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HomeMy WebLinkAboutCC Resolution 13110 (Bond & Disclosure Counsel; Jones Hall)RESOLUTION NO. 13110 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AUTHORIZING THE PUBLIC WORKS DIRECTOR TO ENTER INTO A PROFESSIONAL SERVICES AGREEMENT WITH JONES HALL FOR BOND COUNSEL AND DISCLOSURE COUNSEL SERVICES IN CONNECTION WITH THE FORMATION OF THE PROPOSED PT. SAN PEDRO ROAD MEDIAN LANDSCAPING ASSESSMENT DISTRICT. WHEREAS, the Pt. San Pedro Road Median Landscaping Committee has requested that the City of San Rafael proceed with formation of an Assessment District; and WHEREAS, the Pt. San Pedro Road Median Landscaping Committee has collected adequate funds to pay for the preliminary costs for consulting services for formation of the proposed District; and WHEREAS, the formation of an Assessment District using 1972 Lighting and Landscaping Act requires services of expert consultants; and WHEREAS, City staff has selected Jones Hall to provide the required bond counsel and disclosure counsel services needed in connection with formation of the proposed District; and WHEREAS, Jones Hall has submitted a proposed Professional Services Agreement for the provision of bond counsel and disclosure counsel services in connection with formation of the District, with bond counsel services to be provided for 2% of the first $1.5 million assessment amount (minimum fee of $25,000 for an assessment less than $1.5 million), and 1% of the remaining assessment amount, with only $10,000 of these fees payable if the District is not formed, and the remainder of the fees to be paid entirely out of bond proceeds if bonds are issued and sold, and with disclosure counsel services to be provided for a flat fee of $22,500, payable only if bonds are issued and sold, with payment to be made entirely out of bond proceeds WHEREAS, City staff has reviewed the fee proposal made by Jones Hall and found it to be within industry standards and acceptable. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Rafael that the Public Works Director is authorized to execute the Agreement for Professional Services with Jones Hall, with the fees as specified in the Recitals to this Resolution, and in a form approved by the City Attorney's office. RESOLVED FURTHER that the Interim City Manager of the City of San Rafael is hereby authorized to take any and all such actions and snake changes as may be necessary to accomplish the purpose of this resolution. I, ESTHER C. BEIRNE, 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 Council of said City held on the 22nd day of February, 2011, by the following vote, to wit: AYES: COUNCIL MEMBERS: Brockbank, Connolly, Heller, Levine & Mayor Boro NOES: COUNCIL MEMBERS: None ABSENT: COUNCIL MEMBERS: None .t�eKe . ESTHER C. BEIRNE, City Clerk File No.: 06.01.208 AGREEMENT FOR LEGAL SERVICES BETWEEN THE CITY OF SAN RAFAEL AND JONES HALL, A PROFESSIONAL LAW CORPORATION, FOR BOND COUNSEL SERVICES AND DISCLOSURE COUNSEL SERVICES IN CONNECTION WITH ASSESSMENT DISTRICT FORMATION AND ISSUANCE OF LIMITED OBLIGATION IMPROVEMENT BONDS This AGREEMENT FOR LEGAL SERVICES is entered into this 22nd day of March, 2011, between the CITY OF SAN RAFAEL (the "Client") and JONES HALL, A PROFESSIONAL LAW CORPORATION, San Francisco, California ("Attorneys"). BACKGROUND: 1. The Client proposes to conduct assessment district proceedings to form an assessment district (the "Assessment District") and finance public improvements consisting generally of median landscaping and related improvements within Pt. San Pedro Road (the "Project") by issuing limited obligation improvement bonds (the "Bonds") secured by the assessments levied within the Assessment District 2. In order to form the Assessment District and issue and sell the Bonds, the Client requires the services of nationally -recognized bond counsel and disclosure counsel. AGREEMENT: In consideration of the foregoing and the mutual covenants contained in this Agreement, the Client and Attorneys agree as follows: Section 1. Attornev-Client Relationship. Upon execution of this Agreement, the Client will be Attorney's client and an attorney-client relationship will exist between Client and Attorneys. Attorneys assume that all other parties will retain such counsel, as they deem necessary and appropriate to represent their interests in this transaction. Attorneys further assume that all other parties understand that in this transaction Attorneys represent only the Client, Attorneys are not counsel to any other party, and Attorneys are not acting as an intermediary among the parties. Attorneys' services are limited to those contracted for in this Agreement; the Clients execution of this Agreement will constitute an acknowledgment of those limitations. Attorneys' representation of the Client will not affect, however, our responsibility to render an objective Bond Opinion. Section 2. Scope of Enqaqement as Bond Counsel. Attorneys shall perform all of the following services as bond counsel in connection with the issuance and sale of the Bonds for the purpose of providing financing for the Project: a. Consultation and cooperation with Client and Client staff to assist in the formulation of a coordinated financial and legal issuance of the Bonds. b. Preparation of all legal proceedings for the formation of the Assessment District, including (a) preparation of all necessary resolutions of the governing board of the Client, and (b) participating with the Client and the Client's assessment engineer and other consultants in the preparation of related ballots, certificates, and notices. c. Preparation of all legal proceedings for the authorization, issuance and delivery of the Bonds by the Client; including (a) preparation of a resolution of the governing board of the Client authorizing the issuance and sale of the Bonds and approving related documents and actions, (b) preparation of all financing documents, which may include a fiscal agent agreement or indenture of trust, (c) preparation of all documents required for the closing of the issue, (d) supervising the closing, and (e) preparation of all other proceedings incidental to or in connection with the issuance and sale of the Bonds. d. Advising the Client, from the time Attorneys are hired as Bond Counsel until the Bonds are issued, as to compliance with federal tax law as required to ensure that interest on the Bonds is exempt from federal income taxation. e. Upon completion of proceedings to Attorneys' satisfaction, providing a legal opinion (the "Bond Opinion") approving the validity and enforceability of the proceedings for the authorization, issuance and delivery of the Bonds, and stating that interest on the Bonds is (a) excluded from gross income for purposes of federal income taxes and (b) exempt from California personal income taxation. The Bond Opinion will be addressed to the Client, and may also be addressed to the underwriter of the Bonds and other participants in the financing. Review those sections of the official statement or other form of offering or disclosure document to be disseminated in connection with the sale of the Bonds involving summary descriptions of the Bonds, the legal proceedings leading to the authorization and sale of the Bonds, the legal documents under which the Bonds will be issued, and federal tax law and securities law provisions applicable to the Bonds, as to completeness and accuracy. g. Assist the Client in presenting information to bond rating organizations and providers of credit enhancement relating to legal issues affecting the issuance of the Bonds. h. Such other and further services as are normally performed by bond counsel in connection with similar financings. Attorneys' Bond Opinion will be delivered by Attorneys on the date the Bonds are exchanged for their purchase price (the "Closing"). The Bond Opinion will be based on facts and law existing as of its date, will cover certain matters not directly addressed by such authorities, and will represent Attorneys' judgment as to the proper treatment of the Bonds for federal income tax purposes. Attorneys' opinion is not binding on the Internal Revenue Service ("IRS") or the courts. Attorneys cannot and will not give any opinion or assurance about the effect of future changes in the Internal Revenue Code of 1986 (the "Code"), the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. Client acknowledges that future legislation, if enacted into law, or clarification of the Code may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation, or otherwise prevent owners of the Bonds from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such future legislation or clarification of the Code may also affect the market price for, or marketability of, the Bonds. Attorneys will express no opinion regarding any pending or proposed federal tax legislation. -2- In rendering the Bond Opinion, Attorneys will rely upon the certified proceedings and other certifications of public officials and other persons furnished to Attorneys without undertaking to verify the same by independent investigation, and Attorneys will assume continuing compliance by the Client with applicable laws relating to the Bonds. Section 3. Scope of EnQaoement as Disclosure Counsel. Attorneys shall perform all of the following services as disclosure counsel in connection with the issuance and sale of the Bonds for the purpose of providing financing for the Project: a. Prepare the Official Statement (both preliminary and final) or other disclosure documents in connection with the offering of the Bonds. b. Confer and consult with the officers and administrative staff of the Client as to matters relating to the Official Statement. Attend all meetings of the Client and any administrative meetings at which the Official Statement is to be discussed, deemed necessary by Attorneys for the proper exercise of their due diligence with respect to the Official Statement, or when specifically requested by the Client to attend. d. On behalf of the Client, prepare the bond purchase contract pursuant to which the Bonds will be sold to the underwriter and a continuing disclosure certificate of the Client to assist the underwriter with complying with Securities and Exchange Commission Rule 15c2-12. e. Subject to the completion of proceedings to the satisfaction of Attorneys, provide a letter of Attorneys addressed to the Client and the underwriter that, although Attorneys are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Official Statement and make no representation that Attorneys have independently verified the accuracy, completeness or fairness of any such statements, no facts have come to Attorneys' attention that cause Attorneys to believe that the Official Statement (except for any financial and statistical data and forecasts, numbers, estimates, assumptions and expressions of opinion, and information concerning the Bond Insurance Policy and the Insurer (if any), and information concerning the Depository Trust Company and the book -entry system for the Bonds, contained or incorporated by reference in the Official Statement and the appendices to the Official Statement, which Attorneys will expressly exclude from the scope of this sentence) as of the date of the Official Statement or the date hereof contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Section 4. Excluded Services. Our duties in this engagement are limited to those expressly set forth above in Sections 2 and 3, except as expressly set forth in a written amendment to this Agreement. Among other things, our duties do not include: a. Preparing requests for tax rulings from the Internal Revenue Service, or "no -action" letters from the Securities and Exchange Commission. b. Preparing blue sky or investment surveys with respect to the Bonds. c. rafting state constitutional or legislative amendments. -3- d. Pursuing test cases or other litigation, such as contested validation proceedings. e. Making an investigation or expressing any view as to the creditworthiness of the Client or the Bonds. f. Except as described in paragraph 3(d) above, assisting in the preparation of, or opining on, a continuing disclosure undertaking pertaining to the Bonds or, after Closing, providing advice concerning any actions necessary to assure compliance with any continuing disclosure undertaking. g. Representing the Client in Internal Revenue Service examinations, audits or inquiries, or Securities and Exchange Commission investigations. h. After Closing, unless specifically requested to do so by Client, and agreed to by Attorneys, providing continuing advice to the Client or any other party concerning any actions that need to be taken regarding the Bonds; e.g., actions necessary to assure that interest paid on the Bonds will continue to be excludable from gross income for federal income tax purposes (e.g., our engagement does not include rebate calculations for the Bonds). Reviewing or opining on the business terms of, validity, or federal tax consequences of any investment agreement that the Client may choose as an investment vehicle for the proceeds of the Bonds, unless the Client and Attorneys agree on the terms of such review and compensation for such review. Reviewing or opining on the business terms of, validity, or federal tax consequences of any derivative financial products, such as an interest rate swap agreement, that the Client may choose to enter into in connection with the issuance of the Bonds, unless the Client and Attorneys agree on the terms of such review and compensation for such review. k. Addressing any other matter not specifically set forth above that is not required to render our Bond Opinion. Section 5. Conflicts; Prospective Consent. Attorneys represent many political subdivisions, investment banking firms and financial advisory firms. It is possible that during the time that Attorneys are representing the Client, one or more of Attorneys present or future clients will have transactions with the Client. It is also possible that Attorneys may be asked to represent, in an unrelated matter, one or more of the entities involved in the issuance of the Bonds. Attorneys do not believe such representation, if it occurs, will adversely affect Attorneys' ability to represent you as provided in this Agreement, either because such matters will be sufficiently different from the issuance of the Bonds so as to make such representations not adverse to our representation of you, or because the potential for such adversity is remote or minor and outweighed by the consideration that it is unlikely that advice given to the other client will be relevant to any aspect of the issuance of the Bonds. Execution of this Agreement will signify the Clients consent to Attorneys' representation of others consistent with the circumstances described in this paragraph. Section 6. Compensation. ISE Bond Counsel Services. Based on Attorneys' current understanding of the terms, structure, size and schedule of the financing represented by the Bonds, the services set forth under Section 2, and the time Attorneys' anticipate devoting to the financing, the Client will pay Attorneys a fee for Bond Counsel services equal to the sum of the following, in each case expressed as a percentage of the final assessment amount appearing in the engineer's report and the assessment ballots: 2% of the first $1.25 million assessment amount (with a minimum fee of $25,000 for assessment amounts less than $1.25 million) 1 % of the remaining assessment amount These fees are payable in two components: (a) portion of the above fee equal to $10,000 will be paid after the end of the public hearing and tabulation of ballots (whether or not the balloting is favorable and the Assessment District formation is allowed to proceed), and will be payable from property owner deposits or any other source of available funds to the Client, and (b) the balance of the above fee, and our expenses as set forth below, will be entirely contingent on the sale and issuance of the Bonds, and will be payable solely from the proceeds of the Bonds and from no other funds of the Client. In addition, the Client shall pay to Attorneys all direct out-of-pocket expenses for travel outside the State of California (if any), messenger and delivery service, photocopying, closing costs, legal publication expenses and other costs and expenses incurred by Attorneys in connection with their services hereunder. Attorneys' fee may change if (i) the principal amount of the Bonds actually issued differs significantly from the amount stated above, (ii) material changes in the structure or the schedule of the financing occur or (iii) unusual or unforeseen circumstances arise which require a significant increase in Attorneys' time or responsibility. If, at any time, Attorneys believe that circumstances require an adjustment of our original fee, Attorneys will advise Client of those circumstances and reach agreement with you on the amount of the revised fee. . Disclosure Counsel Services. Based on Attorneys' current understanding of the terms, structure, size and schedule of the financing represented by the Bonds, the services set forth under Section 3, and the time Attorneys' anticipate devoting to the financing, the Client will pay Attorneys a flat fee for disclosure counsel services equal to $22,500. Attorneys will bear all of their expenses in rendering services as disclosure counsel under this Agreement, and shall not be entitled to reimbursement therefor. The above fee will be entirely contingent on the sale and issuance of the Bonds, and will be payable solely from the proceeds of the Bonds and from no other funds of the Client. Section 7. Responsibilities of the Client. (a) General. The Client will cooperate with Attorneys and furnish Attorneys with certified copies of all proceedings taken by the Client, or otherwise deemed necessary by Attorneys to render an opinion upon the validity of the proceedings. During the course of this engagement, Attorneys will rely on Client to provide Attorneys with complete and timely information on all developments pertaining to any aspect of the Bonds and their security. Attorneys are not responsible for costs and expenses incurred incidental to the actual issuance and delivery of the Bonds, including the cost of preparing certified copies of proceedings required by Attorneys in connection with the issuance of the Bonds, and printing and publication costs. (b) Federal Tax Law -Related Responsibilities. The Code imposes various restrictions, conditions and requirements relating to the exclusion from gross income for federal income tax purposes of interest on obligations such as the Bonds. As a condition of Attorneys -5- issuing their opinion, you will be required to make certain representations and covenants to comply with certain restrictions designed to insure that interest on the Bonds will not be included in federal gross income. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Bonds. Attorneys' opinion will assume the accuracy of these representations and compliance with these covenants. Attorneys will not undertake to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds. In this regard, Client agrees to familiarize itself with the relevant requirements and restrictions necessary for the Bonds to qualify for exemption from federal income taxation and to exercise due diligence both before and after issuance of the Bonds in complying with these requirements. (c) Legal Challenges to Assessment District Formation. (i) Client acknowledges that Attorneys duties under this agreement do not include participation to any material extent in defending any litigation or legal challenges to the formation of the Assessment District or the issuance of the Bonds. Client may engage the services of Attorneys in connection with the defense of such litigation or legal challenge on such terms and compensation upon which Client and Attorneys may agree. (ii) If any litigation or legal challenge is brought against the formation of the Assessment District or the issuance of the Bonds which names Attorneys as a party, Client agrees (to the extent permitted by law) to indemnify Attorneys and their employees against, and reimburse Attorneys for, any legal expenses or other expenses reasonably incurred by Attorneys and their employees in connection with participating in, responding to or defending any such litigation or legal challenge. Section 8. Indeoendent Contractor. Attorneys will act as an independent contractor in performing the services required under this Agreement, and under no circumstances shall Attorneys be considered an agent, partner, or employee of the Client. Section 9. Assignment. Attorneys may not assign their rights or delegate their obligations under this Agreement, in whole or in part, except with the prior written consent of the Client. Section 10. Termination of Agreement. (a) Termination by Client. This Agreement may be terminated at any time by the Client with or without cause upon written notice to Attorneys. (b) Termination by Attornevs. This Agreement may be terminated by Attorneys upon 15 days' written notice to Client if Client fails to follow written legal advice given by Attorneys. (c) Termination Upon Issuance of Bonds. This Agreement shall terminate upon the issuance of the Bonds. (d) Consequences of Termination. In the event of termination, all finished and unfinished documents shall at the option of the Client become its property and shall be delivered to the Client by Attorneys. Section 11. Notices. Any notice required to be given under this Agreement shall be in writing and either served personally or sent prepaid, first class mail. Any such notice shall be addressed to the other party at the address set forth below. Notice shall be deemed communicated within 48 hours from the time of mailing if mailed as provided in this section. IM If to Client Public Works Director City of San Rafael 111 Morphew Street San Rafael, CA 94901 If to Attorneys: Jones Hall 650 California Street, 18`h Floor San Francisco, CA 94108 IN WITNESS WHEREOF, the Client and Attorneys have executed this Agreement as of the date first above written. ATTEST: Esther C. Beirne, City Clerk APPROVED AS TO FORM: Robert F. Epstein, City Attorney File No.: 06.01.208 CITY OF SAN RAFAEL By: '.1 Nader Mansourian, Public Works Director JONES HALL, A PROFESSIONAL LAW CORPORATION 2� Scott R. Fergusor� Vice President (v/ WA