HomeMy WebLinkAbout2015-114 I RESOLUTION NO. 2015-114
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
3 BERNARDINO, ACTING AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT
4 AGENCY OF THE CITY OF SAN BERNARDINO, AUTHORIZING THE EXECUTION OF AN
ENGAGEMENT LETTER WITH THE LAW FIRM OF ORRICK, HERRINGTON &
5 SUTCLIFFE LLP, AND A WAIVER OF POTENTIAL CONFLICTS OF INTEREST THAT
6 MAY ARISE FROM SUCH LEGAL REPRESENTATION
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s WHEREAS, pursuant to the Community Redevelopment Law (Part 1 of Division 24 of the
California Health and Safety Code ("HSC")), the Mayor and Common Council of the City of San
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10 Bernardino ("City") created the Redevelopment Agency of the City of San Bernardino ("RDA"); and
WHEREAS, as a redevelopment agency, the RDA had the power to issue bonds and other
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12 obligations for any of its corporate purposes; and
13 WHEREAS, during its existence the RDA issued and entered into certain loan agreements,
14 bonds and notes that remain currently outstanding ("Outstanding RDA Obligations") for the purpose of
15 financing redevelopment activities; and
WHEREAS, California Assembly Bill No. 26 (First Extraordinary Session) ("ABxl 26")
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17 adopted on June 28, 2011, dissolved all redevelopment agencies in California as of February 1, 2012,
is and designated "successor agencies" and "oversight boards" to administer the wind-down of the former
19 redevelopment agencies; and
20 WHEREAS, the City agreed to serve as the successor agency to the RDA ("Successor Agency")
21 upon the dissolution of the RDA pursuant to ABx 126; and
22 WHEREAS, the Oversight Board for the Successor Agency ("Oversight Board") has been
23 established pursuant to HSC section 34179 to assist in the wind-down of the RDA; and
24 WHEREAS, on June 27, 2012 as part of the Fiscal Year 2012-13 State of California budget bill,
25 the Governor signed into law Assembly Bill 1484, which modified or added to some of the provisions of
26 ABx 1 26, including provisions related to the refunding of outstanding redevelopment agency bonds and
27 the expenditure of remaining bond proceeds derived from redevelopment agency bonds issued on or
before December 31, 2010; and
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I WHEREAS, HSC section 34177.5(a)(1) authorizes successor agencies to refund outstanding
2 bonds provided that certain specified requirements are met; and
3 WHEREAS, HSC § 34177.5(a)(2) authorizes successor agencies to refund outstanding bonds or
4 other indebtedness to finance debt service spikes, including balloon maturities, on existing indebtedness,
5 provided that certain specified requirements are met; and
6 WHEREAS, to the extent authorized by HSC § 34177.5(a), the Successor Agency desires to
7 undertake the refunding of all or a portion of the Outstanding RDA Obligations; and
s WHEREAS, on April 6, 2015, the Successor Agency, in Resolution No. 2015-72, resolved to
9 authorize the initiation of steps needed to issue bonds for the purpose of refunding the Outstanding RDA
i o Obligations on more favorable terms ("Refunding Bonds"); and
I i WHEREAS, on April 13, 2015, the Oversight Board, in Resolution No. SBOB/2015-03,
12 resolved to direct the Successor Agency to commence the process for the issuance of the Refunding
13 Bonds to refund all or a portion of the Outstanding RDA Obligations; and
14 WHEREAS, on May 18, 2015, the Successor Agency by resolution authorized the issuance of
15 the Refunding Bonds; and
16 WHEREAS, on May 19, 2015, the Oversight Board by resolution approved the Successor
17 Agency's authorization of the issuance of the Refunding Bonds; and
18 WHEREAS, to issue the Refunding Bonds the Successor Agency will need the assistance of
19 specialized legal counsel with expertise in municipal finance to ensure compliance with all applicable
20 laws; and
21 WHEREAS, San Bernardino Municipal Code section 2.20.040 provides that the Mayor and
22 Common Council ("Council") may retain special legal counsel subject to the recommendation of the
23 City Attorney that such counsel is necessary when legal specialization not possessed by the City
24 Attorney is required; and
25 WHEREAS, the City Attorney, by his approval of this Resolution, recommends that the
26 Council, acting as the Successor Agency, retain the services of special legal counsel to assist in the
27 issuance of the Refunding Bonds and such related matters as may arise in connection with their
28 issuance; and
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I WHEREAS, the law firm of Orrick, Herrington & Sutcliffe LLP ("Orrick") has demonstrated
2 expertise in municipal finance matters; and
3 WHEREAS, in Resolution No. 2015-72, the Council, acting as the Successor Agency, approved
4 the designation of Orrick as bond counsel for the Successor Agency in connection with the issuance of
5 the Refunding Bonds; and
6 WHEREAS, a proposed Engagement Letter providing for the terms of Orrick's representation
7 of the Successor Agency as its bond counsel in connection with the issuance of the Refunding Bonds has
s been prepared and is attached as Exhibit A; and
9 WHEREAS, Orrick has advised the Successor Agency that Orrick currently and periodically
i o represents the County of San Bernardino ("County") with respect to various legal matters that are not
i i related to the issuance of the Refunding Bonds or to any services provided for in the proposed
12 Engagement Letter attached as Exhibit A; and
13 WHEREAS, Orrick has further advised the Successor Agency that its proposed representation
14 of the Successor Agency and simultaneous representation of the County could, but are not likely to,
15 result in the representation by Orrick of clients having adverse interests; and
16 WHEREAS, an attorney may not represent clients having adverse interests without the informed
17 written consent of each client; and
18 WHEREAS, Orrick has therefore prepared a written waiver of any conflict of interest arising
ig from its representation of the Successor Agency in connection with the issuance of the Refunding
20 Bonds, attached to this Resolution as Exhibit B, and has requested that the Successor Agency and the
21 County execute the waiver to allow Orrick to undertake the representation of the Successor Agency in
22 connection with the issuance of the Refunding Bonds, and
23 WHEREAS, all of the prerequisites with respect to the approval of this Resolution have been
24 met.
25 NOW, THEREFORE, BE IT RESOLVED by the Successor Agency to the Redevelopment
26 Agency of the City of San Bernardino, as follows:
27 Section 1. Approval of Engagement Letter. The Engagement Letter attached to this
28 Resolution as Exhibit A is approved, and the City Attorney is authorized and directed to execute the
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I Engagement Letter on behalf of the Successor Agency.
2 Section 2. Approval of Waiver of Conflict of Interest. The waiver of conflict of interest
3 attached to this Resolution as Exhibit B is approved, and the City Attorney is authorized and directed to
4 execute the Agreement on behalf of the Successor Agency.
5 Section 3. Other Acts. The officers and staff of the Successor Agency are authorized and
6 directed,jointly and severally, to do any and all things, and to execute and deliver any and all documents
7 necessary or advisable in order to effectuate the purposes of this Resolution, and any and all such actions
8 previously taken by such officers or staff members are ratified and confirmed.
9 Section 4. Effective Date. This Resolution shall take effect upon its adoption and execution
1 o in the manner as required by the City Charter.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
1 BERNARDINO, ACTING AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT
2 AGENCY OF THE CITY OF SAN BERNARDINO, AUTHORIZING THE EXECUTION OF AN
ENGAGEMENT LETTER WITH THE LAW FIRM OF ORRICK, HERRINGTON &
3 SUTCLIFFE LLP, AND A WAIVER OF POTENTIAL CONFLICTS OF INTEREST THAT
4 MAY ARISE FROM SUCH LEGAL REPRESENTATION
5
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Successor Agency
6 to the Redevelopment Agency of the City of San Bernardino, at a meeting thereof, held on the 1st day of
7 June, 2015, by the following vote, to wit:
8
Council Members Ayes Nays Abstain Absent
10
MARQUEZ X
BARRIOS X
11
VALDIVIA X
12
13 SHORETT X
14 NICKEL X
1s
JOHNSON X
16 MULV IHILL X
18 Georgeann Hanna, City Clerk
19 The foregoing Resolution is hereby approved this �-- day ne 2015.
20
two
21 R. Carey Davis, airman
22 Successor Agency to the
Redevelopment Agency of the
23 City of San Bernardino
Approved as to Form:
24 City Attorney
25
26 By:
G enz, General Counsel
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2015-114
0 ORRICK,HERRINGTON&SUTCLIFFE LLP
777 SOUTH FIGUEROA STREET
SUITE 3200
,p^y I LOS ANGELES,CALIFORNIA 90017
{� tel +1-113-629-2020
fox +1 213-612-2499
WWW.ORRICK.COM
June 1, 2015 William W. Bothwell
213-612-2403
wbothwett@orrick.com
Gary D. Saenz, City Attorney
300 N. "D" Street, Sixth Floor
San Bernardino, CA 92418
Re: Successor Agency Refunding Bonds
Dear Mr. Saenz:
This letter will serve to summarize the terms of our engagement, subject to acceptance by
the Successor Agency to the Redevelopment Agency of the City of San Bernardino (the "Agency")
as Bond Counsel in connection with the proposed issuance of certain Refunding Bonds (collectively
the "Refunding Bonds"). The Refunding Bonds will be issued by the Agency for the purpose of
refunding certain outstanding Agency obligations (including as many as eleven separate loan
agreements, two outstanding Eb-5 notes and a reimbursement agreement, the "Refunded
Obligations").
A. Scope of Services
1. Our services as Bond Counsel for the Refunding Bonds will include the following:
a. Consultation with representatives of the Agency, the financial advisor, the
underwriter and others concerning the financing, its timing, terms and structure. Such
consultation will include considerations of the California law, federal tax law and municipal
bond law as they affect the proposed financing.
b. Preparation of legal proceedings for the authorization, sale and issuance of
the Refunding Bonds, including preparation of any resolution, indenture, installment
purchase contract, lease or any other documents necessary for the issuance of the Refunding
Bonds; preparation of the proceedings for the execution, delivery and sale of the Refunding
Bonds and advice to the Agency concerning the terms thereof; preparation of other
proceedings (including closing papers) required in connection with the issuance of the
Refunding Bonds; and coordination of the closing. All legal proceedings for action by the
Agency necessary for the execution and delivery of the Refunding Bonds will be prepared by
us, to the extent practicable, for submission to the Agency and will be subject to the
approval of the City Attorney. We would not expect to prepare any of the documentation in
connection with any credit support or other security for the Refunding Bonds, and would
not expect to be responsible for reviewing such documentation except as it affects the
OHSUSA:762044323.1 EXHIBIT A
2015-114
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O R R l C K
Gary D. Saenz
June 1,2015
Page 2
validity of the Refunding Bonds and the tax-exempt status of interest thereon. Our services
also do not include any responsibility for compliance with environmental, land use, real
estate, insurance or similar laws or matters or (except as required for tax exemption of the
Refunding Bonds) any tax laws, or for title to, recording, filing or perfection of security
interests in real or personal property.
C. The rendering of a final legal opinion on the validity of the Refunding Bonds
and exclusion from gross income for federal tax purposes of interest payable on the
Refunding Bonds.
B. Fees and Expenses. For all services to be performed, our proposed fee arrangement would
be as follows: A fixed fee of$250,000,plus actual out-of-pocket third party expenses.
These proposed fees would be contingent upon a successful closing and are inclusive of all
of our related expenses. In addition, if the proposed fee structure creates in retrospect an
unsatisfactory fee proposal,we are of course willing to review this with the Agency and together find
a mutually satisfactory result.
Our services will not include representation of the Agency in any legal action challenging,
affecting or arising out of the transactions contemplated by this letter or rendering any advice or
opinion to the Agency or others in connection with questions arising after the closing or the
performing of any rebate calculations or filing or monitoring or other legal services with respect to
the transaction after the closing; but if we are requested to perform such services, we would be
pleased to perform them on circumstances mutually agreeable.
The Agency acknowledges that Orrick regularly performs legal services for many private and
public entities in connection with a wide variety of matters. For example, we have represented, are
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 and swap providers/brokers, providers/brokers of
derivative products and others who may have a role or interest in the financing or the project or that
may be involved with or adverse to the Agency in this or some other matter. We agree not to
represent any such entity in connection with the financing, during the term of this engagement,
without the consent of the Agency. Given the special,limited role of bond counsel described above,
the Agency acknowledges and agrees that no conflict of interest exists or would exist, and waives
any actual or potential conflict of interest that might be deemed to arise, now or in the future, from
this engagement; it being acknowledged that the Agency, the County of San Bernardino and Orrick
are parties to a consent and waiver letter dated June 1, 2015.
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O R R I C
Gary D. Saenz
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This engagement and all legal services to be rendered under it may be terminated at any tune
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 Agency, shall, at the option of the Agency,
become its property and shall be delivered to it or to any party it may designate; provided that
Orrick shall have no liability whatsoever for any subsequent use of such documents.
If you have any questions or wish to discuss any of the foregoing matters, please feel free to
call me. If the foregoing undertaking is satisfactory to the Agency, please execute the enclosed copy
of this letter and return it to me.
Thank you very much and we look forward to working with you on these transactions.
Very truly yours,
(
William W. Bothwell
CONFIRMED AND ACCEPTED FOR THE AGENCY:
SUCCESSOR AGENCY TO THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO
By
Gary D. Saenz, City Attorney
Dated: '''�°`� 2 , 2015
OHSUSA:762044323.1
2015-114
ORRICK, HERRINGTON&SUTCLIFFE uv
777 SOUTH FIGUEROA STREET
0 SUITE 3200
LOS ANGELES,CALIFORNIA 90017
tel +1-113-619-2020
I fax +1 113-611-2499
WWW.ORRICK.COM
VIA EMAIL AND US MAIL Bill W. Bothwell
(213)612-2403
wbothwett@orrick.com
June 1, 2015
Michelle Blakemore Gary D. Saenz
Chief Assistant County Counsel City Attorney
Office of the County Counsel San Bernardino City Attorney
County of San Bernardino City of San Bernardino
385 North Arrowhead Avenue, Fourth Floor 300 North D Street, Sixth Floor
San Bernardino, California 92415 San Bernardino, California 92418
Re: Waiver of Conflict Pertaining to Successor Agency Refunding Bonds
Dear Ms. Blakemore and Mr. Saenz:
As Orrick, Herrington & Sutcliffe LLP ("Orrick") has discussed with you, we are
requesting your informed written consent to a waiver of a potential conflict of interest described
herein. The Successor Agency to the Redevelopment Agency of the City of San Bernardino (the
"Successor Agency") has requested Orrick to represent it as Bond Counsel in connection with
the issuance by the Successor Agency of certain refunding bonds to refinance for savings
obligations previously issued by the former Redevelopment Agency of the City of San
Bernardino.
Orrick is currently representing the County of San Bernardino in connection with certain
bankruptcy matters and periodically in connection with certain public finance matters. Neither
our past nor current representation of the County of San Bernardino has any known relationship
to the proposed representation of the Successor Agency as set forth above. In addition, none of
the work to be performed on behalf of the Successor Agency will be performed by attorneys in
the firm who are engaged to represent the County of San Bernardino. It is only out of an
abundance of caution, anticipating no future circumstance when a conflict might realistically
arise,that Orrick makes this request.
Orrick hereby agrees that we will not disclose to the Successor Agency any information
concerning the County of San Bernardino or its business which is confidential (i.e., trade secrets
and matters covered by the attorney-client or work product privileges), nor utilize any such
information in any manner or proceeding without the County of San Bernardino's consent. In
the event that the disclosure of such information is necessary to the effective representation of
the Successor Agency, and the County of San Bernardino declines to provide the requested
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0 R R I C K
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Gary D. Saenz
June 1, 2015
Page 2
consent, we will so advise the Successor Agency and Orrick will be required to withdraw from
this representation of the Successor Agency.
Orrick hereby further agrees that we will not disclose to the County of San Bernardino
any information concerning the Successor Agency or its business which is confidential (i.e.,
trade secrets and matters covered by the attorney-client or attorney-work product privileges), nor
utilize any such information in any manner or proceeding without consent. In the event that
disclosure of such information is necessary to the effective representation of the County of San
Bernardino, and the Successor Agency declines to provide the requested consent, we will so
advise the County of San Bernardino and Orrick will be required to withdraw from that aspect of
our representation of the County of San Bernardino in which the disclosure of the requested
information is necessary to our effective representation.
Orrick will make every effort to protect the confidences of both the Successor Agency
and the County of San Bernardino.
In the event of any dispute between the Successor Agency and the County of San
Bernardino arising out of our representation of the Successor Agency, the Successor Agency and
the County of San Bernardino agree that Orrick may continue to represent the Successor Agency
in connection with resolution of such dispute, including any formal mediation process related
thereto. Orrick agrees that, in the event the dispute develops into arbitration or litigation, Orrick
will be required to withdraw from representing the Successor Agency and the Successor Agency
consents to Orrick's withdrawal. In no circumstance will Orrick represent the County of San
Bernardino in connection with any dispute with the Successor Agency arising out of the
contemplated representation herein.
You both have graciously agreed to Orrick's representation of the Successor Agency as
outlined this letter while continuing our separate representation of the County of San Bernardino.
Accordingly, we request that you so indicate by signing the enclosed copy of this letter and
returning it immediately by e-mail and then mailing the copy with your signature to us. By
doing so, you will be agreeing as follows:
(1) that the Successor Agency and the County of San Bernardino
acknowledge Orrick's disclosure of the potential conflicts of interest described herein;
(2) that the Successor Agency and the County of San Bernardino agree to
waive any potential or actual conflicts of interest associated with Orrick's contemplated
representation of the Successor Agency as set forth herein;
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Gary D. Saenz
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(3) that the Successor Agency will not directly or indirectly seek to disqualify
Orrick from its representation of the County of San Bernardino, or support such
disqualification, in any matter in which Orrick is representing the County of San
Bernardino as a result of the potential or actual conflicts of interest described herein,
except in the event that disclosure by Orrick of information concerning the Successor
Agency or its business which is confidential (including but not limited to trade secrets
and matters covered by the attorney-client or attorney-work product privileges) is
necessary to Orrick's effective representation of the County of San Bernardino; and
(4) that the Successor Agency and the County of San Bernardino are fully
informed regarding the legal implications of this waiver of conflict of interest, and have
the right, which Orrick strongly encourages, to seek and obtain the advice of independent
legal counsel concerning the law and the implications of this waiver request.
We very much appreciate your agreement as requested herein and your assistance and
cooperation in expediting this request. If you have any questions, please do not hesitate to call
the undersigned.
Sincerely,
Z-
Bill Bothwell
APPROVED, ACCEPTED AND AGREED TO
nA
this 2 day of June, 2015.
By:
/<�
Name: Cary n snenz.
Its: City Attorney
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3 R R I C
Michelle Blakemore
Gary D. Saenz
June 1, 2015
Page 4
APPROVED, ACCEPTED AND AGREED TO
this day of June, 2015.
By:
Name:
Its:
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ORR4 C K
Michelle Blakemore
Gary D. Saenz
May 7,2015
Page 3
(3) that the Successor Agency will not directly or indirectly seek to disqualify
Orrick from its representation of the County of San Bernardino, or support such
disqualification, in any matter in which Orrick is representing the County of San
Bernardino as a result of the potential or actual conflicts of interest described herein; and
(4) that the Successor Agency and the County of San Bernardino are fully
informed regarding the legal implications of this waiver of conflict of interest, and have
the right, which Orrick strongly encourages, to seek and obtain the advice of independent
legal counsel concerning the law and the implications of this waiver request.
We very much appreciate your agreement as requested herein and your assistance and
cooperation in expediting this request. If you have any questions, please do not hesitate to call
the undersigned.
Sincerely,
Z-00
t�-1%
Bill Bothwell
APPROVED,ACCEPTED AND AGREED TO
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this day of , 2015.
Nam �LA
Its: CP-if,.e- A-%'STA+-r—'G60Asrt CGL�s£—
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