HomeMy WebLinkAbout25B - AGMT GAS TAX REFUNDINGREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
SEPTEMBER 3, 2019
TITLE:
APPROVE AGREEMENTS WITH URBAN
FUTURES INC. (NOT -TO -EXCEED
$72,500) AND BEST BEST & KRIEGER,
LLP (NOT -TO -EXCEED $117,600) FOR
PROFESSIONAL SERVICES RELATED
TO THE REFUNDING OF THE GAS TAX
REVENUE CERTIFICATES OF
PARTICIPATION, SERIES 2007
(STRATEGIC PLAN NO. 4, 2D)
CITY 9ANAGER
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 1n Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Authorize the City Manager to execute an agreement with Urban Futures Inc. for
financial advisor services related to the refunding of the Certificates of Participation
beginning September 3, 2019 through June 30, 2020, for a not -to -exceed amount of
$72,500, with a provision for a one-year extension exercisable by the City Manager and
the City Attorney and subject to non -substantive changes approved by the City Manager
and the City Attorney.
2. Authorize the City Manager to execute an agreement with Best Best & Krieger, LLP for
bond counsel and disclosure counsel services related to the refunding of the Certificates
of Participation beginning September 3, 2019 through June 30, 2020, for a not -to -
exceed amount of $117,500, with a provision for a one-year extension exercisable by
the City Manager and City Attorney and subject to non -substantive changes approved
by the City Manager and the City Attorney or his/her designee
DISCUSSION
In 2007, the City issued debt of $68,010,000 in the form of Certificates of Participation (COPS)
to rebuild the neighborhood street system; including grinding and overlay, reconstruction, and
critical repair for sidewalks, curbs and gutters. The debt service is funded with the City's
Highway Users' Tax (Gas Tax) apportionment from the state.
The outstanding principal balance is $55,940,000, and the debt pays interest at rates varying
from 4% to 5%. The final debt payment is scheduled for January 1, 2040. The City's annual
25B-1
Agreement with Urban Futures & BBK
September 3, 2019
Page 2
Gas Tax revenue is $8.5 million, and the annual debt service paid is $4.2 million or 49.3% of
the revenue.
After the debt was issued in 2007, the State Controller's Office issued guidelines that included
a prohibition on installment financings for permitted capital projects. On July 25, 2019, due to
the combined efforts of various bond consultants, the State Controller's Office issued a letter
to the City (see Exhibit 1) indicating the 2007 COPs are considered lawfully issued, any
refunding for debt service savings will not be considered a new debt issue, and debt service
payments on the refunding obligations will be treated as eligible expenditures by the State
Controller.
Current interest rates are closer to 3.2% and conservatively estimated, a refunding could save
more than $0.5 million per year in debt service costs, for a potential total of $10.7 million in
savings over the remaining life of the debt.
Current
Potential
Interest Rates
Varies 4% to 5%
3.2%
Remaining Interest Cost
$31,208,158
$20,500,000
Portion of Gas Tax revenue used for debt service
49.3%
43.5%
Actual savings will depend on the market interest rates in effect at the time the 2019 bonds are
priced, which is expected in November 2019. The proposed refunding is in compliance with
the City's Debt Management Policy adopted February 2018, including the requirement for a
refunding to generate a minimum net present value savings of 3% of the outstanding principal
(3% of 55,940,000 is $1,678,200).
The City Council can choose to reprogram the annual savings for other eligible street
maintenance expenditures, such as a systematic median improvement program.
At this time, staff recommends moving forward with a refunding of the 2007 COPs utilizing
Urban Futures, Inc (UFI) as Financial Advisor, and Best Best & Krieger, LLP (BBK) as both
Bond Counsel and Disclosure Counsel. Both parties were selected due to their prior work with
the refunding of the Tax Allocation Bonds (TABS) in November2018. Both parties went through
a competitive bidding process at the time and are being recommended for the refunding of the
COPS. UFI, in particular, was instrumental in obtaining the State Controller's approval for the
refinancing to take place. Both parties have been at the forefront of refinancing Gas Tax bonds
for other agencies and are the most experienced in dealing with the specialized and limited
Gas Tax transactions in the state. Proposed agreements are provided as Exhibits 2 and 3,
respectively.
Proposed debt documents will be presented to the City Council for consideration of approval
before any refunding debt is issued.
25B-2
Agreement with Urban Futures & BBK
September 3, 2019
Page 3
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's effort to meet Goal #4 — City Financial Stability,
Objective #2 — (Provide a reliable five-year financial forecast that ensures financial stability in
accordance with the strategic plan), Strategy D (Conduct an assessment of the City's debt and
refinancing options to achieve savings).
FISCAL IMPACT
All costs associated with this transaction will be paid at closing of the Refunding Process,
with proceeds from the refunding 2019 Bonds scheduled for November/December 2019.
&&M
Kathryn Downs, CPA
Executive Director
Finance and Management Services Agency
Exhibits:
1. Letter from State Controller's Office dated July 25, 2019
2. Urban Futures Inc. Agreement
3. Best Best & Krieger, LLP Agreement
25B-3
25B-4
K
BETTY T. YEE
California State Controller
July 25, 2019
EXHIBIT 7
Kristine Ridge
City Manager
City of Santa Ana
20 Civic Center Plaza
Santa Ana, CA 92701
Re: Gas Tax Pledge Refunding Obligations
Dear Ms. Ridge,
This office has received information regarding a proposed issuance of refunding bonds or
certificates of participation to refund the City of Santa Ana, Gas Tax Revenue Certificates of
Participation (2007 Local Street Improvement Project) for debt service savings. The Office of
the State Controller has previously issued its guidelines for Gas Tax Expenditures, and stated,
at that time, a prohibition on installment financings for permitted capital projects.
However, to further the public purpose of the use of such Gas Taxes for capital projects, The
City of Santa Ana, Gas Tax Revenue Certificates of Participation (2007 Local Street
Improvement Project), for which this Office has notice, is considered lawfully issued and
outstanding by this Office and the Office of the State Controller. Any refunding thereof, for
debt service savings, will not be considered a new issue and debt service payments on such
refunding obligations will be treated as eligible expenditures by State Controller.
ILARO
Chief Counsel
300 Capitol Mall. Suite 1850, Sacramento, CA 95814 P.O. Box 942850, Sacramento, CA 94250
Phone: (916) 445-2636 Fax: (916) 322-1220
25B-5
r
EXHIBIT 2
AGREEMENT TO PROVIDE FINANCIAL ADVISORY SERVICES FOR
:GAS TAX REFUNDING.CERTIFICATES OF PARTICIPATION, SERIES 2019.
THIS e . in b an between
. RSAMEMENTUrnad.andentered' to this �;44Y, of September, 2010 y db e
Urban Futures; Inc. (1'pqnsdthetanf), and City%a: of Santa Ana, jcharter 'city and municipal
corporation-1 organized and existing under the. Constitution and laws of the $j.ate of California
RECITALS
A. lbeCitydesires.to.retain4consult4nttgpSoyidefinanci.al,a4viwyservi.ces-,rpl4ting
to 'the proposed issuance of the City?s Gas Refunding Certificates :of
padcipatior, Series 20.1.9,
B. Consultant represents. That iti4able AqOwilling lo provide sif0h,sOrvices to the City.
C. In ubdertaldrig the performance of this Agreement; CQnsultant represents. that itis
ldibwledgdable in its field and that any setvicesPerformed by Consultant under this
Agreement,willbe performed ably,
p orm inbompliancowithauchstan standards
be expected from a professional consulting firm- in the field..
NOW THEREFORE,in consideration of the mutualandMpectiyepromises and subject to the
terms and conditions hereinafter set 1kirffi,lbepaities agree as follows:
1, SCOPE OF SERVICES
n- i crib in,Exhibit it
Consultant shall. famish the financial advisory that are described ,E b Ato
this Agreement and incorporated in full.
2. COMPENSATION
ai Compensation for the services to be provided under this Agreement $hall be
contingent on the1ssuance and sale of the proposed -bonds that are the subject of
the services to be provdded under this Agreement. City shall not be obligated to
pay Consul.tant any, amounts under this. Agreement -including expense
,reimbursements, unless the proposed bonds are issued and sold,
b. Upon the issuance and sale, of the proposed ' onds, City agrees to pay, and
Consultant agrees to accept as total payment for its, se m—ceS, the rates and chargesidentified
d enti: 6 ed In -Exhibit A. The, total sum to be expended,dunqg the. term of :this
Agreement shall not. exceed $72,500,Which includes reimbursement. of -expenses
up to $2,500,
2WIs
EXHIBIT 2
3. TERM
This Agreement shall commence on the date first written above and terminate on Jun 30,
202% unless terminated earlieein Accordance with Section 16, below. Theteenof this Agreement
may be extended for up .to one (1) year upon. a writing executed. by the City Manager and City
Attorney.
4. INDEPENDENT CONTRACTOR
Consultant. shall, during the entire term of this Agreement, 'be construed to be an
independent contractor and not at employee ofthe .City. this Agreementis not intended nor shall
it be construed to create an vinployer-employee relationship, a joint int venture relationship, or to
allow the City to exercise discretion or controLover the professior.tal manner in. which Consultant
performs. the services which are the sub f -however, .services. .1. subject matter 0 this Agreement the s i � s, to be
provided.. -by Consultant shall be provided in a manner consistent with All applicable standards and
regulations goVerning suchservices, Consultant shall -pay all salaries and wages, employer's social
security taxes, unemployment insurance. and similar taxes relating. to employees And shall be
responsible for all applicable
withholding taxes.
.5. OWNERSHIP OF MATERIALS
This Agreement creates -a.. non-exclusive and perpetual license for City to, copy, use,
modify, reuse, or sublicense, any and all copyrights, yrights, designs, and otherlutellectual property
embodied plans, specifications; studies, drawings, estimates, art other currents or works of
in ppecif gs.and do
authorship fixed in any tangible medium, of expression; xpression, including
but not limited foi physical
drawings or data magnetically or otherWise-recorded.on pornputerdiskettes, which are prepared o . r
caused .to be prepared by Consultant under -this Agreement ("Documents
s & . Data"),I I Consultant
shall, require All subconsultants to agree in writing that City is granted a non-exclusive
Perpetual license for any Documents & Data the subconsuhant - thi$Agroement.
Consultant represents and warrants that Consultant has the legal Tight to license, any And all
Documents & Data. Consultant makes no -such representation and warranty in regard to
Documents & Data which were provided to Consultant bythe City. !Pity shall not be limited. in
any way in its use of the Documents and Data,at Any time, provided that .anysuch use not. within
the purposes: intended by this Agreement shall be at'Cftyls s616 risk.
6, INSURANCE
'Prior to undertaking performance of work.under this Agreement, Consultant shall maintain
And shall require its subconsultants, if any, to obtain and.inaintain,insur.duce As described below:
A- Coinmercial General, LiabilityConsultant. . ultain commercial
insurance. Consulat shall Mai
geAeralliahility.insurance riAmiiigthq:,Qity, its officers;:employees, agents;
volunteers an repre�entatives.as , additional insureds) and shall include, but not
no . - I additional: ., i
'be limitedtoprotection Against claims arising from bodily and personal injury,
including death resulting thertfioinand, damage to -property, resulting from Any
act or occurrence put arising Iof Consultant's operations in the performance of this
Page 2:of 8
25B-8
EXHIBIT 2
Agreornent,. including, Mthout limitation,.acts involving vehicles. Theamounts
of insurance shall be, not less. than jhO*following0 single limitcove
rage applying to
bodily and personal injury, including death resulting-thdrefrow and property
darhage, in thetotalamount of .$ 1,000,QQQ pappeurreace, with $2.,04000. in the
aggregate. Such insurance shall%(a) name the City; .i# officers, empjayO04 age rits,
volunteers and representatives as additional. insure (i); (b) be primary with
, 4 1
i:vspeO to insurance or self-insutarvdeprqgrams maintained by the City, and (c)
contain standard separation of insureds pmvis , tons.
b. Business automobile liability insurance, or equivalent form,
with a combinedsingle
limit nit of not less than $1,000,000 pproccurinertef-, Such insurance shall. include
coverage for owned, hired and non . owv* automobiles:
cl Worker's Compensation Insurance. In accordance with the California L-ab9t Code.
Consultant if Consultant has, auyetripjoyces, is required to be ,insured :against
liability for workWs compprisatio.n.. or to undertake self-insui=. Prior to
commending theperformance of the, work under this Agrppment;:ContijltpirtagreeA.
to obtain and maintain any employer's liability insurance with limits not less than.
$1,000,000 per accident.
d. If Consultant is or.qmploys a licensed professional such as an Amfittdct or engineer.
Professional-liability(errors and 9m . issions):insurqndqj with a combined singlerimit
of not less than $1,000,,0.00 per claim with.$2,'900.,000 in the aggregate.
e. The following requirements apply to the insurance to be providedby Consultant
purstiant to this section::
(j) Consultant shall maintain all insumpe required above in full force and
effect for the entire period covered by this Agreement,_
60 Certificates of insurance shall be. furnished to the City upon execution of
this Agreement and shall be approved by the City.
(iii) Certificates and policies shall * I state that the policies shall. hot be cancelled
lot reduced in coverage or changed in any other material asptct, by
consultant, without thirty (30) days prior written notice iD the City:
(iv) Consultant shall supply City with a fully executed additional insured
eud9tsement.
'If Consultant fails or refuses to produce or. Maintain the friauraxice required by this
§dctionof fails orrefuses to furnishtheCity wit
h required proofthAt insurance has
been procured and isinforce and paidfor, the Pity shall havejhe right, at -die City.'s
.election, to.forthwith terminate this Agreement. Such termination' shall not Affect
Consultant's right to be paid forlis,firic�bndittateridls.expended prior tonotification,
of termirtation, Consultant waives th"ghtto receive compehsattoft and agrees to
indemnify
the City for any work- performed poor to .approval of insurance by the
City.
WWI
EXHIBIT 2
7. INDEMNIFICATION
Consultant agrees to defend, and shall indemnify And hold harruless the City, its officers,
agents, .employees, consultants, special counsel,and representatives fram liability: (1) forpersonal
injury, damages, just compensation, restitution judicial or equitable relief I outofelaims for
personal injury, including death, and claims for property damage, which. may arise. from .the
negligent operations of the Consultant or its subconsultants, agents, employee§, or otherpersons
acting on their behalf relates to .the services described in. -section 1 of.this A ., ". p t, and
(2) from any claim that ersonal injury, daul8ges, just canipensaUon, restitution; judicial or
equitable relief is due: by-' reason of :the terms of or effects arising from this Agreement, This
iridenu tty and hold harmless agreement applies. to all claims for damages, just compensation,
restitution, judicial or equitable relief suffered, or alleged to have been suffered, byreason of the
events referred to in this Section or by ;reason. b£.the terms :of, or effects, arising from this
Agreement The Consultant further agrees to iademrufy, hold hatiriluk and pay all costs for the
defense of the City, including fees and costs for special counsel .to be selected by the City,
regarding any action by a third party challenging the validity of this Agreernen4 dr asserting that,
Personal injury, damages, just coi0p.ensation;iestitution, judieralor:egpitablereliefdue topersonal.
or, property rights arises by reason of the terms of, or effects arising from this Agreement, City
may make all reasonable .decisions with respect to its representation in any legal •proceeding,
Notwithstanding the foregoing, tothe extent Consultant's services are subject to. _Civil Code
Section 2.782.8. the above indemnity shall be limited, to. the extent required by Civil Code Section
2782:8, to claims that arise of, Pertain to, or.relate to.:the negligence, recklessness, or willful
misconduct of the Co. nstiltant.
8, INTELLEGTUALPROPEAfY.INDEMNIFICATION
Consultant shall defend, indemnify and hold harmless the -City, its officers, agents,
representatives,'and employees against any and allhabiity; including costs, and attorneys fees,
for mfiingementofanyUnitedStates'letters atenttrademark,.orcopgened in ynte work
productor documents provided by Consultant to the City -pursuant to this Agreement.
9. RECORDS
Consultant shall keep records and invoices rn connection with the work to be.pertarmed
under this Agreement.. Consultant shall maintain. complete and:accurate records with respect to
the costs incurred 'under this. Agreement and. any services, expenditures, and disbursements
charged to the City For. a minimum. Period of three (3) years, or fox any longer period required by
law, from the date of final :payment to. Consultant. under this Agreement. All such records and
inVOleeS shall be clsarly identifiable. Consultant shall allow a reptesentatiVe: of the City to
examine, audit, and make.transcripts or copies of such records: and any other documents created.
pursuant to this Agreement dunrig.regular :business hours. Consuitantshall allow *Bection ofall
work, data, documents, proceedings, and ."activities "related to this Agreement for §period of three
(3) years from the date of finalpayment to Consultant under this Agreement,
Pa e4of8
25B-10
EXHIBIT 2
10. CONFIDENTIALITY
If Consultant 'receives froM, the 'City information wKcb due to tfie.w;ure of such
information is reasonably understood to be confidential and/or proprietary , Consultant agrees that
it shall not use or disclose such -infomation except in the performance of this Agreement, and
further agrees to exercise the same degree of care it uses to protect its own information oflike
importance, but in no event less than reasonable e6m, "Confidential Inforniatfori'6411 include all
ponpublic. information.. C60ideptiol information -includes not only written infbrMatim, but also
information transferred orally, visually, electro*caRy, or by other means; Confidential
information disclosed to either party by any subsidiary and/or agent pfthe other party is covered
by this Agreement the':65tqgoinj o61igatiofis of non-use and,nondisclosure -shall not apply to any
.information that . a) has been disclosed in publicly available sources;.(b) is, through no fault of the
Consultant digaoped.inapublicly -avai.14t�16.9ourcp;-.(0)*is: itI rightful .possession .ofthe Consultant
without anobligation. qfp4denfiality; d).jisreq e disclosed b *e4tob.y operation of law; or: (e)
is, independently developed by the Consultant without reference to information disclosed, by the
City.
11. CONFLICT OF INTEREST CLAUSE
Consultant covenants .t.h4titpre�kentlyhas uq interest and shall not have director
indirect, which would conflict in any manner with performance of services specified under this
Agreement.
12. NOTICE
Any notice, tender, demand, delivery, or other communico0orL pursuant to this Agreement
shall be m-*. writing and shall be deemed to .be properly given if delivered in',person'or mailed by
first class or:dertifiedmail, postage:p repalid, (it, sent by fax of othex-VACgr4phic communication m,
the roanner.providedin this section, to. the following persons:
To City. Clerk of ' the Pity Council
City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 108$
Saota,Ana, GA, 9V0I-10.88
Fax 714-6.4749.56
Executive -Director
Public. WorksAgehqy
-CityofSanta Ana
20 Civic Center Plaza (M-2 1)
P.;.O.. Box 1989
Santa Ana, CA 92702
To C6risultaritt Urban Futures, Inc.
1782.1 P- 1 ith Street, Suite 245
2 Defuse-
EXHIBIT 2
Tt.isfin,.CA .92780
Aftn:Afichael Busch, CFO
Party may change its Address by.giving notice in writing to the other party. Thereafter,
any communication shfdl.be addressed. and trans
nutted to Ilia,* new address. If sent. by ma,
communication shall .b,eeffective or:de edto)iav n three 3 hays after it **
. em ... ... , e,been. give ( ) da hhs.been
deposited in the Wiijteq. hates mail, duty registered or certified, with post prepaid, :and
duty
registered
490
addressed as set forth above.. If sentby communication shall be 4ective. or deemed to have
been given "twenty-four (24) hours after the time set forth on.the transmissi
.. .. I . .- . on report -issued by the
U--itsMfttirigfacsimile mAPhine,addressed -ass.d.'forth.,above: For purposes of calculating these
timeozimes, we4onds, federal, Skate',County Or 0-ityliolidays shalt be excluded.
13. EXCLU.S.IVITYANDAMENDMENT
This Agreement: represents the complete and exclusive statement between the City and
Consultant regarding wthe. subject matter her 'cm, y and al andsupersedesam
or. written; w I other. Agreements, oral
. , between the parties. In the event of a conflict between the terms Of this Agreement and
any at.tgetiments hereto, the terms of thi.sAgreemmi shiill prevail. -This.Agreemont may -not be
modified except by written instrument signed by the City and by an authorized represpniative of
Coinsultant. The parties agree that any terms or.conditions of any purchas .ordero offie r r
instrument that..�are inconsistent Wnt mnh, or in.addition to the termsI .ah and condition . s hereof;shall not
onsis
bind or obligate Consultant or the City. Each party to this Agreement acknowledges -.that no
representations inducements . . , promises or agroements, orally or otherwise, have been madeby any
party, or anyone acting on. behalf of any party, which. arerzipt.mb9died herein.
14. ASSIGNMENT
Inasmuch as this Agreement is: intended to secure the specialized services of Consultant,
Consultant may.not assign;
si transfer, delegate, or subepp#act-any interest p herein without the r, e prior
written consent of the City and any such assignment, transfer, de c ati I, S.. ono -sr ubcontract without
the City!&priorwritten,consentshO be considered null: and void. Nothing in this Agreement shall
be construed to limit the City's ability, to bave.imy. of the services which are . the subject to this
Agreement performed by City personnel or byother consultants retained by City,,
15. WAIVER
No waiver of breach, failure of any condition, or any right or remedy contained in or
granted by the provisions of this A
, greenitnt shall be effective unless it is in writing and signed by
the partywavin
. i. .. g the ,breach, fidlure, right or. remedy. No waiver of any brea6h, failure.ofilght, of
remedy shot be deemed a waiver of any other breach, Addine, right or -remedy, -whether or not
similar, nor shall. any waiver constitute it continuing waiver unless the wrirmg-qo specifies.
16.. TERMINATION
This. Agreement may be terminated by the Cityupotn thirty (30).days written notice of
lermination.
x 6 of8
25 -12
EXHIBIT 2
17, NON-DISCWMWATION
Consultant shall not.disadminate because of-=6,ccilor, creed, relation, seximantal
status, sexual orientation age ti9tionalor igin, ancestry, or.disibility, as defined and prohibited
.by applicible'law, in, there—cruitment,,se,loction, training, utilizafton,promotion, termination or
otheremploympni related activifiqs:qr in connection with any activities undqr1his—Agroement.
Consultant affirms that it is an equal opportunity employer and shall comply with all applicable
federal, state and local laws and regulations.
19. JMSDICTION-VENUE
.This. Agreement has been executed and delivered in the State of Ca#fomiaand the validity,
intcrpre!ation, performance, and enforcement of any of the clauses of this Agreement shall be
determined. and. governed by the
laws of . the state of California.
lifornia. Both partiesfiurther agree that
Orange. County, California, shall be theveimc foranyaction, or proceeding that ,inay.bo.brought6r
arise out of, in connection with or by reason ofthis.Agreem—ent,
19.1 PROFESSIONAL LICENSES.
Consultant:shall, throughout the term of this Agreement, Maintain all necessary li=ses,
permits, approvils, waivers, and exemptions . riecesgary for the provision of the,gervices hereunder
and required by the laws and regulations of the United States, the State of CaHf9mia,. theCity of
Santa Ana and all other governmental agencies, Consultant. shall notify the City immpdj gtelyvpd in writing of its inability to obtain or maintain such .permits, .licenses, appr6als, waivers, and
.exemptions. SaidAnability-shalibe cause for termination dihis Agreement.
20. MISCELLMEOUS:PRO VISIONS
a. Each undersigned represents and warrants. that its signature herein below has the
power; authorityand right to bind theirmpectiveparties to each of the terms.of
this Agreement and shall indemnify City filly., induding-reasonable costs and
attorney's few, for any injuries or damages to City in the event that such authority
orpower isnot; infact, helabyfheqignit(jr.y:qtiswithftwp.-
b; All exhibits Teferenced'herein and attached hereto shallbe incorporated as if fully
set forth in-th6b6dyof.this Agreement:
IN WITNESS WHEREOF, the Darties.hereto have-execut.e.d-this Agrccmeatthe.date.a.nd year'first
above written.
ATTEST- CITY OF SANTAANA
Daisy Gomez
Clerk of the Council
Kristine Ridge
City Manager
jAe 70
EXHIBIT 2
APPROVED AS TO FORM
SONIAR. CARVALHO
.City Attorney
By:_LL&q��4
Ap M. FuAk
Assistant City Attorney
RECOMMENDED FOIL APPROVAL
kaffiryn Downs
Executive Director
Finance. and .Management Services.Agen. c y.
CONSULTANT
I'
Title.
Page 9 jDf 9
26B-14
EXHIBIT A EXHIBIT 2
M URBAN. FUTURESJ.i -.1virlion.lied
August 19,2019
FROM 'Urbanfuturesiltic,
Michael Busch, CEO
TO: Kathryn, Downs, g)(ecutive Director/ CityTrgasurer
City of Santa Ana
20 CivIt Center Plaza
Santa Ana, Ca 92702
RE Engagement Letter for Gas Tax Refunding Cartiflotes of Participation (COPs), Series
:2019
Dear Kathryn:
This .letter specifies the terms of tbe:eng@gementb..etween Urban Futures, inc;, located at i7821
E..Street, Suite. .24s.iTti tln.CAW86 and City of Santa Ana lotaedat2QClVitCenter Plaza Santa
Ana,,CA92702.
This :engagement . between City of - Santa Ana (the "City.") and Urban R1.ture$,JnC. (41.1W
) shall
become effective as'of the dlate.of.lts acceptance at provided below.
Scope of Municipal Advisory. Actl4ltiqs to be'Pqrformed,
Assembling a team, that works: for the Municipality Is a[ key part .of the debt issuance process.
Among the first to join. the team is the municipal advisor. As municipal advisor, UFI will
successfully perform the following duties.
• Assist in developing the plan of.fin;Jae and related transaction timetable,,
• Identify and analyze financlpg splu(ions and . alternatives. for funding the tapital
improvement plan;,
q, Advise on the :method of sale, takiing into account. market conclitipffs: and. near -term
activityAni, the municipall market;
Assist In the, preparation of any rating:agency stnite les and- Presentations;
'9 .
•
Coordinate internal/external accountants, feasibility consultants and'escrow agents, as
appropriate,
Assistwith'he select
ion tion of the financing team Including unclerwrlLu tr
ustee; t,r.. ste% bond and
disclosure couns
el,.
• Assist with issues, s' syndicate structure and bond allocations;
PrO017 PUNMS, IRC.
25B-1 5
EXHIBIT 2
• Assist with. negdtlated sales including advice regarding retail order periods and
u ga g rd
institutiorral.marketina, analysis of comparable bonds -and secondary market data,
ata, and
-verify cash flow calculations;
• Prt!part!.and/.or..review'Prq[iMinary cash flow$/ pmelimin ryM
a. funding ana[ S;
• Analyze whether to Use SLGS, open markets and/or agency securities .for purposes of.
investment of bond proceeds;
• Manage the escrow bids, or review SLQs appilleation$. for structuring adV.ance refunding
escrow;
• Assist in procuring printers, verification a$ents, etc,;
• Plan and coordinate bond qlo.slngs;
• Prepare any reqUired post -sale reports ofbOndsales; and
• Evaluate market conditions and pricing performance of senior manager and cotmana9 ers'
.
distribution of bonds;
Independent Registered Municipal Advisor (,'qRMW.)
If acting In the capqdtyofan Independent Registered Muni ipalA. Advisor ('11A A!,) with regard to
I 1 .11 .. . Municipal d.
the, IRMA exemption of the SEC. Rule, Urban Fqturqs Inc, will review all third -party
recornmendationssubmitted to Urban Futures, Inc. in'writing bythe City.
Compensation and Out -of- PocketUpenses
Compensation for the municipal. advisory activities to be performed for.this eqgagement is
contingent. upon the successful salenn. bonds..
For the subject transaction, the fee for financial advisoey services is $72,500 which Incl. des
reimbursement of expenses in an amount not to exceed $2,500- Expense reimbursements will
cover the followin
.. V,
• Acquisition property tax data from Los Angeles County
Mandatory SE(/MS.RB Compliance RequIrementsIkkeporting
.-
a Data Services (Bloomberg, Thompson Reuters, DBC)
• Travel (nlleage airfare; -hotels, etc.)
The City shall not be obligated to compensate. UFI any amounts, including expense
reimbursements, unless the. proposed bonds. are issued and sold:
1d;
Fiduciary Duty
Urban Futurtsi Inc. is registered as a Municipal Advitsor with the Securities and Exchange
Cbenmission (".SW') and Municipal Securities Ru .. Rig emaki Board ("MSRR"), As such, Urban
Urban Futures, Inc.
25B-1 6
EXHIBIT 2
Futures, Inc. has a Fiduciary Duty :tot. h.
eti.ya.pdmustprovtOebbthaDuti/ofCareaiidaDLttyof
Loyalty that entails the following.
Duty of Cafe:
a) exercise dug care in performing its municipal advisory activities,
b) possess the degree of knowledge and.expertiqp needed to provide the Cltvwlth informed
advice;
c) make a reasonable ipqurV.as to the lacts.that are relevant to the. CIW-s determination as
to whether to proceed with a course of action cir`that for the basis for any advice
provided to the City, and
d) undertake a reasonableinvestigaitilon to determinethat Utban Futures,.Inc. Is not forming
anyrecommericlationcin materially inaccurate or incomplete information- Urban Foturesj
lnr,,mvst have a reasonable basis for;
I. any advice provided. to or, on behalf Of the City;
I!. any representations made, In a certificate. that it signs that will be reasonably
foreseeably retied upon by. the City; any other party involved In the municipal! securities transaction or municipal financial Product, or investors in the City
securities, and
111*1 any information provided
ed to.the City Of other parties involved in the municipal
securities transaction In connection with the preparation of an official statement.
Duty. of Loyalty:
Urban Futures, Inc. must deal honestly and .With the utmost good faith With the, City and act in
the city's best Interests without regard to the financial or other interests of Urban
itan Futuresjnt,
.Urban Futures, Inc: will eliminate or provide full and fair
ir disclosure (included herein) to the City
about. each material conflict of interest (as applicable). Urban futures, Inc. will not engage in
Municipal advisory activities with the City as a municipal entity, if It -cannot manag
e or Mitigate
Its conflicts In a mannerlhat.will permit it to act in the. Citys best interests.
Cdnflicts.Af Interest and Other Matters Requiring Disclosures.
As of the date of the Agreement, thereare. no: actual or potential conflictsof Intereathat
Urban Futures, Inc. K aware of that might impair its abilityto render unbiased and
Competent advice or to fulfill its fiduciary -duty: .Urban Futures, Inc. represents that in
connection with the Issuance of Municipal securities, Urban Futures, Inc. may r4pcei e
v
compensation from the City for servites'rendered,: which• compensation. is ,contingent
upon the sUctestful-closing of a trans.action and/or.1s, based. on the size)of a transaction.
Consistentwith the reqylrements of INISR13Rule 0-42, Urban Futures, Inc. hereby discloses
that such contingent O.rid/6r.transaictiodal:compensatton may present a potential conflict
Urban Futures, Inc.
25B-1 7
EXHIBIT 2
of interest regarding Urban Futures,.Inc.' s. ability toptpvid . e.un.blas.ed advice to enter into.
such transaction. This conflict of friterest.will hot impair Urban Futures, Inc.s ability to
render unbiased and competent advice or to fulfill its :11duclafy duty t the City. If Urban
Vo q �
Futures; Inc -becomes pware*qf.any potential conflict of Interestthat arises after this
disclosure,..Urban-Futures, Inc. Will disclose the.detalled information in writingto'the City
in a timely manner.
The fee paid to Urb
an Futures, Inc. I.rcreasestq qqA of.investment to the City, The
increased cost Occurs from .compensa.ting �Urban Futures, Inc. .f . or municipal A . dvis6rV
services provided,
UrbapPutqNs, Inc. doe5 not: act as:principal* in any of -the trans4ctlon(s) related to this
Agreement.
During the.term of the municipal advisory relationship, .this agreement will be. promptly
amended or supplemented to reflect. any,material changes in or additions totheterms . or
information within this agreement qn&the revised writing will be promptly delivered.to
the city.
• Urban Futures, Inc: does not have any affiliate that provides any adVicej service or
produtt to or on behalf of the client thatis directly or Indirectly
9 related to the municipal
advisory activities ta.beperfoftned by Urban Futures, Inc,;
Urban Futures; Inc. has not made any payments directly or indirectly to obtain or retain
the. City Muni ad
visory rybusiness,
Urbap futures, Inc. has not received an payments from, third parties to en
list nlist Urban
Futures; Inc,
reretornmenclation to the City of its,servicts, any Municipal securities
transaction or any municipal finOnceproduct;
• Urban Futures, Inc.. has not engaged in any fee -splitting arraftertients involving Urban
Futures, Inc. and any provider.of investments or services to the City,
• Urban Futures, Inc. does not have any other eng
agementsrelationships that might
Impair Urban Futurqsj Ine
s pollity either to render unbiased and competent Q , 00V.Ic.e to or
on behalf of the Cityprto fulfill its fiduciary duty to.*th6 City, as appjicable;.and
• Urban FuturesN. Inc, does not -have any legal or disciplinary event that is:material to the.
City'sjevoluatiorl of the municipaledVisory.or the Integrity of It management erheInt Or advisory
personnel.
legal Events.and Disciplinary History
I , .' Y
UtbainTutures, Inc..ddLis not have any legal events -and disciplinary history on, its Form.MA and
Form MA-1, which Includes: information m ..on about any criminal actions; regulatqrV actions;
investigations, terminations, judgments, liens, civil "Udicial actions, customer I judicial I complaints, nriplal.nts,
arbitrations and civil litigation. The City may electronically access Urban Futures, Inc!s most
recent Form MA and each most recent Form _MA-J filed With the Commission at -the I he follow. ng
website.- www.sec,gov/edzarLsearchadpar/corilpanysear.ch.htmi
Urban futures, Inc,
25B-1 8
EXHIBIT 2
Thqre.have. been no Material changes to a legator discililinarry eventd! I sclosare On an Form MA
or Form MA-1 filed with the SEC.
,Recommendations
.If Urban Futures; Inc: makes a recommendation of a municipal securities transaction or municipal
financial gr6duct or if the review of a recommendation of another party .is. requested in: writing
by the City and is within the scope.of the engqgement, Urban Futures, jnt�; VlllrrdeterMine, based
on the information obtained: through:reasonable diligence: of, Urban Futures, Inc. Whether a
municipal securities transaction or municipal flnanclal.�roduct is suitable for the City. Inadditlon.,
Urban Futures, Inc. will inform the City of;
• therevaluation of the rhaterialAskspotentiall benefits structure, and othercharacteristics
of the. recommendation;
• the basis upon which 'Urban Futures; Inc: reasonably belleves that the reconfrhended
municipal securities transaction or municipal financial product Is, or Is not, suitable for
the City; and
6 whether Urban Future�s,.lhc. has investigated . at considered
6red other reasonably feasible
alteThativ6s to the recommendation that might also or alternatively ,serve the City's
objectives.
If the City electsa course of action that isinde.pren.dent of orcontrary .to the advice.provided by
Urban Futures, Inc, Urban Futures, Inc. Isnot required .onthat basis ta.disengage from the, City.
ftecord.Retentloo
Effective July 1, 2014, pursuant to the Securities and Exchange Commission (SEC) record
retention regulations, Urban. Futures) Inc. is required tornaintacin in writing, -all communication
and created docurneInts between Urban Futures, Inc. and the City for years.
IftheTe are any qqestions.regprd[r)g the above.; please do poi heskafe to contact Urban Futures,.
Inc., If -the foregoing, terms meet With your apippoyal, please -indicate your acceptance by
executing both coplesof this letterand returning one copy,
Sincerely,
/4//-e �-
Michael Busch, CEO
Urban Futures, Inc.
Urban Futures, Inc.
25B-1 9
25B-20
EXHIBIT 3
LEGAL SERVICES AGREEMENT WITH
BEST BEST & KRIEGER LLP FOR BOND COUNSEL SERVICES
This AGREEMENT is made and entered into this 3rd day of September, 2019, by and between
Best Best & Krieger LLP ("Attorneys"), and the City of Santa Ana, a charter city and municipal
corporation duly organized and existing under the constitution and laws of the State of California
("City")
RECITALS
A. The City of Santa Ana desires to engage Attorneys to provide legal services as bond counsel
and disclosure counsel relating to the proposed issuance of the City's Gas Tax Revenue
Refunding Bonds, Series 2019, which will refinance outstanding bonds originally issued to
finance public capital improvements for the City.
B. Attorneys represent that they are licensed to practice law in the State of Califomia, have
special experience and knowledge related to the above services, and desire to undertake said
services.
NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the
terms and conditions hereinafter set forth, the parties agree as follows:
1. RETENTION OF ATTORNEYS City hereby agrees to and does retain Attorneys, for the
compensation hereinafter specified, to provide legal services as bond counsel and disclosure counsel
relating to the proposed issuance of the City's Gas Tax Revenue Refunding Bonds, Series 2019,
as further described on Exhibit A ("Assignment"). Attorneys accept said retention and agree to
perform the Assignment in a timely and efficient manner.
2. COMPENSATION FOR SERVICES RENDERED
a. City agrees to compensate Attorneys, and Attorneys agree to accept from City, as and
for payment in full for all services forthe Assignment, the sum not to exceed $75,000 forbond counsel
services and the sum not to exceed S40,000 for disclosure counsel services, both sums payable upon
the successful completion of the financing.
b. In a total amount not to exceed $2,500, City agrees to reimburse Attorneys for out-of-
pocket expenses, including but not limited to, mileage, copying costs, service of process, and mail
services authorized by the City in connection with the performance of duties under this Agreement.
In-house printing, copying, and reproduction charges will be reimbursed at the rate of 20 cents per
page. Automobile travel will be reimbursed at the standard mileage rate in effect at the time of billing
by the Internal Revenue Service. All expenses must have supporting documentation submitted with
the invoice.
3. METHOD OF PAYMENT Upon the successful completion of financing, Attorneys shall
submit a statement specifying the services performed and an itemization of expenses related
thereto with supporting documentation (i.e. receipts, invoices, copy of check, etc.). City
25B-21
EXHIBIT 3
acknowledges that the fees incurred for work performed by Attorneys on its behalf are due and
owing within 45 days of receipt of this statement.
4. CONTROL OF LEGAL MATTERS Attorneys agree that each and every matter or
proceeding in which they undertake to assist the City, as aforesaid, shall be and remain under, and
subject to the control and direction of the assigned Assistant City Attorney and the Executive Director
of the Finance and Management Services Agency at all stages, and that they shall at all times keep
the City informed of all matters pertaining thereto. City will keep Attorneys informed of all
significant developments in matters relating to the Assignment. Attorneys further agree, if and when
their retention hereunder is terminated by City, as hereinafter specified, they shall return to City any
and all files then in their possession concerning the Assignment.
5. REPORTING REQUIREMENTS Attorneys agree to keep the City, and any other person(s)
designated by the City, informed of significant findings and at a minimum provide an update on the
status of the Assignment every thirty (30) days. Attorneys also agree to provide the City Attorney's
Office an audit report(s) upon completion of the Assignment.
6. TERM The term of this Agreement shall commence on the date first written above and
terminate on June 30, 2020 unless terminated earlier pursuant to Section 15 below. The term of this
Agreement may be extended for up to one (1) year upon a writing executed by both parties, including
the City Manager and a Senior Assistant or Assistant City Attorney.
7. INDEPENDENT CONTRACTORS It is mutually agreed by and between the parties that,
in the performance of their covenants hereunder, Attorneys are and shall be independent contractors,
and not officers or employees of City.
8. INSURANCE Attorneys shall provide to the City proof of Professional Liability (errors
and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, and
maintain such insurance throughout the term of this Agreement. If Attorneys fail or refuse to
produce and maintain the insurance required by this section, or fail or refuse to famish the City
with required proof that insurance has been procured and is in force and paid for, the City shall
have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall
not affect Attorneys' right to be paid for its time and materials expended prior to notification of
termination.
9. INDEMNIFICATION Attorneys agree to and shall indemnify and hold harmless the City,
its officers, agents, employees, and representatives from liability for personal injury, damages,
restitution, judicial or equitable relief to the extent caused by Attorneys' negligent or wrongful
performance or conduct related to this Agreement.
10. CONFIDENTIALITY All information and documents shared with Attorneys as well as
all work performed by Attorneys in connection with this Agreement should be treated as strictly
confidential. Moreover, all communications between Attorneys and City shall be treated as
protected by the attorney -client privilege and the attorney work product doctrine. Accordingly,
information received by Attorneys from City should be kept in a secure place, and no information
about this work may be disclosed to any third party without City's prior written approval.
25B-22
EXHIBIT 3
Attorneys shall provide materials directly to the City Attorney's Office or to the Finance and
Management Services Agency. All such information and any written product in connection with
Attorneys' retention under this Agreement, shall be marked as "PRIVILEGED AND
CONFIDENTIAL / ATTORNEY -WORK PRODUCT" and shall be the property of the City, and
shall be retumed/provided to the Office of the City Attorney with all copies upon the request of
the City Attorney's Office. Confidential information disclosed to either party by any subsidiary
and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-
use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly
available sources; (b) is, through no fault of the Attorneys, disclosed in a publicly available source;
(c) is in rightful possession of the Attorneys without an obligation of confidentiality; (d) is required
to be disclosed by operation of law; or (e) is independently developed by the Attorneys without
reference to information disclosed by the City.
11. CONFLICT OF INTEREST CLAUSE Attorneys covenant that it presently has no interests
and shall not have interests, direct or indirect, that would conflict in any manner with performance
of services specified under this Agreement.
12. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this
Agreement shall be in writing and shall be deemed to be properly given if delivered in person or
mailed by first class or certified mail, postage prepaid, or sent by facsimile or other telegraphic
communication in the manner provided in this Section, to the following persons:
To City: Clerk of the Council
City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702-1988
Facsimile (714) 647-6956
Courtesy Copy: Office of the City Attorney
20 Civic Center Plaza (M-29)
P.O. Box 1988
Santa Ana, California 92702
Facsimile (714) 647-6515
To Attorneys: Ms. Kim A. Byrens, Partner
Best Best & Krieger LLP
Post Office Box 1028
Riverside, California 92502
Facsimile: 951-686-3 083
A party may change its address by giving notice in writing to the other party. Thereafter, any
notice, tender, demand, delivery, or other communication shall be addressed and transmitted to the
new address. If sent by mail, communication shall be effective or deemed to have been given three
(3) days after it has been deposited in the United States mail, duly registered or certified, with
postage prepaid, and addressed as set forth above. If sent by facsimile, communication shall be
25B-23
EXHIBIT 3
effective or deemed to have been given twenty-four (24) hours after the time set forth on the
transmission report issued by the transmitting facsimile machine, addressed as set forth above. For
purposes of calculating these time frames, weekends, federal, state, County or City holidays shall
be excluded.
13. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and
exclusive statement between the City and Attorneys regarding the Assignment, and supersedes any
and all other agreements regarding the Assignment, oral or written, between the parties. In the
event of a conflict between the terms of this Agreement and any attachments hereto, the terms of
this Agreement shall prevail. This Agreement may not be modified except by written instrument
signed by the City and by an authorized representative of Attorneys. The parties agree that any
terms or conditions of any purchase order or other instrument that are inconsistent with, or in
addition to, the terms and conditions hereof, shall not bind or obligate Attorneys or the City. Each
party to this Agreement acknowledges that no representations, inducements, promises or
agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any
parties, which are not embodied herein.
14. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services
of Attorneys, Attorneys may not assign, transfer, delegate, or subcontract any interest herein
without the prior written consent of the City and any such assignment, transfer, delegation or
subcontract without the City's prior written consent shall be considered null and void. Nothing in
this Agreement shall be construed to limit the City's ability to have any of the services which are
the subject of this Agreement performed by City personnel or by other Attorneys retained by City.
15. TERMINATION This Agreement may be terminated by City at any time. In such event,
Attorneys shall be entitled to receive and the City shall pay Attorneys compensation for all services
performed by Attorneys prior to receipt of such notice of termination. As a condition of such payment,
Attorneys shall deliver to the City all files and records generated under this Agreement as of such
date. Attorneys may terminate this agreement, subject to their obligation to provide written
reasonable notice of at least thirty (30) days to arrange alternative representation if applicable. In
such case, City agrees to secure new counsel as quickly as possible and to cooperate fully in the
substitution of the new counsel.
16. DISCRIMINATION Attorneys shall not discriminate because of race, color, creed,
religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as
defined and prohibited by applicable law, in the recruitment, selection, training, utilization,
promotion, termination or other employment related activities. Attorneys affirm that it is an equal
opportunity employer and shall comply with all applicable federal, state and local laws and
regulations.
17. JURISDICTION —VENUE This Agreement has been executed and delivered in the State
of California and the validity, interpretation, performance, and enforcement of any of the clauses
of this Agreement shall be determined and governed by the laws of the State of California. Both
parties further agree that Orange County, California, shall be the venue for any action or
proceeding that may be brought or arise out of, in connection with or by reason of this Agreement.
25B-24
EXHIBIT 3
18. MISCELLANEOUS PROVISIONS Each undersigned represents and warrants that its
signature herein below has the power, authority and right to bind their respective parties to each of
the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney's
fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held
by the signatory or is withdrawn.
19. COUNTERPARTS: SIGNATURES This Agreement may be executed in counterparts,
secured via facsimile transmission or otherwise, each of which shall be deemed to be an original.
Photocopies of any executed counterpart shall have the same force and effect as an original.
20. NO GUARANTEES City understands and acknowledges that there are certain risks and
uncertainties in the pursuit of any matter for which Attorneys have been retained, that law is not
an exact science, that Attorneys have made no representations or guarantees of success regarding
the conclusion of any particular matter, and that all expressions relative thereto are matters of
Attorneys' opinion only. In other words, Attorneys make no representations or guarantees of
success regarding any matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first
above written.
ATTEST
Daisy Gomez
Clerk of the Council
RECOMMENDED FOR APPROVAL
Kathryn Downs, Executive Director
Finance and Management Services
Agency
APPROVED AS TO FORM
Jo6A M. Funk
Assistant City Attorney
CITY OF SANTA ANA
Kristine Ridge
City Manager
BEST BEST & KRIEGER LLP
m A. Byrens
Partner
25B-25
EXHIBIT 3
EXHIBITTrrA
I♦3 1n
Indian wan:
Ontario
(mine 588-26I1
Irvine
BEST BEST & KRIEGER 3
(A09) a
(949)193-200
ATTORNEYS AT LAW
Sacramento
(91e)]25.4005�4000
Los Angeles
San Mail.
(213)617-0100
1619)525-1300
Manhattan Beach
3390 University Avenue, Slh Floor, P.O. Box 1028. Riverside. CA 92502
(310) 643-844B
Phone: (951) 686.1450 1 Far. (951) 686.3083 1 www.bbklaw.com
WaHul Greek
(925) 977.3300
Washington. BC
Kim A. Byrens
t202)785-O600
(951)826-8273
kim.byrens@bbklaw.com
File No. 99999.09999
August 5, 2019
Kathryn Downs
City of Santa Ana
20 Civic Center Plaza
Santa Ana, California 92701
Re: Bond Counsel and Disclosure Counsel Services to the City of Santa for
its Gas Tax Revenue Refunding Bonds, Series 2019
Dear Kathryn:
We are pleased to submit this letter to you in connection with our services as bond
counsel and disclosure counsel to the City of Santa Ana (the "City") relating to the proposed
issuance of the City's above -captioned Gas Tax Revenue Refunding Bonds, Series 2019 (the
"Bonds") which will refinance outstanding bonds originally issued to finance public capital
improvements for the City. The firm of Best Best & Krieger LLP will serve as bond counsel and
disclosure counsel on this matter and proposes to perform the following services on the basis set
forth in this letter.
As bond counsel we will confer and consult with City staff on all matters relating to the
financing. We will assist the City in identifying the most advantageous method of financing
based upon our experience and we will attend all meetings of the City's staff, consultants and
financial advisor at which financing methods are to be discussed and analyzed for successful
completion of the financing.
With respect to the Bonds, our services will include the preparation of all agreements,
resolutions, notices, bond forms and all other legal documents required by California law for the
execution, sale and delivery of the Bonds. We will attend all meetings in which the Bonds will
be discussed or any action in connection with the proceedings is to be taken.
Subject to completion of the financing to our satisfaction, Best Best & Krieger LLP will
issue its approving legal opinion to the purchasers of the Bonds to the effect that all proceedings
have been legally undertaken for the authorization, execution, sale and delivery of the Bonds, or
other transactions relating to the financing and that interest paid with respect to the Bonds is
55384.00019U2244713.1
25B-26
EXHIBIT 3
IC3Ck
BEST BE5T & KmEGER 3
ATTORNEYS AT LAW
Kathryn Downs
August 5, 2019
Page 2
excluded from gross income for federal income tax purposes and is exempt from State of
California personal income tax. We will also issue appropriate supplemental opinions and
certificates as may be necessary or appropriate.
As disclosure counsel, we will confer and consult with City's staff, bond insurers and the
City's municipal advisor on all matters relating to the preparation of an official statement
describing the terms of issuance of the Bonds. Our services will include the preparation of a
preliminary and final official statement, and a continuing disclosure agreement, in order for the
City to comply with Rule 15c2-12. We will also review the form of Bond Purchase Agreement
prepared by the Underwriter and its counsel.
Subject to completion of the financing to our satisfaction, Best Best & Krieger LLP will
issue its legal opinion with respect to the matters discussed in the official statement.
Based on our current understanding of the issuance of the Bonds and the involvement of
Best Best & Krieger LLP attorneys in drafting documents relating to the issuance of the Bonds
and delivering our legal opinion, our fee, including reimbursement for costs, would be $75,000
for bond counsel, and $40,000 for disclosure counsel, payable upon the successful completion of
the financing. Our fee assumes a bond issuance which would close prior to January 1, 2020. If
the transaction ,is not completed within the estimated schedule or our involvement differs
significantly from our expectations, we would expect to be paid a fee that we mutually agree
would reflect reasonable compensation for legal services rendered considering the risk
undertaken and the level of expertise required to undertake such legal service. By your signature
and return of this letter, you agree to pay our fees and expenses as set forth in this paragraph.
Additionally, we will charge the City for out-of-pocket expenses which would include,
the costs of duplicating and mailing, transportation, long distance telephone calls, messenger and
courier service and the preparation of transcripts of the financing. This expense is not expected
to exceed $2,500.
If this arrangement is satisfactory to you, please authorize our employment according to
the terms of this letter by having this letter executed by you or your agent.
55394.0001902244718.1
25B-27
EXHIBIT 3
1113Ik
BEST BEST & KMEGER3
ATTORNEYS AT LAW
Kathryn Downs
August 5, 2019
Page 3
We look forward to working with you in order to bring this matter to a successful
conclusion.
TERMS OF PAYMENT OF FEES AND
EXPENSES OF BOND COUNSEL AND
DISCLOSURE COUNSEL APPROVED
THIS DAY OF
2019.
Authorized Signatory
55394.00019\322,14718.1
Sincerely,
Kim A.Byrens
of BEST BEST & KRIEGER LLP
25B-28