HomeMy WebLinkAboutOrrick, Herrington & Sutcliffe, LLP - 2011-08-01 F
� CONTRACTS SUBMITTAL TO
CITY CLERK'S OFFICE
To: JOAN FLYNN, City Clerk
Name of Contractor: ORRICK, HERRINGTON & SUTCLIFFE, LLP.
Purpose of Contract: For Example:Audit Services or Water Quality Testing Huntington Lake—Huntington Central Park
Bond Counsel and Disclosure Counsel Services
Amount of Contract: $70,000.00
Copy of contract distributed to: The original insurance certificate/waiver distributed
El
Dept. ❑ to Risk Management
Finance Dept. ❑ ORIGINAL bonds sent to Treasurer ❑
{
Date:
Name/Exten on
City Attorney's Office
G:AttyMisc/Contract Forms/City Clerk Transmittal
AGREEMENT
FOR
BOND COUNSEL
AND
DISCLOSURE COUNSEL SERVICES
THIS AGREEMENT is entered into as of August 1, 2011, between the CITY OF
HUNTINGTON BEACH (the "City") and ORRICK, HERRINGTON & SUTCLIFFE LLP
("Orrick").
RECITALS
WHEREAS, the City desires to refinance certain public capital improvements (the
"Project") by incurring an obligation to make base rental payments for certain property and
causing the Huntington Beach Public Financing Authority (the "Authority") to issue Huntington
Beach Public Financing Authority(Orange County, California)Lease Revenue Refunding Bonds
(the`Bonds"), which are payable from such base rental payments to be made by the City;
WHEREAS, the City desires to employ Orrick to provide legal services incident to the
issuance and sale of the Bonds; and
WHEREAS, Orrick possesses the necessary professional capabilities and resources to
provide the legal services required by the City as described in this Agreement;
NOW, THEREFORE, it is mutually agreed by the parties hereto as follows:
Section 1. Scone of Services. Orrick shall perform the following legal services:
(i) Orrick shall perform the following legal services as bond counsel:
(a) consultation with representatives of the City and the Authority, including
counsel to the City and the Authority (collectively, the "City Attorney"), the City's
financial advisor and underwriters and others, with respect to the timing, terms and legal
structure of the proposed financing;
(b) preparation of documents to be adopted or entered into by the City and the
Authority required for the issuance of the Bonds, including preparation of the authorizing
resolutions, the indenture, the site lease and the lease agreement (the "Major Legal
Documents");
(c) review or preparation of summaries of the Major Legal Documents
included in the official statement;
(d) attendance at such meetings or hearings of the City Council of the City
and the Board of Directors of the Authority and working group meetings or conference
calls as the City may request, and assistance to the City and the Authority staff in
OHS WEST:261260908.1
preparation of such explanations or presentations to the City Council and the Board of
Directors as such staff may request;
(e) preparation of final closing papers to be executed by the City and the
Authority required to effect the issuance of the Bonds (including the tax certificate) and
coordination of the closing; and
(f) rendering of Orrick's customary final legal opinion on the tax-exempt
status of interest on the Bonds.
(ii) Orrick shall perform the following legal services as disclosure counsel:
(a) consultation with representatives of the City and the Authority, including
the City Attorney, the City's financial advisor, underwriters and others, with respect to
the timing, terms and legal structure of the proposed financing, and compilation of
information about the City, the Authority, the Bonds and other pertinent information;
(b) preparation of the preliminary official statement and official statement for
the Bonds;
(c) preparation of the continuing disclosure certificate to be entered into in
connection with the issuance of the Bonds; and
(e) review of relevant proposed and enacted legislation and case law and other
considerations that could have an impact on the City, the Authority, the legality of the
Bonds or the security for the Bonds.
Orrick and the City acknowledge that the City and the Authority have the City Attorney
to render day-to-day and ongoing legal services. Orrick shall circulate documents to and
coordinate its services with the City Attorney to the extent requested by the City or the City
Attorney. Orrick shall be entitled to assume that the City Attorney has reviewed all documents
and matters submitted to the City Council and the Board of Directors for adoption or approval or
to officers of the City and the Authority for execution prior to such adoption, approval or
execution.
Orrick services are limited to those specifically set forth above and do not include any
services beyond those set forth above, including, without limitation (a) any representation of the
City or the Authority or any other party to the transaction in any litigation or other legal or
administrative proceeding involving the Bonds, the Project or any related matter, (b) any
responsibility for state blue sky laws, or (c) any financial advice or analysis. Also, Orrick
services will not extend past the date of execution and delivery of the Bonds and will not, for
example, include services related to rebate compliance or continuing disclosure(although Orrick
may be available for separate engagement to provide either or both such services pursuant to
separate contract).
Section 2. Compensation and Reimbursements. (a) For the services described in
Section 1, Orrick shall be paid a fee of$70,000. Said fee is based, in part, upon the assumption
that the structure of the financing will conform to the description in the first paragraph of this
OHS WEST:261260908.1 2
Agreement, the scope of services will conform to the description thereof contained in Section 1
of this Agreement, the transaction will not have an extraordinary amount of problems/issues,
Orrick will be required to attend no more than the usual number of meetings and conference
calls„ Orrick will not be required to generate an inordinate amount of drafts of the Major Legal
Documents or the preliminary official statement for the Bonds, the structure of the transaction
will not materially change (particularly after preparation of the preliminary official statement for
the Bonds has commenced), and the Bonds will be issued not later than four months from the
date the initial drafts of the Major Legal Documents and the preliminary official statement for
the Bonds is distributed by Orrick. If any part of this assumption is incorrect, or if any unusual
or unforeseen circumstances arise, and occasions substantial additional work or responsibility on
the part of Orrick, Orrick will be entitled to seek additional compensation in such amount as the
City and Orrick shall mutually agree to be appropriate.
In addition to the compensation provided above, the Orrick shall be paid a flat amount of
$2,500 for costs and expenses (direct and indirect) incurred in connection with the services
described in Section 1, including (without limitation) document reproduction and delivery,
travel, long distance telephone, telecopy, word processing, computer research, secretarial
overtime and other similar expenses; provided that legal publication charges and printing
expenses shall be the responsibility of the City.
(b) Fees and expenses shall be payable by the City at or after issuance of the Bonds.
Payment of all fees and expenses hereunder shall be made from proceeds of the Bonds and shall
be entirely contingent upon execution and delivery of the Bonds.
Section 3. Termination of Agreement and Legal Services. This Agreement and all
legal services to be rendered hereunder may be terminated at any time by written notice from
either party, with or without cause. In that event, all finished and unfinished documents prepared
for adoption or execution by the City and the Authority shall, at the option of the City, become
its property and shall be delivered to it or to any party it may designate; provided, however, that
Orrick shall have no liability whatsoever for any subsequent use of such documents. In the event
of termination by the City, Orrick shall be paid for all satisfactory work, unless the termination is
made for cause, in which event compensation, if any, shall be adjusted in the light of the
particular facts and circumstances involved in the termination. If not sooner terminated as
aforesaid, this Agreement and all legal services to be rendered hereunder shall terminate upon
issuance and delivery of the Bonds; provided that the City shall remain liable for any unpaid
compensation or reimbursement due under Section 2 hereof Upon termination, Orrick shall have
no future duty of any kind to or with respect to the Bonds, the City or the Authority.
OHS WEST:261260908.1 3
Section 4. Mature of Engagement; Relationships With Other Parties.
(a) The role of bond counsel, generally, is to prepare or review the procedures for
issuance of the bonds, notes or other evidence of indebtedness and to provide an expert legal
opinion with respect to the validity thereof and other subjects addressed by the opinion.
Consistent with the historical origin and unique role of bond counsel, and reliance thereon by the
public finance market, Orrick's role as bond counsel under this Agreement is to provide an
opinion and related legal services that represent an objective judgment on the matters addressed
rather than the partisan position of an advocate.
In performing its services as bond counsel in connection with the Bonds, Orrick will act
as bond counsel to the City and the Authority with respect to the issuance and delivery of the
Bonds; that is, Orrick will assist the City Attorney in representing the City and the Authority, but
only with respect to the validity of the Major Legal Documents and the tax status of interest on
the Bonds, and in a manner not inconsistent with the role of bond counsel described in the first
sentence of this Section.
(b) In performing its services as disclosure counsel in connection with the execution
and delivery of the Bonds, Orrick will act as disclosure counsel to the City with respect to the
preparation of the preliminary official statement and official statement for the Bonds; provided,
however, that the parties hereto agree and acknowledge that the preliminary official statement
and official statement for the Bonds will be the City's disclosure documents and that Orrick shall
not be responsible for the truth or accuracy of the statements contained therein.
The City acknowledges that Orrick regularly performs legal services for many private
and public entities in connection with a wide variety of matters. For example, Orrick has
represented, is representing or may in the future represent other public entities, underwriters,
trustees, rating agencies, insurers, credit enhancement providers, lenders, contractors, suppliers,
financial and other consultants/advisors, accountants, investment providers/brokers,
providers/brokers of derivative products and others who may have a role or interest in the
financing or the project being financed or that may be involved with or adverse to the City in this
or some other matter. Orrick agrees not to represent any such entity in connection with the
issuance of the Bonds, during the term of this Agreement, without the consent of the City. Given
the special, limited role of Orrick described above, the City acknowledges that no conflict of
interest exists or would exist, and waives any conflict of interest that might appear actually or
potentially to exist, now or in the future, by virtue of this Agreement or any such other attorney-
client relationship that Orrick may have had, have or enter into, and the City specifically
consents to any and all such relationships.
Section 5. Limitation of Rights to Parties; Successor and Assigns. Nothing in this
Agreement or in any of the documents contemplated hereby, expressed or implied, is intended or
shall be construed to give any person other than the City and Orrick any legal or equitable right
or claim under or in respect of this Agreement, and this Agreement shall inure to the sole and
exclusive benefit of the City and Orrick.
Orrick may not assign its obligations under this Agreement without written consent of the
City except to a successor partnership or corporation to which all or substantially all of the assets
OHS WEST:261260908.1 4
and operations of Orrick are transferred. The City may not assign its rights and obligations
under this Agreement without written consent of Orrick. All references to Orrick and the City in
this Agreement shall be deemed to refer to any such successor of Orrick and to any such assignee
of the City and shall bind and inure to the benefit of such successor and assignee whether so
expressed or not.
Section 6. Counterparts. This Agreement may be executed in any number of
counterparts and each counterpart shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same Agreement.
Section 7. Notices. Any and all notices pertaining to this Agreement shall be sent by
U.S. Postal Service; first class, postage prepaid to Orrick at 2050 Main Street, Suite 1100, Irvine,
California 92614-2558, Attention: Donald Field, and to the City at 2000 Main Street,
Huntington Beach, California 92648, Attention: Director of Finance.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
CITY OF HUNTINGTON BEACH
r
City Attorney
ORRICK,HERRINGTON &
SUTCLIFFE LLP
By: D�a�
Partner
OHS WEST:261260908.1 5
0
RICK
Proposal to Serve as Bond and Disclosure Counsel
to the City of Huntington Beach
July 21 , 2011
Orrick, Herrington Ft Sutcliffe LLP
Donald Field
Orrick, Herrington £t Sutcliffe LLP
4 Park Plaza, Suite 1600
Irvine, CA 92614-2558
phone: 949-852-7727/213-612-2287
fax: 213-612-2499
dfield@orrick.com
Please note that effective August 15, 2011, our new address will be:
2050 Main Street
Suite 1100
Irvine, CA 92614-2558
TABLE OF CONTENTS
Page
METHODOLOGY SECTION....................................................................................................... I
QUALIFICATIONS......................................................................................................................5
PROPOSED FEE AND EXPENSES ............................................................................................9
CONCLUSION..............................................................................................................................9
Tab 1: Experience as Bond Counsel, Disclosure Counsel and
Underwriter's Counsel with California Lease Financings
Tab 2: Biographies of Attorneys Assigned to Financing
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PROPOSAL TO SERVE AS BOND AND DISCLOSURE COUNSEL
TO THE CITE'OF HUNTINGTON BEACH
Orrick, Herrington & Sutcliffe LLP is pleased to present this Proposal to Serve as Bond
and Disclosure Counsel to the City of Huntington Beach in connection with the City's proposed
lease revenue bond refunding. We believe that the breadth and depth of Orrick's knowledge and
experience in public finance, as well as Orrick's creative approach to problem solving, enables
us to offer the City expertise of the highest caliber, combined with responsive and personal
service.
Understanding of the City's Goals. It is our understanding that the City is pursuing a
refinancing of the outstanding Huntington Beach Public Financing Authority Lease Revenue
Bonds, 2001 Series A (Capital Improvement Financing Project) and the outstanding Huntington
Beach Public Financing Authority Lease Revenue Bonds, 2001 Series B (Capital Improvement
Financing Project). We understand that the City desires to close the refinancing as soon as
possible to take advantage of the current low interest rate environment. We would very much
like the opportunity to work with the City on the proposed refinancing.
Knowledgeable and Experienced Counsel. As indicated below, Orrick offers
unparalleled experience to issuers undertaking municipal lease financing transactions in
California. In addition, we propose that Donald Field, a public finance partner resident in
Orrick's Orange County and Los Angeles offices, be the lead attorney for the City's refinancing.
Mr. Field is a member of Orrick's Leasing Practice Group with extensive experience in lease
financing, and is committed to providing the City with the level of attention necessary to ensure
that the City's financing is completed in a timely and efficient manner and with the level of
quality the City should demand.
Set forth below are our responses to the information requested in the City's request for
proposals.
METHODOLOGY SECTION
1. Experience.
a. Specific Experience with Lease Revenue Bonds.
For many years, lease financing has been among the most popular methods used to
finance capital improvements while complying with or avoiding constitutional debt limitations
applicable to the State of California, its cities, counties and school districts, and to public entities
in various other states. Orrick pioneered this method of financing with the first lease revenue
bonds in the country. Its popularity further increased following Orrick's successful development
of the certificates of participation (COP) structure in the early 1980s. While California still
surpasses all other states combined in using lease and COP financing, these techniques have
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increasingly spread to other states, and the use of Orrick's special experience in this area has
spread accordingly.
Since 2000, Orrick has served as bond counsel in more than 430 California lease
transactions totaling more than $22.8 billion. These lease revenue bonds or certificates of
participation have been used to finance such projects and programs as public administration
buildings, courthouses, police and fire stations, civic center complexes, sports stadiums,
museums and convention centers, telephone, telecommunications and data processing systems,
prison,jail and other correctional facilities, health care facilities, cogeneration projects and other
electric power facilities, water system facilities, wastewater treatment facilities, aviation hangars
and other airport facilities, parking structures, public golf course and recreational projects, open
space, unfunded pension liabilities, land acquisition, light rail transit, equipment, buses,
computers and other personal property. The leases and related agreements on which these
financings were based have involved such features as master lease arrangements, leveraged
leases,transfer of tax benefits, and rent payable from a general fund, but limited to the amount of
a particular tax or other revenue received by the lessee. Included behind Tab 1 to this proposal is
a list of California lease financings for which Orrick has served as bond counsel, disclosure
counsel or underwriter's counsel since January 1, 2000. The financings in which the proposed
team members have been involved are highlighted in yellow.
b. General Experience in Municipal Finance.
Municipal Finance. With the dramatic changes that have occurred in the municipal
market over the past few years, it is increasingly important for municipal issuers, like the City, to
retain knowledgeable and experienced counsel, like Orrick, to assist and advise in connection
with their financings. We take particular pride in being able to provide our clients the comfort of
entrusting us with the most complex legal and technical aspects of their financial transactions:
® Orrick has maintained a substantial practice in the area of public finance for over
100 years.
e Orrick has been the premier bond counsel firm in California throughout that
period, and has been ranked first in the country for most of the last ten years in
total volume of financings for which it served as bond counsel.
o Nationally, during 2010, Orrick served as bond counsel on over 415 long-term
issues aggregating over $45.8 billion (representing a national market share of
10.6%) and 225 short-term issues aggregating over $15.2 billion (representing a
national market share of 23.1%), and was ranked the number one bond counsel
firm in total volume of financings (long-term and short-term) in the country by
Thomson Reuters in 2010.
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® Orrick also served as disclosure counsel on 130 long-term issues aggregating
more than $31.2 billion and 12 short-term issues aggregating more than $10.4
billion in 2010, and was ranked the number one disclosure counsel firm in total
volume of financings in the country by Thomson Reuters in 2010.
® With 90 attorneys practicing public finance, Orrick is the best known, most
widely respected and experienced bond counsel firm in California and in the
country.
As indicated above, our public finance department presently consists of 90 attorneys,
with 10 in Los Angeles/Orange County, 27 in San Francisco, 23 in New York, 10 in Sacramento,
12 in the Pacific Northwest, 7 in Washington, D.C. and I in Wheeling, West Virginia. Orrick is
the largest bond counsel firm in California, possibly the largest in the country, and is
strategically situated to provide the best legal services for our clients.
The quality of our attorneys, the depth of resources, the diversity of practice and the
unmatched level of tax and disclosure expertise are considered to be particular strengths of our
public finance department.
Despite being the largest bond counsel firm in California (and probably the nation), we
pride ourselves in giving our clients personal and responsive attention. As a result, our clients
have the advantage of a large firm's resources without compromising the attention they deserve.
Disclosure Counsel Experience. No other firm matches Orrick in experience in public
finance securities laws issues. Orrick is fundamentally a finance firm and as such has very
diverse expertise in federal and state securities laws relating to the sale of and disclosure about
virtually all types securities, both in the initial and secondary markets. Orrick's Public Finance
Department is home to some of the best known and most respected securities law professionals
in the country. This includes the undisputed leading authority in federal securities law as applied
to municipal securities, Robert Fippinger, author of The Securities Law of Public Finance
(Practicing Law Institute, 2nd ed., 1999). In addressing securities law issues arising in public
finance, we are also able to draw upon the expertise of attorneys in the firm specializing in
derivative products, futures, broker-dealer regulation, and investment company act and securities
law generally. In addition, we have regular contact with the staff of the Securities and Exchange
Commission and the Municipal Securities Rulemaking Board on issues related to disclosure. For
2010, Orrick was ranked the number one disclosure counsel firm in the country by Thomson
Reuters.
Tax Practice. Nationally recognized for its expertise in tax matters related to public
finance, Orrick's Public Finance Tax Group is involved in every aspect of the firm's public
finance practice. The group, composed of six partners, one of counsel, and six associates,
includes one partner who was the U.S. Department of Treasury's principal attorney-advisor on
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municipal bond matters; a former chairman of the American Bar Association's Tax Section; a
past chairman of the National Association of Bond Lawyers ("NABL"); two past chairmen of the
American Bar Association's Committee on Tax-Exempt Finance; and a former chair of the
General Tax Committee of NABL. Our reputation as leaders in public finance tax law affords the
group ready access to U.S. Congressional, Internal Revenue Service ("IRS") and Treasury
Department staff for commentary on pending legislation, legislative history, regulations, rulings,
and announcements relating to public finance, as well as access to timely information about what
these federal bodies plan to do or mean by what they have done.
Broad and Varied Experience. Well-established practices in other areas, such as
corporate securities, commercial law and bankruptcy, environmental, general tax law, leasing,
project finance and real estate, enable us to better serve our public finance clients. Our
commercial law and bankruptcy practices help supply the expertise necessary to handle credit
enhancement, investment products, secured transactions and structured financing. Real estate
expertise supports our lease revenue bond and certificates of participation financings, lease
financings and financings secured by mortgages or deeds of trust. Environmental expertise
supports many project financings. Asset leasing and general tax expertise has enabled us to be a
leader in domestic, cross border and other tax advantaged leases for public entities.
2. Lead and Support Personnel.
Donald Field, a public finance partner with over 15 years of public finance experience
resident in Orrick's Orange County and Los Angeles offices, will be the City's principal contact
and lead attorney for the City's financing. He will have overall responsibility for supervision and
work assignments in connection with the City's financing, for ensuring the availability of other
attorneys on the team, and for seeing that the City receives the priority attention of those
attorneys.
Mr. Field is a member of Orrick's Leasing Practice Group, Revenue Practice Group,
Assessment/Mello-Roos Practice Group and Redevelopment Practice Group. He has extensive
experience, as bond counsel, disclosure counsel and underwriter's counsel, in the financing
techniques used by counties, cities, school and community college districts and redevelopment
agencies in California, and has served as bond counsel, disclosure counsel and underwriter's
counsel on scores of lease financings. His practice focuses on local governmental infrastructure
financing, including municipal lease financing, general obligation bond financing and land-
secured financing, as well as tax and revenue anticipation note (TRAN), pension obligation and
other post-employment benefit (OPEB) obligation financings. He is the Co-Chair of Orrick's
practice specialty group for School Finance and General Obligation Bonds and the principal
author and editor of the third edition of The XYZs of California School District Debt Financing,
published by Orrick in 2005. He frequently appears as a panelist and lecturer for numerous
organizations, including the Associated Press News Editor's Council, the League of California
Cities, the California Society of Municipal Finance Officers, the California School Boards
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Association, the Coalition for Adequate School Housing and the California Community College
League. Mr. Field serves as the lead attorney for the California School Boards Association's
annual tax and revenue anticipation note pool,which consisted of 130 participants in 2011.
Mr. Field is committed to providing the City with the level of attention necessary to
ensure that the City's financing is achieved in a timely and efficient manner and with the level of
quality the City should demand.
Disclosure matters will be handled by Kevin Hale, an of counsel with 16 years of public
finance experience resident in our Los Angeles office. Mr. Hale has broad experience as bond
counsel and as disclosure counsel on tax-exempt financings structured as certificates of
participation and lease revenue bonds, tax increment redevelopment bonds, transportation and
capital improvement revenue bonds, both pooled and stand-alone Marks-Roos financings and
general obligation bonds. Mr. Hale also has extensive experience working as counsel to
underwriters and placement agents comprised of a diverse group of national and regional
investment banks working with public sector clients.
Tax matters will be handled by Winnie Tsien, a tax of counsel with over 15 years of
public finance experience resident in Orrick's Los Angeles office. As and when appropriate in
order to achieve efficiency for the City, we will assign one or more additional associates or
project managers to the financing. A team approach will be used to ensure ample resources and
support to the City. Biographies of the attorneys assigned to the proposed financing are included
behind Tab 2 to this proposal.
3. Proposed Fee Structure.
We propose to structure our fee on a contingent basis conforming to the structure
described in the City's request for proposals. If the financing does not close, we would receive
no payment. In general, we try to be as flexible as possible with our clients in terms of
structuring satisfactory fee agreements, and the City should feel free to suggest an alternative
arrangement to the fee proposed below under the heading "PROPOSED FEE AND
EXPENSES."
4. Responsiveness.
We pride ourselves on understanding the needs of our clients and providing them
personal and responsive service. We become involved as early and as broadly in a transaction as
possible, participating in discussions with our client's staff and financial advisors about its
financing needs, project plans and schedules, and repayment sources. In this way, we can help
suggest solutions at crucial times that will most benefit our clients, taking into account their
special needs and circumstances.
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QUALIFICATIONS
1. General.
a. State Bar of California. All attorneys of the firm who provide services to the
City must be members in good standing of the State Bar of California. This requirement does not
apply to attorneys in the firm who only provide federal tax advice.
All attorneys proposed to provide services to the City, including our proposed tax
attorney, are members of and are in good standing with the State Bar of California.
b. Municipal Finance Experience. The selected firm must have a minimum of
three years of recent municipal finance experience servicing as bond counsel, co-bond counsel
and/or disclosure counsel in California with respect to municipal finance transactions.
As indicated above, Orrick has maintained a substantial practice in the area of public
finance for over 100 years.
C. Recent Lease Revenue Bond and Variable Rate Debt Experience. During the
period between July 1, 2008 and July 1, 2011, the selected firm must have served as bond
counsel, co-bond counsel and/or disclosure counsel for at least one refinancing of lease revenue
bonds or certificates of participation by a California public entity. In addition, during the period
between July 1, 2008 and July 1, 2011, the selected firm must have served as bond counsel
and/or disclosure counsel for at least one issuance of variable rate debt by a California public
entity.
As shown in Tab 1, Orrick meets both of these requirements.
2. Statement Regarding Potential Conflicts of Interest. Please identify any
potential conflicts of interest your firm might have in providing services to the City.
We are unaware of any conflict of interest or potential conflict of interest. We note that
Orrick regularly performs legal services for many public and private entities in connection with a
wide variety of matters. For example, Orrick has represented, is representing or may in the future
represent other public entities, underwriters, trustees, rating agencies, insurers, credit
enhancement providers, lenders, contractors, suppliers, financial, engineering and other advisors,
accountants, investment brokers and providers and others who may be involved with or adverse
to the City in some manner. If selected as bond counsel, we will again review and identify any
conflicts of interest that may exist and seek appropriate waivers when necessary from the City
and the other client(s). Given our many years of experience in representing governmental clients,
we are very sensitive to the possibilities of legal and business conflicts arising among various
entities and will identify those cases to the City as soon as we become aware of them.
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3. Disclosure of Pending ]Litigation. Please state whether or not there is any
pending litigation involving the firm or any attorney in the firm arising from legal services
provided by the attorney or firm. If the answer is yes, please describe the nature and the status of
the litigation.
As is the case for any large firm our size, the firm and its attorneys are from time to time
named as defendants in a legal matter. There is no pending litigation that would affect our
ability to serve as bond counsel to the City. However in order to be responsive to the City's
request for proposals,we note the following:
West Contra Costa Unified School District: On February 3, 2010, Orrick was sued by the
West Contra Costa Unified School District ("West Contra Costa") alleging that the firm
committed malpractice in connection with a 2009 bond transaction. West Contra Costa alleges
that Orrick should have advised West Contra Costa regarding the implications of a prior
transaction in which Orrick was not involved, whereby West Contra Costa purported to sell the
"call rights" regarding certain previously issued district bonds. While West Contra Costa does
not allege that it was unaware of the prior sale of call rights, it contends that it was required to
settle with the entity that purports to have purchased the call rights, and that the terms of such
settlement were more costly to West Contra Costa because Orrick failed to warn West Contra
Costa of the import of the call rights matter before the 2009 bonds had been issued. Orrick
believes that its actions met all professional standards of conduct, that West Contra Costa was
fully aware of its prior sale of call rights, and that the claimed injury was a function of West
Contra Costa's ill-advised prior sale of call rights rather than being caused by the timing of the
purchaser's assertion of those rights.
Tri-City Healthcare District: On April 5, 2010, former Orrick client Tri-City Healthcare
District("Tri-City") commenced an action in California Superior Court, County of Orange, Civil
Complex Center, naming Orrick, among several other entities, as a defendant. Case number 30-
2010-00359692. Tri-City alleges that Orrick committed malpractice in connection with its work
on a 2007 bond transaction. The thrust of Tri-City's claim is that Orrick failed to advise Tri-City
of the risks involved in issuing auction rate securities. Tri-City further alleges that Orrick
misreported to Tri-City and the California Debt and Investment Advisory Commission of the
State of California ("CDIAC") the correct cost of the debt issue for the life of the debt, failed to
properly limit the interest rate on the bonds to the maximum allowable interest rate under statutes
governing certain municipal or government agency bonds, and failed to ensure that an agreement
between Tri-City and a commercial bond insurer (MBIA) contained a requirement that the
insurer maintain its AAA rating. The firm believes that its actions met all professional standards
of conduct and that Tri-City's claims are without merit.
4. Criminal or Administrative Actions. Are there any pending criminal or
administrative actions (including disciplinary matters) involving the firm or any attorney in the
firm which arise from legal services provided by the attorney or the firm? If yes, please describe
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the nature of such actions and the status.
Orrick has responded to requests for information from the Securities and Exchange
Commission, and federal and state agencies in connection with investigations by such entities,
but to our knowledge neither the firm, nor any of its principals, or key team members have been
the targets of such investigations. There is no pending investigation that would affect our ability
to serve as bond or disclosure counsel to the City.
5. Disbarment or Suspensions. Please indicate whether your firm or any individual
attorneys who are principals, partners or employees of your firm, have been debarred or
suspended by any public entity from obtaining or performing a contract.
To our knowledge neither the firm, nor any of its principals, or key team members have
been debarred or suspended by any public entity from obtaining or performing a contract.
6. Public Agency References. Please Provide at least three California public agency
references for the lead attorney proposed to be assigned and the attorney to be assigned to be
disclosure counsel (if different than the lead attorney), including the references name, title,
contact information and the description of the bond issue(s) on which the attorney worked. It is
preferred that at least one of the references be the public agency's in-house counsel.
Don Field's References
Glenn Byers Doug Baron Cammy DuPont,Esq.
Deputy Treasurer Director of Public Finance Principal Deputy County Counsel
County of Los Angeles County of Los Angeles County of Los Angeles
500 West Temple Street,Room 432 500 West Temple Street,Room 432 500 West Temple Street,Room 432
Los Angeles,CA 90012 Los Angeles,CA 90012 Los Angeles,CA 90012
(213)974-7175 (213)974-7175 (213)974-7175
(Bond Counsel for lease revenue bonds) (Bond Counsel for lease revenue bonds) (Bond Counsel for lease revenue bonds)
Gary McBride Katrina Turturro Michelle Blakemore,Esq.
Deputy Administrative Officer Principal Administrative Analyst Principal Assistant
County Administrative Office County Administrative Office County Counsel
County of San Bernardino County of San Bernardino County of San Bernardino
385 North Arrowhead Avenue,4th Floor 385 North Arrowhead Avenue,4th Floor 385 North Arrowhead Avenue,4th Floor
San Bernardino,CA 92415 San Bernardino,CA 92415 San Bernardino,CA 92415
(909)387-4599 (909)387-3076 (909)387-5445
(Bond and Disclosure Counsel for (Bond and Disclosure Counsel for (Bond and Disclosure Counsel for
various lease and other financings) various lease and other financings) various lease and other financings)
Jeanette Ullrich
Chief Business Official
Huntington Beach Union High School District
5832 Bolsa Avenue
Huntington Beach,CA 92649
(714)903-7000,Ext.4310
(Bond and Disclosure Counsel for various
lease and general obligation bond financings)
8
0
0 R R I C K
Kevin Hale's References
Ron Holly Matthew E.Hawkesworth Alison A.Ban•att-Green
Debt Manager,Division Chief Assistant City Manager Assistant County Counsel
County of Monterey City of Rosemead County of Nevada
168 W.Alisal St,Room 3111 8838 E.Valley Blvd. 950 Maidu Avenue
Salinas,CA 93902 Rosemead,CA 91770 Nevada City,California 95959
(831)755-5493 (626)569-2107 (530)265-1319
(Disclosure Counselfor lease-leaseback (Bond and Disclosure Counselfor Tax (Disclosure Counselfor lease-leaseback
Certificates of Participation) Allocation Bonds) Certificates of Participation)
PROPOSED FEE AND EXPENSES
Outlined below is our proposed compensation arrangement for a lease revenue bond
financing conforming to the structure described in the City's request for proposals. As indicated
above, we generally try to be as flexible as possible with our clients in terms of structuring
satisfactory fee agreements, and the City should feel free to suggest an alternative arrangement to
the fees proposed below.
Fees. Although we have responded to a number of the City's requests for proposals over
the years, we have not yet been selected by the City to serve as its bond or disclosure counsel.
We are eager to demonstrate to the City our ability to provide exemplary legal services.
Therefore, we propose to charge a fixed fee (reflective of our desire to work with the City) of
$70,000 for both bond and disclosure counsel services in connection with the City's proposed
lease revenue bond refinancing. Such fee would be on a contingent basis. If the financing does
not close, we would receive no payment. Given the opportunity,we are confident that we will be
able to demonstrate our responsive and personal service and superior public finance knowledge
and experience to the City.
Expenses. In addition to the fee quoted above for bond and disclosure counsel services,
we would be paid $2,500 for all direct and indirect expenses such as, but not limited to, travel
expenses, long-distance telephone charges, copying, telecopying, express mail and delivery
charges, word processing, transcript preparation and secretarial overtime. Any legal publication
charges and printing expenses would be the responsibility of the City.
CONCLUSION
As indicated above, we take particular pride in being able to provide our clients the
comfort of entrusting us with the most complex legal and technical aspects of their financial
transactions. The trust our clients place in us is gained through our clients' understanding and
knowledge of the following:
9
0
ORRICK
Personal and Responsive Client Service. As indicated above, we pride ourselves on
understanding the needs of our clients and providing them personal and responsive service. As a
result, our clients have the advantage of a large firm's resources without compromising the
attention they deserve.
Extensive Resources, Local Team. With 90 attorneys practicing public finance across
country, we are able to draw on resources when and as needed to assist with new or unique
issues. However, all of the members of the primary team of attorneys proposed for the City's
financing are local and easily accessible to the City.
Long-Term Commitment to City. We understand that the City's request for proposals
only relates to the proposed lease revenue bond refinancing. However, our goal is to develop
long-term relationships with all our clients. Therefore, we would like to use the opportunity to
serve as the City's bond and disclosure counsel with respect to the lease revenue bonds to
demonstrate our responsive and personal service and superior public finance knowledge and
experience with the goal of developing a long-term relationship with the City.
Municipal Lease Financing. Orrick is the leader in municipal lease financing
transactions in California. Moreover, Mr. Field, the City's principal contact and lead attorney for
the City's lease financing, is a member of Orrick's Leasing Practice Group and has extensive
experience in lease financing.
Knowledgeable, Experienced and Established Counsel. Orrick has maintained a
substantial practice in the area of public finance for over 100 years. We have found that firms
practicing in the area of public finance for less than half the number of years as Orrick and with
less than half the number of public finance attorneys as Orrick, claim to be just the right size
with just the right number of public finance attorneys, but Orrick continues to be the undisputed
number one bond counsel in California and across the nation. We consistently achieve this status
by holding ourselves to the highest standards of technical expertise, professional dedication,
client service and ethical responsibility.
We are pleased to submit this proposal to you and look forward to the opportunity to
work on the proposed lease revenue bond refinancing. We are prepared to begin working on the
City's refinancing as soon as you indicate you are ready. If you have any questions, or if
additional information or materials are required, please contact Donald Field at(949) 852-7727.
Respectfully submitted,
ORRICK, HERRINGTON & SUTCLIFFE LLP
10
su ►t� INSURANCE AND INDEMNIFICATION WAIVER
Huntin n Bm&® MODIFICATION REQUEST
1. Requested by: City Attorney
D ��► ��
2. Date: 9-15-11
3. Name of contractor/permittee: Orrick Herrington Sutcliffe
4. Description of work to be performed: provide bond and disclosure counsel services.
5. Value and length of contract: NTE $75,000
6. Waiver/modification request: Orrick's insurance is purchased via a conglomerate,fixed
terms
7. Reason for request and why it should be granted: Self insured company has strong
financials to support waiver
8. Identify the risks to the City in approving this waiver/modification: NONE
q,�, - 0 - 14�3 - I I -
v epartment He Signature Date:
APPROVALS
Approvals must be obtained'in the order listed on this form. Two approvals are required
for a request to be granted. Approval from he City Administrator'sjoffice is only required if
Risk.Management and th City Attorney's icy disagree.
1. ask Management � R
Approved ❑ Denied
Signature D to
2. City Attorney's Office
Approved ❑ Denie ' f�yEas
" Signature Date
3. City Manager's Office
❑ Approved ❑ Denied
Signature Date
If approved, the completed waiver/modification request is to be submitted to the
City Attorney's Office along with the contract-for approval. Once the contract has,been approved,
this form is to be filed with the Risk Management Division of Human Resources
Insurance Waiver Form 9/15/2011 4:17:00 PM
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(A-Ca ifornia Limited Uabiiity Pai-lnersVip)
Consolidated Statements o' Revenues Collected and Expenses Disbursed
(Modified [CaSh Basis
Years Ended DeceMber 31, 2010 and 2009
2010 2009
nave Suescollected
r-�s tr Prctession�-'i servc�s S 847,c-40 587 8>415,6622,571-9
rrnisce;laneous income 694.51 -2.0(--,4--3
848,E35 84-73 5.9 78
Ex.oense�disbursed
EF-r;pl.C-,eE- cur its 2 92,601b,71&CI 3417 1 t 8
Occupancy cost e2,J3S5,31C 74.0636.7--�-70
3
Olmer operatl-,q�xp-nses 1=1,673,320 =07 372.4,6
Reco'v ry of ex.p�.nstas frc.m cli�n'LS 142.711)
Excess of remsriues collec'LE:d c-er Elxoenses d;sbLir-.ed
n�'income) 'S 351,663.496 -16226-59-
See accomipjanying nct--S a co-ilsofidate financt Sict
3