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
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APWYED, { f�ORM:
City Attome
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Name:
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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
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OCT 1 02 I EACH OCCURRENCE
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I STATUTORYLIMITS
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tDISEASE-POLtcYLaLTT —_—
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Is
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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
...
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GARAGE LIABILITY ..
.- •. . •- -- ... _---
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!
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f
Fl
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s
J J
WORKER'S COMPENSATION
i
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i
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(NAME & ADDRESS
LIMITS
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GENERAL AGGREGATE
S
IS
PRODUCTS - COMPIOP AGG
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i
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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 --- - --�
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! OTHER
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FEES
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