obligations under any provision of this Agreement without the prior written consent of the other. D. Return of Documents. Upon termination, any and all CITY documents or materials provided to CONTRACTOR and any and all of CONTRACTOR's documents described in paragraph 7 below, shall be delivered to CITY as soon as possible, but not later than thirty (30) days after termination. 7. OWNERSHIP OF DOCUMENTS The written documents and electronic data materials prepared by the CONTRACTOR in connection with the performance of its duties under this Agreement shall be the sole property of CITY. CITY may use said property for any purpose, including projects not contemplated by this Agreement. 8. INSPECTION AND AUDIT Upon reasonable notice, CONTRACTOR shall make available to CITY, or its agent, for inspection and audit, all documents directly related to CONTRACTOR'S performance of its duties under this Agreement. CONTRACTOR shall fully cooperate with CITY or its agent in any such audit or inspection. 9. ASSIGNABILITY The parties agree that they shall not assign or transfer any interest in this Agreement nor the performance of any of their respective obligations hereunder, without the prior written consent of the other party, and any attempt to so assign this Agreement or any rights, duties or obligations arising hereunder shall be void and of no effect. Page 2 10. INSURANCE A. During the term of this Agreement, CONTRACTOR shall maintain, at no expense to CITY, the following insurance policies: 1. A comprehensive general liability insurance policy in the minimum amount of one million ($1,000,000) dollars per occurrence for death, bodily injury, personal injury, or property damage; 2. An automobile liability (owned, non -owned, and hired vehicles) insurance policy in the minimum amount of one million ($1,000,000) dollars per occurrence; 3. If any licensed professional performs any of the services required to be performed under this Agreement, a professional liability insurance policy in the minimum amount of one million ($1,000,000) dollars to cover any claims arising out of the CONTRACTOR's performance of services under this Agreement. B. The insurance coverage required of the CONTRACTOR by section 11. A., shall also meet the following requirements: 1. The insurance shall be primary with respect to any insurance or coverage maintained by CITY and shall not call upon CITY's insurance or coverage for any contribution; 2. Except for professional liability insurance, the insurance policies shall be endorsed for contractual liability and personal injury; 3. Except for professional liability insurance, the insurance policies shall be specifically endorsed to include the CITY, their officers, agents, employees and volunteers as additionally named insured under the policies; 4. CONTRACTOR shall provide to PROJECT MANAGER, (a) Certificates of Insurance evidencing the insurance coverage required herein, and (b) specific endorsements naming CITY, their officers, agents, employees and volunteers as additional insured under the policies; 5. The insurance policies shall provide that the insurance carrier shall not cancel, terminate or otherwise modify the terms and conditions of said insurance policies except upon thirty (30) days written notice to CITY's PROJECT MANAGER; 6. If the insurance is written on a Claims Made Form, then, following termination of this Agreement, said insurance coverage shall survive for a period of not less than five years; Page 3 7. The insurance policies shall provide for a retroactive date of placement coinciding with the effective date of this Agreement; 8. The insurance shall be approved as to form and sufficiency by PROJECT MANAGER and the City Attorney. C. If it employs any person, CONTRACTOR shall maintain worker's compensation and employer's liability insurance, as required by the State Labor Code, other applicable laws and regulations, and as necessary to protect both CONTRACTOR and CITY against all liability for injuries to CONTRACTOR's officers and employees. D. Any deductibles or self-insured retentions in CONTRACTOR's insurance policies must be declared to and approved by the PROJECT MANAGER and the City Attorney. At CITY's option, the deductibles or self-insured retentions with respect to CITY shall be reduced or eliminated to CITY's satisfaction, or CONTRACTOR shall procure a bond guaranteeing payment of losses and related investigations, claims administration, attorney's fees and defense expenses. 11. INDEMNIFICATION A. Indemnification - Professional Malpractice. CONTRACTOR is skilled in the professional calling necessary to the services and duties agreed to be performed and CITY relies upon the skills and knowledge of CONTRACTOR. CONTRACTOR shall perform such services and duties in conformance to and consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. CONTRACTOR agrees to indemnify and hold harmless the CITY, its officers and employees, defend, from any and all liability, losses, damages, costs and expenses resulting from any professional malpractice of CONTRACTOR, its officers, employees, agents or subcontractors claimed to have occurred in the performance of services under this Agreement. B. Indemnification - Personal Iniury or Death, or Propertv Damaqe. CONTRACTOR shall defend, indemnify and hold harmless CITY, its officers, agents and employees, against any claim, loss or liability regarding the personal injury or death of any person, or property damage, caused by CONTRACTOR, its officers, agents or employees while engaged in performance of this Agreement, due to the willful or negligent acts (active or passive) or omissions by CONTRACTOR's officers, employees or agents. The acceptance of said services and duties by CITY shall not operate as a waiver of such right of indemnification. Page 4 12. NONDISCRIMINATION CONTRACTOR shall not discriminate, in any way, against any person on the basis of age, sex, race, color, religion, ancestry, national origin or disability in connection with or related to the performance of its duties and obligations under this Agreement. 13. COMPLIANCE WITH ALL LAWS CONTRACTOR shall observe and comply with all applicable federal, state and local laws, ordinances, codes and regulations, in the performance of its duties and obligations under this Agreement. CONTRACTOR shall perform all services under this Agreement in accordance with these laws, ordinances, codes and regulations. CONTRACTOR shall release, defend, indemnify and hold harmless CITY, their officers, agents and employees from any and all damages, liabilities, penalties, fines and all other consequences from any noncompliance or violation of any laws, ordinances, codes or regulations. 14. NO THIRD PARTY BENEFICIARIES CITY and CONTRACTOR do not intend, by any provision of this Agreement, to create in any third party, any benefit or right owed by one party, under the terms and conditions of this Agreement, to the other party. 15. NOTICES All notices and other communications required or permitted to be given under this Agreement, including any notice of change of address, shall be in writing and given by personal delivery, or deposited with the United States Postal Service, postage prepaid, addressed to the parties intended to be notified. Notice shall be deemed given as of the date of personal delivery, or if mailed, upon the date of deposit with the United States Postal Service. Notice shall be given as follows: TO CITY: Mr. Ken Nordhoff Assistant City Manager (Project Manager) City of San Rafael P.O. Box 151560 San Rafael, CA 94915-1560 TO CONTRACTOR: Mr. Stephen Melikian (Project Director) Jones Hall, A Professional Law Corporation 650 California Street Eighteenth Floor San Francisco, CA 94108 Page 5 16. INDEPENDENT CONTRACTOR For the purposes, and for the duration, of this Agreement, CONTRACTOR, its officers, agents and employees shall act in the capacity of an Independent Contractor, and not as employees of the CITY. CONTRACTOR and CITY expressly intend and agree that the status of CONTRACTOR, its officers, agents and employees be that of an Independent Contractor and not that of an employee of CITY. 17. ENTIRE AGREEMENT —AMENDMENTS A. The terms and conditions of this Agreement, all exhibits attached, and all documents expressly incorporated by reference, represent the entire Agreement of the parties with respect to the subject matter of this Agreement. B. This written Agreement shall supersede any and all prior agreements, oral or written, regarding the subject matter between the CONTRACTOR and the CITY. C. No other agreement, promise or statement, written or oral, relating to the subject matter of this Agreement, shall be valid or binding, except by way of a written amendment to this Agreement. D. The terms and conditions of this Agreement shall not be altered or modified except by a written amendment to this Agreement signed by the CONTRACTOR and the CITY. E. If any conflicts arise between the terms and conditions of this Agreement, and the terms and conditions of the attached exhibits or the documents expressly incorporated by reference, the terms and conditions of this Agreement shall control. 18. WAIVERS The waiver by either party of any breach or violation of any term, covenant or condition of this Agreement, or of any ordinance,law or regulation, shall not be deemed to be a waiver of any other term, covenant, condition, ordinance, law or regulation, or of any subsequent breach or violation of the same or other term, covenant, condition, ordinance, law or regulation. The subsequent acceptance by either party of any fee, performance, or other consideration which may become due or owing under this Agreement, shall not be deemed to be a waiver of any preceding breach or violation by the other party of any term, condition, covenant of this Agreement or any applicable law, ordinance or regulation. Page 6 19. COSTS AND ATTORNEY'S FEES The prevailing party in any action brought to enforce the terms and conditions of this Agreement, or arising out of the performance of this Agreement, may recover its reasonable costs (including claims administration) and attomey's fees expended in connection with such action. 20. CITY BUSINESS LICENSE/OTHER TAXES CONTRACTOR shall obtain and maintain during the duration of this Agreement, a CITY business license as required by the San Rafael Municipal Code. CONTRACTOR shall pay any and all state and federal taxes and any other applicable taxes. CONTRACTOR's taxpayer identification number is 94-2698987, and CONTRACTOR certifies under penalty of perjury that said taxpayer identification number is correct. 21. APPLICABLE LAW The laws of the State of California shall govern this Agreement. Page 7 IN WITNESS WHEREOF, the parties have executed this Agreement as of the day, month and year first above written. CITY OF SAN RAFAEL ATTEST: City Clerk n/ APWYED, { f�ORM: City Attome WAManagement Services- WorkFile\Finance- Contracts\2002\jh bond counsel svcs 2002 .DOC CONTRACTOR By: /tr,�.r I Name: T�P4 G' /ale% 1&4 Title: Sll areG olalo- ' WorkFileWgreement and Contracts\Professional Page 8 JoNF, s HA.T L A PROFESSIONAL LAW CORPORATION ATTORNEYS AT LAW CHART Rc F. ADAMS STEPHEN R. CASALEGGIO THOMAS A. DOWNEY DAVID T. FAMA SCOTT E. FERGUSON ANDREW C. HAl-I.. JR. COURTNEY L. JONES WILLIAM J. HADI WILLIAM H. MADISON STEPHEN G. MAT IVa N DAVID J. OSTER DAV ID A. WALTON JULIE A. WUNDERLICH Ken Nordhoff Assistant City Manager City of San Rafael 1400 Fifth Avenue, Room 203 San Rafael, California 94901 May 14, 2002 ATTACHMENT "A" 060 CALIFORNIA STREET E1 ---.- FLOOR SAN FRANCISCO, CA 94108 TELEPHONE (416) 391-6780 FACISTMR E (416) 091-5784 KENNETH L JONES, RETIRED ROMEPAGF-http://www.joneshall.com Re: Reauest for Provosals - Bond Counsel - Parkine Structure - 3rd @ C Streets Dear Mr. Nordhoff: Thank you for requesting us to submit our qualifications to act as bond counsel to the City of San Rafael in connection with its proposed financing for the construction of an approximately 400 space public parking garage. We would very much like to be retained as the City's bond counsel on this financing, and would consider it an honor to be selected. Our firm has recently represented the San Rafael Redevelopment Agency on two financings, the $23,504,004.10 initial principal amount of Central San Rafael Redevelopment Project Tax Allocation Bonds, Series 1999 and three separate series of bonds for the San Rafael Commons Apartments. Additionally, the undersigned, while a partner at another law firm, served as bond counsel to Agency on its 1995 tax allocation bond issue. We very much would like to continue our relationship with San Rafael. Jones Hall is unique among bond counsel firms, for a variety of reasons, all of which conspire to make us the best choice to serve the City as bond counsel. The most prominent distinguishing factor is our size. As a California law firm, we are relatively small, having only 13 attorneys. Small firms do not survive by being conservative and un -responsive to their clients' needs, and do not have the luxury of relying on their august name to generate and maintain a stable of clients. Small firms survive, and in our case thrive, by being aggressive, creative and highly responsive. This is our distinguishing characteristic. Our small size also allows us to focus our internal operating structures to the single goal of facilitating the municipal bond practice. For example, our staff of closing personnel, who have been highly trained in the art and science of closing bond issues, cannot be found at the larger firms. All of the support staff and infrastructure of the firm has been developed and trained with one objective in mind — processing a municipal bond issue from beginning to end in the most efficient and efficacious manner possible. We have been able to accomplish this objective because we do not have to take into account how this infrastructure wo !Ve such unrelated practices as litigation, probate, or real estate law. MAY 14 2002 Management Services Ken Nordhoff May 14, 2002 Page 2 Although we are small in total numbers as a law firm, we are actually a large municipal bond firm when compared to the municipal departments of the big firms. All 13 of our attorneys practice exclusive in the municipal finance area. We have specialists in virtually every area, such as assessment bonds, Mello -Roos special tax bonds, water, sewer and other enterprise financings, redevelopment bonds and multi -family housing bonds. As a result, there is tremendous expertise within the firm, and the attorneys in the firm make a point of sharing techniques and ideas between different areas. Another distinguishing factor is that all of our attorneys but 3 are partners. All of the partners have between 15 and 25 years of experience each. We hear complaints all the time about our competitors, who have a senior partner on hand to sign up a client, and then disappears when there's real work to be done, leaving it to a junior attorney who lacks the experience, judgment and authority to make prompt, effective decisions. With Jones Hall, a client gets an experienced partner from the beginning through the end of the project, who can solve problems in the best way possible, on the spot. Included with this letter is our response to the City's Request for Proposals, which includes a description of our relevant experience, a discussion of financing structures, the list of attorneys who would perform services for the City, and a list of the services we would provide as bond counsel, together with our fee proposal. Again, thank you for this opportunity to respond to the City's Request for Proposal. Very truly I yy yours, �/f ,J" %)/k -t Stephen G. Melikian RESPONSE TO REQUEST FOR PROPOSALS PARKING STRUCTURE THIRD @ C STREETS 1. RECENT PROJECTS Jones Hall has served as bond counsel on 18 parking financings since 1997. These transactions are listed below: Exhibit A Parking Financing 1997 - Present Name of Issue $35,460,000 City of Palo Alto Limited Obligation Improvement Bonds - University Avenue Area Off -Street Parking Assessment District, Series 2002-A (Bond Counsel/ Disclosure Counsel) Date of Issue Issuer Contact 4/11/2002 Joe Saccio Deputy Director of Administrative Services (650) 329-2288 $3,500,000 City of Palo Alto Certificates of 1/29/2002 Participation, Series 2002A (Tax -Exempt) (Civic Center Refinancing and Downtown Parking Improvements Project) (Bond Counsel/ Disclosure Counsel) $3,555,000 City of Palo Alto Certificates of 1/29/2002 Participation, Series 2002B (Taxable) (Civic Center Refinancing and Downtown Parking Improvements Project) (Bond Counsel/ Disclosure Counsel) $6,180,000 City of Stockton Community 12/28/2001 Facilities District No. 2001-1 (Downtown Parking) (Bond Counsel) $9,135,000 City of Palo Alto Limited Obligation Improvement Bonds - University Avenue Area Off -Street Parking Assessment District, Series 2001-A (Bond Counsel/ Disclosure Counsel $11,500,000 Long Beach Bond Finance Authority 2001 Lease Revenue Bonds (Plaza Parking Facility) (Bond Counsel) $19,000,000 Stone & Youngberg LLC City and County of San Francisco Uptown Parking Corporation (Union Square Parking Financing) (Underwriter's Counsel) Joe Saccio Deputy Director of Administrative Services (650) 329-2288 Joe Saccio Deputy Director of Administrative Services (650) 329-2288 Gary Ingraham Assistant city Manager (209) 937-8212 6/27/2001 Joe Saccio Deputy Director of Administrative Services (650) 329-2288 6/14/2001 Heather Mahood Assistant City Attorney (562) 570-2210 5/16/2001 Theresa Alvarez Deputy City Attorney (415)554-4739 $8,185,000 Parking Authority of the City and 7/12/2000 Theresa Alvarez County of San Francisco Lease Revenue Bonds, Deputy City Attorney Series 2000 (North Beach Parking Garage (415) 554-4739 Project) (Bond Counsel) *All of our contacts at the City of West Covina have left the City since this financing. Jim Starbird, the former City Manager in West Covina (who was one of those contacts), is now the City Manager in Glendale. 7 Date of Issuer Name of Issue Issue Contact $8,335,000 City of Campbell Redevelopment 11/09/1999 Gretchen Conner Agency 1999 Tax Allocation Bonds Series A Finance Director (Public Parking Facility) (Bond (408) 866-2111 Counsel/Disclosure Counsel) $2,355,000 City of Campbell Redevelopment 11/09/1999 Gretchen Conner Agency 1999 Tax Allocation Bonds Series B Finance Director (Public Parking Facility) (Bond (408) 866-2111 Counsel/Disclosure Counsel) $22,390,000 City and County of San Francisco 5/20/1999 Theresa Alvarez Parking Authority of the City and County of Deputy City Attorney San Francisco Parking Meter Revenue (415) 554-4739 Refunding Bonds, Series 1999-1 (Bond Counsel) $10,035,000 City of Santa Cruz 1998 Parking 11/24/1998 David P. Culver and Refunding Certificates of Participation Director of Finance (Bond Counsel) (408) 429-3587 $7,340,000 City of Santa Rosa Central Parking 4/16/1998 Bruce McConnell Service Facilities District (Refunding Deputy Director of Improvement Bonds), Series 1998 (Bond Administrative Services Counsel) (707) 543-3140 $17,525,000 E.J. De La Rosa & Co., Inc. City of 4/01/1998 Mary Bradley Sunnyvale Certificates of Participation Director of Finance (Parking Facility Refunding) Series 1998A (408) 730-4950 (Underwriter's Counsel) $27,105,000 City of West Hollywood 1998 3/19/1998 Paul Arevald Refunding Certificates of Participation/Fixed City Manager Rate (1) City Hall Parking Facility (2) Fire (323) 848-6400 Station (3) City Hall 1995 COP (Bond Counsel) $5,360,000 City of West Hollywood 1998 3/19/1998 Paul Arevald Variable Rate Refunding Certificates of City Manager Participation (1) Pac Bell Parking (2) Homeless (323) 848-6400 Shelter (Bond Counsel) $12,000,000 Redevelopment Agency of the City 6/04/1997 Jim Starbird* of West Covina 1997 Refunding Certificates of (818) 548-4844 Participation Remarketing (Barranca-Garvey Public Parking Project) (Disclosure Counsel) $5,855,000 City of Long Beach 1997 Certificates 5/08/1997 Heather Mahood of Participation (Queensway Bay Parking Assistant City Attorney Facility) (Disclosure Counsel) (562) 570-2210 *All of our contacts at the City of West Covina have left the City since this financing. Jim Starbird, the former City Manager in West Covina (who was one of those contacts), is now the City Manager in Glendale. 7 These transactions included various approaches to financing parking facilities including, general fund leases, parking revenue bonds, tax allocation bonds and Mello -Roos and assessment bonds. 2. FINANCING STRUCTURES Clearly, a general fund lease is the simplest approach for a parking facility, as few parking facilities or enterprises are able to generate sufficient revenues to adequately back a bond issue. However, we believe that a general fund lease financing, combined with a pledge of the net revenues of the City's Parking Services Enterprise Fund, provides the best model for the City to pursue. There are two possible ways to implement this approach. The first method would involve a traditional lease structure, either through a lease revenue bond issue or certificates of participation (COPs). In either case, the City could utilize the San Rafael Financing Authority, either as the issuer of lease revenue bonds or as the counterparty on the lease in connection with COPs. This structure would put the primary burden of the payment of debt service on the bonds or COPS on the City's General Fund. In order to provide additional security for the financing, the City could also pledge the net revenues of its Parking Services Enterprise Fund to the payment of debt service. This would mitigate the risk of abatement* with respect to the lease revenue bonds or COPS, while also providing the rating agencies a clear indication of the "essentiality" of the parking project to the City. Generally, parking structures are not viewed by the rating agencies as being as essential to a city as certain other facilities, such as a city hall or a police or fire station, and, accordingly, they assign a lower rating for a lease financing for a parking facility than they would for a lease financing for a city hall. The pledge of the net revenues of the Parking Services Enterprise Fund might serve to eliminate all or a portion of that rating gap. A second approach utilizing a lease structure would involve the City using the net revenues from its Parking Services Enterprise Fund as the first source of security for the financing. However, given the lack of history of the City's Parking Services Enterprise Fund, and the general reluctance of the rating agencies to rate parking revenue financings other than in dense urban populations, the pledge of net parking revenues would probably not be sufficient to accomplish a marketable revenue based financing. Accordingly, we would propose the City also enter into a lease/leaseback of the parking facility with the San Rafael Financing Authority, with the City making payments under this lease/leaseback only if the net parking revenues do not provide sufficient amounts to pay debt service on this financing. In other words, the City General Fund would only be liable for the debt service not payable from the net revenues of the City's Parking Services Enterprise Fund. There are two substantial benefits to this approach. First, it puts the onus of debt service where it should be - on the enterprise to which the parking project belongs. Second, it might be possible to structure the lease/leaseback so that it terminates once certain coverage criteria are met with respect to the net parking revenues and the payment of debt service on the financing. In other words, if at same point in the future the ratio of net parking revenues to the debt service on the financing (and any other future financings) exceeds 1.50 (or perhaps 1.25) to 1.00 for a certain period of time (, two consecutive years, or, perhaps, three consecutive years at 1.25), the lease/leaseback could terminate. *Abatement occurs on a lease financing when a city is not able to use the financed facility due to an uninsured casualty loss or taking, and therefore is not obligated to make lease payments, thereby putting at risk the payment of debt service on the financing. 3 Set forth below are diagrams describing the two structures proposed above: SCENARIO 1 LEASE REVENUE BONDS BACKED UP BY A NET PARKING REVENUE PLEDGE San Rafael Financing Authority Lease Revenue Bonds V Bond Proceeds used to construct Project; Project leased to City n City make lease payments to the Authority for the payment of debt service on the Bonds A Pledge of net revenues from Parking Services Enterprise Fund to cover abatement risk SCENARIO 2 PARKING REVENUE PLEDGE BACKED UP BY A GENERAL FUND LEASE San Rafael Financing Authority Parking Revenue Bonds Bond Proceeds used to construct parking facility which is sold to city pursuant to installment sale agreement n City uses net parking revenues to make payments to Authority for debt service on the Bonds W V City leases parking garage to Authority and leases it back from Authority; City is obligated to make lease payments to Authority if net parking revenues are insufficient to pay debts service on bonds Two additional approaches to financing the Third @ C Streets parking structure that are mentioned in the Request for Proposals are special tax (Mello -Roos) Bonds and assessments bonds. We have served as bond counsel on Mello -Roos financings that included parking structures as part of the capital projects being financed. If the City can form a community facilities district which provides the required two-thirds vote (with a sufficient special tax to issue a large enough bond issue), we would recommend the City seriously consider this approach. Of course, the problem with utilizing a Mello -Roos approach is that individual property owners might indicate that they would vote no, thereby forcing the special tax on only those property owners strongly committed to the parking structure. Additionally, there are issues that will need to be considered regarding the whether the election regarding the special tax would need be on a registered voter or property owner basis. If more than 12 registered voters reside within the District, the special tax election would have to be done on a registered voter basis. That would lead to a result where the persons and businesses paying the tax largely had no official participation in the decision to form the District, and might be opposed to it. An assessment district has its own problems. The primary problem is determining special benefit to particular parcels of a parking structure when the parking structure generates so much general benefit. While it might be theoretically possible to create a valid assessment spread, and to obtain the majority vote required under Proposition 218, this approach could most easily be derailed by one or more recalcitrant property owners within the assessment district by threat of litigation. We understand that this occur with the City's proposed assessment district for street improvements in Peacock Gap. Notwithstanding the problems that arise with a traditional assessment bond, the City might want to consider creating a Parking and Business Improvement Area under the Parking and Business Improvement Area Law of 1965 (the "1965 Law") or the Parking and Business Improvement Area Law of 1989 (the "1989 Law") in order to defray the cost of debt service being bome by the General Fund or the Parking Services Enterprise Fund. This would involve taxing or assessing business within the Improvement Area for the costs of providing public parking of benefit to the Improvement Area. A recent appellate court decision held that these types of District's are not covered by the assessment restrictions of Proposition 218 since they do not assess real property, but rather assess businesses. Although bonds cannot be issued under either of these laws, taxes or assessments received by the City could be used to pay debt service on the City's parking financing or to reimburse the City for such payments. Recommendation We believe that structuring the financing as either a General Fund lease with net parking revenue pledged as a back-up or as a net parking revenue financing with a General Fund lease back-up provides the City with the strongest financing structure. However, this should not deter the City from considering utilizing the 1965 Law or the 1989 Law to reimburse the General Fund or the Parking Services Enterprise Fund for payments of debt service on the financing. 3. ASSIGNED PERSONNEL Since only three of our attorneys are associates, each financing is handled by a partner, with the result that the client is assured that it will be working with the attorney hired, without delegation to less experienced personnel. We propose that Stephen Melikian will have primary responsibility for acting as bond counsel to the Agency, with assistance on a back-up basis from Chick Adams. Both Mr. Melikian and Mr. Adams can be contacted at the firm's office in San Francisco (650 California Street, San Francisco, California 94108, tel: 415/391-5780; fax: 415/391- 5784). David Walton will be assigned to render legal advice concerning federal tax law, and will play an integral role in ensuring that the financing is structured to both comply with, and take advantage of, the provisions of federal tax law. Dave is highly respected around the country for his expertise and knowledge of federal tax law relating to municipal bonds. A brief resume for each of these three attorneys follows: Stephen G. Melikian. Mr. Melikian has approximately 23 years of municipal bond experience and joined Jones Hall in 1999. He has experience in all types of municipal financings, including tax allocation bonds, revenue bonds, lease financings and assessment and special tax financings. Mr. Melikian attended Dartmouth College, where he received an A.B. in 1976, and University of Southern California where he received his J.D. in 1979. He was admitted to the California Bar in 1979 and is a member of the American Bar Association and the National Association of Bond Lawyers. Charles F. Adams. Mr. Adams has over 25 years of municipal bond experience and joined Jones Hall in 1979. He has practiced municipal bond law continuously since 1976 with experience in all areas of municipal financing as bond counsel and underwriter's counsel. Mr. Adams attended Yale University where he received his B.A. degree in 1973 and the University of Michigan where he received his J.D. degree in 1976. He was admitted to the California Bar in 1976 and is a member of the National Association of Bond Lawyers. Mr. Adams is currently a member of the City Council in his home town of Hillsborough, California. David A. Walton. Mr. Walton has over 18 years of municipal bond experience and joined Jones Hall in 1992. From 1989 to June of 1990 he was Counsel to the Assistant Chief Counsel (Technical) - Financial Institutions and Products at the Internal Revenue Service; and for two years thereafter served as an Attorney -Advisor in the Office of Tax Policy at the United States Department of Treasury where he specialized in tax-exempt finance. Mr. Walton attended Brigham Young University, where he received a B.S. degree in 1980, and Hastings College of the Law, where he received his J.D. degree in 1983. He was admitted to the Utah Bar in 1983 and the California Bar in 1990. He is currently a member of the Board of Directors of the National Association of Bond Lawyers (NABL) and was chair of the NABL's Committee on Arbitrage and Rebate from 1994 to 1997. Mr. Walton is a member of the Committee on Tax - Exempt Finance of the American Bar Association, and a member of the Editorial Advisory Board of the Public Finance Advisor. 4. SCOPE OF SERVICES If selected as bond counsel, we would propose that the "Duties of Contract or" set forth in Exhibit A to the Request for Proposals include the following duties: A. Consultation and cooperation with staff and employees of the City and their consultants, including the City's financial advisor, and assisting such staff, employees and consultants in the formulation of a coordinated financial and legal bond issuance. B. Attendance at all meetings regarding the financing that City staff feels it is appropriate for bond counsel to attend. C. Preparation of all legal proceedings for the authorization, issuance and delivery of bonds by the City; including preparation of resolutions authorizing the issuance of such bonds, fixing the date, denominations, numbers, maturity and interest rates, providing the form of the bonds and authorizing their execution, authentication and registration; certifying the terms and conditions upon which the same are to be issued; providing for the setting up of special funds for the disposition of proceeds of the sale of the bonds, and providing all other details in connection therewith; preparation of the resolution selling all or any part of the authorized bond issue; preparation of all documents required for bond delivery and supervising such delivery; preparation of all other proceedings incidental to or in connection with the issuance, sale and delivery of the bonds. D. Preparation of all assessment or special tax proceedings if an assessment district (including an improvement area under the 1965 Law or the 1989 Law) is utilized for the financing. E. Upon completion of proceedings to the satisfaction of Jones Hall, providing a legal opinion approving in all regards the legality of all proceedings for the authorization, issuance and delivery of bonds, and stating that interest on the bonds is excluded from gross income for purposes of federal income taxes and is exempt from California personal income taxation, which opinion shall inure to the benefit of the purchasers of the bonds. F. Any and all legal consultation requested by the City concerning the bonds at any time after delivery of the bonds. G. Such other and further services as are normally performed by bond counsel in connection with the issuance of lease revenue bonds or COPs or parking revenue bonds. H. Unless Jones Hall is also asked to serve as disclosure counsel to the City, Jones Hall will not be responsible for the preparation or content of the official statement prepared by the financial advisor other than to examine said official statement as concerns description of bonds and matters within Jones Hall's knowledge. 5. COMPENSATION In general, our fees are based upon factors such as the anticipated amount of the work involved and the size of the financing. Our fees include all reasonable follow-up work done at the request of the City, so that the City pays only once, at closing of the financing. Our fees are charged on a strictly contingent basis. Base Fee. Based on the financing structure we have recommended, we propose charging a percentage fee for our services as bond counsel to the City, in accordance with the following formula: 1% of the first $2.5 million principal amounts of bonds, plus 1/2 of 1% of the next $2.5 million principal amount of bonds, plus 1/4 of 1% of the next $10 million principal amount of bonds, plus 1/8 of 1% of the remaining principal amount of bonds. If the City elected to augment a General Fund or revenue financing with an improvement area established under the 1965 Law or the 1989 Law, we would propose charging an additional $10,000 for completed the proceedings required under the 1965 Law or the 1989 Law. Additionally, if Jones Hall were asked also to serve as disclosure counsel in addition with serving as bond counsel, we would propose charging a fixed fee of $15,000 for providing disclosure counsel services (which includes reimbursement for expenses). Expense Reimbursement. In addition to our base compensation listed above, we would expect reimbursement for actual out-of-pocket expenses incurred by us for shipping, delivery and courier service, photocopying, official transcript duplication and expenses for travel outside of California, if any, but specifically excluding expense for travel within the State of California. Reimbursement is also contingent upon the successful closing. We are willing to put a cap of $3,500 on the total amount of expenses which are reimbursed to us (excluding legal publication costs). Willingness to Negotiate Fees. We believe we are the most qualified firm to act as your bond counsel, in light of our overall experience and our history with the San Rafael Redevelopment Agency. While we believe our fee proposal is fair, our over-riding interest is in being chosen as your bond counsel. Therefore, if fees become a critical factor in making the selection of bond counsel, we will be happy to discuss our fees with you with the goal of reaching a mutually acceptable arrangement. 6. CONFLICTS We are not aware of any past, current or potential conflicts that might prohibit Jones Hall from serving as bond counsel to the City for the Third @ C Streets parking project. 7. INSURANCE Attached as Exhibit A are copies of our insurance certificates for general liability, malpractice and workers' compensation. Submitted by: JONES HALL, A PROFESSIONAL LAW CORPORATION Y 141iki2an StephenG. 46�6 EXHIBrr A Insurance Certificates A-1 DECLARATIONS Attaching to and forming part of Lawyers Professional Liability Insurance Certificate THIS INSURANCE is effected with certain Underwriters at Lloyd's of London (not incorporated) THIS IS A CLAIMS MADE EXCESS PROFESSIONAL LIABILITY INSURANCE POLICY PLEASE READ CAREFULLY . � 3thl 101 JAM15ON SPECIAL RISK, INC. 100 Executive Drive West Orange, NJ 07052 (The Correspondent) LAWYERS CERTIFICATE NO.: LLPP053 1. NAMED INSURED AND ADDRESS: Jones Hall, A Professional Law Corporation 650 California Street -18th Floor San Francisco, CA 94108 2. POLICY TERAL- 01/03/01 to 01/03/03 12-01 AM STANDARD TIME AT TIM ADDRESS SHOWN IN NUMBER 3 ABOVE Fust Annual Policy Period: 01/03/01 to OI/03/02 Second Annual Policy Period: 01/03/02 to 01/03/03 3. ANNUAL LIMITS OF LLABILITY UNDER THIS CERTIFICATE: All claims arising out of the same, related or continuing professional services $5,000,000 Annual Aggregate $5,00,000 4. PER -CLAIM DEDUCTIBLE: includes Claims Expense $ 50,000 5. PREMIUM SCHEDULE CLASSIFICATION PRIMARY TOTAL PREMIUM $ Lawyers 11 GROSS PRIMARY PRE11 IUM$ A 7. First Annual Premium: Second Annual Premium: (subject to change per Endorsement) RETROACTIVE DATE: TOTAL PREMIUM $ Not Applicable FORMS AND ENDORSEMENTS ATTACFIING TO THIS Lr�c tsrltATE End. # 1,2,3,4,5,6,7,8,9,10, SLA Form D-2 9 92 AUTHORIZED REPRESENTATIVE of Jamison Special Risk, Inc_ nmr- niAi CERTIFICATE OF INSr-<ANCE PI ODUCER ' -- — -.—Cert# 15008 CALENDER-ROBINSON CO., INC. 185 MARKET ST. #750 SAN FRANCISCO, CA 94103 (415) 978-3800 FAX (415) 978-3825 IIJ§URED - --- -- - JONES HALL, A PROFESSIONAL LAW CORPORATION 650 CALIFORNIA STREET #1800 SAN FRANCISCO, CA 94108 ISSUE DATE _ _ 09/01/2001 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND -CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND. EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. COMPANIES AFFORDING COVERAGE — COMPANY A HARTFORD INSURANCE COMPANY COMPANY -" - B HARTFORD INSURANCE COMPANY COMPANY C STATE COMPENSATION INSURANCE FUND COMPANY - D ICOVERAGES THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED NOTWITHSTANDING ANY REQUIREMENT, 7ERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO LMtICH THIS CERTIFICATE MAY BE IStSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN 13 SUBJECT TO ALL THE TERMB, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMBS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS CO TYPE OF INSURANCE LTR GENERAL LIABILITY .)C- COMMERCIAL GENERAL LIABILITY A - -:— CWMS MADE DccuR OWNER'S & CONTRACTOR'S PROT_ INCLUDES SEVERARILTTY OF _ INTEREST CLAUSE AUTOMOBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS A� HIRED AUTOS NON OWNED AUTOS GARAGE LIABILITY ANYAuTO EXCESS LIABILITY — B UMBRELLA FORM OTHER THAN UMBRELLA FORM 1NORKER'S COMPENSATION AND EMPLOYERS' LIABILITY C THE PROPRIETOR/ F-Xl INCL PARTNERVEXECUTIVE DFFICERSARE: j I EXCL OTHER POLICYNuMBER POLICY EFFECTIVE POLICY EXPIRATION LIMITS DATE (MM)00/YY) • - - DATE (MM)DDNY) 1 aGGitEGAYE ---- S • — -•• !GENERALAGGRECATE 15 4,000,000 57 SBA NK7611 OCT 101 OCT 102 PRODUCTS-COMP/OPAGG- IS 4,000,000 tDISEASE-POLtcYLaLTT —_— �S 1,000,000 Is PERSONAL a Arnr INJURY 3 2.000.000 •:EACH OCCURii NCE • � ' j s 2,000,000 IFIRE DAMAGE(Any One F'ro) Is 300,000 ;MED_ EXPENSE(Any One Petsonj( S 10,000 57 SBA NK7611 OCT 1 01 OCT 1 02 I COMBINED SINGLE LIMIT j S i 2,000,000 I BODILY INJURY (Por Person) 3 BODILY INJURY s (PorAcaoenq PROPERTY DAMAGE �s 57 SBA NK7611 OCT 101 537-4823-01 APR 1 01 t+c�1.'iiR' i YGn Oh Opi RAnoNS/LoCA-noNs)vEHiCLEsIsPECu1L 11 tm ;AUTO ONLY . EA ACCIDENT is OTHER TW W AUTO ONLY: E- EACHACCIDNT s 1 aGGitEGAYE ---- S OCT 1 02 I EACH OCCURRENCE S 1,000,000 AGGREGATE - ---- S 1,000,000 I STATUTORYLIMITS i APR 1 02 EACH ACCIDENT tDISEASE-POLtcYLaLTT —_— �S 1,000,000 Is �piSEASE:FJ+CNEhIPLOYEE 1,000,000 i 1•CERT)F,ICATEHOLDER.' A5ADDITIONAL.INSURED-- CANCELLATION. SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO 1'6E CERTIfICATE HOLDER NAMED TO THE LEFT BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KN0 UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES. AYNOy10E OF CANCELLATION APPLIES FOR NONPAYMENT OF PREMIUM A D ncrncx . TIVE INSURANCE BINDER - DATE(MM/DD,YY; 03/25/2002 THIS 8INDEI2IS A TEMPORARY INSURANCE CONTRACT, SUBJECT TO THE CONDITIONS SHOWN ONYHIS FORM. PkODUCCR ;PHONE (415% 978.3800 --- COMPANY ' -- • --"'" - - " -- - .. _ DINGFTi#-" n,c Notal - - -- STATE COMPENSATION INS f UND 5480 CALENDER ROBINSON CO, INC ETT[cTIVEDATE TIME DATE TIME 785 MARKET ST. #750 _ _ _ ; SAN FRANCISCO, CA 94103 X AM 1 ' -X it;J 04/01/2002 12:21 I -- � 06/01/2002 12:01 (415) 978-3800 = , PM FAX (415) 978-3825 - _ THIS BINDER IS ISSUED TO EXTEND COVERAGES IN THE ABOVE NAMED Cof)t:—FM1ihlIPH I SUB CODE- I 'COMPANY PER EXPIRING POLICY#: . AGENCY C,IISTOMER ID: 55'74 I DESCRIPTION OF OPERATIONSNEHICLESIPROPERTY (1—waing Lo lion) .ZONES HALL, A PROFESSIONAL LAW rnRpnanTlnN - 650 CALIFORNIA STREET #18DO SAN FRANCISCO, CA 94108 COVERAGES TYPE OF INSURANCE PROPERTY CAUSES OF LOSS OASIC __iBROAD j___jSPEG GENERAL LIABILITY COMMERCIAL GENERAL LIABILITY �CLAIMSMADE OCCUR. 1 OWNER'S d CONTRACTOR'S PROT. ALITOMDBILE LIABILITY ANY AUTO ALL OWNED AUTOS SCHEDULED AUTOS HIRED AUTOS NON -OWNED AUTOS COVERAGEIFORMS l RETRO DATE FOR CLAIMS MADE' i i SPECIAL CONDmONSI OTHER COVERAGES (NAME & ADDRESS LIMITS DEDUCTIBLE COWS% AMOUNT i GENERAL AGGREGATE S 1 AUTO PHYSICAL DAMAGE DEDUCTIBLE _ L VEHICLESI SCHEDULED VEHICLE I S COLLISION: J ... OTHER THAN COLL: FIRE DAMAGE (Any one f—) GARAGE LIABILITY .. .- •. . •- -- ... _--- ANY AUTO ! EXCESS LIABILITY f Fl L( UMBRELLA BODILY INJURY (Per ecrideryt) THER THAN UMBRELLA FORM i RETRO DATE FOR CLAIMS MADE: s J J WORKER'S COMPENSATION i AND EMPLOYER'S LIABILITY i i SPECIAL CONDmONSI OTHER COVERAGES (NAME & ADDRESS LIMITS DEDUCTIBLE COWS% AMOUNT i GENERAL AGGREGATE S IS PRODUCTS - COMPIOP AGG I S PERSONd AL ADV IrUURY : s ' EACH OCCURRENCE ' S i FIRE DAMAGE (Any one f—) i S MEDICAL EXPENSE (Ary mm peroon) i COMBINED SINGLE LIMB S BODILY INJURY(Perper--on) BODILY INJURY (Per ecrideryt) i S " PROPERTY DAMAGE s MEDICAL PAYMENTS S PERSONAL INJURY PROT S UNINSURED MOTORIST IS IS __ ACTUAL CASH VALUE STATEDAMOUNT --- - --� S ! OTHER AUTO ONLY -EA ACCIDENT S OTHER THAN AUTO ONLY' EiiGWi iZG1DENT S AGGREGATE S EACH OCCURENCE S AGGREGATE $ SELF-INSURED RETENTION S— -- STATUTORY LIMITS I EACH ACCIDENT DISEASE -POLICY LIMIT S DISEASE - EACH EMPLOYEE -' S FEES S TAXES -- - - -•.-.. - . ... IS ESTIMATED TOTAL PREMIUM Is MORTCAGEF I ADDITIONAL INSURED LOSS PAYEE - L A " D/REPRESENTATIVE ATTN' _J