HomeMy WebLinkAbout08-03-2009 ITEM VIII-B-5CITY OF
AGENDA BILL APPROVAL FORM
WASHINGTON
Agenda Subject:
Date:
Outside Legal Counsel Agreement with Foster Pe er, PLLC
August 3, 2009
Department:
Attachments: Resolution No. 4511
Budget impact: N/A
Legal/Finance
Legal Services Agreement
Administrative Recommendation:
City Council adopt Resolution No. 4511.
Background Summary:
The City of Auburn has utilized the legal services
of Foster Pepper, PLLC, for many years, with the law
firm primarily serving as the City's bond counsel.
The City does not currently have a professional
services agreement with Foster Pepper. Due to the outside legal services anticipated for upcoming debt
financing issues and alternative financing measures, such as the new market tax credits, a legal services
agreement with Foster Pepper is needed.
A3.12.5
A0803-2
Reviewed by Council & Committees:
Reviewed by Departments & Divisions:
❑ Arts Commission COUNCIL COMMITTEES:
❑ Building ❑ M&O
❑ Airport ® Finance
❑ Cemetery ❑ Mayor
❑ Hearing Examiner ® Municipal Serv.
® Finance ❑ Parks
❑ Human Services ❑ Planning & CD
❑ Fire ❑ Planning
❑ Park Board ❑ Public Works
® Legal ❑ Police
❑ Planning Comm. ❑ other
❑ Public Works ❑ Human Resources
❑ Information Services
Action:
Committee Approval: ❑Yes ❑No
Council Approval: ❑Yes ❑No
Call for Public Hearing 1 1
Referred to Until
1 1
Tabled Until
1 1
Councilmember: Backus
Staff: Heid/Coleman
Meeting Date: August 3, 2009
Item Number: V111.13.5
AUBURN* MORE THAN YOU IMAGINED
RESOLUTION NO.4 5 1 1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
AUBURN, WASHINGTON, AUTHORIZING THE MAYOR
AND CITY CLERK TO EXECUTE AN AGREEMENT
BETWEEN THE CITY OF AUBURN AND FOSTER
PEPPER, PLLC FOR LEGAL SERVICES
WHEREAS, the City anticipates the need for outside legal services for
upcoming debt financing issues and alternative financing measures, such as
the new market tax credits; and
WHEREAS, the City of Auburn has utilized the legal services of Foster
Pepper, PLLC, for many years, with the law firm primarily serving as the City's
bond counsel; and
WHEREAS, the City does not currently have a professional services
agreement with Foster Pepper; and
WHEREAS, it is in the public interest for the City to enter into an
agreement with Foster Pepper, PLLC, for specified legal services.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
KING COUNTY, WASHINGTON, HEREBY RESOLVES as follows:
Section 1. The Mayor of the City of Auburn and the Auburn City Clerk
are hereby authorized to execute an Agreement between the City of Auburn
and Foster Pepper, PLLC for legal services which agreement shall be in
substantial conformity with the Agreement a copy of which is attached hereto,
marked as Exhibit "A" and incorporated herein by this reference.
Resolution No.4511
July 30, 2009
Page 1 of 2
Section 2. The Mayor is hereby authorized to implement such
administrative procedures as may be necessary to carry out the directives of
this legislation.
Section 3. This resolution shall be in full force and effect upon
passage and signatures hereon.
Dated and Signed this day of
Lei I 1welffiAll:111:1►1
1INi1i1)
PETER B. LEWIS, MAYOR
ATTEST:
Danielle E. Daskam, City Clerk
niel B. He"'ft,--£qty Attorn�y
-------------------------------------
Resolution No.451 1
July 30, 2009
Page 2 of 2
LEGAL SERVICES AGREEMENT
FOSTER PEPPER, PLLC
THIS CONTRACT is made and entered into by and between the CITY OF AUBURN,
hereinafter referred to as the "City," and FOSTER PEPPER, PLLC, hereinafter referred to as
the "Law Firm." The City and the Law Firm hereby agree to the following terms and conditions:
1, Services Provided
A. The primary purpose of this contract is to provide legal advice, consultation and services to
the City of Auburn, specifically, (1) bond counsel services described in section A of the Scope of
Services attached as Exhibit 1 to this Contract; (2) other finance counsel services described in
section B of Exhibit 1; and (3) other legal services as expressly requested by the City, 'including
without limitation services in the areas of land use, environmental, construction, condemnation,
public records, open public meetings, and/or labor law.
B. The City's Finance Director shall be the City's representative for bond counsel services
described in Exhibit I. and the City Attorney shall be the City's client representative and contact
person for all other services performed under this contract. The Law Firm shall designate a
representative and contact person for bond counsel work, and may designate a separate
representative and contact person with respect for other work performed by Law Firm for the
City.
C. The Law Firm will keep City well informed of all legal matters it handles on the City's
behalf. The Law Firm shall send , the City copies of all material papers coming in or going out of
its offices to or from third parties. The Law Firm shall, at such times and in such form as the
City may require, furnish the City with periodic reports pertaining to the work and services
undertaken pursuant to this agreement.
2. Compensation and Payment
Until December 31, 2012, compensation for the bond counsel services described in Section A of
Exhibit 1 will be payable as set forth in Exhibit 2, only upon the issuance of the bonds or notes
with respect to which the services are rendered. Compensation for bond counsel services may be
adjusted commencing January 1, 2013, by agreement of the parties.
Until December 31, 2012, compensation for the non -bond counsel finance -related services
described in Section B of Exhibit 1, and for the other services requested by the City Attorney,
will be billed monthly at the hourly rates for Law Firm's attorneys expected to assist the City are
set forth in Exhibit 3.. Compensation for non -bond counsel services may be adjusted
commencing January 1, 2013, by agreement of the parties. As additional attorneys are proposed
to perform work for the City, Law Firm will propose an applicable hourly rate. As specific
projects are proposed for assistance by the Law Firm, the City Attorney and the Law Firm shall
discuss budgets for that work and/or rate adjustments.
If the Law Firm performs non -bond counsel services in connection with a project that is later
financed through bonds, the hourly fees paid to the Law Firm in connection with those services
51041342.4
will serve as an offset to the bond counsel fee to the extent that the bond counsel fee exceeds the
time value of the work performed by individual Law Firm lawyers at their regular (not
discounted) hourly rates then in effect. For example, if the Law Firm performs and is paid
$5,000 for hourly work negotiating an intergovernmental agreement regarding revenues that are
later pledged to bonds, and the Law Firm's bond counsel fee for those bonds would be $25,000
based on the schedule in Exhibit 2 but the time value for Law Firm attorneyserformin the
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bond counsel services is only $19,000 at their regular, non -discounted rates, then the Law Firm
will receive $20,000 as the bond counsel fee for that bond issue (i.e., $25,000 minus the $5,000
previously paid for hourly work).
The Law Firm may incur various costs and expenses in performing legal services under this
Agreement. The City agrees to pay costs in connection with Law Firm's performance under this
agreement. Costs subject to this section include mileage, any messenger service and other
special delivery fees, and photocopying expenses. However, if the Law Firm and the City agree
that out of state travel is necessary, the City agrees to pay transportation costs of an necessary
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out-of-state travel by Law Firm. The Law Firm shall fly coach class on any airplane trips. The
City will be charged the. hourly rate for the time attorneys in the Law Firm spend traveling, so
long as such attorneys are not engaged in work for other clients during the travel time billed.
For work billed on an hourly basis, the Law Firm will provide a detailed invoice identifying the
work performed, the date accomplished, and the hours charged. The Law Firm will also detail
and provide documentation for any costs. The City will pay the Law Firm within 30 days after
receipt of properly completed invoices for legal services. Invoices for work performed on an
hourly basis shall be submitted to the City Attorney. Bond counsel services bills shall be
submitted to the City's Administrative Services Director.
Payment shall be considered timely if made by the City within 30 days after receipt of a properly
completed invoice.
Advance Payment Prohibited. No payment in advance or in anticipation of services or
supplies under this contract shall be made by the City.
3. Termination of Contract
Either party may terminate this agreement prior to that date upon 30 days written notification,
subject to the Washington Rules of Professional Conduct applicable to attorneys. It ; is agreed
that the Law Firm will be compensated for services provided through the date of notification of
termination at the applicable hourly rates. However, in the case of bond counsel services, the
Law Firm will be compensated on an hourly basis at the time bonds are issued (at discounted
rates applicable under this contract), for the work that the Law Firm performed with respect to
that bond issue, but in no event greater than the fee calculated in accordance with . the bond
counsel fee schedule set forth in Exhibit 2. Compensation for any services provided after
notification of termination shall be pursuant to agreement of the parties.
51 001342.4 2
4. Contract Amendments
Modifications to the contract, including changes to the scope of representation or the maximum
compensation, and term of agreement shall be made by written- agreement executed by both
parties.
5. Applicable Law and Venue
This contract shall be governed by the laws of the State of Washington. In the event of a lawsuit
involving this contract, venue shall be proper only in King County Superior Court.
6. Independent Capacity of Law Firm
The Law Firm and its employees or agents performing under this contract are not employees or
agents of the City. The Law Firm will not hold itself out as, nor claim to be, an officer or
employee of the City by reason of this contract, nor will the Law Firm make any claim of right,
privilege, or benefit which would accrue to a civil service employee under civil service laws
applicable to the City.
7. Conflicts of Interest
The parties recognize that Law Firm may be asked to represent clients in cases or on matters
adverse to the City. The Law Firm shall notify the City when the Law Firm is. asked to
participate in cases or matters adverse to the City by advising the City Attorney of the nature of
the matter or the name of the case, and will request a written waiver from the City prior to
undertaking work on such case or matter. The City and the Law Firm will use the "Guidelines:
Conflicts and Sensitive Issues" attached as Exhibit 4 as working guidelines for approaching
potential conflicts of interest.
8. Confidentiali
The Law Firm shall maintain as confidential all information concerning its advice and
recommendations, as well as information related to the business of the City, its financial affairs,
relations with its clientele and its employees, and any other information which may be
specifically classified as confidential by the City in writing to the Law Firm. To the extent
consistent with RCw 42.56 (Public Records Act), the City shall maintain all information which
the Law Firm specifies in writing as confidential.
9. Professional Liability Insurance
The Law Firm shall maintain professional liability insurance to cover any work performed by the
Law Firm pursuant to this Agreement. Such insurance shall be written with limits no less than
$1,000,000 per claim and $1,000,000 policy aggregate limit.
5100 1342,4 3
1 0. Licensing
The Law Firm shall be licensed to practice law in Washington and in the City of Auburn, and be
inood standing with the Washington State Bar Association. The Law Firm is responsible for
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compliance with all applicable city and state business licensing.
CITY OF AUBURN
Title:
Date:
Attest:
Dan Daskam, City Clerk
Approved as to Form:
Dan Heid
51041342.4 4
FOSTER PEPPER PLLC
Federal Tax ID: 91-0605972
Date:
Address:
1111 Third Avenue Suite 3400
Seattle WA 95104-3200
EXHIBIT 1
SCOPE OF BOND COUNSEL/FINANCE COUNSEL SERVICES
FEES FOR BOND COUNSEL SERVICES
In the following, we use the term "bonds" to include any obligation of the issuing local
government (the "City") for which we are asked to serve as bond counsel.
.A, BOND COUNSEL SERVICES
Those services which Foster Pepper PLLC traditionally provides as bond counsel to the
City include:
(1) Advising the City and its consultants on the legal requirements applicable to and,
when �participating re uestedwith those consultants and City's staff in planning, the financing of
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aJro' ect, including advice on state law and federal income tax and securities laws;
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(2) g Reviewing the transcripts relating to the prior issuance by the City of related
outstandingobligations(typically revenue obligations), to assure conformity of the bonds with
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applicable covenants and conditions;
Based on facts rovided b the issuer, performing the necessary legal analysis to
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determine, in financings in which the bonds are intended to be tax-exempt, whether interest on
the bonds willualif for an exclusion from gross income for federal income tax purposes, and
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preparing tax exemption and nonarbitrage certificates;
(4) Drafting the ordinances/resolutions and other documents necessary to authorize
the bonds to be sold and issued (including, where applicable, ballot title ordinances/resolutions),
4.
(5) If requested, attending certain meetings relating to the sale and issuance of the
bonds;
(6) Forwarding City financing documents to bond rating agencies and/or bond
insurers, requested uested by the City or City's financial consultant or underwriter, and explaining
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those documents to agency and insurer representatives;
(7) If requested, preparing the official statement and if not, reviewing the official
statement, offering circular or other sales material relating to the bonds;
(8) Prearia closing documents necessary to support the issuance of the bonds and
Preparing
assembling the transcript after the closing; and
(9) Subject to the completion of proceedings to our satisfaction, furnishing the firm's
approving legal opinion for the bonds regarding the validity and binding effect of the bonds and
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the excludability of interest on the bonds from gross income for federal income tax purposes.
51041342.4
Our bond opinion will be based on facts and law existing as of its date, and will constitute
the expression of our professional judgment on the matters expressly addressed and not a
guarantee of result. In rendering that opinion, we will rely upon the certified proceedings and
other certifications of public officials and other persons furnished to us without undertaking to
verify the same by independent investigation, and we will assume the City's continuing
compliance, after the 'issue date, with applicable laws relating to the bonds. During the. course of
this engagement, we will rely on the City to provide us with complete and timely information on
all developments pertaining to any aspect of the bonds and their security, as well as the. expected
use of bondp roceeds. We understand and expect that officers and employees of the City will
cooperate with us in this regard.
B, OTHER SERVICES
Traditional bond counsel services described above do not include the following
additional bond and project -related work for the City which we would be pleased to perform on
request, working with the City and its designated representatives. The provision of these
services involves appropriate fee arrangements.
(1) The drafting or review for sufficiency of any environmental impact statements or
other evidence of compliance with the State and National Environmental Policy .Acts, the
Shorelines Management Act, Growth Management Act and similar laws;
(2) Giving advice to the City's consultants regarding the applicability of the
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re istration requirements under federal or state securities laws or regarding federal and state
securities disclosure requirements or due diligence review;
(3) Negotiation and drafting of repurchase agreements, investment contracts,
custodial agreements, swap agreements, credit enhancement or liquidity facilities (other than
bond insurance), and contracts (including contracts with developers or owners of property
included within local improvement district formed by the City), or disputes or litigation in
connection therewith;
(4) The drafting or obtaining of state or federal legislation;
(5) pParticipating in administrative proceedings, trial or appellate litigation,
(6) Drafting special assessment City formation and assessment documents and
attending special assessment hearings;
(7) Work in connection with seeking or obtaining governmental assistance or
approvals from governmental agencies other than the City, necessary for carrying out the
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purposes of the bond issue;
(8) g Providing services relating to public works bidding, negotiating design or
construction contracts, or carrying out the acquisition of property or the construction of projects;
(9) Representing the City in Internal Revenue Service examinations or inquiries, or
Securities and Exchange Commission investigations; or
51401342.4 2
(10) Addressing any other matter not specifically set forth above that is not required to
furnish our bond opinion.
C. FILE MANAGEMENT
After the transaction is concluded, we will deliver to the City a complete copy of the
transcript of the transaction. A transcript is delivered generally within 30 to 60 days after
closing. We then close our files regarding the matter, and our representation on the transaction is
completed. Additional services after closing would be addressed under Part B, above. All
records and transcripts are records of the City of Auburn.
51041342.4 3
F.Yu1RIT
Fees for Bond Counsel Services
Bond counsel services will be compensated as follows:
Issue Size
G.O. Bonds
Revenue Bonds
$1,000,000 or less
Negotiable
Ne otiable
$7,500 + 2.40 per thousand above
$95000 + 2.88 per thousand above
$1 MM - $4,999MM
$1MM
- $1 MM
$17,100 + 1.20 per thousand above
$20,520 + 1.40 per thousand above
$5MM - $95999MM
$SMM
$5MM
$lOMM -
$23,200 +.85 per thousand above
$27,720 + 1.02 per thousand above
$245999MM
$10MM
$
$35,850 +.55 per thousand above
$43,020 +.66 per thousand above
$25MM - $50 MM
$25 MM
$25 MM
$50MM +
Neot*able
Negotiable
Ad' ustments to Base Fee Schedule
1. Bond Anticipation Notes: 0.50 x base fee.
2. Complex Transactions: Complex transactions involving conduit borrowings, lease
financings, swaps or derivatives would be negotiable based on complexity of the
transaction.
3. Refundings: 1.20 x base fee.
4. Private Placements With A Bank -- Single Bond: 0.75 x base fee.
5. Preparation of Official Statements: $7,500 for general obligation bonds, and $10,000 for
revenue bonds.
6. Public Works Trust Fund and State Revolving Fund Counsel: Hourly.
7. Local Improvement District bond counsel and special counsel: Negotiable.
51001342.4
EXHHIRIT 3
Initial Hourly Rates Applicable to City
Disco un ted
Attorney
2009 Rate
Rate
Steve DiJulio
$465.00
$430.00
Marc Greenough
$375.00
$340.00
Greg Guedel (procurement)
$390.00
$350.00
Julie Kebler (employment)
$375.00
$335.00
Chris Napier (real estate)
$375.00
$335.00
Jeff Nave (tax credits)
$410.00
$370.00
Nancy Neraas
$400.00
$360.00
Alice Ostdiek
$375.00
$340.00
Will Patton
$375.00
$340.00
Mike Schechter
$285.00
$255.00
Allison Schwartzman
$305.00
$275.00
Richard L. Settle (environ.)
$480.00
$430.00
Hugh Spitzer
$420.00
$375.00
Lori Terry Gregory (environ.)
$415.00
$375.00
Bill Tonkin
$475.00
$400.00
Research &Support Staff
Barbara Rothwell
$160.00
$145.00
51001342.4 1
EXHIRIT 4
Guidelines for Addressing Conflicts and Sensitive Issues
1. objectives
Foster Pepper PLLC ("FP") from time to time may be asked to provide: legal
services to the City on a variety of matters, including work as bond counsel, counsel on
public disclosure, work on land use, environmental, land use, construction, employment
and other areas of law. FP will provide services to the City, as requested, pursuant to a
services contract. That contract provides that FP serves as bond counsel, and will perform
services in other areas on a project -by -project basis, as requested by the City during the
term of the contract.
while providing various legal services to the City, FP may be asked to do legal
work for other clients that may have interactions with the City. FP understands that the
City is likely to have particular sensitivity about actual or potential conflicts of interest
with regard to those other representations. Likewise, the City understands that that there
are a number of circumstances in which FP attorneys should be able to represent clients
in matters before the City as a regulatory authority, or in matters involving the City as a
contracting party in either instance unrelated to the matters on which FP is assisting
the City. The City also understands that FP and its other clients have an interest in
obtaining some degree of certainty prior to the establishment of any attorney-client
relationship. The following principles are intended to strike a reasonable balance between
these interests.
2. Potentially Sensitive Matters
The following types of matters should be considered potentially sensitive:
Matters implicating significant policy judgments of the City Manager or Council
Matters likely to require significant contact with a City elected official in an
adverse relationship (such as a deposition or in negotiations)
Matters in which large amounts (greater than $100,000) of City money or liability
exposure are at stake
Litigation involving constitutional claims or challenges
Litigation challenging the City's authority to act (contrasted with a matter in
which the City's authority is accepted, but the matter challenges the City's
application of existing laws or ordinances)
Matters in which the City's actions are likely to be the subject of significant
publicity or policy concern
51001342,4
3. Resolution of Conflicts
Before undertaking a legal matter for a person or entity where that representation
would create, or reasonably could be expected to later create, an ethical conflict with its
representation of the City and/or involve a potentially sensitive matter, FP shall in writing
(by letter or e-mail) call the matter to the attention of the City Attorney and request a
waiver of the conflict. Such a request for a waiver should specifically address whether,
in the view of FP, the matter is "potentially sensitive." The City Attorney will consult
appropriate City personnel and with reasonable promptness (ordinarily within 3 working
days) provide FP with a determination whether a conflict exists and, if so, whether the
City will provide a written waiver (which may be subject to specific conditions or
limitations) or the City's decision not to waive the conflict. FP will expect that in
situations not involving a "potentially sensitive" matter, the City would ordinarily; agree
to provide a waiver, and that the City will give consideration to a waiver even in
potentially sensitive situations. In instances where the City and FP determine that there is
a potential or actual conflict of interest, FP will simultaneously consult with the other
client (or potential client) and seek a corresponding waiver from that other client so that
FP's continuing ability to fully represent the City in then -current matters may continue
unhindered.
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51001342.4