HomeMy WebLinkAbout04/20/1993, C-2 - RENEW BOND COUNSEL AGREEMENT WITH JONES, HALL, HILL & WHITE IIUIII 'f1/ r _ MEETING DATE_
City O f San LUIS OBS SPO
COUNCIL AGENDA REPORT ITEM NUMBER
FROM: William C. Statler, Director of Finance���✓—� ,/
Prepared by: Linda Asprion, Revenue Manager/*fir
SUBJECT: RENEW BOND COUNSEL AGREEMENT WITH JONES, HALL, HILL
& WHITE
CAO RECOMMENDATION
Authorize the Mayor to execute an agreement with Jones, Hall,Hill & White to retain their
services as the City's Bond Counsel.
DISCUSSION
Background
On November 1, 1988 the Council approved the selection of Jones, Hall, Hill & White as
the City's bond counsel and authorized the execution of an agreement with annual renewals
for five years. The selection of this firm was based on an evaluation of four proposals
solicited through a request for proposal (RFP) process. The criteria used in the selection
process was as follows:
■ Demonstrated professional skills and credentials of the staff to be assigned to the
proposed financings
■ Related experience and references
i Quality of the proposal
■ Approach to performing the services
■ Proposed compensation structure
Jones, Hall, Hill & White has served as the City's bond counsel for three financings - the
1988 Water Fund Certificates of Participation, the General Fund 1990 Certificates of
Participation, and the 1993 Water Revenue Bonds.
Why does the City need bond counsel?
Bond Counsel provides a number of specific technical legal services relating to case-by-case
project financings that cannot reasonably be provided by staff. These services include but
are not limited to the following:
■ Examining the applicable law relating to the financing to be accomplished from the
proceeds.
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MIGn COUNCIL AGENDA REPORT
■ Preparing all legal proceedings necessary for the authorization and delivery of the
issuance.
■ Applying to the Internal Revenue Service for any rulings necessary to assure tax-
exempt status.
M Advising the City on registration requirements of the Securities Exchange
Commission or California Corporations Commission.
■ Examining any official statement or other document as to the sufficient description
of the debt issue.
■ Approving the validity of the financing agreements and the execution and delivery
of the debt issuance.
What are the key provisions of the proposed agreement?
The proposed agreement with Jones, Hall, Hill & White is for a period of one year and may
be renewed annually for a cumulative period not to exceed three years (April 20, 1996).
Their compensation is based on the same fee structure as the 1988 agreement with no
additional increases. It should be noted that payment for bond counsel services is entirely
contingent upon the delivery of a financing issuance and all fees are paid solely from the
proceeds of the issuance and from no other City funds.
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Why should the City conhvwe to use loru4 Half H71r & White as bond counsel?
Jones, Hall, Hill & White has provided outstanding service to the City at a very competitive
cost. As we go forward on a number of key capital projects - Salinas Reservoir expansion,
performing arts center, headquarters fire station, Nacimiento Reservoir - continuity of
sound legal advice will be extremely important to us.
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FISCAL IMPACT
As indicated above, the bond counsel's compensation is entirely contingent on the
completion of a financing and is payable solely from the proceeds of the issuance and from
no other City funds. The proposed compensation schedule is unchanged from that agreed
upon five years ago, summarized as follows:
1% for the first $1,000,000; 1/2% of the next $4,000,000; 1/4% of the next
$5,000,000; 1/8% of the next $10,000,000; and 1/16% of any amount in excess of
$20,000,000.
The compensation indicated above covers out-of-pocket costs incurred by bond counsel
unless out-of-state expenses such as travel, messenger and delivery services, or legal
publication are required.
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��Ill�i�iiimllllllllll�°�uil���lh City of San LUIS OBISp0
l COUNCIL AGENDA REPORT
SUMMARY
Jones, Hall, Hill & White has proven themselves as trustworthy bond counsel who can on
a case-by-case basis examine applicable financing laws, prepare financing agreements, and
advise the City regarding Internal Revenue Service, Securities Exchange Commission, and
California Corporation Commission requirements. Jones, Hall, Hill & White is a long-
standing firm employing individuals with experience, integrity, and excellent technical j
abilities. As such, we recommend approval of the agreement.
ATTACHMENT
Agreement for Bond Counsel Services
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AGREEMENT FOR BOND COUNSEL SERVICES
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THIS AGREEMENT is made and entered into in the City of San Luis Obispo on
this 20th day of April, 1993, by and between the CITY OF SAN LUIS OBISPO, California
(hereinafter referred to as "City"), and JONES, HALL, HILL & WHITE, A
PROFESSIONAL LAW CORPORATION, (hereinafter referred to as 'Bond Counsel').
WITNESSETH:
WHEREAS, the City desires to retain the services of the Bond Counsel to serve as
the City's legal advisor in connection with financing proceedings in accordance with the
terms of this Agreement; and
WHEREAS, City desires to engage Bond.Counsel to provide these services by reason
of its qualifications and experience for performing such services, and Bond Counsel has
offered to provide the requested services on the terms and in the manner set forth herein.
NOW THEREFORE, in consideration of their mutual covenants, the parties hereto
agree as follows:
1. PROGRAM COORDINATION
A. City. The Director of Finance or designated representative shall be the
Program Manager representing the City for all purposes under this agreement.
The Program Manager shall supervise the progress and execution of this
agreement.
B. Bond Counsel. Bond Counsel shall assign a single Program Manager to have
overall responsibility for the progress and execution of this agreement for
Bond Counsel.
2. DUTIES OF BOND COUNSEL
A. Services to be furnished. The Bond Counsel shall provide the services as
described in Exhibit "A".
B. Laws to be observed. Bond Counsel shall:
1. Procure all permits and licenses, pay all charges and fees, and give all
notices which may be necessary and incidental to the due and lawful
prosecution of the services to be performed by the Bond Counsel
under this agreement;
2. Keep itself informed of all existing and proposed federal, state and
local laws, ordinances, regulations, orders, and decrees which may
affect those engaged or employed under this agreement, and materials
used in Bond Counsel's performance under this agreement, or the
conduct of the services under this agreement.
3. At all times observe and comply with and cause all of its employees to
observe and comply with all of said laws, ordinances, decrees and
orders mentioned above.
C. Release of reports and information. Any reports, information, data or other
material given to, or prepared or assembled by, Bond Counsel under this
agreement shall be the property of City and shall not be made available to
any individual or organization by Bond Counsel, except in fulfillment of Bond
Counsel's duties under law or under this agreement.
D. Qualifications of Bond Counsel. Bond Counsel represents that it is qualified
to furnish the services described under this agreement.
3. DUTIES OF THE CITY
City agrees to cooperate with Bond Counsel in its performance of work.
4. COMPENSATION
For furnishing Bond Counsel Services as specified in this agreement, City will pay
and consultant shall receive compensation as follows:
A. 1% for the first $1,000,000; 1/2% of the next $4,000,000; 1/4% of the next
$5,000,000; 1/8% of the next $10,000,000; and 1/16% of any amount in excess
of $20,000,000.
B. In addition, the City will reimburse Bond Counsels for all out-of-pocket costs
and expenses incurred by Bond Counsels in connection with their services
hereunder for out-of-state travel, messenger and delivery services;
photocopying, legal publication, and the cost of preparing transcripts of the
proceedings for closing purposes.
C. Payment of compensation shall be entirely contingent, and shall be due and
payable, upon the delivery of the financing issuance; and shall be payable
solely from the proceedings of the issuance and from no other funds of the
City.
5. TERM OF CONTRACT
The term of this Agreement shall be for a period of one year and may be renewed
annually thereafter for a cumulative period not to exceed three years from the date
of this Agreement.
6. TERMINATION
The City retains the right to terminate this Agreement.for any reason with or without
cause by notifying the Bond Counsel in writing thirty(30) days prior to termination
and by paying the compensation due and payable to the date of termination. Said
compensation is to be arrived at by mutual agreement of the City and Bond Counsel
and should they fail to agree, then an independent arbitrator is to be appointed, and
the independent arbitrator's decision shall be binding upon the parties. Upon such
termination, Bond Counsel shall turn over to the City immediately any and all copies
of studies, sketches, drawings, computations, and other data, whether or not
completed, prepared by Bond Counsel, and for which Bond Counsel has received
reasonable compensation, or given to Bond Counsel in connection with this
Agreement. Such materials shall become the permanent property of City. Bond
Counsel, however, shall not be liable for City's use of incomplete materials or for
City's use of complete documents if used for other than the project contemplated by
this Agreement.
\� 7. INSPECTION
Bond Counsel shall furnish City with every reasonable opportunity for City to
_ascertain that the services of Bond Counsel are being performed in accordance with
the requirements and intentions of this agreement. All work done and all materials
furnished, if any, shall be subject to the City Program Manager's inspection and
approval. The inspection of such work shall not relieve Bond Counsel of any of its
obligations to fulfill its agreements as prescribed.
8. ASSIGNMENT
This Agreement is for the performance of being the Financial Advisor for the City
and is not assignable by the Bond Counsel without prior written consent of the City.
9. NOTICE
All notices hereunder shall be given in writing and mailed, postage prepaid, by
Certified Mail, addressed as follows:
To City: City Clerk
City of San Luis Obispo
P. O. Box 8100
San Luis Obispo, CA 93403-8100
To Bond Counsel: Vice President
Jones, Hall, Hill & White
Four Embarcadero Center, Suite 1950
San Francisco, CA 94111
10. INTEREST OF BOND COUNSEL
Bond Counsel covenants that it presently has no interest and shall not acquire any
interest, direct or indirect,financial or otherwise,which would conflict in any manner
or degree with the performance of the services hereunder. Bond Counsel further
covenants that, in the performance of this agreement, no subcontractor or person
having such an interest shall be employed. Bond Counsel certifies that no one who
has or will have any financial interest under this agreement is an officer or employee
of the City. It is expressly agreed that, in the performance of the services hereunder,
Bond Counsel shall at all times be deemed an independent consultant and not an
agent or employee of the City.
11. INDEMNITY
Bond Counsel hereby agrees to indemnify and save harmless City, its officers, agents
and employees from:
A. Any and all claims and demands which may be made against City, its officers,
agents or employees by reason of any injury to or death of any person or
corporation caused by an negligent act or omission of Bond Counsel under
this agreement or of Bond Counsel's employees or agents.
B. Any and all damage to or destruction of the property of City, its officers,
agents or employees, occupied or used by or in the care, custody or control
of Bond Counsel, or in proximity to the site of Bond Counsel's work, caused
by any negligent act or omission of Bond Counsel under this agreement or of
Bond Counsel's employees or agents.
C. Any and all claims and demands which may be made against City, its officers,
agents or employees by reason of any injury to or death of or damage suffered
or sustained by any employee or agent of Bond Counsel under this agreement,
however caused, excepting, however, any such claims and demands which are
the result of the negligence or willful misconduct of City, its officers, agents,
or employees.
D. Any and all penalties imposed or damages sought on account of the violation
of any law or regulation or of any term or condition of any permit, when said
violation of any law or regulation or of any term or condition of any permit
is due to negligence on the part of the Bond Counsel.
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12. WORKER'S COMPENSATION
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Bond Counsel certifies that it is aware of the provisions of the Labor Code of the
State of California, which require every employer to be insured against liability for
workers compensation or to undertake self-insurance in accordance with the
provisions of that code, and it certifies that it will comply with such provisions before
commencing the performance of the work in this Agreement.
13. INSURANCE
Bond Counsel shall provide proof of insurance in accordance with Insurance
Requirements for Bond Counsels as described in Exhibit "A" attached hereto and
incorporated herein by reference as though fully set forth.
14. AGREEMENT BINDING
The terms, covenants, and conditions of this agreement shall apply to, and shall bind,
the heirs, successors, executors, administrators, assigns, and subcontractors of both
parties.
15. WAIVERS
The waiver by either party of any breach or violation of any term, covenant, or
condition of this agreement or of any provision, ordinance, or law shall not be
deemed to be a waiver of any subsequent breach or violation of the same or of any
other term, covenant, condition, ordinance, or law. The subsequent acceptance by
either party of any fee or other money which may become due hereunder shall not
be deemed to be a waiver of any preceding breach or violation by the other party of
any terms, covenant, or condition of this agreement or of any applicable law or
ordinance.
16. COSTS AND ATTORNEY'S FEES
The prevailing party in any action between the parties of this agreement brought to
enforce the terms of this agreement or arising out of this agreement may recover its
reasonable costs and attorney's fees expended in connection with such action from
the other party.
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17. DISCRIMINATION �—
No discrimination shall be made in the employment of persons under this agreement
because of race, color, national origin, ancestry, religion, sexual orientation, or sex
of such person.
If Bond Counsel is found to be in violation of the nondiscrimination provisions of the
State of California Fair Employment Practices Act or similar provisions of federal
law or executive order in the performance of this agreement, it shall thereby be
found in material breach of this agreement. Thereupon, City shall have the power
to cancel or suspend this agreement, in whole or in part, or to deduct from the
amount payable to Bond Counsel the sum of Twenty-Five Dollars ($25) for each
person for each calendar day during which such person was discriminated against, as
damages for said breach of contract, or both. Only a finding of the State of
California Fair Employment Practices Commission or the equivalent federal agency
or officer shall constitute evidence of a violation of contract under this paragraph.
If Bond Counsel is found in violation of the nondiscrimination provisions of this
agreement or the applicable affirmative action guidelines pertaining to the
agreement, Bond Counsel shall be found in material breach of this agreement.
Thereupon, City shall have the power to cancel or.suspend this agreement, in whole
or in part, or to deduct from the amount payable to the Bond Counsel the sum of
Two Hundred Fifty Dollars ($250) for each calendar day during which the Bond -
Counsel is found to have been in noncompliance as damages for said breach of
contract, or both.
18. AMERICANS WITH DISABILITY ACT
Subject to the provisions of state and federal law, no qualified individual with a
disability shall, by reason of such disability, be excluded from participation in or be
denied the benefits of the services, programs, or activities of the City of San Luis
Obispo or be subjected to discrimination by the City of San Luis Obispo.
19. .AGREEMENT CONTAINS ALL UNDERSTANDINGS
This document represents the entire and integrated agreement between City and
Bond Counsel and supersedes all prior negotiations, representations, or agreements,
either written or oral. This document may be amended only by written instrument,
signed by both City and Bond Counsel. All provisions of this agreement are
expressly made conditions. This Agreement shall be governed by the laws of the
State of California.
IN WITNESS WHEREOF, City and Bond Counsel have executed this agreement on
the day and year first above written.
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JONES H L, HILL, & WHITE
Cla-rlesP. Adams
Vice President
CITY OF SAN LUIS OBISPO
Mayor Peg Pinard
ATTEST:
City Clerk, Diane Gladwell
APPROVED:
tto e
EXHIBIT "A"
BOND COUNSEL SERVICES AGREEMENT WORKSCOPE
As specified in the Agreement, Jones, Hall, Hill & White, is to provide bond counsel
services related to debt issuances by the City. These services are to include but not be
limited to the following:
A. Examining of the applicable law relating to the financing to be accomplished from
the proceeds of the financing (Bonds).
B. Preparing of all legal proceedings deemed necessary or advisable by Attorneys for
the authorization and delivery of the Bonds and related documentation, including but
not limited to preparation of:
1. Any necessary site lease, lease agreement, trust agreement and assignment
agreement (collectively, the "Financing Agreements").
2. All resolutions adopting and authorizing the execution of the Financing
Agreements and the execution, sale and delivery of the Bonds.
3. Necessary notices of the sale of the Bonds required in connection with any
competitive sale thereof.
4. All necessary California Debt Advisory Commission filings and other reports
and documents required to be filed by the City in connection with the
financing of the project.
5. All documentation initially required to organize any authority required to be
formed in connection with the financing.
6. All certification, deeds, requisitions, receipts and other documents required
in connection with the delivery of the Bonds to the original purchaser thereof.
7. All other proceedings of the City incidental to or in connection with the
issuance, sale and delivery of the Bonds.
C. Attending all meetings requested by City staff to discuss the financing of the project
or at which official action will be taken by the City Council on the debt financing.
D. Applying to the Internal Revenue Service for any rulings deemed necessary by Bond
Counsel (but only following consultation with and approval by the City) to assure tax-
exempt status of the interest represented by the Bonds.
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E. Advising the City as to the need to register the Bonds under applicable federal
securities laws or to obtain a permit to deliver the Bonds under applicable State of
California securities laws, or to obtain no-action letters or similar determinations
from the Securities Exchange Commission or California Corporations Commission.
F. Examining any Official Statement or other offering document prepared by an
underwriter or financial advisor selected by the City, but only as to the sufficient
description therein of the Bonds and the financing documents. Bond Counsel has no
responsibility to undertake any independent investigation with respect to other
matters described in such official statement or offering document.
G. Subject to the completion of proceedings to the satisfaction of Bond Counsel,
providing a legal opinion approving the validity of the Financing Agreements and the
execution and delivery of the Bonds, and stating that interest represented by the
Bonds is exempt from federal and State of California personal income taxation. Such
opinion will be addressed'to the City but will inure to the benefit of the owners of
the Bonds, and Bond Counsel may execute letters to other interested parties entitling
such parties to rely upon such opinion. In addition, subject to the completion of
proceedings to the satisfaction of Bond Counsel, they shall provide such additional
legal opinions to the City, the original purchaser of the Bonds and other interested
parties as shall be requested of and deemed appropriate by Bond Counsel. Any
opinion delivered by Bond Counsel in connection with the financing of the project
may be subject to such qualifications as may be customary or required by applicable
federal or State of California law.
H. Advising the City concerning the Financing Agreements, the Bonds and any
resolutions, certificates, agreements and other documents relating to the
authorization and delivery of the Bonds at any time following original delivery of the
Bonds.
I. Providing such other services as are customarily performed by special legal counsel
on similar tax-exempt financings.
Bond Counsel has no responsibility to advise the City with respect to legal requirements
applicable to the construction of any project, including but not limited to compliance with
public bidding requirements, payment of prevailing wages and other matters incident to the
contract for such construction, which matters shall be exclusively the responsibility of the
City Attorney or other counsel to the City.
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Exhibit B "
INSURANCE REQUIREMENTS
Consultant shall procure and maintain for the duration of the contract insurance against claims for injuries to persons of damaoes
to prop", which may arise from or in connection with the performance of the work hereunder by the Consultant, his agents,
representatives,emplcyees.
Mnimum Scope of Insurance
Coverage shall be at least as bread as:
1. Insurance Services Ct:ice Commercial General Usbiliy coverage (occurrence form CO 0001).
2. Insurance Services O-ice form number CA 00:,i ('cd. 1/E7) covering A;.ftrnobile Liability, code 1 (any zone).
3. Vdarkers'Compensation insurance as required by the State of Californ:a and Employer's Uabiiiy Insurance.
4. Errors and Omissions Uabifiy insurance as app:opr1z a to the consul ant's profession.
Minimum Um'rs of Insuranoe
Consultant shall maintain limits no less than,
1. General Uabi!!ty: 81,000,000 per occurrence for bodily injury, personal injury and property damage. N Commereal
Genets! Uabiriy or enter form with a general aggreeate limit is used, either the general aggregate limit shall zpp!y
sepa:zte!y'o this prefect;ocz:ion or he general aeg:ego a limit shah be twice the required occurrence limit.
2. Aviz.-nebile Uabiliy: 61,000,000 per accident for bodily injury and prop"r. damage.
3. Employer's Uabilityt :1,000,000 per aecident for bodily injury or disease.
4. Errors and Omissions Uabllityt 31,000,000 per occurrence.
Deductibles and SeK.Insured Retentions
Any deductibles or self-insured retentions must be dec:ared to and approved by the City. k the optipn of the City, either: the
insurer shall reduce or eliminate such dedue ibies or sell-insured retentions as resile:s the City,its et ieem, officials,employees
and volunteers; or L`e Cons_!,art shall procure a band guaranteeing payment of Iesses and related investigations, claim
adminisL•atlen and defense expenses.
Mer Insurance Provisions
The general Eabiliy and w.",-bile NabT,fy poGgies are to art:ain, or be endorsed to contain,the following provisions:
1. The Gy,its efIIcers, officials. employees, agents and volunteers are to be covered as insureds as respects: liability
arising out of activities performed by or on behalf of the Consultant, products and completed operations of the
Ccnsul:znt; premises owned, oxupied or used by the Consultant; of a nornoblles.owned, leased, hired or borrowed
by .he Consu°ant. The coverage shall contain no special limitations on the scope of protection afforded to the C'ry,
its et'eers, etrci.al, employees, agents or volunteers.
2 For any claims r"!aced to this project, the C.D.nsu tent's insurance coverage shall be primary insurance as respects the
C:OA its officers, o'Scia%employees, agents and volunteers. Ary insurance or self-insurance maintained by The C"ry,
is ef:leers, et ieia!s, employees, agents or volunteers shall be excess of the Consul ant's insurance and shall not
con rib•:a with it
3. Any'allure to comply with reporting or ether provisions of the policies including breaches of w•arwities shall net a ect
coverage provided to:he Cly, ?s o'icers, el",cia!s, employees, eoer.'s or volunteers.
4. The Consultant's insurance shah zpply separately to each insured against whom claim is rade or suit is brought,except
w.-.h respect to the limits of the insurer's 1!abilmj.
S Each insurance potty required by this clause shall be endorsed to state that coverage shall not be suspended,voided,
cancelled by either pay,reduced in coverage or in Gmi:s except e.er thirty (30) days'prior women notice by certified
mail, return receipt requested, has been given to the City.
AcceotabilN of Insurers
Insurance is to be placed with insurers with a Current A.1d. Best's rating of no less than AML
Verification of Coverage
ConsuN.ant shall furnish the City wM original endorsements effecting coverage required by this clause. The endorsements are
to be signed by a person authori:ed by that insurer to bind coverage on Its behad. AJI endorsements are to be received and
approved by the Cry before work commences.
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