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HomeMy WebLinkAbout2010/08/03 Item 4 CITY COUNCIL AGENDA STATEMENT ~\'f:.. ((WOF ~(HULA VISTA ITEM TITLE: AUGUST 3, 2010, ItemL A. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA REGARDING ITS INTENTION TO REIMBURSE EXPENDITURES FROM THE PROCEEDS OF QUALIFIED ENERGY CONSERVATION BONDS B. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA REGARDING ITS INTENTION TO REIMBURSE EXPENDITURES FROM THE PROCEEDS OF NEW CLEAN RENEWABLE ENERGY BONDS C. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING At'! AGREEMENT WITH PUBLIC FINANCIAL MANAGEMENT, 1NC TO PROVIDE FINANCIAL ADVISORY SERVICES REVIEWED BY: DIRECTOR OF FINAt'!CE/TREASURER fill! ta- If /L DIRECTOR OF CONSERVATION & ENVIRONME~ SERVICES ~ CITY MAt"lAGER l1t!s ASSISTANT CIT~NAGER Sf 4/5THS VOTE: YES D NO 0 SUBMITTED BY: SUMMARY As part of the American Recovery and Reinvestment Act (ARRA), the Internal Revenue Service (IRS) has created innovative financing mechanisms to help local governments reduce energy use. As a result, the IRS approved an al1ocation of Clean Renewable Energy Bonds (CREBs) under 4-1 August 3, 2010, Item if Section 54C of the Internal Revenue Code in October 2009. This allocation enables the City to issue up to $29.6 million in CREBs by October 2012 to tlnance solar photovoltaic installations at 18 City facilities. In addition, the City received an allocation of Qualified Energy Conservation Bonds (QECB) under Section 54D of the Internal Revenue Code in the amount of$2.2 million to tlnance community energy efficiency retrofits. The approval of the reimbursement resolutions for the two bond types are the next step in preparing to issue bonds using the CREB/QECB allocations. In order to determine the most economically feasible plan to finance the encrgy retrofits the Finance and Conservation & Environmental Services Departments have submitted a Request for Proposal (RFP) to engage a tlnancial advisor to assist in determining the financing structure that will benefit the City most. The selection committee has is recommending that Public Financial Management, Inc. be the City's financial advisors for the CREB/QECB allocation. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that there is no possibility that the activity may have a significant effect on the environment because it is only the adoption of resolutions declaring the City's intention to reimburse expenditures with bond funds; therefore, pursuant to Section 15061(b)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDATION Council approves the resolutions and the agreement. BOARDS/COMMISSION RECOMMENDATION Not Applicable DISCUSSION The CREB/QECB allocation by the IRS and State of California provide an opporhmity for the City to use the tax credit structures to issue bonds that will help the City further reduce energy use and the associated greenhouse gas emissions. These allocations do not guarantee that a bond issuance will occur. Many factors must be evaluated before the City can move forward with any contemplated bond issuance. The underlying premise that must be thorougWy vetted is the projected energy savings that will be generated from the energy retrofits for each individual facility. Energy savings must exceed the financing costs in order for an individual project to be deemed economically feasible. This is especially important because the General Fund will serve as the ultimate source for repayment of any debt issued. The projected energy savings will be used as the basis [or repayment of the debt, but the General Fund must be pledged in order to ensure that the debt issued will be investment grade. Approval of the reimbursement resolutions will allow the City to recoup its investment from the energy retrofits from any bonds that are issued in the future. We will bring back recommendations for the financing stmcture for City Council consideration after careful consultation with the City's 4-2 August 3, 2010, ltemL financial advisor. Attached is a bond counsel opinion stating that the City's contemplated projects are in conformance with applicable sections of the Internal Revenue Service code. The following paragraphs discuss in greater detail the approved uses of the CREB/QECB allocations. For municipal facility retrofits, the Finance Department and Conservation & Environmental Services Department worked with CleanTECH San Diego to obtain authorization from the Internal Revenue Service to issue Clean Renewable Energy Bonds cCREBs). CREBs are tax credit bonds which can be used to fund local government's renewable energy projects such as solar and wind. Because tax credits are a significant benefit to bondholders, the interest rates typically result in lower financing costs for the issuer. The bond's debt service is repaid over an approximately 15- year period through the renewable energy projects resulting energy cost savings. As a result of these eftarts, Chula Vista has heen apportioned a not to exceed amount of $29.6 million of CREBs allocations to install approximately 3.2 MW of solar photovoltaic systems at 18 municipal sites. There is a strong possibility that the City will issue the CREBs on a phased basis for those projects that will generate the most energy savings for the City. Additionally, the City has been olfered a Pre-Paid Power Purchase Agreement (P4A) that could serve as an alternative to CREBs for financing future municipal solar photovoltaic installations. The City has also been apportioned approximately $2.2 million of Qualitied Energy Conservation Bonds (QECBs) to finance community energy etTtciency through its Home Upgrade. Carhon Downgrade program. Similar to CREBs, QECBs are low-interest tax credit bonds which local governments can issue and repay through the resulting energy cost savings. Property-owners who voluntarily elect to participate in the efficiency retrofit program would have an assessment placed on their property which would be used to repay the bond debt. The City is particularly interested in working with financial institutions that operate business facilities within the City and own property or have clients that own property that would be interested in using the QECBs to finance energy efficiency improvements for their local facilities. Agreement for Financial Advisor The approved allocation of the CREB/QECB tax credits was the important first step in obtaining financing vehicles for the energy retrofits. However, the next step in the process is to determine whether the contemplated projects are indeed economically feasible for inclusion in any future debt issuance. The energy savings from the proposed projects must be less than the cost of financing the retrofits and the General Fund must be pledged as a source of repayment in the event that the projected savings are insutticient to service the debt. The commitment of the General Fund is required in order to ensure that the debt quality is at least investment grade for any potential investors. As such, the services of a financial advisor are required to assist in determining the optinlal financing structures for the CREB/QECB allocations. A Request for Proposals (RFP) was issued tar Financial Advisors. The proposal was opened on June II, 2010 and closed June 28, 2010. The RFP was advertised on Planet Bids, The Bond Buyer (a bond industry periodical) and The Star News. The City received four responses to the RFP. TIle respondents are: 4-3 August 3, 2010, ltemL/- o Fieldman Rolapp o Urban Futures Inc o Harrell and Company, LLC o Public Financial Management, Inc. The proposals were reviewed and all four respondents were interviewed by a selection conm1ittee composed of the Finance Director, Assistant Finance Director and Environmental Resource Manager. The selection committee agreed that Public Financial Management, Inc. was the best qualified to assist the City in determining the optimal financing strategy for the CREB/QECB allocations with the goal of minimizing risks to the General Fund. The decision was based primarily upon their current experience working with several large jurisdictions in the State on how best to use their allocations ofCREB/QECB. DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found a contlict exists, in that Council Members Castaneda and Ramirez has property holdings within 500 feet of the boundaries of the property which is the subject of this action. This contlict onlv applies to Resolution B. CURRENT YEAR FISCAL IMP ACT There is no tiscal impact to the General Fund at this time. The approval of the resolutions allow the City to seek reimbursement for expenditures related to the energy retrofits in the future if bonds are issued. All costs associated with the Financial Advisor will be paid out of the bond issuance and not existing reserves. The fees are $50,000 for a public sale or $30,000 for a private placement of the debt. ONGOING FISCAL IMPACT There is no anticipated ongoing fiscal impact by approving this action. ATTACHMENTS Listing of Projects Bond Counsel opinion Prepared by Phillip Davis, Assistant Director of Finance, Finance Department Brendan Reed, Environmental Resource .Alanager, Conservation Department 4-4 CITY OF CHULA VISTA 2009 CRESS Applications Updated: November 2, 2009 Site Name Project Name DC Rating Total System 5 Year Payout Total Energy IRS Allocation Amount (kW) Cost Savings Allocation? 1. AmmalShelter Roof 62.23 $435,610 $146,370 $395,381 y $444,322.00 Parkinq 64.18 $641,800 $144,678 $390,813 y 5654,636,00 2. Chula Vista Civic Ctr Lot 1 232.5 $2,325,000 $524,322 $1,450,077 y $2,371,500.00 Lot2 57.9 $579,000 $126,381 $349,522 y $590,58000 Lot3 35.92 $359,200 $126,381 $349,522 y $366,384.00 3 CV Police Headquarters Lot 1 28,855 $288,550 $64,453 5178,252 Y $294,321,00 Lot 2 200 $2,000,000 5446,733 $1,235,496 y $2,040,000.00 4. Fire Station 3 Roof 9.387 $65,709 $22,086 $59,661 y $67,023.00 Parkinq 34.765 $347,650 $78,381 $211,726 y S354,603.00 5 Fire Station 7 Roof 16.128 $112,896 $27,096 $73,193 y $115,153.00 Parkinq 90.81 $908,100 $204,709 $552,970 y $926.262.00 6. Fire Station 8 Roof 57.89 $405,230 $136,072 $401,413 y $413,334.00 Parkmq 95 $950,000 $214,238 'S592,503 y $969,000,00 7. Fire Station 6 Roof 19.796 $138,572 $46,154 $124,672 y $141,343.00 Parking 55.83 $558,300 5125,904 5340,096 Y $569,455.00 8. Fire Station 4 Parkinq 49.735 $497,350 5112,126 $302,881 y $507,297,00 9. Otay Rec Ctr Roof 67.578 $473,046 $158,954 $429,373 y 5482,507.00 Parkinq 126.28 $1,262,800 $284,667 $768,957 y $1,288,056.00 10. Parkway RecCtr Roof 101.017 $707,119 $235,477 $636,082 y $721,261.00 Parkinq 82.14 $821,400 $183,474 $495,608 y $837,828.00 ". Lorna Verde Ree Ctr Buildings 141.82 $992,740 $330,582 $892,986 y $1,012,595.00 Parkinq 289.35 $2,893,500 $646,312 $1,745,850 N $0.00 12. Montevalle RecCtr Buildings 113.694 $795,858 $265,021 $732,948 y $811,775,00 Lot 1 100 $1,000,000 $223,366 $617,748 y $1,020,000.00 Lot2 164 $1,640,000 $366,322 $1,013,108 y $1,672,800.00 13. Norman Park Senior Ctr 47.061 $470,610 $105,118 $290,718 y $480,022.00 14. Public Works Corp Yard Hillside 930.51 6,513,570 $2,233,581 $6,007,143 N $0.00 Yard j 62175 56,217,500 $1,401,581 $3,437,158 N $0.00 Parking Lot 1 65 $650,000 $146,526 $405,237 Y $663,000.00 Parkinn Lot 2 800,09955 $8,000,996 $1,803,626 $4,988,153 N $0.00 15. RohrPark Parkin 670,185 $6,701,850 $1,495,981 $4,043,719 N SO.OO 16. Salt Creek Rec Ctr Building 1 153.40969 $1,073,868 5364,981 $1,009,400 Y $1,095,345.00 Building 2 108.23225 $757,626 $257,498 $712,142 y $772,778.00 Patkinq 381.3904 $3,813,904 $870,482 $2,407,426 N $0,00 17_ChulaVista South Library 1 145 $1,450,000 $323,882 $895,735 y $1,479,000.00 Library 2 205 52,050,000 $457,901 $1.266,382 y $2,091,000.00 18. ChulaVlsta CivicCtr Parking Lot 1 66.75 $667,500 $150,531 S416,313 y $680,850.00 Librarv parktna Lot2 223.765 $2,237,650 5504,622 51,395,597 Y $2,282,403.00 19. Veterans Park Roof 91.392 $639,744 $214,957 $580,652 y $652,539.00 parkino Lots 76.465 $764,650 S170,808 $461,395 y $779,G43.00 TOTAL $29,648,926,00 Projects Receiving CRESS Allocations I Proposed kW Allocated kW 6,882.81 3,189.53 4-5 'STRADLlNG YOCCA CARLSON & RAUTH A PROFESSIONAL CORPORATION ATTORNEYS AT LAW 660 NEWPORT CENTER DRIVE, SUITE 1600 NEWPORT BEACH, CA 92660-6422 TELEPHONE (949) 725-4000 FACSIMILE (949) 725-4100 ORANGE COUNTY (9491 725-4000 SM, DIEGO (858) 926-3000 SAN FRANCISCO (415) 283-2240 SANTt.. BARBARA (805)730-6800 SACRAMEfJTO (916) 449-2350 July 12,2010 City of Chula Vista 276 Fourth Avenue Chula Vista, CA 91910 California Debt Limit Allocation Committee 915 Capital Mall, Room 311 Sacramento, CA 95814 Re: Citv ofChll/a Vista Use ofOllalif/ed Enere-v Conservation Bond Allocation Ladies and Gentlemen: You have requested guidance regarding whether the proposed project (the "Project") described in the Plan of Issuance for Allocated Qualified Energy Conservation Bonds (QECBs) (the "Plan") of the City of Chula Vista (the "City") constitutes a Qualified Conservation Purpose (within the meaning of Section 540 of the Internal Revenue Code of 1986, as amended (the "Code")) for purposes of the City's use of its allocation to issue Qualified Energy Conservation Bonds, within the meaning of Section 540 and 54A of the Code. For purposes of this opinion, we have examined the Plan and such other documents and information we have deemed necessary to render this opinion. Under Section 540 of the Code, 100 percent of the available project proceeds of a Qualified Energy Conservation Bond must be used for Qualified Conservation Purposes. Section 540(f) defines Qualified Conservation Purposes to include capital expenditures incun'ed for the purposes of implementing green community programs (including the use of loans, grants, or other repayment mechanisms to implement such program). The Plan provides that the Project to be financed will consist of prospective capital expenditures for efficiency retrofits (both indoors and outdoors) to existing residential and commercial buildings (located within the City) which will lower energy and water consumption and reduce utility costs. The Plan states that the funding will be distributed through "low-interest loans" to residences and businesses. Because the Project will lower energy and water consumption within the City, we are of the view that the proposed Project constitutes a Qualified Conservation Purpose, within the meaning of Section 540(f), that is eligible to be financed with the proceeds of Qualified Energy Conservation Bonds within the meaning ofSectio~ 540 of the Code, DOCSOC! 14203 77v t /02403 6-003 3 4-6 July 12,2010 Page Two Other than as specifically provided herein we express no other view with respect to the Project or obligations to be issued to finance the Project. Very truly yours, STRADLING YOCCA CARLSON & RAUTH By: CLLnc DOCSOCil4203 77v 1/024U36-0033 4-7 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA REGARDING ITS INTENTION TO REIMBURSE EXPENDITURES FROM THE PROCEEDS OF QUALIFIED ENERGY CONSERVATION BONDS WHEREAS, the City Council of the City ofChula Vista (the "City") desires to reimburse its General Fund for the costs of acquiring and constructing certain facilities and improvements, as provided in Exhibit A attached hereto and incorporated herein (the "Project"); and WHEREAS, the City intends to reimburse its expenditures for the Project or portions of the Project with the proceeds of Qualified Energy Conservation Bonds, within the meaning of Section 54D of the Internal Revenue Code of 1986, as amended (the "Code") (the "Obligations"); and WHEREAS, prior to the issuance of the Obligations the City desires to incur certain expenditures with respect to the Project from available monies of the City which expenditures are desired to be reimbursed by the City from a portion of the proceeds of the sale of the Obligations. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby resolve as follows: SECTION I. The City hereby states its intention and reasonably expects to reimburse the Project costs incurred prior to the issuance of the Obligations with proceeds of the Obligations. Exhibit A describes the general character, type, purpose, and function of the Project. SECTION 2. The reasonably expected maximmn principal amount of the Obligations is $2,256,000. SECTION 3. This resolution is being adopted prior to the payment of the original expenditures with respect to the Project (the "Expenditures Date or Dates"). SECTION 4. Except as described below, the expected date of issue of the Obligations will be within eighteen months of the Expenditure Date or Dates. SECTION 5. Proceeds of the Obligations to be used to reimburse for Project costs are not expected to be used, within one year of reimbursement, directly or indirectly to pay debt service with respect to any obligation (other than to pay current debt service coming due within the next succeeding one year period on any tax-exempt obligation of the City) or to be held as a reasonably required reserve or replacement fund with respect to an obligation of the City or any entity related in any manner to the City, or to reimburse any expenditure that was originally paid with the proceeds of any obligation, or to replace funds that are or will be used in such manner. SECTION 6. This resolution is consistent with the budgetary and financial circumstances of the City, as of the date hereof. No monies from sources other than the Obligation issue are, or are reasonably expected to be reserved, allocated on a long-term basis, or otherwise set aside by the City (or any related party) pursuant to their budget or tinancial policies 4-8 Resolution No. Page 2 with respect to the Project costs. To the best of our knowledge, this City Council is not aware of the previous adoption of oftlcial intents by the City that have been made as a matter of course for the purpose of reimbursing expenditures and for which tax-exempt obligations have not been issued. SECTION 7. This resolution is adopted as official action of the City in order to comply with the provisions of Section 54A of the Code and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of City expenditures incurred prior to the date of issue of the Obligations, is part of the City's oftlcial proceedings, and will be available for inspection by the general public at the main administrative office of the City. SECTION 8. All the recitals in this Resolution are true and correct and this City Council so finds, determines and represents. Presented by Approved as to form by Maria Kachadoorian Director of Finance 4-9 EXHIBIT A DESCRIPTION OF PROJECT The Project consists of: 1. Efficiency retrotits (both indoor and outdoor) to eXlstmg residential and commercial buildings to lower energy and water consumption. 4-10 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA REGARDING ITS INTENTION TO REIMBURSE EXPENDITURES FROM THE PROCEEDS OF NEW CLEAN RENEW ABLE ENERGY BONDS WHEREAS, the City Council of the City ofChula Vista (the "City") desires to reimburse its General Fund for the costs of acquiring and constructing certain public facilities and improvements, as provided in Exhibit A attached hereto and incorporated herein (the "Project"); and WHEREAS, the City intends to reimburse its expenditures for the Project or portions of the Project with the proceeds of New Clean Renewable Energy Bonds, within the meaning of Section 54C of the Internal Revenue Code of 1986, as amended (the "Code") to be issued by the City (the "Obligations"); and WHEREAS, prior to the issuance of the Obligations the City desires to incur certain expenditures with respect to the Project from available monies of the City which expenditures are desired to be reimbursed by the City from a portion of the proceeds of the sale of the Obligations. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista does hereby resolve as follows: SECTION I. The City hereby states its intention and reasonably expects to reimburse the Project costs incurred prior to the issuance of the Obligations with proceeds of the Obligations. Exhibit A describes the general character, type, purpose, and function of the Project. SECTION 2. The reasonably expected maximum principal amount of the Obligations is $30,000,000. SECTION 3. This resolution is- being adopted prior to the payment of the original expenditures with respect to the Project (the "Expenditures Date or Dates"). SECTION 4. Except as described below, the expected date of issue of the Obligations will be within eighteen months of the Expenditure Date or Dates. SECTION 5. Proceeds of the Obligations to be used to reimburse for Project costs are not expected to be used, within one year of reimbursement, directly or indirectly to pay debt service with respect to any obligation (other than to pay current debt service coming due within the next succeeding one year period on any tax-exempt obligation of the City) or to be held as a reasonably required reserve or replacement fund with respecno an obligation of the City or any entity related in any manner to the City, or to reimburse any expenditure that was originally paid with the proceeds of any obligation, or to replace funds that are or will be used in such manner, 4-11 Resolution No. Page 2 SECTION 6. This resolution IS consistent with the budgetary and financial circumstances of the City, as of the date hereof. No monies from sources other than the Obligation issue are, or are reasonably expected to be reserved, allocated on a long-term basis, or otherwise set aside by the City (or any related party) pursuant to their budget or financial policies with respect to the Project costs. To the best of our knowledge, this City Council is not aware of the previous adoption of official intents by the City that have been made as a matter of course for the purpose of reimbursing expenditures and for which tax-exempt obligations have not been issued. SECTION 7. This resolution is adopted as official action of the City in order to comply with the provisions of Section 54A of the Code and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of City expenditures incurred prior to the date of issue of the Obligations, is part of the City's official proceedings, and will be available for inspection by the general public at the main administrative office of the City. SECTION 8. All the recitals in this Resolution are true and correct and this City Council so finds, determines and represents. Presented by Approved as to form by .~~, Maria Kachadoorian Director of Finance / I ~r,i _lll~ \ . \.j 4-12 EXHIBIT A DESCRIPTION OF PROJECT The Project consists of solar energy installations and energy efficiency improvements at the following City facilities: I. Animal Shelter 2. Chub Vista Civic Center 3. Chula Vista Police Headquarters 4. Fire Station 3 5. Fire Station 7 6. Fire Station 8 7. Fire Station 6 8. Fire Station 4 9. Otay Recreation Center 10. Parkway Recreation Center II. Lorna Verde Recreation Center 12. Montevalle Recreation Center 13. Norman Park Senior Center 14. Public Works Corp Yard 15. Rohr Park 16. Salt Creek Recreation Center 17. Chula Vista South 18. Chula Vista Civic Center Library 19. Veterans Park 4-13 RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN AGREEMENT WITH PUBLIC FINANCIAL MANAGEMENT, INC TO PROVIDE FINANCIAL ADVISORY SERVICES WHEREAS, the approved allocation of the CREB/QECB ta.x credits was the important first step in obtaining financing vehicles for the energy retrofits; and WHEREAS, the next step in the process is to determine whether the contemplated projects are indeed economically feasible for inclusion in any future debt issuance; and WHEREAS, the energy savings from the proposed projects must be less than the cost of financing the retrofits and the General Fund must be pledged as a source of repayment in the event that the projected savings are insufficient to service the debt; and WHEREAS, the commitment of the General Fund is required in order to ensure that the debt quality is at least investment grade for any potential investors; and WHEREAS, as such, the services of a financial advisor are required to assist in determining the optimal financing structures for the CREB/QECB allocations; and WHEREAS, a Request for Proposals (RFP) was issued for Financial Advisors; and WHEREAS, the proposal was opened on June II, 20 I 0, and closed June 28, 20 I 0; and WHEREAS, the RFP was advertised on Planet Bids, The Bond Buyer (a bond industry periodical) and The Star News; and WHEREAS, the City received four responses to the RFP; and WHEREAS, the respondents were: I) Fieldman Rolapp, 2) Urban Futures Inc., 3) Harrell and Company, LLC, and 4) Public Financial Management, Inc.; and WHEREAS, the proposals were reviewed and all four respondents were interviewed by a selection committee composed of the Finance Director, Assistant Finance Director and Environmental Resource Manager; and WHEREAS, the selection committee agreed that Public Financial Management, Inc. was the best qualified to assist the City in determining the optimal financing strategy for the CREB/QECB allocations with the goal of minimizing risks to the General Fund; and WHEREAS, the decision was based primarily upon their current experience working with several large jurisdictions in the State on how best to use their allocations of CREB/QECB. 4-14 Resolution No. Page 2 NOW, THEREFORE, BE IT RESOLVED that the City Council of the City ofChula Vista hereby approves an Agreement with Public Financial Management, Inc. to provide financial advisory services. Maria Kachadoorian Director of Finance Approved as to form by /) 'Si~~MJ ~~.~ie~ City i ttorney Presented by 4-15 THE ATTACHED AGREEMENT HAS BEEN REVIEWED AND APPROVED AS TO FORM BY THE CITY ATTORNEY'S OFFICE AND WILL BE FORMALLY SIGNED UPON APPROVAL BY THE CITY COUNCIL /~ Dated: 1/7/ G j In ( AGREEMENT BETWEEN THE CITY OF CHULA VISTA, AND PUBLIC FINANCIAL MANAGEMENT, INC. 4-16 PARTIES AND RECITAL PAGE(S) Agreement between City of Chula Vista and Public Financial Management, Inc. To provide Financial Advisory Services This agreement ("Agreement"), dated August 3, 2010 for the purposes of reference only, and effective as of the date last executed unless another date is otherwise specified in Exhibit A to this Agreement CExhibit A"), Paragraph 1, is between the City-related entity whose name and business form is indicated on Exhibit A, Paragraph 2, ("City"), and the entity whose name, business form, place of business and telephone numbers are indicated on Exhibit A, Paragraphs 4 through 6, ("Consultant"), and is made with reference to the following facts: Recitals WHEREAS, a request for proposal for financial advisory services was issued on June 11, 2010 and closed on June 28,2020; and, WHEREAS, there were four respondents to the proposal that were evaluated by the Selection Committee composed of the Finance Director, Assistant Finance Director and Conservation Manager based on their respective proposal content and subseqnent interview; and, WHEREAS, based on the selection committee's recommendation; Public Financial Management, Inc. is the successful respondent; and WHEREAS, Public Financial Management. Inc. will assist the City in determining how best to issue the City's allocation of Clean Renewable Energy Bonds (CREBs) and QualitIed Energy Conservation Bonds; and, WHEREAS, Public Financial Management, Inc. will determine if the bonds are issued publicly, privately or if it is detennined that bonds are not economically feasible, then assist the City in negotiating a Pre-Paid Power Purchase Agreement, and, WHEREAS, Consultant warrants and represents that it is experienced and staffed in a manner such that it can deliver the services required of Consultant to City in accordance with the time frames and the terms and conditions of this Agreement. [End of Recitals. Next Page Starts Obligatory Provisions.] Page 1 J:IFinanciallPhillBondslFinancial Advisor - CREBS\F~.6~rl'ment - 08032010.doc OBLIGATORY PROVISIONS PAGES NOW, THEREFORE, BE IT RESOLVED that the City and Consultant do hereby mutually agree as follows: All of the Recitals above are incorporated into this Agreement by this reference. ARTICLE 1. CONSULTANT'S OBLIGATIONS A. General I. General Duties. Consultant shall perfonn all of the services described on Exhibit A, Paragraph 7 ("General Duties"). 2. Scope of Work and Schedule. Tn performing and delivering the General Duties, Consultant shall also perform the services, and deliver to City the "Deliverables" described in Exhibit A, Paragraph 8, entitled "Scope of Work and Schedule," according to, and within the time franles set forth in Exhibit A, Paragraph 8, time being of the essence of this agreement. The General Duties and the work and Deliverables required in the Scope of Work and Schedule shall be referred to as the "Defined Services." Failure to complete the Defined Services by the times indicated does not, except at the option of the City, terminate this Agreement. a. Reductions in Scope of Work. City may independently, or upon request from Consultant, from time to time, reduce the Defined Services to be performed by the Consultant nnder this Agreement. Upon doing so, City and Consultant agree to meet in good faith and confer for the purpose of negotiating a corresponding reduction in the compensation associated with the reduction. b. Additional Services. Tn addition to performing the Defined Services, City may require Consultant to perfoml additional consulting services related to the Defined Services ("Additional Services"), and upon doing so in writing, if they are within the scope of services offered by Consultant, Consultant shall perform same on a time and materials basis at the rates set forth in the "Rate Schedule" in Exhibit A, Paragraph IO(C), unless a separate fixed fee is otherwise agreed upon. All compensation for Additional Services shall be paid monthly as billed. 3. Standard of Care. The Consultant expressly warrants that the work to be performed pursuant to this Agreement, whether Defined Services or Additional Services, shall be performed in accordance with the standard of care ordinarily exercised by members of the profession currently practicing under similar conditions and in similar locations. a. No Waiver afStandard of Care. Where approval by City is required, it is understood to be conceptual approval only and does not relieve the Consultant of responsibility for complying with all laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions, noncompliance with industry standards, or tl1e willful misconduct of the Consultant or its subcontractors. Page 2 J:\FinanciallPhillBondslFinancial Advisor - CREBSIF ".t~rgement - 0803201 O.doc B. Application of Laws. Should a federal or state law pre-empt a local law, or regulation, the Consultant must comply with the federal or state law and implementing regulations. No provision of this Agreement requires the Consultant to observe or enforce compliance with any provision, perform any other act, or do any other thing in contravention of fcderal, state, territorial, or local law, regulation, or ordinance. If compliance with any provision of this Agreement violates or would require the Consultant to violate any law, the Consultant agrees to notify City immediately in writing. Should this occur, the City and the Consultant agree that they will make appropriate arrangements to proceed with or, if necessary, amend or terminate this Agreement, or portions of it, expeditiously. 1. Subcontractors. Consultant agrees to take appropriate measures necessary to ensure that all participants utilized by the Consultant to complete its obligations under this Agreement, such as subcontractors, comply with all applicable laws, regulations, ordinances, and policies, whether federal. state, or local, affecting Project implementation. In addition, if a subcontractor is expected to fulfill any responsibilities of the Consultant under this Agreement, the Consultant shall ensure that the subcontractor carries out the Consultant's responsibilities as set forth in this Agreement. C. Insurance I. General. Consultant must procure and maintain, during the period of performance of this Agreement, and for twelve months after completion, policies of insurance from insurance companies to protect against claims for injuries to persons or damages to property that may arise from or in connection with the performance of the work under this Agreement and the results of that work by the Consultant, his agents, representatives, employees or subcontractors, and provide documentation of same prior to commencement of work. 2. Minimum Scope ofInsurance. Coverage must be at least as broad as: a. CGL. Insurance Services Office Commercial General Liability coverage (occurrence Form CGOOOl). b. Auto. Insurance Services Oftlce Form Number CA 0001 covenng Automobile Liability, Code I (any auto). c. We. Workers' Compensation insurance as required by the State of California and Employer's Liability Insurance. d. E&O. Professional Liability or Errors & Omissions Liability insurance appropriate to the Consultant's profession. Architects' and Engineers' coverage is to be endorsed to include contractual liability. 3. Minimum Limits of Insurance. Consultant must maintain limits no less than those included in the table below: Page 3 J:IFinanciallPhil\BondslFinoncial Advisor - CREBS\F 4--"'f'gernent - 0803201 O.doc i. General Liability: $1,000,000 per occurrence for bodily injury, personal injury, (Including (including death), and property damage. If Commercial General operations, Liability insurance with a general aggregate limit is used, either products and the general aggregate limit must apply separately to this completed Project/location or the general aggregate limit must be twice the operations, as required occurrence limit. applicable) ii. Automobile $1,000,000 per accident for bodily injury, including death, and Liability: property damage. iii. Workers' Statutory Compensation $1,000,000 each accident Employer's $1,000,000 disease-policy limit Liability: $1,000,000 disease-each employee iv. Professional $5,000,000 each occurrence Liability or Errors & Omissions Liability: 4. Oeductibles and Self-Insured Retentions. Any deductibles or self.insured retentions must be declared to and approved by the City. At the option of the City, either the insurer will reduce or eliminate such deductibles or selt~insured retentions as they pertain to the City, its officers, ot1icials, employees and volunteers; or the Consultant will provide a financial guarantee satisfactory to the City guaranteeing payment of losses and related investigations, claim administration, and defense expenses. 5. Other Insurance Provisions. The general liability, automobile liability, and where appropriate, the worker's compensation policies are to contain, or be endorsed to contain, the following provisions: a. Additional Insureds. City of Chula Vista, its officers, officials, employees, agents, and volunteers are to be named as additional insureds with respect to all policies of insurance, including those with respect to liability arising out of automobiles owned, leased, hired or borrowed by or on behalf of the Consultant, where applicable, and, with respect to liability arising out of work or operations perfonned by or on behalf of the Consultant, including providing materials, parts or equipment furnished in connection with such work or operations. The general liability additional insured coverage must be provided in the form of an endorsement to the Consultant's insurance using ISO CG 2010 (11/85) or its equivalent. Specifically, the endorsement must not exclude Products/Completed Operations coverage. b. Primary Insurance The Consultant's General Liability insurance coverage must be primary insurance as it pertains to the City, its officers, officials, employees, agents. and volunteers. Any insurance or self-insurance maintained by the City, its ot1icers, officials, employees, or volunteers is wholly separate from the insurance of the Page 4 . J:\FinanciallPbil\BondslFinancial Advisor - CREBS\F'4,62'ff'ment - 08032010.doc Consultant and in no way relieves the Consultant from its responsibility to provide lllsurance. c. Cancellation. The insurance policies required by this Agreement shall not be canceled by either party. except after thirty days' prior written notice to the City by certified mail, return receipt requested. The words "will endeavor" and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents, or representatives" shall be deleted from all certificates. d. Active Negligence. Coverage shall not extend to any indemnity coverage for the active negligence of the additional insureds in any case where an agreement to indemnify the additional insured would be invalid under Subdivision (b) of Section 2782 of the Civil Code. e. Waiver o.lSubrogation. Consultant's insurer will provide a Waiver of Subrogation in favor of the City for each required policy providing coverage for the term required by this Agreement. 6. Claims Forms. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverage are written on a claims-made form: a. Retro Date. The "Retro Date" must be shown, and mnst be before the date of the Agreement or the beginning of the work required by the Agreement. b. lvfaintenance and Evidence. Insurance must be maintained and evidence of insurance must be provided for at least five years atier completion of the work required by the Agreement. c. Cancellation. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a "Retro Date" prior to the effective date of the Agreement, the Consultant must purchase "extended reporting" coverage for a minimum of five years after completion of the work required by the Agreement. d. Copies. A copy of the claims reporting requirements must be submitted to the City for review. 7. Acceptabilitv of Insurers. Insurance is to be placed with licensed insurers admitted to transact business in the State of Califomia with a current A.M. Best's rating of no less than A V. If insurance is placed with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers ("LESLI") with a current A.M. Best's rating of no less than A X. Exception may be made for the State Compensation Fund when not specifically rated. 8. Verification of Coverage. Consultant shall furnish the City with original certificates and amendatory endorsements etTecting coverage required by Section LC. of this Agreement. The endorsements should be on insurance industry forms, provided those endorsements Page 5 J:\Financial\PhillBonds\Financia\ Advisor - CREBS\F~6~',ement - 08032010.doc or policies conform to the requirements of this Agreement. All certificates and endorsements are to be received and approved by the City before work commences. The City reserves the right to require, at any time, complete, certified copies of all required insurance policies, including endorsements evidencing the coverage required by these specifications. 9. Subcontractors. Consultant must include all subconsultants as insureds under its policies or furnish separate certificates and endorsements for each subconsultant. All coverage for subconsultants is subject to all of the requirements included in these specifications. 10. Not a Limitation of Other Obligations. Insurance provisions under this Article shall not be construed to limit the Consultant's obligations under this Agreement, including Indemnity. D. Security for Performance 1. Performance Bond. In the event that Exhibit A, at Paragraph 18, indicates the need for Consultant to provide a Performance Bond (indicated by a check mark in the parenthetical space immediately preceding the subparagraph entitled "Performance Bond"), then Consultant shall provide to the City a performance bond, in the amount indicated at Exhibit A, Paragraph 18, in the form prescribed by the City and by such sureties which are authorized to transact such business in the State of California, listed as approved by the United States Department of Treasury Circular 570, http://www.fms.treas.gov/c570, and whose underwriting limitation is sufficient to issue bonds in the amount required by the Agreement, and which also satisfy the requirements stated in Section 995.660 of the Code of Civil Procedure, except as provided otherwise by laws or regulations. All bonds signed by an agent must be accompanied by a certified copy of such agent's authority to act. Surety companies must be duly licensed or authorized in the jurisdiction in which the Projcct is located to issue bonds for the limits so required. Form must be satisfactory to the Risk Manager or City. 2. Letter of Credit. [n the event that Exhibit A, at Paragraph 18, indicates the need for Consultant to provide a Letter of Credit (indicated by a check mark in the parenthetical space immediately preceding the subparagraph entitled "Letter of Credit"), then Consultant shall provide to the City an irrevocable letter of credit callable by the City at its unfettered discretion by submitting to the bank a letter, signed by the City Manager, stating that the Consultant is in breach of the terms of this Agreement. The letter of credit shall be issued by a bank, and be in a form and amount satisfactory to the Risk Manager or City Attorney which amount is indicated in the space adjacent to the term, "Letter of Credit," in Exhibit A, Paragraph 18. 3. Other Securitv. In the event that Exhibit A, at Paragraph 18, indicates the need for Consultant to provide security other than a Performance Bond or a Letter of Credit (indicated by a check mark in the parenthetical space immediately preceding the subparagraph entitled "Other Security"), then Consultant shall provide to the City such Page 6 J:IFinanciallPhillBondslFinancial Advisor - CREBS\F -t..;\2'2ement - 080320 10.doc other security therein listed in a form and amonnt satisfactory to the Risk Manager or City Attorney. E. Business License. Consultant agrees to obtain a business license from the City and to otherwise comply with Title 5 of the Chula Vista Municipal Code. ARTICLE n. CITY OBLIGATIONS A. Consultation and Cooperation. City shall regularly consult the Consultant for the purpose of reviewing the progress of the Defined Services and Schedule, and to provide direction and guidance to achieve the objectives of this Agreement. The City shall allow Consultant access to its office facilities, files and records, as deemed necessary and appropriate by the City, tluoughout the term of this Agreement. [n addition, City agrees to provide the materials identified at Exhibit A, Paragraph 9, with the understanding that delay in the provision of those materials beyond thirty days after authorization to proceed, shall constitute a basis for the justifiable delay in the Consultant's performance. B. Compensation. I. Following Receipt of Billing. Upon receipt of a properly prepared bill from Consultant, submitted to the City as indicated in Exhibit A, Paragraph 17, but in no event more frequently than monthly, on the day of the period indicated in Exhibit A, Paragraph 17, City shall compensate Consultant for all services rendered by Consultant according to the terms and conditions set forth in Exhibit A, Paragraph 10, adjacent to the governing compensation relationship indicated by a "checkmark" next to the appropriate arrangement, subject to the requirements for retention set forth in Paragraph 18 of Exhibit A, and shall compensate Consultant for out of pocket expenses as provided in Exhibit A, Paragraph 11. 2. Supporting Information. Any billing submitted by Consultant shall contain sufficient information as to the propriety of the billing, including properly executed payrolls, time records, invoices, contracts, or vouchers describing in detail the nature of the charges to the Project in order to permit the City to evaluate that the amount due and payable is proper, and such hilling shall specifically contain the City's account number indicated on Exhibit A, Paragraph 17(C) to be charged upon making such payment. 3. Exclusions. In determining the amount of the compensation City will exclude any cost: 1) incurred prior to the effective date of this Agreement; or 2) arising out of or related to the errors, omissions, negligence or acts of willful misconduct of the Consultant. its agents, employees, or subcontractors. a. Errors and Omissions. In the event that the City Administrator determines that the Consultant's negligence, errors, or omissions in the performance of work under this Agreement has resulted in expense to City greater than would have resulted if there were no such negligence, errors, omissions, Consultant shall Page 7 J:IFinanciallPhillBondslFinancial Advisor - CREBSIF ii,82'3ement - 08032010.doc reimhurse City for any additional expenses incurred by the City. Nothing in this paragraph is intended to limit City's rights under other provisions of this Agreement. 4. Pavment Not Final Approval. The Consultant understands and agrees that payment to the Consultant for any Project cost does not constitute a City tinal decision about whether that cost is allowable and eligible for payment under the Project and does not constitute a waiver of any violation of Consultant of the terms of the Agreement. The Consultant acknowledges that City will not make a tinal determination about the eligibility of any cost until the final payment has been made on the Project or the results of an audit of the Project requested by the City has been completed, whichever occurs latest. If City determines that the Consultant is not entitled to receive any portion of the compensation due or paid, City will notify the Consultant in writing, stating its reasons. The Consultant agrees that Project closeout will not alter the Consultant's responsibility to return any funds due City as a result of later refunds, corrections, or other similar transactions; nor will Project closeont alter the right of City to disallow costs ami recover funds provided for the Projcct on the basis of a later audit or other review. a. Consulrant's Obligation to Pay. Upon notification to the Consultant that specific amounts are owed to City, whether for excess payments or disallowed costs, the Consultant agrees to remit to City promptly the amounts owed, including applicable interest. ARTICLE III. ETHICS A. Financial Interests of Consultant 1. Consultant is Desi,mated as an FPPC Filer. If Consultant is designated on Exhibit A, Paragraph 14, as an "FPPC filer," Consultant is deemed to be a "Consultant" for the purposes of the Political Reform Act conflict of interest and disclosure provisions, and shall report economic interests to the City Clerk on the required Statement of Economic Interests in such reporting categories as are specified in Paragraph 14 of Exhibit A, or if none are specified, then as determined by the City Attorney. 2. No Participation in Decision. Regardless of whether Consultant is designated as an FPPC Filer, Consultant shall not make, or participate in making or in any way attempt to use Consultant's position to int1uence a governmental decision in which Consultant knows or has reason to know Consultant has a financial interest other than the compensation promised by this Agreement. 3. Search to Determine Economic Interests. Regardless of whether Consultant is designated as an FPPC Filer. Consultant warrants and represents that Consultant has diligently conducted a search and inventory of Consultant's economic interests, as the tenn is used in the regulations promulgated by the Fair Political Practices Commission, and has detennined that Consultant does not, to the best of Consultant's knowledge, have an economic interest which would conflict with Consultant's duties under this Agreement. Page 8 J"lFinancial\Phil\Bonds\Financial Advisor - CREBS\F 4l.6~4ement - 0803201 O.doc 4. Promise Not to Acquire Conflicting Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant further warrants and represents that Consultant will not acquire, obtain, or assume an economic interest during the term of this Agreement which would constitute a conflict of interest as prohibited by the Fair Political Practices Act. 5. Dutv to Advise of Conflicting Interests. Regardless of whether Consultant is designated as an FPPC Filer, Consultant further warrants and represents that Consultant will immediately advise the City Attorney if Consultant learns of an economic interest of Consultant's that may result ilt a conflict of interest for the purpose of the Fair Political Practices Act, and regulations promulgated thereunder. 6. Specific Warranties Against Economic Interests. Consultant WalTants, represents and agrees that: a. Neither Consultant, nor Consultant's immediate family members, nor Consultant's employees or agents ("Consultant Associates") presently have any interest, directly or indirectly, whatsoever in any property which may be the.subject matter of the Defined Services, or in any property within 2 radial miles from the exterior boundaries of any property which may be the subject matter of the Defined Services, ("Prohibited Interest"), other than as listed in Exhibit A, Paragraph 14. b. No promise of future employment, remuneration, consideration, gratuity or other reward or gain has been made to Consultant or Consultant Associates in connection with Consultant's performance of this Agreement. Consultant promises to advise City of any such promise that may be made during the Term of this Agreement, or for twelve months thercafter. c. Consultant Associates shall not acquire any such Prohibited Interest within the Term of this Agreement, or for twelve months after the expiration of this Agreement, except with the written permission of City. d. Consultant may not conduct or solicit any business for any party to this Agreement, or for any third party that may be in connict with Consultant's responsibilities under this Agreement, except with the written pern1ission of City. IV. LIQUIDATED DAMAGES A. Application of Section. The provisions ofthis section apply if a Liquidated Damages Rate is provided in Exhibit A, Paragraph 13. I. Estimating Damages. It is acknowledged by both parties that time is of the essence in the completion of this Agreement, It is difficult to estimate the amount of damages resulting from delay in performance. The parties have used their judgmcnt to arrive at a reasonable amount to compensate for delay. Page 9 J:IFinanciallPhillBondslFinancial Advisor - CREBS\F4~2'5ement - 08032010.doc 2. Amount of Penaltv. Failure to complete the Defined Services within the allotted time period specified in this Agreement snall result in the following penalty: For each consecutive calendar day in excess of the time specified for the completion of the respective work assignment or Deliverable, the Consultant shall pay to the City, or have withheld from monies due, the sum of Liquidated Damages Rate provided in Exhibit A, Paragraph 13 ("Liquidated Damages Rate"). 3. Request for Extension of Time. If the performance of any act required of Consultant is directly prevented or delayed by reason of strikes, lockouts, labor disputes, unusual governmental delays, acts of God, fire, floods, epidemics, freight embargoes, or other causes beyond the reasonable control of the Consultant, as determined by the City, Consultant shall be excused from performing that act for the period of time equal to the period of time of the prevention or delay. In the event Consultant claims the existcnce of such a delay, the Consultant shall notify the City's Contract Administrator, or designee, in writing of that fact within ten calendar days after the beginning of any such claimed delay. Extensions of time will not be granted for delays to minor portions of work unless it can be shov.n that such delays did or will delay the progress of the work. ARTICLE V. INDEMNIFICATION A. Defense, Indemnity, and Hold Harmless. I. General Requirement. Except for liability for Design Professional Services covered under Article V., Section A.2., Consultant shall defend, indemnify, protect and hold harmless the City, its elected and appointed officers, agents and employees, from and against any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful misconduct of Consultant, its officials, officers, employees, agents, and contractors. arising out of or in cOlmection with the performance of the Defined Services or this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses (including without limitations, attorneys fees) arising from the sole negligence, active negligence or willful misconduct of the City, its officers, employees. Also covered is liability arising from, connected with, caused by or claimed to be caused by the active or passive negligent acts or omissions of the City, its agents, officers, or employees which may be in combination with the active or passive negligent acts or omissions of the Consultant, its employees, agents or officers, or any third party. 2. Design Professional Services. If Consultant provides design professional services, as defined by California Civil Code section 2782.5, as may be amended from time to time, Consultant shall defend, indemnify and hold the City, its officials, ofticcrs, employees, volunteers, and agents free and harnl1ess from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or relating to the negligence, recklessness, or willful misconduct of Consultant, its officials, officers, Pagc 10 J:\Financial\Phil\Bonds\Financial Advisor - CREBSIF 1l~'5'ment - 0803201 O.doc employees, agents, consultants, and contractors arising out of or in connection with the perfol111ance of Consultant's services. Consultant's duty to defend, indemnify, and hold harmless shall not include any claims or liabilities arising trom the sole negligence, active negligence or willful misconduct of the City, its agents, officers or employees. This section in no way alters, affects or modifies the Consultant's obligations and duties under this Agreement. 1. Costs of Defense and Award. Included in the obligations in Sections Al and A2, above, is the Consultant's obligation to defend, at Consultant's own cost, expense and risk, any and all suits, actions or other legal proceedings, that may be brought or instituted against the City, its directors, officials. officers, employees, agents and/or volunteers, subject to the limitations in Sections A.l. and A.2. Consultant shall pay and satisfy any judgment, award or decree that may be rendered against City or its directors, officials, officers, employees, agents and/or volunteers, for any and all related legal expenses and costs incurred by each of them, subject to the limitations in Sections A.!. and A.2. 4. Insurance Proceeds. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, its directors, officials, officers, employees, agents, and/or volunteers. 5. Declarations. Consultant's obligations under Article V shall not be limited by any prior or subsequent declaration by the Consultant. 6. Enforcement Costs. Consultant agrees to pay any and all costs City incurs enforcing the indemnity and defense provisions set forth in Article V. 7. Survival. Consultant's obligations under Article V shall survive the tennination of this Agreement. ARTICLE VI. TERMINATION OF AGREEMENT A Termination for Cause. If, tln'ough any cause, Consultant shall fail to fultill in a timely and proper manner Consultant's obligations under this Agreement, or if Consultant shall violate any of the covenants, agreements or stipulations of this Agreement, City shall have the right to terminate this Agreement by giving written notice to Consultant of such termination and specifying the effective date thereof at least five (5) days before the effective date of such termination. In that event, all finished or unfinished documents, data, studies, surveys, drawings, maps, reports and other materials prepared by Consultant shall, at the option of the City, become the property of the City, and Consultant shall be entitled to receive just and equitable compensation, in an amount not to exceed that payable under this Agreement and less any damages caused City by Consultant's breach, for any work satisfactorily completed on such documents and other materials up to the effective date of Notice of Tennination,. B. Termination of Agreement for Convenience of City. City may terminate this Agreement at any time and for any reason, by giving specific written notice to Consultant of such telmination and specifying the effective date thereof, at least thirty (30) days before the Page 11 J:\Finoncial\PhiIIBondsIFinancial Advisor - CREBSIF ~.Affrnent - 080320] O.doc effective date of such termination. In that event, all finished and unfInished documents and other materials described hereinabove shall, at the option of the City, become City's sole and exclusive property. If the Agreement is terminated by City as provided in this paragraph, Consultant shall be entitled to receive just and equitable compensation, in an amount not to exceed that payable under this Agreement, for any satisfactory work completed on such documents and other materials prior to the effective date of such termination. Consultant hereby expressly waives any and all claims for damages or compensation arising under this Agreement except as set forth in this section. ARTICLE VII. RECORD RETENTION AND ACCESS A. Rccord Retention. During the course of the Project and for three (3) years following completion, the Consultant agrees and to maintain, intact and readily accessible, all data, documents, reports, records, contracts, and supporting materials relating.to the Project as City may require. ' B. Access to Records of Consultant and Subcontractors. The Consultant agrees to permit, and require its subcontractors to permit City or its authorized representatives, upon request, to inspect all Project work, materials, payrolls, and other data, and to audit the books, records, and accounts of the Contractor and its subcontractors pertaining to the Project. C. Projcct Closeout. The Consultant agrees that Project closeout does not alter the reporting and record retention requirements of this Agreement. ARTICLE VIII. PROJECT COMPLETION, AUDIT, AND CLOSEOUT A. Project Complction. Within ninety (90) calendar days following Project completion or termination by City, Consultant agrees to submit a fInal certification of Project expenses and audit reports, as applicable. B. Audit of Consultants. Consultant agrees to perform financial and compliance audits the City may requirc. The Consultant also agrees to obtain any other audits required by City. Consultant agrees that Project closeout will not alter Consultant's audit responsibilities. Audit costs are allowable Project costs. C. Project Closeout. Project closeout occurs when City notifies the Consultant that City has closed the Project, and either forwards the final paymei1t or acknowledges that the Consultant has remitted thc proper refund. The Consultant agrees that Project closeout by City docs not invalidate any continuing requirements imposed by the Agreement or any unmet requirements set forth in a v/fitten notification from City ARTICLE IX. MISCELLANEOUS PROVISIONS A. Assignability. The services of Consultant are personal to the City, and Consultant shall not assign any interest in this Agreement, and shall not transfer any interest in the same (whether by assigmnent or notation), without prior written consent of City. Page 1 2 J:\FinanciallPhillBonds\Financial Advisor - CREBS\F 4b21gement - 080320 10.doc I. Limiteu Consent. City hereby consents to the assignment of the portions of the Defineu Services iuentified in Exhibit A, Paragraph 16 to the sub consultants identified as "Pem1itted Subconsultants". B. Ownership, Publication, Reprouuction and Use of Material. All reports, studies, information, data, statistics, fomls, designs, plans, procedures, systems and any other materials or properties produced under this Agreement shall be the sole and exclusive property of City. No such materials or properties produced in whole or in part under this Agreement shall be subj ect to private use, copyrights or patent rights by Consultant in the United States or in any other country without the express written consent of City. City shall have unrestricted authority to publish, disclose (except as may be limited by the provisions of the Public Records Act), distribute, and otherwise use, copyright or patent, in whole or in part, any such reports, studies, uata, statistics, forms or other materials or properties produced under this Agreement. C. Independent Contractor. City is interested only in the results obtained anu Consultant shall perfom1 as an inuependent contractor with sole control of the manner and means of performing the services requireu under this Agreement. City maintains the right only to reject or accept Consultant's work products. Consultant and any of the Consultant's agents, employees or representatives are, for all purposes under this Agreement, independent contractors and shall not be deemed to be employees of City, and none of them shall be entitled to any benefits to which City employees are entitled including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Therefore, City will not withhold state or feueral income tax, social security tax or any other payroll tax, and Consultant shall be solely responsible for the payment of same anu shall hold the City harmless with regard to them. 1. Actions on Behalf of Citv. Except as City may specify in writing, Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever, as an agent or otherwise. Consultant shall have no authority, express or implied, to bind City or its members, agents, or employees, to any obligation whatsoever, unless expressly provided in this Agreement. 2. No Obligations to Third Parties. In connection with the Project, Consultant agrees and shall require that it's agents, employees, subcontractors agree that City shall not be responsible for any obligations or liabilities to any third party, including its agents, employees, subcontractors, or other person or entity that is not a party to this Agreement. Notwithstanuing that City may have concurred in or approved any solicitation, subagreement, or third party contract at any tier, City shall have no obligation or liability to any person or entity not a party to this Agreement. D. Administrative Claims Requirements and Procedures. No suit or arbitration shall he brought arising out of this Agreement, against City unless a claim has first been presentcd in writing and filed with City and acted upon by City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may from time to time be Page 13 J:IFinanciallPhillBondslFinancial Advisor - CREBSIF lIe,:fg'tllent - 0803201 O.doc amended, the provIsIOns of which are incorporated by this reference as if fully set forth herein, and such policies and procedures used by City in the implementation of same. Upon . request by City, Consultant shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement. E. Administration of Contract. Each party designates the individuals ("Contract Administrators") indicated on Exhibit A. Paragraph 12, as that party's contract administrator who is authorized by the party to represent it in the routine administration of this Agreement. F. Term. This Agreement shall tenninate when the parties have complied with all executory provisions hereof. G. Attorney's Fees. Should a dispute arising out of this Agreement result in litigation, it is agreed that the prevailing party shall be entitled to a judgment against the other for an amount equal to reasonable attorneys' fees and court costs incurred. The "prevailing party" shall be deemed to be the party who is awarded substantially the relief sought. H. Statement of Costs. In the event that Consultant prepares a report or document, or participates in the preparation of a report or document in perfonning the Defined Services, Consultant shall include, or cause the inclusion of, in the report or document, a statement of the numbers and cost in dollar amounts of all contracts and subcontracts relating to the preparation of the report or document. 1. Consultant is Real Estate Broker and/or Salesman. If the box on Exhibit A, Paragraph 15 is marked, the Consultant and/or is principals is/are licensed with the State of California or some other state as a real estate broker or salesperson. Otherwise, Consultant represents that neither Consultant, nor its principals are licensed real estate brokers or salespersons. J. Notices. All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing. All notices, demands and requests to be sent to any party shall be deemed to have been properly given or served if personally served or deposited in the United States mail, addressed to such party, postage prepaid, registered or certified, with return receipt requested, at the addresses identified in this Agreement as the places of business for each of the designated parties. K. Integration. This Agreement, together with any other written document referred to or contemplated in it, embody the entire Agreement and understanding between the parties relating to the subject matter hereof. Neither this Agreement nor any provision of it may be amended, modified, waived or discharged except by an instrument in writing executed by the party against which enforcement of such amendment, waiver or discharge is songht. L. Capacity of Parties. Each signatory and party to this Agreement warrants and represents to the other party that it has legal authority and capacity and direction from its principal to enter into this Agreement, and that all necessary resolutions or other actions have been taken so as to enable it to enter into this Agreement. Page 14 J:IFinanciaIIPhil\BondsIFinancial Advisor - CREBSIF ~~oement - 080320 10.doc M. Governing LawlVenue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising under or relating to this Agreement shall be brought only in the federal or state courts located in San Diego County, State of California, and if applicable, the City of Chula Vista, or as close thereto as possible. Venue for this Agreement, and performance under it, shall be the City ofChula Vista. (End of page. Next page is signature page.) Page 15 J:IFinanciallPhillBondslFinancial Advisor - CREBSIF "lbgrfement - 080320] O.doc Signature Page to Agreement between City of Chula Vista and Public Fiuancial Management, Ine. To provide Financial Advisory Services IN WITNESS WHEREOF, City and Consultant have executed this Agreement, indicating that they have read and understood same, and indicate their full and complete consent to its terms: Dated: City of Chula Vista By: Cheryl Cox, Mayor Attest: Donna Norris, City Clerk Approved as to form: Bart Miesfe1d, City Attorney Dated: Public Financial Management, Inc ~ ------------- By:~._._~-- Mic erwanger Senior Managing Consultant Exhibit List to Agreement (X) Exhibit A. Page 16 l:\FinanciahPhil\Bonds\Financial Advisor. CREBS".F A Agreement - 0803201O.doc 4-32 Exhibit A to Agreement between City of Chula Vista aud Public Financial Management, Inc. 1. Effeetive Date of Agreement: August 3. 2010 2. City-Related Entity: (X) City ofChula Vista, a municipal chartered corporation of the State of California ( ) Redevelopment Agency of the City ofChula Vista, a politieal subdivision of the State of California ( ) Industrial Development Authority of the City ofChula Vista, a ( ) Other: , a [insert business form] ("City") 3. Place of Business for City: City of Chula Vista 27 6 Fourth A venue Chula Vista, CA 91910 4. Consultant: Michael Berwanger 5. Business Form of Consultaut: ( ) Sole Proprietorship ( ) Partnership (X.) Corporation 6. Plaee of Business, Telephone and Fa.x Number of Consultant: 633 West Fifth Street Suite 6700 Los Angeles, CA 90071 (2113) 404-0078 Page 17 J:\Financial\Phil\BondslFinancial Advisor - CREBS\F 4!b8'gement - 0803201 O.doc 7. General Duties: The financial advisor will advise the City in structuring the issuance and sale of bonds, notes, and other securities as well as providing assistance and analyses for various projects, including negotiating financing terms, drafting documents, and advising on legislation, regulations or other procedures. 8. Scope of Work and Schedule: A. Detailed Scope of Work: Consultant shall: . Provide independent financial advice and serve solely the interest of the City. . Advise and assist the City in considering and structuring a bond issuance utilizing the CREBs and/or QECBs tax credits structure. . Advise on the advantages and disadvantages of using CREBs financing in contrast to a Pre-Paid Power Purchase Agreement. . Advise on the merits of competitive, negotiated or private placement of debt. . Advise and assist the City in the development structure and timing of the issuance of bonds in accordance with applicable laws, customs, and practices governing such Issuance. . Advise on the anlOunt, timing and nature of borrowings, as well as the credit structure, maturity schedule, call provisions and other items, as needed. . Assist in the preparation of Official Statements, notices of sale (competitive offerings) and other appropriate information to prospective bond and note investors. . Assist in preparing and presenting timely and adequate information on proposed financings and the City's finances and operations to the bond rating agencies and institutions providing credit enhancement. . Evaluate the tenus and recommendation of acceptance, rejection or regeneration with respect to sale bids or final pricing as applicable. . Advise on such matters as bond registration, printing, and other matters related to the settlcment and delivery of the bonds or notes, as required. . Assist with preparation of RFPs and evaluation of proposals for the procurement of: o Credit enhancements, including Letters of Credit and bond insurance o Investment banking services o Financial printing Page 18 J:\FinanciaIIPhil\BondsIFinancial Advisor - CREBSIF 4.8g~ement - 080320 I O.doc o Competitive offerings o Paying Agent or Trustee o Escrow Agent, if required o Verification Agent, if required . In the case of competitive otlerings, assume responsibility for the following: Preparation and advertisement of Notice of Sale Preparation of Bid Form Advice as to manner of bid procedures Management of competitive bidding procedures . Attend (in person or by telephone, as required) meetings related to debt offerings and participation in the deliberations at such meetings, including: o Preparation of Official Statement with the entire working group o Due diligence o Rating agency presentations o Pricing o Closing . Provide ongoing financial advisory services as necessary, including: o Review financial issues with the rating agencies (and arrange and support calls and meetings) relating to specific debt issues and to periodic updates. o Evaluate unsolicited financial proposals received by the City, including but not limited to refundings and alternate forms of financing vehicles like risk management products. o Provide advice on investor relations and assistance in preparation of related presentation materials. . Review bond documents, regulations, rules, proposed legislation, and other documents relating to the City's financing programs. . Assist the City in understanding and complying with Internal Revenue Service regulations and the Federal tax code regarding CREBs and QECBs and any subsequent audits by the Internal Revenue Service. . Assist the City staff in drafting and preparing Continuing Disclosure documents for the investor community. . Assist the City when necessary in negotiating and preparing any agreements between the City and other jurisdictions participating in any financing program. . As necessary, resolve issues regarding the sale and issuance of bonds that are raised by prospective purchasers, rating agencies, or public officials. Page 19 J:\FinanciaJIPhiJ\Bonds\Financial Advisor - CREBS\F~.e,gr5"ment - 080320JO.doc . As requested, prepare and maintain projected debt service, debt outstanding and other schedules related to City debt for use in the City budgeting processes and oftlcial statements. . Provide other technical assistance on debt financings, bond ratings and financing alternatives as requested by the City. B. Date for Commencement of Consultant Services: ( X ) Same as Effective Date of Agreement ( ) Other: C. Dates or Time Limits for Delivery of Deliver abIes: Deliverable No. I: 10/31/2012 Deliverable No.2: Deliverable No.3: Deliverable No.4: D. Date for completion of all Consultant services: CREBs must be issued by 10/31/2012. 9. Materials Required to be Supplied by City to Consultant: 10. Compensation: A. (X) Single Fixed Fee Arrangement. For perfoffilance of all of the Defined Services by Consultant as herein required, City shall pay a single fixed fee in the amounts and at the times or milestones or for the Deliverables set forth below: Single Fixed Fee Amount: Public Sale (Competitive or Negotiated) $50,000 Private Placement $30,000 Payable as follows: Tbe fee will be contingent and payable only upon the closing of a bond issuance. Milestone or Event or Deliverable Amonnt or Percent of Fixed Fee ) 1. Interim Monthly Advances. The City shall make interim monrhly advances against the compensation due for each phase on a percentage of completion basis for each given phase such that, at the end of each phase only the compensation for that Page 20 J:\FinanciallPhil\Bonus\Financial Advisor - CREBS\F 4...~r5ement - 0803201 O.doc phase has been paid. Any payments made hereunder shall be considereu as interest free loans that must be retumeu to the City if the Phase is not satisfactorily completeu. If the Phase is satisfactorily completed, the City shall receive credit against the compensation due for that phase. The retention amount or percentage set forth in Paragraph 18 is to be applied to each interim payment such that, at the end of the phase, the full retention has been held back from the compensation due for that phase. Percentage of completion of a phase shall be assessed in the sole and unfettered discretion by the Contracts Administrator designated herein by the City, or such other person as the City Manager shall designate, but only upon such proof demanued by the City that has been provided, but in no event shall such interim advance payment be made unless the Contractor shall have represented in writing that said percentage of completion of the phase has been performed by the Contractor. The practice of making interim monthly advances shall not convert this agreement to a time and materials basis of payment. B. ( ) Phased Fixed Fee Arrangement. For the performance of each phase or portion of the Defined Services by Consultant as are separately iuentified below, City shall pay the fixed fee associated with each phase of Services, in the anlOunts and at the times or milestones or Deliverables set forth. Consultant shall not commence Services under any Phase, al1d shall not be entitled to the compensation for a Phase, unless City shall have issued a notice to proceed to Consultant as to said Phase. Phase 1. Fee for Said Phase 3. $ $ $ 2. ( ) 1. Interim Monthly Advances. The City shall make interim monthly auvances against the compensation due for each phase on a percentage of completion basis for each given phase such that, at the end of each phase only the compensation for that phase has been paid. Any payments made hereunder shall be considered as interest free loans that must be returned to the City if the Phase is not satisfactorily completed. If the Phase is satisfactorily completed, the City shall receive credit against the compensation uue for that phase. The retention amount or percentage set forth in Paragraph 18 is to be applied to each interim payment such that, at the end of the phase, the full retention has been held back from the compensation uue for that phase. Percentage of completion, of a phase shall be assessed in the sole and unfettered discretion by the Contracts Administrator designated herein by the City, Or such other person as the City Manager shall designate, but only upon such proof demanded by the City that has been provided, but in no event shall such interim advance payment be made unless the Contractor shall have representeu in writing that said percentage of completion of the phase has been performed by the Contractor. Page 21 J:lFinancial\Phil\Bonds\Financial Advisor - CREBS\F 4~7ement - 0803201 O.doc The practice of making interim montWy advances shall not convert this agreement to a time and materials basis of payment. c. ( ) Hourly Rate Arrangement For performance of the Defined Services by Consultant as herein required, City shall pay Consultant for the productive hours of time spent by Consultant in the performance of said Services, at the rates or amounts set forth in the Rate Schedule herein below according to the following terms and conditions: (I) ( ) Not-to-Exceed Limitation on Time and Materials Arrangement Notwithstanding the expenditure by Consultant of time and materials in excess of said Maximum Compensation amount, Consultant agrees that Consultant will perfolm all of the Defined Services herein required of Consultant for $ including all Materials, and other "reimbursables" ("Maximum Compensation"). (2) ( ) Limitation without Further Authorization on Time and Materials Arrangement At such time as Consultant shall have incurred time and materials equal to $ ("Authorization Limit"), Consultant shall not be entitled to any additional compensation without further authorization issued in writing and approved by the City. Nothing herein shall preclude Consultant from providing additional Services at Consultant's 0\\11 cost and expense. See Exhibit B for wage rates. ( ) Hourly rates may increase by 6% for services rendered after [month], 20~, if delay in providing services is caused by City. II. Materials Reimbursement AlTangement For the cost of out of pocket expenses incurred by Consultant in the performance of services herein required, City shall pay Consultant at the rates or amounts set forth below: ( X) None, the compensation includes all costs. Cost or Rate $ $ $ $ $ $ $ $ () Reports, not to exceed $ () Copies, not to exceed $ () Travel, not to exceed $ () Printing, not to exceed $ () Postage, not to exceed $ () Delivery, not to exceed $ () Outside Services: (X) Other Actual Identifiable Direct Costs: Miscellaneous Expense, not to exceed $2,500: $2,500 Page 22 J:\Financial\PhitlBonds\Financial Advisor - CREBS\F 4.bgrgement - 080320 t O.doc ~~{~. , not to exceed $ $ 12. Contract Administrators: City: Phillip Davis, Assistant Finance Director Consultant: Michael Berwanger, Senior Managing Consultant 13. Liquidated Damages Rate: ( ) S ( ) Other: per day. 14. Statement of Economic Interests, Consultant Reporting Categories, per Conflict ofInterest Code (Chula Vista Municipal Code chapter 2.02): ( X) Not Applicahle. Not an FPPC Filer. ( ) FPPC Filer ( ) Category No.1. Investments, sources of income and business interests. ( ) Category No.2. Interests in real property. ( ) Category No.3. Investments, business posll1ons, interests in real property, and sources of income subject to the regulatory, pennit or licensing authority of the department administering this Agreement. ( ) Category No.4. Investments and business positions in business entities and sources of income that engage in land development, construction or the acquisition or sale of real property. ( ) Category NO.5. Investments and business positions in business entities and sources of income that, within the past two years, have contracted with the City of Chula Vista or the City's Redevelopment Agency to provide services, supplies, materials, machinery or equipment. ( ) Category No.6. Investments and business positions in business entities and sources of income that, within the past two years, have contracted with the department administering this Agreement to provide services, supplies, materials, machinery or equipment. Page 23 J:\Financial\PhiIIBonds\Financial Advisor - CREBS\F 1\.6~r!lement - 080320 1O.doc ( ) List "Consultant Associates" interests in real property within 2 radial miles of Project Property, if any: 15. ( ) Consultant is Real Estate Broker and/or Salesman 16. Permitted Subconsultants: None 17. Bill Processing A. Consultant's Billing to be submitted for the following period of time: ( ) Monthly ( ) Quarterly ( X )Other: At bond closing. B. Day of the Period for submission of Consultant's Billing: ( ) First of the Month ( ) 15th Day of each Month (X) End of the Month (X) Other: At bond closing. C. City's Account Number: ".. 'l~'.--"- ..-.. ., :..:: "jt ~ . .~" 18. Security for Performance ( ) Performance Bond, $ ( ) Letter of Credit, $ ( ) Other Security: Type: Amount: $ ( ) Retention. If this space is checked, then notwithstanding other provisions to the contrary requiring the payment of compensation to the Consultant sooner, the City shall be entitled to retain, at their option, either the following "Retention Percentage" or "Retention Amount" until the City determines that the Retention Release Event, listed below, has occurred: ( ) Retention Percentage: % Page 2 4 J:\FinanciaIIPhiIIBondsIFinancial Advisor - CREBSIF 1\b.ijroement - 080320 I O.doc ( ) Retention Amount: $ Retention Release Event: ( ) Completion of All Consultant Services ( ) Other: Page 25 J:\Financial\Phil\Bonds\Financial Advisor - CREBS\F ilb~rfement - 0803201 O.doc