HomeMy WebLinkAboutItem 14 - Legal Services Agreement with Best Best & Krieger LLP Finance and Management Services
www.santa-ana.org/finance
Item # 14
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
April 2, 2024
TOPIC: Bond Counsel and Disclosure Counsel Related to Water Revenue Bonds
AGENDA TITLE
Legal Services Agreement with Best Best & Krieger LLP for Bond Counsel and
Disclosure Counsel for Potential Water Enterprise Revenue Bond Issuance (Non-
General Fund)
RECOMMENDED ACTION
Authorize the City Manager to execute an agreement with Best Best & Krieger LLP for
bond counsel and disclosure counsel services related to a potential water enterprise
revenue bond issuance for a not-to-exceed amount of $88,000 for a term expiring
September 30, 2025 (Agreement No. A-2024-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
The City’s 2019 Water Enterprise rate study indicated the future need to issue debt and
raise capital for improvements to the City’s water delivery system. Over the last several
years, the Water Enterprise has been making progress on improvements, such as well
rehabilitation, pump stations, and the Advanced Metering Infrastructure (AMI) project.
Following an updated analysis by the water rate study consultant, it has been
determined that at least $30 million in additional capital is needed to maintain the
delivery of vital water projects.
The water enterprise has existing revenue bonds issued in 2014, which refunded 2004
bonds and provided additional capital for improvement projects. The potential 2024
revenue bonds would likely refund the 2014 bonds and provide the additional capital.
In preparation of funding future improvements via a bond, the City is gathering a bond
team. Best Best & Krieger LLP (BBK)’s attorneys are experienced to provide the
services and have worked on past City bond issuances. The City’s Financial Advisor,
Urban Futures, Inc., has compared the proposed fees to recent bond issuances for
other agencies and found them to be competitive. If bonds are issued, BBK’s fees will
be paid from bond proceeds. If bonds are not issued, the Water Enterprise will be
Bond Counsel and Disclosure Counsel for Potential Water Enterprise Revenue Bonds
April 2, 2024
Page 2
4
1
4
0
obligated to pay BBK $25,000 plus up to $3,000 of out-of-pocket expenses for services
rendered.
Staff expects to bring a bond issuance proposal to the City Council over the next
several months. Bonds cannot be issued without City Council approval.
FISCAL IMPACT
If bonds are issued, bond counsel and disclosure counsel will be paid from bond
proceeds. If no bonds are issued, the Water Enterprise will pay up to $28,000 from
account 06017645-62300 (Water Admin & Engineering, Contract Services-
Professional).
EXHIBIT(S)
1. Agreement
Submitted By: Kathryn Downs, FMSA Executive Director
Approved By: Tom Hatch, Interim City Manager
09960.00000\42067547.1 1
LEGAL SERVICES AGREEMENT WITH
BEST BEST & KRIEGER LLP
This AGREEMENT, made and entered into this 2nd day of April, 2024, by and between Best Best
& Krieger LLP (“Bond Counsel”), 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 employ Bond Counsel to provide legal services described as
Disclosure and Bond Counsel Services related to a proposed issuance for Water Revenue
Bonds (the “Bonds”) issued with the participation of the Santa Ana Financing Authority, as
further detailed below.
B.Bond Counsel represents that they are licensed to practice law in the State of California, have
special experience and knowledge related to administrative and litigation matters concerning
the above services, and desire to undertake such 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 BOND COUNSEL On an as-needed basis, and at the sole discretion of
the City, City hereby agrees to and does retain Bond Counsel, for the compensation hereinafter
specified, to provide, and Bond Counsel agrees to provide, legal services in connection with the
issuance of Bonds. Such services shall include the rendering of legal opinions (hereinafter called the
“opinions”) pertaining to the issuance of the Bonds to the effect that
The Bonds have been properly issued and are valid and binding obligations; and
The essential sources of security for the Bonds have been legally provided; and
Interest on the Bonds is exempt from federal gross income and California personal
income taxation.
Bond Counsel’s services will also include:
Researching applicable laws and ordinances relating to the proposed Bonds;
Attending conferences and consulting with City staff and counsel regarding such
laws, and the need for amendments thereto, or additional legislation;
Participating in meetings, conferences or discussions with any financial advisors,
underwriters or other experts retained by the City with respect to the issuance of
the Bonds;
Supervising and preparing documentation of the steps to be taken through the
issuance of the Bonds, including: (city comment: because the agreement is already
organized into numbered provisions, recommend that the points below be given
alpha designation or other)
EXHIBIT 1
09960.00000\42067547.1 2
1.Drafting all resolutions, notices, rules and regulations and other legal
documents required for the issuance of the Bonds, and all other
documents relating to the security of the Bonds, in consultation with
the City, the City’s financial advisor, underwriter and other experts;
2.Preparing the record of proceedings for the authorization, sale and
issuance of the Bonds;
3.Assisting in the preparation of the portions of the official statement for
the sale of the Bonds which relate to the terms of the Bonds and the
firm’s legal opinion delivered with respect to the Bonds;
4.Reviewing the purchase contracts or the bidding documents relating to
the sale of the Bonds and participating in the related negotiations;
5.Participating in meetings and other conferences scheduled by the City,
the City’s financial advisor or the underwriter;
6.Consulting with prospective purchasers, their legal counsel and rating
agencies;
7.Consulting with the City concerning any legislation or litigation which
may affect the Bonds, the security for the Bonds, or any other matter
related to the issuance of the Bonds;
8.Consulting with any trustee or fiscal agent for the Bonds and their
counsel;
9.Preparing the form of the Bonds, and supervising their production or
printing, signing, authentication and delivery;
10.Rendering the final approving opinion as to the validity of the Bonds
for use and distribution upon their issuance; and
11.Rendering a legal opinion to the underwriter or purchaser of the Bonds
as to the applicability of the registration requirements of federal
securities laws and a statement as to the fair and accurate nature of
those portions of the Official Statement described in (d) above.
Bond Counsel further agrees to prepare the Official Statement and will provide a letter addressed to
the underwriter or purchaser of the Bonds to the effect that, to the best knowledge of Bond Counsel,
the offering document (exclusive of financial, statistical and certain other information therein) does
not misstate a material fact or omit a material fact required to be stated therein.
Finally, in addition to bond counsel services, Bond Counsel will prepare the documents necessary to
establish a new joint powers financing authority to act as the issuer of the bonds for the benefit of the
City and any future issuances for the City.
Bond Counsel accepts said retention and agrees to perform, in a timely and efficient manner, all such
services as may be requested by the City.
09960.00000\42067547.1 3
2. COMPENSATION FOR SERVICES RENDERED
a. For services to be rendered as Bond Counsel and Disclosure Counsel to the City in
connection with the issuance of the Bonds, Bond Counsel will be paid a flat fee of
$85,000.
b.The fees referenced in this Section 2(a) and (b) shall be paid to Bond Counsel on the
closing date and shall be payable solely from Bond proceeds; provided that, if the City
does not elect to pursue the issuance of the Bonds, the City shall pay Bond Counsel
the $25,000 referenced above plus the expenses incurred as specified below.
c.The fees referenced in this Section assume that the Bonds will be issued within
eighteen months from the date of this Agreement. In the event the Bonds are not
issued within that time, Bond Counsel reserves the right to make such modifications
to the foregoing fees as the City and Bond Counsel agree, as justified by reason of
increased cost to Bond Counsel and the then prevailing fees for disclosure counsel and
bond counsel services for Bonds.
d.The total sum to be expended under this Agreement, shall not exceed $88,000,
including any extension periods
e.City agrees to reimburse Bond Counsel for out-of-pocket expenses, including but not
limited to, mileage, copying costs, service of process, and mail services authorized by
the City Attorney 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 Bond Counsel shall submit a monthly statement specifying
the services performed, dates and number of hours, and an itemization of expenses related thereto
with supporting documentation (i.e. receipts, invoices, copy of check, etc.). City acknowledges
that the fees incurred for work performed by Bond Counsel on its behalf are due and owing within
60 days of the work being performed. At Bond Counsel’s discretion, they may choose to defer
payment. Notwithstanding this, City agrees that it shall tender payment within 60 days of written
demand by Bond Counsel for payment. Unless expressly stated thereon, monthly statements
generated by Bond Counsel shall not constitute written demand, but shall simply be a written
reflection of work performed and fees incurred.
4.CONTROL OF LEGAL MATTERS Bond Counsel agrees 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 City at all stages, and that they shall at all times keep the City
informed of all matters pertaining thereto. City will keep Bond Counsel informed of all significant
developments in matters relating to any representation undertaken by Bond Counsel. Bond Counsel
further agrees, 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 each and every matter or
proceeding in which they represented the City pursuant to this Agreement.
09960.00000\42067547.1 4
5.REPORTING REQUIREMENTS Bond Counsel agrees to keep the City, and any other
person(s) designated by the City, informed of significant events in the Actions.
a. (a) and (b) probably not pertinent here
6.TERM The term of this Agreement shall commence on the date first written above and
terminate on September 30, 2025, 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 the City Attorney.
7.INDEPENDENT CONTRACTORS It is mutually agreed by and between the parties that,
in the performance of their covenants hereunder, Bond Counsel is and shall be independent
contractors, and not officers or employees of City.
8.INSURANCE
Prior to undertaking performance of work under this Agreement, Bond Counsel shall
maintain and shall require any subcontractors to obtain and maintain insurance as described below
for the entire Term of this Agreement against claims for injuries to persons or damage to property
which may arise from or in connection with services, products and materials supplied to City. Total
cost of such insurance shall be borne by Bond Counsel.
MINIMUM SCOPE AND LIMIT OF INSURANCE
A.Professional Liability Insurance: with limits no less than $1,000,000 per occurrence or
claim, and $2,000,000 aggregate.
If Bond Counsel maintains broader coverage and/or higher limits than the minimum
requirements for each line of coverage shown above, City requires and shall be entitled to the
broader coverage and/or the higher limits maintained by Bond Counsel. Any available insurance
proceeds in excess of the specified minimum limits of insurance and coverage shall be available
to City.
Other Insurance Provisions
The above required insurance policies are to contain or be endorsed to contain the following
provisions:
A.Certificate Holder on each Evidence of Insurance certificate shall be: City of Santa Ana,
20 Civic Center Plaza, Santa Ana, CA 92701. The name and location of project must be
included in the Description of Operations section of each certificate.
Self-Insured Retentions. Self-insured retentions must be declared to and approved by the City.
The City may require the Bond Counsel to purchase coverage with a lower retention or provide
proof of ability to pay losses and related investigations, claim administration, and defense expenses
within the retention.
09960.00000\42067547.1 5
Acceptability of Insurers. Insurance is to be placed with insurers authorized to conduct business
in the State of California with a current A.M. Best rating of no less than A:VII, unless otherwise
acceptable to City.
Verification of Coverage. Bond Counsel shall furnish City with original Certificates of Insurance
including all required amendatory endorsements (or copies of the applicable policy language
effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page
of the CGL policy listing all policy endorsements before work begins. However, failure to obtain
the required documents prior to the work beginning shall not waive Bond Counsel’s obligation to
provide them.
City reserves the right to require complete, certified copies of all required insurance policies,
including endorsements required by these specifications, at any time.
Special Risks or Circumstances. City reserves the right to modify these requirements, including
limits, based on the nature of the risk, prior experience, insurer, coverage, or other special
circumstances.
9. INDEMNIFICATION Bond Counsel agrees 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 Bond Counsel’s negligent
or wrongful performance or conduct related to this Agreement.
10. CONFIDENTIALITY All information and documents shared with Bond Counsel as well
as all work performed by Bond Counsel in connection with this Agreement should be treated as
strictly confidential. Moreover, all communications between Bond Counsel and City shall be
treated as protected by the attorney-client privilege and the attorney work product doctrine.
Accordingly, information received by Bond Counsel 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. Bond Counsel 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 Bond Counsel’s 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 returned/provided to the City with all copies upon the request of
the City. 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 Bond Counsel, disclosed in a publicly available source; (c) is in rightful
possession of the Bond Counsel without an obligation of confidentiality; (d) is required to be
disclosed by operation of law; or (e) is independently developed by the Bond Counsel without
reference to information disclosed by the City.
11. CONFLICT OF INTEREST CLAUSE Bond Counsel covenants 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. Bond Counsel represents many of the
underwriting firms active in the issuance of Bonds of participation and other municipal financings.
The City hereby provides its informed written consent to Bond Counsel’s representation of such
underwriting firms on matters unrelated to the Bonds, provided that, before Bond Counsel
09960.00000\42067547.1 6
undertakes such a matter, it has first reasonably concluded that it can represent both the City’s and
the underwriting firms’ interests without compromising Bond Counsel’s independent judgment or
lessening its vigorous representation of either client and also takes timely and effective steps to
protect all confidential information provided by and to each client.
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 telefacsimile 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: City Attorney
City of Santa Ana
20 Civic Center Plaza (M-29)
P.O. Box 1988
Santa Ana, California 92702
Facsimile (714) 647-6515
To Bond Counsel: Kim Byrens
Best Best & Krieger LLP
3390 University Avenue, 5th Floor
Riverside, CA 92501
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 telefacsimile, communication shall
be 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 Bond Counsel, and supersedes any and all other
agreements, 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 Bond Counsel. 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 Bond Counsel or the City. Each party to this
Agreement acknowledges that no representations, inducements, promises or agreements, orally or
09960.00000\42067547.1 7
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 Bond Counsel, Bond Counsel 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 Bond Counsel retained
by City.
15. TERMINATION This Agreement may be terminated by City at any time. In such event,
Bond Counsel shall be entitled to receive and the City shall pay Bond Counsel compensation for all
services performed by Bond Counsel prior to receipt of such notice of termination. As a condition of
such payment, Bond Counsel shall deliver to the City all files and records generated under this
Agreement as of such date.
Bond Counsel may terminate this agreement, subject to their obligation to provide written reasonable
notice of at least thirty (30) days to arrange alternative representation. 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 Bond Counsel shall not discriminate because of race, color, creed,
religion, sex, marital status, sexual orientation, gender identity, gender expression, gender, medical
conditions, genetic information, military and veteran status, 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. Bond Counsel affirms
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.
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. City
further acknowledges that it has read and received a copy the full text Section 6148 of the
California Business and Professions Code prior to signing this Agreement.
09960.00000\42067547.1 8
20. NO GUARANTEES City understands and acknowledges that there are certain risks and
uncertainties in the pursuit of any matter for which Bond Counsel have been retained, that law is
not an exact science, that Bond Counsel has made no representations or guarantees of success
regarding the conclusion of any particular matter, and that all expressions relative thereto are
matters of Bond Counsel’s opinion only. In other words, Bond Counsel makes 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:
_________________________
Jennifer L. Hall
City Clerk
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attorney
By: _________________________
Andrea Garcia-Miller
Assistant City Attorney
RECOMMENDED FOR APPROVAL
_____________________________
Kathryn Downs, CPA
Finance and Management Services
Agency
CITY OF SANTA ANA
____________________________
Thomas R. Hatch
Interim City Manager
BEST BEST & KRIEGER LLP
By: ______________________________
Kim Byrens
Partner
Kathryn Downs (Mar 18, 2024 11:01 PDT)
Santa Ana - 2024 Legal Services Agreement-c1
Final Audit Report 2024-03-18
Created:2024-03-18
By:Kristin Andrade (kandrade@santa-ana.org)
Status:Signed
Transaction ID:CBJCHBCAABAAOuejp7c4FbWWpsd88Kua6IsCxIeG6G-L
"Santa Ana - 2024 Legal Services Agreement-c1" History
Document created by Kristin Andrade (kandrade@santa-ana.org)
2024-03-18 - 5:43:46 PM GMT
Document emailed to Kathryn Downs (kdowns@santa-ana.org) for signature
2024-03-18 - 5:44:09 PM GMT
Email viewed by Kathryn Downs (kdowns@santa-ana.org)
2024-03-18 - 6:01:10 PM GMT
Document e-signed by Kathryn Downs (kdowns@santa-ana.org)
Signature Date: 2024-03-18 - 6:01:27 PM GMT - Time Source: server
Agreement completed.
2024-03-18 - 6:01:27 PM GMT