HomeMy WebLinkAboutAgenda Report - January 17, 2007 E-13AGENDA ITEM IESO13
kink CITY of Lom
COUNCIL COMMUNICATION
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AGENDA TITLE: Approve contract with Kronick Moskovitz Tiedemann & Girard for Services as Bond
Counsel in Connection with the formation of Community Facilities Districts.
MEETING DATE: January 17, 2007 City Council Meeting
PRIEPAW D BY: City 6*rnev's Office
RECOMMENDED ACTION: Approve contract with Kronick Moskovitz Tiedemann & Girard for
services as Bond Counsel in connection with the formation of
Community Facilities Districts,
BACKGOOUND: Staff is moving forward on the City Council's direction to create
community facilities districts to fund the impacts associated with new developments. Because the funds
to create the development rued improvements will not be available up front from the developments,
bond financing will be required to construct the contemplated public improvements, including the water
treatment facility. Toward that end, the City will be required to have outside bond counsel. Although the
City has traditionally used lawyers from Orrick Herrington for bond counsel, equally qualified bond
counsel is available through Kronick Moskovitz at significantly reduced rates as set forth in the attached
contract. Accordingly, staff recommends approval of the attached contract.
FISCAL IMPACT: Staff anticipates no fiscal impact because fees will be charged to the developers
pursuant to the development agreements.
FUNDING AVAILABLE: As specified above.
�.� Stepheq Schwabauer, City Attorney
APPROVED:
W Blair King7nty Manager
CITY OF LODI
AGREEMENT FOR BOND COUI"�TML AND DISCLQ$URE SERVICES
This Agreement is between Kronick, Moskovitz, Tiedemann & Girard, a
Professional Corporation (hereinafter "KMTG"), and the City of Lodi (hereinafter "Client").
The subject matter of the representation governed by this Agreement is described in Paragraph 1.
KMTG currently represents Client on a variety of other matters pursuant to a separate legal
services agreement.
1. Scope of Services. Client retains KMTG under this Agreement to provide such
legal services as necessary for the formation of a water treatment community facilities district
and a services community facilities district (the "CFDs"), the authorization of special taxes, and
the authorization and issuance of bonds for the water treatment community facilities district (the
"Bonds") to finance services and public improvements to serve various developments known as
Westside, Southwest Gateway and Reynolds Ranch (the "Developments") currently being
annexed into the City of Lodi. In particular, KMTG shall:
(a) Consult with Client and its administrative officers, financial advisor,
special tax consultant, and other consultants and assist in the implementation of the financing.
(b) Prepare all resolutions of Client's governing board and other legal
documents necessary for formation of the CFDs, authorization of special taxes in the CFDs, and
the authorization, issuance and delivery of the Bonds.
(c) Confer with Client's other consultants regarding the rate and method of
apportionment of the special tax and the structure of the bond issue(s) and review any documents
to be prepared by such other parties in the proceedings for compliance with law.
(d) Prepare for and attend such meetings of Client's governing board as
deemed necessary for the proper conduct of the proceedings.
(e) Without undertaking an independent investigation, review any official
statement, private placement memorandum, or other offering document prepared in connection
with the sale of the Bonds.
(f) Prepare a preliminary and final official statement describing the terms of
the Bonds offered for sale, security for their repayment, credit enhancements (if any) and their
issuer(s), the Client and its financial condition, material risks to prospective purchasers of the
bonds, legal matters related to the financing, credit ratings of the bonds, contractual
arrangements between the Client and the underwriter(s) of the bonds, and other information
material to prospective purchasers of the bonds.
(g) Prepare a comprehensive closing memorandum and prepare and arrange
the execution and delivery of the Bonds (in typewritten, book -entry form), a receipt for the
Bonds, a receipt for the proceeds of the Bonds, signature certificates, an arbitrage/rebate
certificate and associated certificate of the underwriter, Form 8038-G, continuing disclosure
WWI 11233.999 1
agreement, CDIAC report of final sale, forms of opinions of other counsel, and all other
necessary closing certificates/documents.
(h) Assuming completion of the preliminary and final official statements in
form acceptable to KMTG, deliver a letter addressed to the Client with respect to the bonds to
the effect that, in the course of KMTG's participation in the preparation of the official statement
for the financing, nothing came to the attention of those attorneys rendering legal services to the
Client that caused KMTG to believe that such official statements as of its date and as of the date
of the letter (except for financial data or forecasts, estimates, assumptions, or expressions of
opinion, or any information regarding The Depository Trust Company or any credit enhancer)
contained any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
(i) Prepare and deliver to each participant in the financing a complete
transcript of the proceedings for the formation of the CFDs, authorization of special taxes in the
CFDs, and the authorization, issuance, and sale of the Bonds.
0) Upon due and proper completion of the proceedings, deliver our final
approving opinion confirming the validity of the Bonds and opinions that interest on the Bonds is
excluded from gross income for federal income tax purposes and is exempt from State of
California personal income taxes, under existing statutes, regulations, rulings, and court
decisions.
2. Conmenswent o Services. KMTG's obligation to provide legal services
under this Agreement shall commence upon KMTG's receipt of a copy of this Agreement signed
and dated by Client.
3. Completigs of Senices. KMTG's representation of Client with respect to each
series of Bonds will be concluded upon their issuance. Nevertheless, subsequent to issuance,
KMTG will prepare and distribute to the participants in each transaction a transcript of the
proceedings.
4. Dunes of I+ITG od Client
(a) D!L*s of KMTG. KMTG shall provide those legal services reasonably
required to represent Client in the matters described in Paragraph 1 of this Agreement. KMTG
shall also take reasonable steps to keep Client informed of significant developments and to
respond to Client's inquiries.
(b) Ppt
j,es of Client. Client shall cooperate with KMTG, keep them informed
of developments, perform the obligations it has agreed to perform under this Agreement, and pay
KMTG's bills in a timely manner.
5. KMTG ftsonuel. While one attorney at KMTG may be primarily responsible
for completing the work that is within the scope of this Agreement, that attorney may also
delegate work to other attorneys, paralegals, law clerks and office personnel within KMTG when
it is determined that such delegation is appropriate in representation of Client's interests. If
844681.2 11233.999 2
Client. so requests, Client will be notified prior to any delegation and a decision will be made in
consultation with Client.
6. Dbilaimm2f 9smntkc. KMTG cannot guarantee the successful conclusion of
any legal matter. KMTG has made no promises or guarantees to Client about the outcome of
Client's matters, and nothing in this Agreement shall be construed as such a promise or
guarantee.
7. C94aegsWkn.
For the services described in Section 1, KMTG will bill and Client will pay hourly fees
at the rates described in Exhibit A, billed monthly. Client shall pay statements from KMTG
within thirty (30) days after each statement's date. In addition to its fees for legal services,
KMTG will bill Client for its out-of-pocket expenses, such as travel, delivery and courier
service, postage, long distance telephone tolls, and similar expenses.
The fees and expenses due pursuant to this Agreement shall be subject to the City of
Lodi Billing Guidelines dated February 20, 2004 as previously provided to KMTG.
S. AblWdongpnt. If for any reason the financing is abandoned or terminated prior
to the issuance of Bonds, then KMTG will charge Client a fee determined by the extent of the
services rendered by KMTG to the date of the abandonment or termination of the proposed
financing at the hourly rates specified in Exhibit A, together with KMTG's out-of-pocket
expenses; provided that such fees and expenses shall not exceed $20,000.
9. Ad 'tioaal-LeM Services. In addition to the bond counsel services described in
Section 1 above relating to the formation of the CFDs and issuance of Bonds, KMTG, as
requested by Client, will also prepare and negotiate ancillary agreements between Client and the
owners of the Developments, and shall render such advice as is requested by Client in connection
with such documents.
Client agrees to pay for these additional legal services at the hourly rates set forth in
Exhibit A, together with any related out-of-pocket expenses. KMTG shall send Client a
statement for the fees and costs incurred relating to the additional services every month.
10. Legg Actin Uipoa Default. If Client does not pay the balance when due or
breaches any other terms of this Agreement, KMTG may commence any legal action for
collection of the balance due. Client and KMTG agree that all legal proceedings related to the
subject matter of this Agreement shall be maintained in courts sitting within the State of
California, County of San Joaquin. Client and KMTG agree that the jurisdiction and venue for
such proceedings shall lie exclusively with such courts.
11. Arbltratigl of Fee Dispute. If a dispute arises between KMTG and Client
regarding KMTG's fees or costs under this Agreement and KMTG files suit in any court, or
begins an arbitration proceeding other than through the State Bar or a local bar association under
Business and Professions Code Sections 6200-6206, Client will have the right to stay that suit or
arbitration proceeding by timely electing to arbitrate the dispute through the State Bar or a local
bar association under Business and Professions Code Sections 6200-6206, in which event
KMTG must submit the matter to that arbitrator.
844681.2 11233.999 3
12. Terilninatan. This Agreement may be terminated by Client or KMTG, or
modified by mutual consent, at any time. KMTG and Client each agree to sign any documents
reasonably necessary to complete KMTG's discharge or withdrawal. If Client terminates this
Agreement, then Client shall pay KMTG a fee determined by the extent of the services rendered
by KMTG to the date of the termination at the hourly rates specified on Exhibit A, together with
KMTG's out-of-pocket expenses, but not in excess of the amounts specified in Section 7.
13, Cliiynt Fills. At Client's request, upon the termination of services under this
Agreement, KMTG will promptly release all of Client's papers and property to Client (subject to
any applicable protective orders or non -disclosure agreements).
14. Dea1ructigS of Client File. If Client does not request the return of Client's
papers and property, KMTG will retain Client's file for a period of seven years from the date of
delivery of the obligations, after which time KMTG may have Client's file destroyed. Client
acknowledges that it will not be notified prior to the destruction of its papers and property and
consents to the same. If Client desires to have Client's file maintained beyond seven years after
Client's matter is concluded, separate arrangements with KMTG must be made.
15. Moffificat' by Subsegment Agreement. This Agreement may be modified
only by a written instrument signed by both parties.
KMTG:
KRONICK, MOSKOVITZ, TIEDEMANN & GIRARD,
A Professional Corporation
DATED: By:
DATED-.
APPROVED AS TO FORM:
_i
a2.. D. hen Schwabauer
lytorney
Robert E. Murphy
CLIENT:
CITY OF LODI
Wo
Bob Johnson, Mayor of the City of Lodi
844681.2 11233.999 4
EXHIBIT A
Hourly Rates
KMTG's rate schedule for public finance matters as of the date of this Agreement is as
set forth below:
Shareholders
$190-235
Principals/Senior Associates
$175-190
Associate Attorneys
$150-170
Paralegals
$85-125
Document Clerk/Law Clerk
$50-120
Jon Cristy's current hourly rate for this fee agreement is $225.
Constantine Baranoff's current hourly rate for this fee agreement is $190.
W681.2 11233.999