Loading...
13-0604_FIELDMAN, ROLAPP & ASSOCIATES, INC._Agenda Report_H1bCapistrano port TO: Karen P. Brust, City ~a t FROM: Cindy Russell, Chief Fina cial Officer/City TreasurerW DATE: June 4, 2013 6/4/2013 H1b SUBJECT: Consideration of the Refunding Opportunities for the 2002 and 2004 Water Certificates of Participation (Water System Facilities) and the San Juan Basin Authority Lease Revenue Bonds (Groundwater Recovery Project) Issue of 2002, and Agreements for Financial Advisor Services (Fieldman, Rolapp & Associates, Inc.) and Bond/Disclosure Counsel Services (Orrick, Herrington & Sutcliffe, LLP) RECOMMENDATION: By motion, 1. Authorize City staff to proceed with a combined refunding of the 2002 and 2004 Water Certificates of Participation; and, 2. Authorize City staff to proceed with a refunding of the San Juan Basin Authority Lease Revenue Bonds (Groundwater Recovery Project) Issue of 2002 and notify the San Juan Basin Authority of the City's intent to proceed with the refunding; and, 3. Approve the Professional Services Agreement for Financial Advisor Services with Fieldman, Rolapp & Associates, Inc., in the amount of $37,500, plus expenses not to exceed $1,500 for the combined refunding of the Certificates of Participation, Series 2002 and Series 2004; and $40,500, plus expenses not to exceed $3,500 for the refunding of the San Juan Basin Authority Lease Revenue Bonds, Issue of 2002 for a total of $78,000 plus costs not to exceed $5,000; and, 4. Approve the Agreement for Bond/Disclosure Counsel Services with Orrick, Herrington & Sutcliffe, LLP, in the amount of $85,000, for the combined refunding of the Certificates of Participation, Series 2002 and Series 2004; and $135,000 for the refunding of both the Certificates of Participation, Series 2002 and Series 2004 and the San Juan Basin Authority Lease Revenue Bonds, Issue of 2002. EXECUTIVE SUMMARY: Based on current interest rates and market conditions, the City's Financial Advisor, Fieldman, Rolapp & Associates, Inc. (FRA) has identified the opportunity for the City to City Council Agenda Report June 4, 2013 Page 2 of 6 realize savings on its annual lease payments to the San Juan Capistrano Public Financing Authority (SJCPFA) for the Certificates of Participation, Series 2002 (2002 COPs) and Series 2004 (2004 COPs) that were issued for water system improvements as well as the annual lease payments to the San Juan Basin Authority (SJBA) for the San Juan Basin Authority Lease Revenue Bonds, Issue of 2002 (2002 SJBA Bonds) issued for the construction of the Groundwater Recovery Plant (GWRP). Based on preliminary estimates it is expected that by reducing the average interest (coupon) rate on these obligations, the City ·could potentially realize an average annual savings of $143,220 on a combined refunding (refinancing) of the 2002 COPs and 2004 COPs, as well as $221,964 on the 2002 SJBA Bonds for a total of $365,184 and still pay these obligations off in the timeframe originally planned for. Additionally, the net present value savings as a percentage of the amounts refunded are 8.98% and 13.16% for the combined refunding (refinancing) of the 2002 COPs and 2004 COPs and the 2002 SJBA Bonds, respectively. These percentages are well above the benchmark savings for refunding debt of 3% to 5% of the amount refunded. In order to facilitate the refunding of these obligations, the City needs to retain the services of a financial advisor and bond/disclosure (legal) counsel. City staff is recommending an agreement with the City's current financial advisor, Fieldman, Rolapp & Associates (FRA), at a fixed cost of $37,500, plus expenses not to exceed $1,500 for the combined refunding of the 2002 and 2004 COPs; and $40,500, plus expenses not to exceed $3,500 for the refunding of the 2002 SJBA Bonds for a total of $78,000, plus expenses not to exceed $5,000 for both refunding issues. City staff is also recommending Orrick, Herrington & Sutcliffe, LLP as bond and disclosure counsel at a cost of $85,000, for the combined refunding of the 2002 and 2004 COPs; and $135,000 for the refunding of both the 2002 and 2004 COPs and the 2002 SJBA Bonds. These costs are entirely contingent on and payable from the proceeds of the refunding issue. These costs have been included in the cost of issuance, and included in the calculations above. DISCUSSION/ANALYSIS: San Juan Capistrano Public Financing Authority...., Certificates of Participation Refunding In December 2010, the City's financial advisor Fieldman, Rolapp & Associates (FRA) recommended the City consider refunding the 2002 COPs based on lower interest rates and · market conditions at that time in order to reduce its annual debt service costs. Ralph Andersen and Associates included in its Final Report on the Management and Operations Audit of the Utilities Enterprise dated December 12, 2011, (Ralph Andersen Final Report) a refunding analysis conducted by Public Finance Management (PFM) of the SJCPFA's three outstanding COPs for potential savings on debt service costs. The PFM analysis concluded that based on current interest rates at that time, the 2002 COPs could be refunded and the Ralph Andersen Final Report recommended the City explore the opportunity further either with· PFM or their financial advisor to determine if the refunding of the 2002 COPs was desirable. During 2012, FRA updated its analysis of the 2002 COPs refunding and also included an analysis of the refunding of the 2004 COPs as the call date of December 1, 2013, is City Council Agenda Report June 4, 2013 Page 3 of 6 approaching for this issue. The very conservative preliminary estimates are based on the following assumptions: • A combined refunding of the 2002 and 2004 COPs. • A competitive sale of the Refunding Certificates of Participation. • An average coupon (interest) rate based on current interest rates and market conditions. • The City's current A rating on its water enterprise obligations. • No bond insurance to enhance the current A rating to AA, however a recommendation that the City allow the option for bidders to purchase bond insurance at the competitive sale if it produces a bid with a lower True Interest Cost. , • All costs of issuance associated with the refunding issue are included in the calculation of cost savings • No extension on the term of either past its original end date. Attachment 1 to this report includes a summary of the COPs Refunding results, as well as detailed information for reference (See Attachment 1 -Exhibit A). The following is an overview of the results: Summary of 2002 and 2004 Certificates of Participation and Refunding Opportunity Refunding Issue 2002 COPS 2004 COPS Combined COPS Attachment 1 -Exhibit A Pages 3 and 6 Pages 4 and 7 Pages 2 and 5 Current COPS Principal (Par) amount outstanding $4,720,000 19,270,000 $23,990,000 Call Date(1) 12/01/10 12/01/13 N/A Final Maturity Date(2) 12/01/21 12/01/34 12/01/34 A\oerage Interest Rate 4.99% 4.64% 4.67% Refunding COPS (Prelimina!Y Estimates} Principal (Par) amount $4,225,000 $19,200,000 $23,425,000 A\oerage Interest Rate 3.89% 4.02% 4.01% Final Maturity Date(2) 12/01/21 12/01/34 12/01/34 Net Present Value Savings ($) $472,124 $1,682,702 $2,154,826 Net Present Value Savings (%) 10.00% 8.73% 8.98% Average Annual Savings(3) $104,059 $100,651 $143,220 (1) The COPs can be called within 90 days of the call date. There is no advance refunding of either COP issue. (2) The portion of the refunding COPs, related to the 2002 COPs is still paid off in 2021, while the remainder has a final maturity date in 2034, which is the same as the 2004 COPs. See Attachment 1, Exhibit A, Page 5. (3) The average annual savings on the 2002 COPs is through 2021 when the portion of the refunding related to the 2002 COPs is paid off. The savings on the 2004 COPs continues through 2034. San Juan Basin Authority Lease Revenue Bond Refunding The San Juan Basin Authority issued $31,555,000 of Lease Revenue Bonds in January 2003 (SJBA 2002 Bonds) to fund the construction of the Ground Water Recovery Plant (GWRP). The SJBA 2002 Bonds are secured by lease payments made under the Lease Agreement for City's use and possession of the GRWP. Based on the same assumptions used for the Refunding COPs, FRA also prepared a very conservative preliminary estimate of the cost City Council Agenda Report June 4, 2013 Page 4 of 6 savings that could be realized by the City. Attachment 1 to this report also includes a summary of the SJBA 2002 Bond Refunding, as well as detailed information (See Attachment 1 -Exhibit B). The following is an overview of the results: Summary of the SJBA 2002 Bonds Refunding Opportunity Refunding Issue Current COPS Principal (Par) amount outstanding Call Date Final Maturity Date A\ierage Interest Rate Refunding COPS (Preliminary Estimates) Principal (Par) amount A\ierage Interest Rate Final Maturity Date Total Gross Sa\1ngs(1l Net Present Value Sa\Angs ($) Net Present Value Sa\Angs (%) Average Annual Savings Professional Services Amount $24,780,000 12/1/2012 12/01/34 5.04% $23,925,000 4.05% 12/01/34 $4,883,200 $3,262,015 13.16% $221,964 In order to facilitate the refunding of the 2002 and 2004 COPs and the 2002 SJBA Bonds, the City needs to retain a financial advisor and bond/disclosure (legal) counsel. Since this is a refunding of existing obligations, the financial advisor has the most familiarity with the obligations, and with the City. Therefore a formal Request for Proposals (RFP) process would not necessarily produce the most economically feasible result. The City's financial advisor Fieldman, Rolapp & Associates (FRA) has worked closely with the City on its water enterprise system financings over the past ten years as well as other non-enterprise financings for more than twenty years. FRA has continually provided sound financial advisor services and assisted the City in preparation of information to be reviewed by the rating agencies to assure the best results and obtaining very successful pricing during the competitive sale process. Additionally, FRA assists the City with regular reviews by the bond rating agencies and other related matters on an as needed basis at no charge. The costs proposed by FRA for financial advisor services are approximately 10%-15% below FRA's cost for original 2004 COPs that were similar in sizing to each of the refunding issues. Additionally, the City will save staff time related to the RFP process and providing background and other financial information on these issues, which will is assist in moving this process along as quickly as possible. Therefore, a formal Request for Proposal (RFP) process would not necessarily provide the most cost-effective overall results. Section 3- 4.306(e)(3) allows for formal RFP process to be bypassed when extenuating circumstances would make the formal RPF process not the most cost-effective approach. City Council Agenda Report June 4, 2013 Page 5 of 6 City staff also requested a proposal from its current bond counsel firm Stradling, Yocca Carlson & Rauth (SYCR). Staff requested bond counsel with specific water system financing expertise be assigned. Since new bond counsel was anticipated to be proposed by SYCR, · and given the fact that SYCR is also general counsel for the San Juan Basin Authority, City staff also requested proposals from the City's general legal counsel firm, Rutan & Tucker and Orrick, Herrington & Sutcliffe, LLP based on their familiarity with the City and/or professional expertise and reputation. The results of the limited RFP process were as follows: Stradling, Yocca, Orrick, Carlson and Harrington and Rutan & Refunding Issue Rauth Sutcliffe Tucker 2002 and 2004 COPS Refunding (Combined) $60,000 $85,000 $99,120 SJBA 2002 Bonds Refunding $70,000 $50,000 $98,940 Total for Both Refundings $130,000 $135,000 $198,060 All three firms have extensive water related financing experience, solid reputations, and strong references. Based on the proposals submitted, water related expertise, professional expertise and references; staff recommends the selection of Orrick, Herrington & Sutcliffe, LLP (Orrick) to the City Council for bond/disclosure counsel services. FISCAL IMPACT: The City's Water Enterprise Debt Service fund makes lease payments to the SJCPFA on the 2002 and 2004 COPs, and to the SJBA on the SJBA 2002 Bonds. The annual lease payments are equivalent to the annual debt service payment on each of these obligations. Based on the preliminary estimates discussed earlier in this report, the estimated potential savings to the City's Water Enterprise Fund is as follows: Total Potential Cost Sal.ings to the City's Water Enterprise Fund Net Present Value Net Present Value A~.erage Annual Refunding Issue Gross Savings Sal.ings ($) Sal.ings (%) Savings SJCPFA 2002 and 2004 COPS Refunding (Combined) $3,150,852 $2,154,826 8.98% $143,220 SJBA 2002 Bonds Refunding 4,883,200 3,262,015 13.16% 221,964 Total $8,034,052 $5,416,841 $365,184 The cost of financial advisor and bond/disclosure counsel services has been included in the estimated cost of issuance for each refunding. The total cost of issuance for each refunding issue has been conservatively estimated at $200,000, and is approximately 0.85% of the principal amount to be issued. See Attachment 1; Exhibit A, Page 1 and Exhibit B, Page 1. All costs associated with the refunding issues are paid directly from the proceeds of the refunding issue at the time of closing. City Council Agenda Report June 4, 2013 Page 6 of6 PRIOR CITY COUNCIL REVIEW: • On December 7, 2010, the City Council considered the possible refunding of the 2002 Certificates of Participation. COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS: • On May 12, 2013, the Utilities Commission reviewed the refunding opportunities for the 2002 and 2004 Water Certificates of Participation and the San Juan Basin Authority Lease Revenue Bonds (Groundwater Recovery Project) Issue of 2002. The Utilities Commission approved a recommendation to the City Council to move forward with both refundings, and approve the agreements for Financial Advisor Services with Fieldman, Rolapp & Associates, Inc. and Bond/Disclosure Counsel Services with Orrick, Herrington & Sutcliffe, LLP. (See Attachment 4) NOTIFICATION: Jim Fabian, Principal-Fieldman, Rolapp & Associates, Inc. Stephen A. Spitz, Partner -Orrick, Herrington & Sutcliffe, LLP ATTACHMENTS: Attachment 1 -Summary and Detail of Water Debt Obligation Refunding Opportunities Attachment 2-Agreement for Financial Advisor Services (Fieldman, Rolapp & Associates) Attachment 3 -Proposal for Bond and Disclosure Counsel Services (Orrick, Herrington & Sutcliffe, LLP) Attachment 4-Draft Minutes of the Utilities Commission meeting of May 21, 2013 San Juan Capistrano Water Debt Refunding Opportunities with No Bond Insurance (1) Call Date Principal Outstanding as of 3/11/2013 Security Refunding Gross Savings ($) Refunding NPV Savings ($) Any date on or after 12/1/2010@ 100% $4,720,000 Installment payments from Net Revenues of the Water System Any date on or after 12/1/2013@ 100% $19,270,000 Installment payments from Net Revenues of the Water System Any date on or after 12/1/2012@ 100% $24,780,000 Lease payments from Revenues of the Water System included as an O&M expense )> I Refunding NPV Savings (%) I -j -j Average Annual Savings ($)(2) )> ~ 0 ·-·---~--··--' 0 ~ <1l The above refunding numbers are based on an A rated scale as of March 7, 2013, and assumes no bond insurance. We are recommending that the City allow m the option for bidders to purchase bond insurance at the competitive sale if it produces a bid with a lower True Interest Cost to the City. z -j __, (2) The average annual savings of the combined refundings is higher through December 1, 2021, when the 2002 COPs are paid off. HELDMAN ROLAPP 5/1/2013 :-\SSOCL\1'[ S May 2, 2013 8:06 am Prepared by DBC Finance (Finance 7.003 San Juan Capistrano, City of:REF0204) Page I SOURCES AND USES OF FUNDS Water Debt Combined Current Refunding of 2002 and 2004 Water Revenue COPs Sources: Bond Proceeds: Par Amount Net Premium/OlD Other Sources of Funds: Debt Service Reserve Fund Uses: Refunding Escrow Deposits: Cash Deposit SLGS Purchases Other Fund Deposits: Debt Service Reserve Fund Delivery Date Expenses: Cost oflssuance Underwriter's Discount Other Uses of Funds: Additional Proceeds Notes: NR/A Scale sent by Citi 3-7-13 per Robert Porr COl= $200k Underwriter's Discount of$8/Bond Refunding of 2002 Water Revenue COPs 4,225,000.00 339,013.50 4,564,013.50 679,853.76 5,243,867.26 Refunding of 2002 Water Revenue COPs 0.61 4,833,782.00 4,833,782.61. 338,287.68 36,072.57 33,800.00 69,872.57 1,924.40 5,243,867.26 Refunding of 2004 Water Revenue COPs Total 19,200,000.00 23,425,000.00 917,687.05 1,256,700.55 20,117,687.05 24,681,700.55 1,440,312.50 2,120,166.26 21,557,999.55 26,801,866.81 Ref1mding of 2004 Water Revenue COPs Total 0.54 1.15 19,700,610.00 24,534,392.00 19,700,610.54 24,534,393.15 1,537,307.32 1,875,595.00 163,9.27.43 200,000.00 153,600.00 187,400.00 317,527.43 387,400.00 2,554.26 4,478.66 21,557,999.55 26,801,866.81 ATTACHMENT 1 -EXHIBIT A May 2, 2013 8:06am Prepared by DBC Finance (Finance 7.003 San Juan Capistrano, City of:REF0204) Page 2 SUMMARY OF REFUNDING RESULTS Water Debt Combined Current Refunding of2002 and 2004 Water Revenue COPs Dated Date Delivery Date Arbitrage yield Escrow yield Bond Par Amount True Interest Cost Net Interest Cost Average Coupon Average Life Par amount of refunded bonds Average coupon of refunded bonds Average life of refunded bonds PV of prior debt to 10/31/2013@ 3.298846% Net PV Savings Percentage savings of refunded bonds Percentage savings of refimding bonds 10/31/2013 10/31/2013 3.298846% 0.029591% 23,425,000.00 3.464963% 3.579662% 4.010385% 10.598 23,990,000.00 4.668303% 10.796 27,226,581.75 2,154,825.82 8.982183% 9.198830% ____ , ___ ,_, __ , ............... _, ...................... .. _____ ....................... ,_,.., ___ ............. _ ... __ ........ __ _ May 2, 2013 8:06 am Prep¥ed by DBC Finance (Finance 7.003 San Juan Capistrano, City ot:REF0204) Page 3 SUMMARY OF REFUNDING RESULTS Water Debt Refunding of2002 Water Revenue COPs· Dated Date Delivery Date Arbitrage yield Escrow yield Bond Par Amou11t True Interest Cost Net Interest Cost Average Coupon Average Life Par amount of refunded bonds Average coupon of refunded bonds Average life of refunded bonds PV of prior debt to 10/3112013@ 3.298846% Net PV Savings Percentage savings of refunded bonds Percentage savings of refunding bonds ---··--.. ---..... __ ,_,, __ ,, _____ ................................................. ---'- 10/31/2013 10/3112013 3.298846% 0.029592% 4,225,000.00 2.048389% 2.166812% 3.894225% 4.182 4,720,000.00 4.992576% 4.391 5,130,654.94 472,124,22 10.002632% 11.174538% ------· _,_,_, __ .. ___ , ____ _ May 2, 2013 8:06 am Prepared by DBC Finance (Finance 7.003 Sfm Juan Capistrano, City of:REF0204) Page 4 SUMMARY OF REFUNDING RESULTS Water Debt Refunding of2004 Water Revenue COPs Dated Date Delivery Date Arbitrage yield Escrow yield Bond Par Amount True Interest Cost Net Interest Cost Average Coupon Average Life Par amount of refunded bonds Average coupon of refunded bonds Average life of refunded bonds PV of prior debt to 10/3112013@ 3.298846% Net PY Savings Percentage savings of refunded bonds Percentage savings of refimding bonds _______ ..................... _ .......... . 10/31/2013 10/31/2013 3.298846% 0.029591% 19,200,000.00 3.595054% 3.687922% 4.019286% . 12.010 19,270,000.00 4.640094% 12.364 22,095,926.81 1 ,682, 701.60 8.732235% 8.764071% May 2, 2013 8:06 am Prepared by DBC Finance (Finance 7.003 San Juan Capistrano, City ot:lUIF0204) Page 5 SAVINGS Water Debt Combined Current Refunding of2002 and 2004 Water Revenue COPs Present Value Prior Refunding to 10/31/2013 Date Debt Service Debt Service Savings @ 3.2988462% 12/0112013 1,550,650.63 1,536,621.24 14,029.39 13,989.92 12/01/2014 2,096,498.76 1,875,595.00 220,903.76 214,710.82 12/01/2015 2,059,636.26 1,835,295.00 224,341.26 210,843.91 12/01/2016 2,056,105.00 1,835,445.00 220,660.00 200,627.18 12/01/2017 2,059,288.76 1,839,445.00 219,843.76 193,412.96 12/01/2018 2,064,138.76 1,846,645.00 217,493.76 185,145.97 12/0112019 2,060,238.76 1,841,845.00 218,393.76 179,862.14 12/0112020 2,058,388.76 1,835,445.00 222,943.76 177,612.49 12/01/2021 2,062,728.76 I ,842,445.00 220,283.76 169,773.39 12/01/2022 1,403,101.26 1,297,245.00 105,856.26 79,220.15 12/01/2023 1,404,221.26 1,296,845.00 107,376.26 77,742.18 12/01/2024 1,407,996.26 1,305,245.00 102,751.26 71,995.18 12/01/2025 1,409,971.26 1,303,745.00 106,226.26 72,036.95 12/01/2026 1,414,261.26 1,310,245.00 104,016.26 68,292.82 12/01/2027 1,416,481.26 1,309,245.00 107,236.26 68,142.16 12/01/2028 1,421,387.50 1,315,645.00 105,742.50 65,004.16 12/01/2029 1,422,700.00 1,315,245.00 107,455.00 63,883.01 12/01/2030 1,426,637.50 1,322,445.00 104,192.50 59,898.74 12/0112031 1,427,962.50 1,321,656.26 106,306.24 59,081.43 12/01/2032 1,431,675.00 1,324,3 77.50 107,297.50 57,648.59 12/0112033 1,437,537.50 1,333,947.50 103,590.00 53,812.71 12/0112034 1,440,312.50 1,336,400.00 103,912.50 52,181.54 36,531,919.51 33,381,067.50 3,150,852.01 2,394,918.42 Savings Summary PV of savings from cash flow Less: Prior fm1ds on hand Plus: Refunding funds on hand Net PV Savings 2,394,918.42 -2,120,166.26 1,880,073.66 2,154,825.82 ------.... --.. ·-···-··-····"'"'""'"""'"'"'' _____ _ May 2, 2013 8:06 am Prepared by DBC Finance (Finance 7.003 San Juan Capistrano, City of:REF0204) Page 6 SAVINGS Water Debt Refunding of 2002 Water Revenue COPs Present Value Prior Refunding to I 0/31/2013 Date Debt Service Debt Service Savings @ 3.2988462% 12/01/2013 549,538.13 542,563.61 6,974.52 6,954.90 12/01/2014 664,936.26 550,300.00 114,636.26 111,228.03 12/01/2015 664,461.26 547,000.00 117,461.26 110,192.44 12/0112016 662,492.50 544,400.00 118,092.50 107,146.13 12/01/2017 663,732.50 547,200.00 116,532.50 I02,285:oo 12/01/2018 663,382.50 549,200.00 114,182.50 96,951.40 12/0l/2019 661,132.50 545,400.00 115,732.50 95,043.57 12/0112020 657,632.50 541,000.00 116,632.50 92,638.37 12/01/2021 662,287.50 546,000.00 116,287.50 89,326.07 ---····--·····-·····-···--........ _ .. ,_,_,_.., ______ ,_, __ ,_., ______ ,,,, .......... ___ ...... ______ ........ -.......... __ , __ ... 5,849,595.65 4,913,063.61 936,532.04 811,765.90 Savings Summary PV of savings fi·om cash flow Less: Prior ftmds on hand Plus: Refunding funds on hand Net PV Savings 811,765.90 -679,853.76 340,212.08 472,124.22 ---·--·--·--·-·--·-··-- May 2, 2013 8:06 am Prepared by DBC Finance (Finance 7.003 San Juan Capistrano, City ot:REF0204) Page 7 SAVINGS Water Debt Refunding of2004 Water Revenue COPs Present Value Prior Refunding to 10/31/2013 Date Debt Service Debt Service Savings @ 3.2988462% 12/0112013 1,001,112.50 994,057.63 7,054.87 7,035.02 12/0112014 1,431,562.50 1,325,295.00 106,267.50 103,482.79 12/0112015 I ,395,175.00 1,288,295.00 106,880.00 100,651.47 12/01/2016 1,393,612.50 1,291,045.00 102,567.50 93,481.06 12/0 l/2017 1,395,556.26 1,292,245.00 103,311.26 91,127.97 12/0l/2018 1,400,756.26 1,297,445.00 103,311.26 88,194.57 12/0112019 1,399,106.26 1,296,445.00 102,661.26 84,818.57 12/0112020 1,400,756.26 1,294,445.00 106,311.26 84,974.12 12/01/2021 1,400,441.26 I ,296,445.00 103,996.26 80,447.32 12/01/2022 1,403,101.26 1,297,245.00 105,856.26 79,220.15 12/01/2023 1,404,221.26 1,296,845.00 107,376.26 77,742.18 12/0112024 I ,407,996.26 1,305,245.00 102,751.26 71,995.18 12/0112025 1,409,971.26 1,303,745.00 106,226.26 72,036.95 12/01/2026 I ,414,261.26 1,310,245.00 104,016.26 68,292.82 12/01/2027 I ,416,481.26 1,309,245.00 107,236.26 68,142.16 12/0 l/2028 1,421,387.50 1,315,645.00 105,742.50 65,004.16 12/0 l/2029 1,422,700.00 1,315,245.00 107,455.00 63,883.01 12/01/2030 1,426,637.50 1,322,445.00 I 04,192.50 59,898.74 12/01/2031 1,427,962.50 1,321,656.26 106,306.24 59,081.43 12/01/2032 1,431,675.00 1,324,377.50 107,297.50 57,648.59 12/01/2033 1,437,537.50 1,333,947.50 103,590.00 53,812.71 12/01/2034 1,440,312.50 1,336,400.00 103,912.50 52,181.54 30,682,323.86 28,468,003.89 2,214,319.97 1,583,152.52 Savings Summary PV of savings from cash flow Less: Prior funds on hand Plus: Refunding funds on hand Net PV Savings 1 ,583,152.52 -I ,440,312.50 1,539,861.58 1,682,701.60 May 15, 2013 4:44pm Prepared by Fieldman, Rolapp & Associates (AVR) (Finance 7.002 San Juan ... :WATER-REF02BON,REF02BON) Page I SOURCES AND USES OF FUNDS Water Debt Refunding of 2002 Lease Revenue Bonds (San Juan Basin Authority) Notes: Sources: Dated Date Delivery Date Bond Proceeds: Par Amount Net Premium Other Sources of Funds: Debt Service Reserve Fund Uses: Refunding Escrow Deposits: Cash Deposit SLGS Purchases Other Fund Deposits: Debt Service Reserve Fund Delivery Date Expenses: Cost of Issuance Underwriter's Discount Other Uses of Funds: Additional Proceeds NRI A Scale sent by Citi 3-7-13 per Robert Porr COl . $200k Underwriter's Discount of $8/Bond -·······-·····-····----.. -.... --·-------------.. ·------------"'"'" ----- 10/31/2013 10/3112013 23,925,000.00 1,576,018.55 25,501,018.55 2,252,537.50 27,753,556.05 0.38 25,406,655.00 25,406,655.38 1,953,777.52 200,000.00 191,400.00 391,400.00 1,723.15 27,753,556.05 ATTACHMENT 1 -EXHIBIT B May 15, 2013 4:44 pm Prepared by Fieldman, Rolapp & Associates (A VR) (Finance 7.002 Srm Juan ... :WAri::I\-RI·:F·02BON,REI·"02BON) Page 2 SUMMARY OF REFUNDJNG RESULTS Water Debt Refunding of 2002 Lease Revenue Bonds (San .I uan Basin Authority) Dated Date Date yield Escrow yield Bond Par Amount True Interest Cost Net Interest Cost Average Coupon Average Life Par amount of refunded bonds Average coupon of refunded bonds Average life of refunded bonds PV of prior debt to l 0/31/2013@ 3.102406% Net PV Savings Percentage savings of reli.mded bonds Percentage of refunding bonds I 0/31/2013 I 0/31/2013 3.102406% 23.925,000.00 3.288048% 3.431559% 4.052784% 9.316 24.780.000.00 5.036726'Yo 10.047 29,222,375.99 3,262,015.36 13.163904% 13.634338% May 15, 2013 4:44pm Prepared by Fieldman, Rolapp & Associates (AVR) (Finance 7.002 San Juan ... :WATER-REF02BON,REF02BON) Page 3 SAVINGS Water Debt Refunding of 2002 Lease Revenue Bonds (San .Juan Basin Authority) Present Value Prior .Refunding to 10/31/2013 Date Debt Service Debt Service Savings @ 3.1024065% 12/01/2013 1,620,156.25 1,598,488.34 21,667.91 21,610.54 12/0112014 2,250,812.50 2,021,077.50 229,735.00 224,653.71 12/0112015 2,251,212.50 2,018,277.50 232,935.00 220,612.57 12/01/2016 2,248,725.00 2,018,477.50 230,247.50 211,320.35 12/0 l/2017 2,248,350.00 2,015,677.50 232,672.50 206,966.14 12/01/2018 2,249,825.00 2,021,077.50 228,747.50 197,243.11 12/0112019 2,247,887.50 2,014,277.50 233,610.00 195,197.67 12/01/2020 2,252,537.50 2,020,677.50 231,860.00 187,768.44 12/01/2021 2,248,250.00 2,014,677.50 233,572.50 183,300.42 12/01/2022 2,249,000.00 2,016,677.50 232,322.50 176,703.06 12/01/2023 2,251,000.00 2,021,277.50 229,722.50 169,339.92 12/01/2024 2,249, 000.00 2,018,277.50 230,722.50 164,812.17 12/01/2025 I, 148,000.00 916,527.50 231,472.50 160,309.84 12/01/2026 1,147,750.00 915,777.50 231,972.50 155,760.62 12/0112027 1,145,750.00 913,527.50 232,222.50 151,176.61 12/01/2028 1,147,000.00 916,527.50 230,472.50 145,436.28 12/01/2029 1,146,250.00 913,327.50 232,922.50 142,460.90 12/01/2030 1,148,500.00 917,047.50 231,452.50 137,197.74 12/01/2031 1,148,500.00 918,737.50 229,762.50 131,995.72 12/0112032 1,146,250.00 914,310.00 231,940.00 129,127.18 12/01/2033 1, 146,750.00 912,932.50 233,817.50 126,148.36 12/0112034 1,149,750.00 920,400.00 229,350.00 119,910.84 37,841,256.25 32,958,055.84 4,883,200.41 3,559,052.19 Savings Summary PV of savings from cash flow Less: Prior funds on hand Plus: Refunding funds on hand Net PV Savings 3,559,052.19 -2,252,537.50 l ,955,500.67 3,262,015.36 PROFESSIONAL SERVICES AGREEMENT FOR FINANCIAL ADVISOR This agreement has been entered into this __ day of , 2013 by and between the City of San Juan Capistrano, fCalifornia] (the "City") and Fieldman, Rolapp & Associates, Inc. (herein, the "Consultant"). WHEREAS, the City desires independent financial advisory services to be performed in connection with refunding of outstanding bonds related to water improvement projects (herein, the "Project"); and WHEREAS, the City desires to retain the professional and technical services of the Consultant for the purpose of refunding outstanding debt, (herein, the "Services"); WHEREAS, the Consultant is well qualified to provide professional financial advice to entities such as the City; NOW, THEREFORE, in consideration of the above recitals and the mutual covenants and conditions hereinafter set forth, it is agreed as follows: Section 1 Section 2 Financial Advisory Services. As directed by the City, Consultant will provide services in connection with the Project as such Services are fully described in Exhibit A attached to this Agreement. Consultant is engaged in an expert financial advisory capacity to the City only. It is expressly understood that the Services rendered hereunder are rendered solely to the City of San Juan Capistrano. Consultant does not undertake any responsibility to review disclosure documents on behalf of owners or beneficial owners of bonds or debt which may arise from the Consultant's work hereunder. Additional Requested Services. The City may request that Consultant provide additional services beyond the scope of those referenced in Section 1 above and specifically listed in Exhibit A to this Agreement. Services performed for the City by Consultant that are not otherwise specifically identified in Exhibit A to this Agreement shall be Additional Services. Additional Services shall not be conducted by the Consultant without prior written authorization from the City. Additional Services include, but are not limited to, the following: 2.01 Assisting the City in obtaining enabling legislation or conducting referendum elections. 2.02 Extraordinary services and extensive computer analysis in the structuring or planning of any debt issue or financing program. 2.03 The repeat of any element of a service described in Exhibit A to this Agreement which is made necessary through no fault of Consultant. CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSOCIATES FRA Project No. __ 00075721 Page 1 ATTACHMENT 2-Page 1 of 12 2.04 credit or considered within the scope 2Jl5 Services rendered in connection with any of the City to a disclosure entered into in order to with Securities Commission Rule 15c2~12 or other similar rules. 2.06 Services rendered to the in connection with calculations or determination 3.01 3.02 :un 3JJ4 3.06 Section 4 any rebate to the United States of America from investment activities associated with debt issued to fund the For of Services in this Services the the Consultant's will as in of Exhibit B attached to this of Consultant's expenses shaU be made at the tirne and in the form as for in Exhibit B to this of Consultant's and expenses after submission of Consultant's invoice for services. In the the Consultant are abandoned Consultant shall be for Services ,.,,.,,.r,.,,,.,.,.,,rl of abandonment as if such Services were an additional service to Section 2 of this to a maximum fee of An act of abandonment shall be deemed to have occurred when no action has been taken the relative to the services of Consultant for a of three months from the date of the initial of a and there has been the schedule of Consultant fees set forth in this and Exhibits is months from the date of this PersonneL Consultant Consultant for a of twelve ( to Con~ultant shall make available other to Consultant's services. The in Consultant's staff The and agree that such "'",."'""'."'"' Consultant and shall not be considered be '"ty'""~'""""' Rf)L,\PP & ;\SSC)CIA 1'ES 2 ATTACHMENT 2-Page 2 of 12 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Term of Agreement. This Agreement shall continue in full force and effect for a period of thirty-six (36) months from the date hereof unless terminated by either patty by not less than thirty (30) days written notice to the other party except that the Agreement shall continue in full force and effect until completion of Consultant's services or until an abandonment shall have occurred as described in Section 3.04 hereof. This Agreement may be extended from time to time as agreed by the City and the Consultant. Modification. This Agreement contains the entire agreement of the parties. It may be amended in whole or in part from time to time by mutual consent of the parties. This shall not prohibit the City and Consultant from entering into separate agreements for other services. Assignment. The rights and obligations of the City under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the City. This agreement may not be assigned by the Consultant without the consent of the City except for compensation due Consultant. Disclosure. Consultant does not assume the responsibilities of the City, nor the responsibilities of the other professionals and vendors representing the City, in the provision of services and the preparation of the financing documents, including initial and secondary market disclosure, for financings undertaken by the City. Information obtained by Consultant and included in any disclosure documents is, by reason of experience, believed to be accurate; however, such information is not guaranteed by Consultant. Confidentiality. The Consultant agrees that all financial, statistical, personal, technical and other data and information designated by the City as confidential shall be protected by the Consultant from unauthorized use or disclosure. The City acknowledges that the Consultant is required to comply with applicable laws governing disclosure of public information. Indemnification. To the fullest extent permitted by law, Consultant agrees to protect, defend, and hold harmless the City and its elective and appointive boards, officers, agents, and employees from any and all claims, liabilities, expenses, or damages of any nature, including attorneys' fees, for injury or death of any person, or damages of any nature, including interference with use of property, arising out of, or in any way connected with the negligence, recklessness and/or intentional wrongful CITY OF SAN JUAN CAPISTRANOIFIELDMAN, ROLAPP & ASSOCIATES Page 3 FRA Project No. __ 00075721 ATTACHMENT 2-Page 3 of 12 This hold harmless agreemeO! shall of whether any insurance are T'he upon the amount of indenmification to be ""'''"''"'''" Section 11 Insurance. 11 .01 Consultant :'.hall and insurance 1 L02 at its own expense, shan obtain and maintain insurance at all times of this contract. insurance must be written with a Best Guide "A"-rated or insurance carrier admitted to write insurance in the state where the work is located. 11.()3 Insurance coverages shall not be less than the A Workers' I L 2. 2. 3. Products 4. limits of not l.ess than UUHWCf,'-' and Errors and omissions with limits Sed:ion 12 Pennits/Ucenses, for it Section Effect, 13.01 A waiver or the of a breach of any of this be construed as a waiver of any the Consultant CiTY OF SAN JlJAN ROLAPP & ASSOCIATES 4 FRA No. 00075721 ATTACHMENT 2-Page 4 of 12 13.02 All agreements contained herein are severable and in the event any of them shall be held to be invalid by any competent court, this Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein, and the remaining provisions of this Agreement shall not be affected by such determination and shall remain in full force and effect. This Agreement shall not fail because any part or any clause hereof shall be held indefinite or invalid. 13.03 Each party hereto represents and warrants that this Agreement has been duly authorized and executed by it and constitutes its valid and binding agreement, and that any governmental approvals necessary for the performance of this Agreement have been obtained. 13.04 The validity, interpretation and construction of this Agreement and of each part hereof shall be governed by the laws of the State of California. Venue for any lawsuit concerning this agreement is Orange County, California. IN WITNESS Whereof, the parties have duly executed this Agreement as· of the day and year first above set forth. CITY OF SAN JUAN CAPISTRANO By: -------------------------- Date:----'-------- FIELD MAN, ROLAPP & ASSOCIATES, INC. 19900 MacArthur Boulevard, Suite 1 1 00 92612 Da APPROVED AS TO FORM: Title: Title: ATTEST: Maria Morris, City Clerk CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSOCIATES FRA Project No.· __ 00075721 PageS ATTACHMENT 2-Page 5 of 12 EXHIBIT A TO PROF'ESSJONAL SERVICES AGREEMENT FOR :FINANCIAL ADVISOR BY AND BETWEEN THE CITV OF SAN CAPISTRANO AND ROLAPP & ASSOCIATES A. The Consultant shall all the duties and services described in Section 1 of this and shaH such other services as it deems necessary or advisable to consistent with the standards and of nn,lP~Q'"""I the time such services are rendered to the The may, vvith the concurrence of Services not identified within the terms of may be described in an addendum to this Exhibit A and arc Exhibit B to this B. Consultant shaH assume and execution of each debt issue Services which are rendered shall be such as to minimize the costs of the transaction coincident with described in and market access. The Consultant's debt issuance Services • Establish the • the Monitor the Transaction Process Review the Official both and final Procure and Coordinate Additional Service Providers Provide Financial Advice to the Related to Documents "' and • Plan and Schedule Presentation and Investor • Conduct Credit Enhancement Procurement and Evaluation • Conduct Market of Market • Recommend Award of Debt Issuance • Provide and Assistance ROLAPP & ASSOCIATES Exhibit ATTACHMENT 2-Page 6 of 12 Specifically, Consultant will: l. Establish the Financing Objectives. At the onset of the financing transaction process for the Project, the Consultant shall review the City's financing needs and in conjunction with the City's management, outline the objectives ofthe financing transaction to be undertaken and its proposed form. Unless previously determined, Consultant shall recommend the method of sale of debt and outline the steps required to achieve efficient market access. 2. Develop the Financing Timetable. The Consultant shall take the lead role in preparing a schedule and detailed description of the interconnected responsibilities of each team member and update this schedule, with refinements, as necessary, as the work progresses. 3. Monitor the Transaction Process. The Consultant shall have primary responsibility for the successful implementation of the financing strategy and timetable that is adopted for each debt issue relating to the Project. The Consultant shall coordinate (and assist, where appropriate) in the preparation of the legal and disclosure documents and shall monitor the progress of all activities leading to the sale of debt. The Consultant shall prepare the timetables and work schedules necessary to achieve this end in a timely, efficient and cost-effective manner and will coordinate and monitor the activities of all parties engaged in the financing transaction. 4. Review the Official Statement . a. Upon direction of the City, the Consultant shall review the official statement for each debt issue relating to the Project to insure that the City's official statement is compiled in a manner consistent with industry standards. b. The Consultant shall post the official statement on its website at www .fieldman.com. 5. Procure and Coordinate Additional Service Providers. Should the City desire, the Consultant may act as City's representative in procuring the services of financial printers for the official statement and related documents, and for the printing of any securities. In addition, the Consultant may act as the City's representative in procuring the services of trustees, paying agents, fiscal agents, feasibility consultants, redevelopment consultants, or escrow verification agents or other professionals, if the City directs. 6. Provide Financial Advice to the City Relating to Financing Documents. Simultaneous with the review of official statements for each debt issue relating to the Project, the Consultant shall assist the managing underwriters, bond counsel and/or other legal advisors in the drafting of the respective financing resolutions, notices and other CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSDCIATES Exhibit A, Page 2 FRA Project No. __ 00075721 ATTACHMENT 2-Page 7 of 12 documents. In this regard, the Consultant shall monitor document for a consistent and accurate presentation of the recommended business terms and financing stmcture of each debt issue relating to the Project, it being specifically understood however that the Consultant's services shall in no manner be construed as the Consultant in the of law. 7. The Consultant shall work with the staff to debt issue relating to the Project that is consistent with that coordinates each transaction with outstanding issues and that reflects current conditions in the capital markets. 8. The Consultant shaH """''"'-"''"")''"' rating agency are available for the opn,btum materials and assist the City officials in preparing for the 9. the Consultant will initiate discussions with bond and vendors of other forms of credit enhancements to determine of and cost benefit of credit The Consultant shall provide regular summaries of current trends in the market and how these may favorably or affect For all types of the Consultant shall undertake such activities sale of securities bid • Review and comment on terms of Notice of Sale Inviting Bids • Provide advice on debt sale scheduling • Provide advice on the use of electronic bidding • Coordinate bid opening with the City officials • bids received and make for"''''"'~'" "' Provide confirmation of issue bids where appropriate • Coordinate with the successful bidder(s) CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSOCIATES Exhihit A, 3 FRA No. 00075721 ATTACHMENT 2-Page 8 of 12 11. Recommend Award of Debt Issuance. Based upon activities outlined in Task lO(a) and lO(b) above, the Consultant will recommend accepting or rejecting offers to purchase the debt issue. If the City elects to award the debt issue, the Consultant will instruct all parties and help facilitate the actions required to formally consummate the award. 12. Provide Pre-Closing and Closing Activities. The Consultant shall assist in arranging for the closing of each financing. The Consultant shall assist counsel in assuming responsibility for such arrangements as they are required, including arranging for or monitoring the progress of bond printing, qualification of issues for book-entry status, signing and final delivery of the securities and settlement of the costs of issuance. CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSOCIATES FRA Project No. __ Exhibit A, Page 4 00075721 ATTACHMENT 2-Page 9 of 12 EXHffiiTB TO PROFESSIONAL SERVICES AGREEMENT FOR FINANCIAL ADVISOR BY AND BETWEEN THE CITY OF SAN JUAN CAPISTRANO AND FIELDMAN, ROLAPP & ASSOCIATES Compensation and Expenses Part 1: Fee for Services Financial Advisory Services performed pursuant to Section 1 of this Agreement, and as more fully described in the Scope of Services set forth in Exhibit A, the Consultant will be compensated as described in the table below: Transaction San Juan Basin Authority Lease Revenue Bonds Fees $40,500 San Juan Capistrano Public Finance Authority COPs Series 2002 and 2004 $37,500 Payment of compensation earned by Consultant pursuant to this Part 1 shall be contingent on, and payable at the closing of the debt issue(s) undertaken to finance the Project. Part 2: Additional Services Upon authorization of the City in writing of Additional Services to be provided and unless agreed to otherwise, financial advisory services performed pursuant to Section 2 of this Agreement will be compensated at the then current hourly rates. The table below reflects the rates in effect as of the date of execution of this Agreement. Personnel Hourly Rate Executive Officers ............................................................ $300.00 Principals .......................................................................... $290.00 Senior Vice President .................... : .................................. $275.00 Vice Presidents ................................................................. $225.00 Assistant Vice President ................................................... $195.00 Senior Associate ............................................................... $150.00 Associate ........................................................................... $125.00 Analyst ................................................................................ $85.00 Administrative Assistants .......... ; ........................................ $65.00 Clerical. ............................................................................... $35.00 Hourly Compensation will be billed on a monthly basis. CITY OF SAN JUAN CAPISTRANOIFIELDMAN, ROLAPP & ASSOCIATES FRA Project No. __ 00075721 Exhibit B, Page 1 ATTACHMENT 2..: Page 10 of 12 Expenses Expenses will be billed for separately and will cover, among other things, travel, lodging, subsistence, overnight courier, conference calls, computer, and fax transmission charges. Advances made on behalf of the City for costs of preparing, printing or distributing disclosure materials or related matter whether by postal services or electronic means, may also be billed through to the City upon prior authorization. Additionally, a surcharge of 6% of the compensation amount is added to verifiable out-of-pocket costs for recovery of costs such as telephone, postage, document reproduction and the like. Expenses for the San Juan Basin Authority Lease Revenue Bonds will be capped at $3,500 and for the City of San Juan Capistrano Public Financing Authority Revenue COP's will be capped at $1,500. Limiting Tenns and Conditions The above compensation is based on completion of work orders within six months of the City's authorization to proceed, and assumes that the City will provide all necessary information in a timely manner. The fee shown above in Part 1 presumes attendance at up to 8 meetings in the City's offices or such other location within a 25-mile radius of the City place of business as the City may designate. Preparation for, and attendance at City Council meetings on any basis other than "by appointment" may be charged at our normal hourly rates as shown in Part 2, above. Abandonment If, once commenced, the services of the Consultant are termipated prior to completion of our final report for any reason, the Consultant will be compensated for professional services and reimbursed for expenses incurred through the time of receive notification of such termination at the standard hourly rates shown above, subject to a minimum charge of $0 CITY OF SAN JUAN CAPISTRANO/FIELDMAN, ROLAPP & ASSOCIATES FRA Project No. __ 00075721 Exhibit B, Page 2 ATTACHMENT 2-Page 11 of 12 ATTACHMENT 2-Page 12 of 12 AGREEMENT FOR Bffi:jQ COUNSEL ~ERVICES THIS AGREEMENT is entered into as of June , 2013, between the CITY OF SAN JUAN CAPISTRANO (the "Issuer") and ORRICK, HERRINGTON & SUTCLIFFE LLP ("Bond Counsel"), as follows: Recitals A. Issuer desires to engage the services of bond counsel in connection with a proposed (i) issuance of revenue bonds by the San Juan Capistrano Financing Authority or the San Juan Basin Authority backed by installment payments or lease payments to be made by the Issuer or (ii) execution and delivery of certificates of participation evidencing interests in installment payments to be made by the Issuer (in either case, the "Bonds"), to be sold at competitive sale for the purpose of refunding all or a portion of the San Juan Capistrano Public Financing Authority Revenue Certificates of Participation, Series 2002 (the "Water System Refunding"), and/or refunding all or a portion of the San Juan Basin Authority Lease Revenue Bonds (Groundwater Recovery Project), Issue of2002 (the "SJBA Refunding"), each issued to fund certain water system capital improvement projects (the "Projects"). B. Bond Counsel possesses the necessary professional capabilities and resources to provide the legal services required by Issuer as described in this Agreement. 1 . Scope of Services. Bond Counsel shall perform the following legal services: (1) Analysis of the validity of the Bonds under State Of California law and the exclusion of interest on the Bonds from gross income under federal tax law. (2) Consultation with representatives of the Issuer, including Rutan & Tucker, LLP ("Issuer Cmmsel"), Fieldman, Rolapp & Associates, and others, with respect to the timing, terms, and legal structure of the proposed Bonds. (3) Preparation of documents to be adopted or entered into by the Issuer, the San Juan Capistrano Public Financing Authority or the San Juan Basin Authority required for the authorization, sale and issuance of the Bonds, including preparation of the resolutions approving the issuance of the Bonds, the notice of sale, any indenture or trust agreement providing for the issuance of the Bonds, and any installment sale agreement or lease entered into by the Issuer backing the Bonds (the "Major Legal Documents"). ( 4) Coordination of preparation of the Preliminary Official Statement and final Official Statement for the Bonds based on information provided by the Issuer and others. · OHSUSA:753749804.1 ATTACHMENT 3-Page 1 of 5 (5) Preparation of the Continuing Disclosure summaries ofthe Major Documents included in (7) Attendance at of the working by Juan Juan Basin Authority and coordination ofthc Bond of Counsel's customary form of legal opinion to validity of Bonds the , ... ,. .. ""''"''" status of thereon. (I 0) Preparation shall have to render circulate documents to and Counsel to the extent requested by or entitled to assume that Issuer reviewed all documents and of f(Jr prior to Cmmsel any litigation or other or ofthe Bonds, the Projects or any related matter. not include the content or validity of any or to or OllSUSA:753749804.l 2 ATTACHMENT 3-Page 2 of 5 post issuance tax compliance or disclosure (although Bond Counsel may be "'"'!"''"''"'"'''"to provide either or both to the Bond or the Project after "'·''"'"'''"''"' 2. Bond will paid a fixed the services of $85,000 if the proceeds with Water System Refunding only and $135,000 if the proceeds with Water System Refunding and the Refunding. fee is in part, upon the assumption that the HH<HlvlH~ will conform to the will conform to the thereof contained the Water System Refunding and the Refunding will proceed on same schedule, the will not have an extraordinary of problems/issues, Counsel will not be to more than two out of town trips and will be required to attend no more than the usual of meetings and conference calls, Bond will not be required to an inordinate amount of drafts of the Major Legal the structure of the transaction will not materially change (particularly after ofthe Major Documents has commenced), and Bonds not December 31,2013. Bond Counsel wili not for customarily incurred by Bond Counsel performing bond counsel services Section 1 of Any publication or printing costs required connection with Bonds shall be paid directly by but if paid by the Bond Counsel on behalf of shall be to Counsel on demand. payable by Issuer entirely OHSUS/\:753749804. l 3 ATTACHMENT 3-Page 3 of 5 terminate upon issuance of the Bonds; provided that Issuer shall remain liable for any unpaid compensation or reimbursement due under Section 2 of this Agreement. Upon termination, Bond Counsel shall have no future duty of any kind to or with respect to the Bonds or the Issuer. This Agreement shall not be the basis of any breach of contract claim that would have the effect of extending the statute of limitations pertaining to legal malpractice to the statute of limitations pertaining to breach of contract. Except as state above, Bond Counsel retains. the right to discard any files and materials. It is Bond Counsel's current policy (subject to change) to discard all files and materials after issuance of the Bonds'( except the closing transcript until after the Bonds are paid or defeased) or following cessation of work on the financing without issuance of Bonds. 4. Nature of Engagement; Client Relationships With Other Parties. The role of bond counsel, generally, is to prepare or review the proceedings for issuance of the bonds, notes or other evidence of indebtedness and to provide an expert l~gal opinion with respect to the validity thereof and other subjects (usually including the tax status of interest thereon) addressed by the opinion. Consistent with the historical origin and unique role of bond counsel, and reliance thereon by the public finance market, Bond Counsel's role as bond counsel under this Agreement is to provide opinions 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, Bond Counsel will act as special counsel to Issuer (as such and not any particular body, board, office or official) with respect to issuance of the Bonds; i.e., Bond Counsel will assist Issuer Counsel in representing Issuer but only with respect to validity of the Bonds and the Major Legal Documents as to the Issuer and 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. Issuer acknowledges that Bond Counsel regularly performs legal services for many private and public entities in connection with a wide variety of matters .. For example, Bond Counsel 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 and swap providers/brokers, providers/brokers of derivative products and others who may have a role or interest in the Bond financing or the Projects or that may be involved with or adverse to Issuer in this or some other matter. Bond Counsel agrees not to represent any such entity in connection with the Bond financing, during the term of this Agreement, without the consent oflssuer. Given the special, limited role of bond counsel described above, Issuer 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 Agreement or any such other relationship that Bond Counsel may have had, have or enter into, and Issuer specifically consents to any and all such relationships. 5. Limitation of Rights to Parties. Nothing in this Agreement or in any ofthe documents contemplated hereby, expressed or implied, is intended or shall be construed to give any person other than Issuer and Bond Counsel 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 Issuer and Bond Counsel. OHSUSA:7537498041 4 ATTACHMENT 3-Page 4 of 5 I 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. Issuer and Bond Counsel have executed this Agreement by their duly authorized representatives as of the date provided above. 7. Insurance. Bond Counsel advises that it does maintain errors and omissions insurance coverage applicable to the services to be rendered under this Agreement. CITY OF SAN JUAN CAPISTRANO John Taylor, Mayor ORRICK, HERRINGTON & SUTCLIFFE LLP By: ATTEST: Maria Morris, City Clerk OHSUSA:753749804.l 5 ATTACHMENT 3-Page 5 of 5 CALL TO ORDER UTILITIES COMMiSSION MINUTES TUESDAY MAY 21, 2013 The meeting of the Utilities Commission was called to order by Chairman Lytle at 8:05 am. PLEDGE OF ALLEGIANCE: Commissioner Miller led the Pledge of Allegiance. ROLL CALL: Commissioners Present: Staff Present Tom Lytle, Chair Richard Hartl, Vice Chair Dan Merkle Ray Miller Lee Goode Keith VanDer Maaten, Utilities Director Francie Kennedy, Water Conservation Coordinator Ziad Mazboudi, Senior Civil Engineer Tom Bokosky, Human Resources Manager Cindy Russell, Chief Financial Officer Justin Kirk, Senior Management Analyst Betsy Dubois, Administrative Specialist PRESENTATIONS: None COMMISSION REPORTS/ORAL COMMUNICATIONS: Resident John Perry addressed the Commission. Susan Hinman, Director of MWDOC, gave an update to the Commission. Resident Jim Reardon addressed the Commission Karl Seckle with MWDOC addressed the Commission ITEMS RECEIVED TOO LATE TO BE AGENDIZED: None CONSENT CALENDAR: 1. Consideration of Meeting Minutes from the April 22. 2013 Meeting 2. Consideration of the Utilities Department Update for the Month of April. 201 ~ 3. gonsideration of the Award of an Outside Contract Services for Backflow Program ATTACHMENT 4-Page 1 of 3 UC Meeting Minutes 2 May 21. 2013 4. Consideration of Easements within the Riding Park 5. Consideration of the Award of a Construction Agreement for the Installation of Water lines at the Reata Park This item was pulled by the Commission. Commissioner Merkle inquired about the exhibits that were not attached to the item. J. Kirk explained that the exhibits were not necessary for action on this item. Motion to approve Items H5 Moved by Commissioner Merkle; seconded by Vice-Chair Hartl and carried 5-0-0. 6. Consideration of Soticitation of Bids for the Marbetla Recycled,d:~: ~ooversion 7. ".,;l/i~~;;:g>, Item H-5 was pulled for further discussiott:' · balance of the consent calendar moved by ··~!l~~un1r~ Commissioner Goode and carried 5-0-0. UNFINISHED BUSINESS None NEW BUSINESS: Chairman Lytle requ that ite~;.!~1 and J2 be:$witched . rove ltems::i~J~~~~rove the er Mi/ler; ~~rseconded by f Discussion Regardi~cjiit~e Utiliffis;C,ol!lmission,:if~eting Twice a Month. , .. , ,.,_\~,,··<:v:;?~:<· · .. , ,_. ,,:;' This it an DerM~'§ten. Moti91l&~fq continue i£fitfi:'D~1 indel(ff!teiY Moved by Commissioner Merkle; seconded by cotffmitiSioner Miller and carried 5~0J.o. 2. ,·1~?·:' This item was· ·r;~s~nteg'by Tom Bokosky, Human Resources Manager. Motion to continu~~~:3if~m J2 until the City Manager can present the item to the Commission Moverf by Commissioner Miller; seconded by Commissioner Goode and carried 5-0-0. 3. Consideration of the Refunding Opportunities of the 2002 and 2004 Water Certificates of Participation (Water System Facilities) and the San Juan Basin Authoritv Lease Revenue Bonds (Groundwater Recover Project) Issue of 2002. and Agreements for Financial Advisor Services (Fieldman. Rolapp and Associates. Inc.) and Bond/Disclosure Counsel Services (Orrick. Harrington and Sutcliffe. LLP) This item was presented by C. Russell. ATTACHMENT 4-Page 2 of 3 UC Meeting Minutes 3 May 21,2013 Motion to Recommend to City Council Moved by Commissioner Merkle; seconded by Vice Chair Hartl and carried 5-0-0. 4. Consideration of the City of Sal"! Juan Capistrano's Third Quarter Financial Report for the Period from July 1, 2012 through March 31, 2_913, Water and Sewer Enterprise Funds (City Council Urgent Strategic Priority}; and Proposed Budget Revisions and Update on the City Council's Priorities .. This item was presented by C. Russell. Motion to Recommend to City Council Moved by Commissioner Miller; seconded by Commissioner Goode and carried 5-0~0. COMMISSIONER QUESTIONS/COMMENTS: Commissioner Goode shared a mailer he had received and suggested that the Utilities Department consider doing a newsletter. K. Van Der Maaten replied that a citywide newsletter was being considered. ADJOURNMENT: Action: Motion to Adjourn to Special Utilities Commission Meeting dated June 4, 2013 at Bam Moved by Commissioner Miller; seconded by Commissioner Goode, and carried unanimously, 5~0-0 to adjourn to the Special Utilities Commission meeting on June 2013 at Bam Respectfully submitted, Keith VanDer Maaten, Commission Secretary Prepared by, Betsy Dubois, Administrative Specialist ATTACHMENT 4 -Page 3 of 3